<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended SEPTEMBER 30, 1998
[ ] 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
Commission Jurisdiction of Incorporation; I.R.S Employer
File Number Address; and Telephone Number Identification No.
333-47925 Yorkshire Power Group Limited 84-1393785
(England & Wales)
Wetherby Road
Scarcroft
Leeds LS14 3HS
United Kingdom
011-44-113-289-2123
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 __
A description of the registrant's common stock follows:
Description of Shares Outstanding
Registrant Common Stock at October 30, 1998
Yorkshire Power Par Value (POUND)1 Per Share 440,000,002
Group Limited
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARY COMPANIES
Form 10-Q
For The Quarter Ended September 30, 1998
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
Consolidated Statements of Income 3
Consolidated Balance Sheets 5
Consolidated Statements of Cash Flows 7
Consolidated Statements of Changes in Shareholders' Equity 9
Notes to Consolidated Financial Statements 11
Management's Discussion and Analysis of Results of
Operations and Financial Condition 16
PART II. OTHER INFORMATION
Item 5 Other Information 22
Item 6 Exhibits and Reports on Form 8-K 24
SIGNATURES 25
Forward Looking Statements
Certain statements in this Form 10-Q under Part
I Financial Information - "Management's Discussion
and Analysis of Results of Operations and Financial
Condition" may 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 achievements
expressed or implied by such forward looking
statements. Such risks, uncertainties and other
important factors include, among others: general
economic and business conditions in the UK, the
Yorkshire franchise area 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, developments, 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; the
ability of Yorkshire to adequately identify and
address Year 2000 issues and the ability of third
parties to do the same; the ability of Yorkshire to
identify and implement Year 2000 contingency plans;
and other factors referenced in this Form 10-Q.
These forward looking statements speak only as of
the date of this Form 10-Q.
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions)
(UNAUDITED)
<CAPTION>
Three Months Ended
September 30, September 30,
1998 1997
(POUND) $ (POUND)
(See Note 1)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . 301 511 270
COST OF SALES. . . . . . . . . . . . . . . 191 325 172
GROSS MARGIN . . . . . . . . . . . . . . . 110 186 98
OPERATING EXPENSES:
Maintenance. . . . . . . . . . . . . . . 15 26 19
Depreciation and Amortization. . . . . . 19 32 18
Selling, General and Administrative. . . 32 54 22
INCOME FROM OPERATIONS. . . . . . . 44 74 39
OTHER INCOME (EXPENSE):
Loss on Investment in Ionica . . . . . . (5) (9) -
Other Income (Expense), net. . . . . . . 4 7 (2)
Total Other Income (Expense), net . (1) (2) (2)
NET INTEREST EXPENSE:
Interest Expense . . . . . . . . . . . . (34) (57) (29)
Interest Income. . . . . . . . . . . . . 2 3 4
Net Interest Expense. . . . . . . . (32) (54) (25)
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES . . . . . . . . . . 11 18 12
(CREDIT) FOR INCOME TAXES. . . . . . . . . (1) (2) (6)
INCOME FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEM . . . . . . . . . . . 12 20 18
INCOME FROM DISCONTINUED OPERATION
NET OF INCOME TAXES OF (POUND)1 ($2)
AND (POUND)1. 0 0 3
INCOME BEFORE EXTRAORDINARY ITEM . . . . . 12 20 21
EXTRAORDINARY LOSS - UK WINDFALL TAX . . . - - (134)
NET INCOME (LOSS). . . . . . . . . . . . . 12 20 (113)
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions)
(UNAUDITED)
<CAPTION>
Six Months Ended
September 30, September 30,
1998 1997
(POUND) $ (POUND)
(See Note 1)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . 593 1008 527
COST OF SALES. . . . . . . . . . . . . . . 379 644 341
GROSS MARGIN . . . . . . . . . . . . . . . 214 364 186
OPERATING EXPENSES:
Maintenance. . . . . . . . . . . . . . . 31 53 34
Depreciation and Amortization. . . . . . 37 63 35
Selling, General and Administrative. . . 56 95 49
INCOME FROM OPERATIONS. . . . . . . 90 153 68
OTHER (EXPENSE) INCOME:
Loss on Investment in Ionica . . . . . . (11) (19) -
Other Income, net. . . . . . . . . . . . 4 7 2
Total Other (Expense) Income, net . (7) (12) 2
NET INTEREST EXPENSE:
Interest Expense . . . . . . . . . . . . (66) (112) (56)
Interest Income. . . . . . . . . . . . . 3 5 7
Net Interest Expense. . . . . . . . (63) (107) (49)
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES. . . . . . . . . . . 20 34 21
(CREDIT) PROVISION FOR INCOME TAXES. . . . (9) (15) (1)
INCOME FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEM . . . . . . . . . . . 29 49 22
INCOME FROM DISCONTINUED OPERATION
NET OF INCOME TAXES OF (POUND)2 ($3)
AND (POUND)2. 3 5 4
INCOME BEFORE EXTRAORDINARY ITEM . . . . . 32 54 26
EXTRAORDINARY LOSS - UK WINDFALL TAX . . . - - (134)
NET INCOME (LOSS). . . . . . . . . . . . . 32 54 (108)
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
(UNAUDITED)
<CAPTION>
March 31,
September 30, 1998 1998
(POUND) $ (POUND)
(See Note 1)
ASSETS
<S> <C> <C> <C>
FIXED ASSETS:
Property, Plant and Equipment, Net of Accumulated
Depreciation of (POUND)79 ($134) and (POUND)53 . . 1,042 1,770 992
Construction Work in Progress. . . . . . . . . . . . 57 97 68
Total Fixed Assets . . . . . . . . . . . . . 1,099 1,867 1,060
CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 30 51 35
Investments. . . . . . . . . . . . . . . . . . . . . 43 73 41
Accounts Receivable, Less Provision for
Uncollectible Accounts of (POUND)7 ($12) and (POUND)6. . . . 52 88 62
Unbilled Revenue . . . . . . . . . . . . . . . . . . 58 99 78
Prepaids and other . . . . . . . . . . . . . . . . . 58 99 50
Total Current Assets . . . . . . . . . . . . 241 410 266
OTHER ASSETS:
Goodwill, Net of Accumulated Amortization of
(POUND)37 ($63) and (POUND)25. . . . . . . . . . . 957 1,626 969
Investments, Long-term . . . . . . . . . . . . . . . 61 104 73
Prepaid Pension Asset. . . . . . . . . . . . . . . . 85 144 75
Other Non-Current Assets . . . . . . . . . . . . . . 28 48 19
Total Other Assets . . . . . . . . . . . . . 1,131 1,922 1,136
Total Assets . . . . . . . . . . . . . . . . . . . . . 2,471 4,199 2,462
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
(UNAUDITED)
<CAPTION>
March 31,
September 30, 1998 1998
(POUND) $ (POUND)
(See Note 1)
SHAREHOLDERS' EQUITY AND LIABILITIES
<S> <C> <C> <C>
SHAREHOLDERS' EQUITY
Share capital, (POUND)1 par value common shares,
440,000,100 authorized and 440,000,002
issued and outstanding . . . . . . . . . . . . . . 440 748 440
Retained Deficit . . . . . . . . . . . . . . . . . . (85) (145) (117)
Total Shareholders' Equity . . . . . . . . . . . . 355 603 323
LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . 1,159 1,970 1,026
SHORT-TERM DEBT REFINANCED . . . . . . . . . . . . . . - - 164
Company-Obligated Mandatorily Redeemable Trust
Securities of Subsidiary Holding Solely Junior
Subordinated Deferrable Interest Debentures (Note 2) 168 285 -
OTHER NON-CURRENT LIABILITIES:
Deferred Income Taxes. . . . . . . . . . . . . . . . 207 352 208
Provision for Uneconomic Electricity
and Gas Contracts. . . . . . . . . . . . . . . . . 77 131 84
Other . . . . . . . . . . . . . . . . . . . . . . . 12 20 15
Total Other Non-current Liabilities. . . . . . . . 296 503 307
CURRENT LIABILITIES:
Current Portion of Long-term Debt. . . . . . . . . . 5 8 5
Short-term Debt. . . . . . . . . . . . . . . . . . . 183 311 319
Accounts Payable . . . . . . . . . . . . . . . . . . 74 126 82
Accrued Liabilities and Deferred Income. . . . . . . 69 117 63
Income Taxes Payable . . . . . . . . . . . . . . . . 34 58 40
Windfall Tax Payable . . . . . . . . . . . . . . . . 67 114 67
Other Current Liabilities. . . . . . . . . . . . . . 61 104 66
Total Current Liabilities. . . . . . . . . . . . . 493 838 642
Total Liabilities. . . . . . . . . . . . . . . . . . . 2,116 3,596 2,139
COMMITMENTS AND CONTINGENCIES (NOTE 4)
Total Shareholders' Equity and Liabilities . . . . . . 2,471 4,199 2,462
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(UNAUDITED)
<CAPTION>
Six Months Ended
September 30, September 30,
1998 1997
(POUND) $ (POUND)
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss). . . . . . . . . . . . . . 32 54 (108)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided By Operating Activities:
Depreciation and Amortization. . . . . . . 41 70 39
Gain on sale of fixed assets . . . . . . . (2) (3) (1)
Loss on Investment in Ionica . . . . . . . 11 19 -
Deferred Income Taxes. . . . . . . . . . . (1) (2) (4)
Changes in Assets and Liabilities:
Receivables and Unbilled Revenue . . . . . 30 51 43
Provision for Uneconomic Electricity
and Gas Contracts. . . . . . . . . . . . (7) (12) (1)
Prepaid Pension Asset. . . . . . . . . . . (10) (17) (6)
Accounts Payable . . . . . . . . . . . . . (8) (14) 5
Accrued Liabilities and Deferred Income. . 6 10 (2)
Windfall Tax . . . . . . . . . . . . . . . - - 134
Prepaids and Other Current Assets. . . . . (8) (14) 17
Other Current Liabilities. . . . . . . . . (5) (8) 6
Other. . . . . . . . . . . . . . . . . . . (9) (15) 9
Net Cash Provided by Operating
Activities . . . . . . . . . . . . . . 70 119 131
Cash Flows From Investing Activities:
Capital Expenditures . . . . . . . . . . . (70) (119) (76)
Proceeds from Sale of Property,
Plant and Equipment. . . . . . . . . . . 4 7 9
Purchase of Yorkshire Electricity Group plc - - (1,474)
Other. . . . . . . . . . . . . . . . . . . (1) (2) 4
Net Cash Used in Investing Activities. . (67) (114) (1,537)
Cash Flows From Financing Activities:
Proceeds From Issuance of Trust Securities 162 275 -
Proceeds From Issuance of Common Stock . . - - 436
Receipt of Capital Contribution. . . . . . - - 4
Proceeds From Issuance of Long-term Debt . 130 221 -
Net Change in Short-term Debt. . . . . . . (300) (509) 953
Other. . . . . . . . . . . . . . . . . . . - - -
Net Cash (Used) Provided by Financing Activities (8) (13) 1,393
Decrease in Cash and Cash Equivalents. . . . (5) (8) (13)
Cash and Cash Equivalents at Beginning of Period 35 59 221
Cash and Cash Equivalents at End of Period . 30 51 208
</TABLE>
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(UNAUDITED)
<CAPTION>
Six Months Ended
September 30, September 30,
1998 1997
(POUND) $ (POUND)
<S> <C> <C> <C>
Cash Paid for Interest . . . . . . . . . . . . . 34 58 48
Cash Paid for Income Taxes . . . . . . . . . . . 0 0 6
The accompanying notes are an integral part of these consolidated financial statements.
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in millions, except shares)
(UNAUDITED)
For the three months ended September 30, 1998:
Unrealized
Profit on
Available
Share Capital For Sale Retained
Shares Amount Investments Deficit Total
(POUND) (POUND) (POUND) (POUND)
Balance, July 1, 1998. .. . . 440,000,002 440 1 (97) 344
Unrealized Profit on Available
for Sale Investments . . .. . - - (1) - (1)
Net Income . . . . . . . . . . - - - 12 12
Balance, September 30, 1998 . 440,000,002 440 - (85) 355
For the three months ended September 30, 1997:
Unrealized
Shares Profit on
Subscribed Available
Share Capital But Not For Sale Retained
Shares Amount Yet Issued Investments Deficit Total
(POUND) (POUND) (POUND) (POUND) (POUND)
Balance, July 1, 1997. 436,000,002 436 4 - 5 445
Unrealized Profit on Available
for Sale Investments . . - - - 20 - 20
Net Loss . . . . . . . . . . . - - - - (113) (113)
Balance,
September 30, 1997 . 436,000,002 436 4 20 (108) 352
The accompanying notes are an integral part of these consolidated financial statements.
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in millions, except shares)
(UNAUDITED)
For the six months ended September 30, 1998:
Share Capital Retained
Shares Amount Deficit Total
(POUND) (POUND) (POUND)
Balance, April 1, 1998 . 440,000,002 440 (117) 323
Net Income . . . . . . . - - 32 32
Balance,
September 30, 1998 . . 440,000,002 440 (85) 355
For the six months ended September 30, 1997:
Unrealized
Shares Profit on
Subscribed Available
Share Capital But Not For Sale Retained
Shares Amount Yet Issued Investments Deficit Total
(POUND) (POUND) (POUND) (POUND) (POUND)
Balance, April 1, 1997 . 2 - - - - -
Issuance of
Ordinary Shares 436,000,000 436 - - - 436
Receipt of Capital - - 4 - - 4
Contribution
Unrealized Profit on
Available
for Sale Investments . - - - 20 - 20
Net Loss . . . . - - - - (108) (108)
Balance,
September 30,
1997 . 436,000,002 43 6 4 20 (108) 352
The accompanying notes are an integral part of these consolidated
financial statements.
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
1. GENERAL
The accompanying unaudited financial
statements should be read in conjunction
with the audited financial statements
for the Fiscal Year ended March 31, 1998
(the "1998 Audited Financial
Statements") filed in Yorkshire Power
Group Limited's Annual Report on Form
10-K for the Fiscal Year ended March 31,
1998 (the "Form 10-K"). In the opinion
of management, the financial statements
reflect all adjustments (consisting of
only normal recurring accruals) which
are necessary for a fair presentation of
the results of operations for interim
periods.
The consolidated financial
statements of Yorkshire Power Group
Limited and its subsidiaries ("Yorkshire
Group") are presented in pounds sterling
and in conformity with accounting
principles generally accepted in the
United States of America.
The consolidated balance sheets,
income statements, statements of cash
flows 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 =
$1.6995, the noon buying rate in New
York City for cable transfers in pounds
sterling as certified for customs
purposes by the Federal Reserve Bank Of
New York on September 30, 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.
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
2. FINANCING AND RELATED ACTIVITIES
Yorkshire Capital Trust I, (the
"Trust"), is a statutory business trust
wholly owned by Yorkshire Power Group
Limited, 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 (the
"Debentures") to be issued by Yorkshire
Power Finance Limited ("Yorkshire
Finance"), a subsidiary of Yorkshire
Power Group Limited. On June 9, 1998 the
Trust issued 11,000,000 shares of 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 Debentures, of
Yorkshire Finance. Yorkshire Finance in
turn loaned the net proceeds to Yorkshire
Power Group Limited. Substantially all of
the Trust's assets will consist of the
Debentures.
The Trust Securities are subject to
mandatory redemption upon payment of the
Debentures at maturity or upon
redemption. The Debentures are
redeemable, in whole or in part at the
option of Yorkshire Finance or at any
time upon the occurrence of certain
events. Yorkshire Power Group Limited
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 net proceeds of the issue were
used for the repayment of short term
debt.
Yorkshire Group's credit facility
with Union Bank of Switzerland (the "1997
Credit Facility") matured on July 30,
1998 and has been refinanced by a (POUND)550
million syndicated credit facility. This
credit facility consists of four tranches
which are: Tranche A a (POUND)150 million 364
day revolving credit with a one-year
extension option; Tranche B a (POUND)130
million 5 year term loan; Tranche C a (POUND)50
million 5 year revolving credit facility
and Tranche D a (POUND)220 million 5 year
revolving credit facility. Tranches A
and B have been drawn down to repay the
1997 Credit Facility and Tranches C and D
have replaced existing committed bank
facilities.
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
3. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting
Standards (SFAS) No. 130 "Reporting
Comprehensive Income" was adopted by
Yorkshire Group in the first quarter of
Fiscal Year 1999. SFAS No. 130
established the standards for reporting
and displaying components of
"comprehensive income," which is the
total of net income and all transactions
not included in the net income affecting
equity except those with shareholders.
There was a (POUND)20 million unrealized profit
on available for sale investments in the
quarter ended September 30, 1997 which is
a difference between comprehensive income
and net income. There is no material
difference between comprehensive income
and net income for the first six months
of Fiscal Year 1999.
In the first quarter of Fiscal Year
1999 Yorkshire Group adopted the American
Institute of Certified Public
Accountants' Statement of Position (SOP)
98-1, "Accounting for the Costs of
Computer Software Developed or Obtained
for Internal Use". The SOP requires the
capitalization and amortization of
certain costs of acquiring or developing
internal use computer software. The
adoption of the SOP did not have a
material effect on results of operations,
cash flows or financial condition.
4. CONTINGENCIES
Yorkshire Group continues to be
involved in certain other matters
discussed in the Fiscal Year 1998
Financial Statements Note 5 and
Management's Discussion and Analysis of
Results of Operations and Financial
Condition.
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
5. IONICA
Reference is made to Note 7 to the
1998 Audited Financial Statements.
Yorkshire Group charged an unrealized
loss of (POUND)11 million to the Income
Statement in the first six months of
Fiscal Year 1999 to write down Yorkshire
Group's investment in Ionica Group plc
("Ionica") to management's estimate of
fair value.
Ionica announced on October 29, 1998
that it had appointed administrators for
its operating subsidiary due to its
inability to obtain further investment
necessary to continue trading and expand
its service. Ionica plans to distribute
net assets after closing the operating
subsidiary. The Ionica Board has been
advised that this is a complex process
that may take a considerable time to
complete. Management is currently
assessing the recoverability of the
remaining book value of the investment
((POUND)3 million at September 30, 1998).
6. DISCONTINUED OPERATIONS - GENERATION
BUSINESSES
Yorkshire Electricity Group plc
("Yorkshire") has decided to divest its
generation assets, primarily as part of
its strategy to reduce debt. It is
anticipated that the disposal of these
assets will be completed during the
current fiscal year. See Form 10-K Part
I Item 1 "Business Restructuring".
Yorkshire's principal investment in
generation is a 75% interest in Regional
Power Generators ("RPG"). Yorkshire has
agreed to sell its 75% share and loan
interests in RPG to IVO Energy Ltd
("IVO"). IVO is a subsidiary of Imatran
Voima Oy, part of Finland's energy group
Forum. IVO already owned 25% of RPG.
RPG owns Brigg power station, a 272-
megawatt combined cycle, gas-fired plant
located in North Lincolnshire, England.
The consideration receivable from IVO
will include cash and the repayment of
Yorkshire's loan to RPG. In addition,
Yorkshire, RPG and IVO have agreed to
restructure certain contracts relative to
the Brigg power station and its
operations. The sale is subject to a
number of conditions prior to closing.
It is anticipated that the sale will be
completed by December 30, 1998.
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
Yorkshire has an additional 191.4
megawatts of generating capacity.
Investments in Combined Heat and Power
and Peaking are grouped together in
Yorkshire's 100% owned subsidiary
Yorkshire CoGen Ltd. Windpower plants
are held within a 50:50 joint venture
company, Yorkshire Windpower Ltd.
Yorkshire is in the process of evaluating
indicative offers for these remaining
assets.
As of September 30, 1998 the book
value of Generation assets and
liabilities were (POUND)214 million and (POUND)97
million respectively. Generating
revenues (including trading with other
Yorkshire Group companies) for the three
month period to June 1998 were (POUND)13
million and (POUND)33 million for the six
months ended September 1998.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Second Quarter Fiscal Year 1999 vs.
Second Quarter Fiscal Year 1998
And
Year to Date Fiscal Year 1999 vs Year to
Date Fiscal Year 1998
Results of Operations
Net income before extraordinary item
for the year to date period increased by
(POUND)6 million (23%) from (POUND)26 million to (POUND)32
million due primarily to the following:
the settlement of earlier years tax
liabilities resulting in a (POUND)12 million
release of tax provisions; a (POUND)6 million
release of deferred tax provision due to
a reduction in the UK corporation tax
rate from 31% to 30%; changes in the
regulation of supply business revenues
and increases in electricity and gas
supply margins due to reduced purchase
costs. These items were partly offset by
increased interest expense and a write
down in the investment in Ionica.
Income statement line items which
changed significantly were:
Increase (Decrease)
Second Quarter Year to Date
(POUND) % (POUND) %
(in millions) (in millions)
Operating Revenues 31 11 66 13
Gross Margin 12 12 28 15
Maintenance (4) (21) (3) (9)
Selling, General and
Administrative 10 45 7 14
Loss on Investment in Ionica (5) N/A (11) N/A
Interest Expense (5) (17) (10) (18)
(Credit) Provision for
Income Taxes 5 83 (8) (800)
Extraordinary item -
UK Windfall Tax (134) N/A (134) N/A
The increase in operating revenues is largely
due to the signing of new electricity contracts
with Non-Franchise Supply Customers in April 1998
and the commencement of residential gas sales in
Fiscal Year 1999. In addition, beginning with
Fiscal Year 1999 there was a change in the
regulation of supply business revenues in that the
Supply Price Control Formula covering supply of
electricity to Franchise Supply Customers ended and
was replaced by supply regulation based on maximum
tariffs for residential and smaller business
electricity customers in Yorkshire's Franchise Area
(Yorkshire's service area as determined by its PES
license) whose annual consumption is under 12,000
kWh. Consequently, accruals to reduce operating
revenues to the regulated amount which were made in
the first six months of Fiscal Year 1998 were not
required in the first six months of Fiscal Year
1999.
The changes in revenues noted above, in
addition to reduced purchase costs for electricity
and gas, caused gross margin to increase.
The reduction in maintenance expense is due to
delays in maintenance work and an increased
emphasis on capital work during the first half of
Fiscal Year 1999.
The increase in selling, general and
administrative costs is due primarily to costs
incurred in relation to year 2000 modifications and
expenditures in relation to the opening up of the
competitive market in the supply business. These
increases were partially offset by a change in
respect of identifying the element of costs to be
capitalized within the distribution network,
reducing operating expenses by (POUND)7 million.
Management have further written down the
investment in Ionica to their estimate of fair
value by charging an unrealized loss of (POUND)5 million
before taxes in the second quarter of Fiscal Year
1999. This is in addition to the (POUND)41 million
charged in the Fiscal Year 1998 and the (POUND)6 million
charged in the first quarter of Fiscal Year 1999,
bringing the remaining book value down to (POUND)3
million. 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
providers of bank finance and had been advised to
obtain further equity investment prior to seeking
further bank funding. On October 29, 1998 Ionica
appointed administrators as they had been unable to
obtain further equity investment. Management is
currently assessing the recoverability of the
remaining investment.
The increase in interest expense arises from
the debt in connection with Yorkshire Group's
acquisition of Yorkshire Electricity Group plc
being drawn down in installments during the first
quarter of Fiscal Year 1998 and higher interest
rates.
The first quarter of Fiscal Year 1999 was
favorably affected by a (POUND)12 million settlement
related to earlier years' tax liabilities.
In the second quarter of Fiscal Year 1998, the
UK rate of corporation tax on income was reduced
from 33% to 31%, resulting in a tax release of (POUND)12
million. In the second quarter of Fiscal Year
1999, a further reduction in the rate of
corporation tax on income, from 31% to 30%, was
enacted by the UK government. The impact of this
reduction was approximately (POUND)6 million.
The effective income tax rate decreased from
(5)% in the first six months of Fiscal Year 1998 to
(45)% in the first six months of Fiscal Year 1999.
The effective income tax rate in both quarters has
been increased by the amortization of goodwill,
which is not deductible for UK income tax purposes.
On July 2, 1997 the UK government enacted a
"windfall tax" to be applied at that date to
companies privatized by flotation and regulated by
relevant privatization statutes. The windfall tax
is not deductible for UK income tax purposes and
was recorded as an extraordinary charge in Fiscal
Year 1998. The final installment of the windfall
tax, which amounts to (POUND)67 million is due for
payment in December 1998.
Financial Condition
During the first quarter of Fiscal Year 1999
Yorkshire Capital Trust I, a statutory business
trust wholly owned by Yorkshire Power Group
Limited, issued 11,000,000 shares of 8.08% Trust
Securities at the liquidation amount of $25 per
Trust Security. The proceeds of $275,000,000 were
invested in an equivalent amount of 8.08% Junior
Subordinated Deferrable Interest Debentures, Series
A due June 30, 2038 issued by Yorkshire Finance.
Yorkshire Finance in turn loaned the net proceeds
to Yorkshire Power Group Limited, which repaid
short term debt.
Yorkshire Group's credit facility with Union
Bank of Switzerland (the "1997 Credit Facility")
matured on July 30, 1998 and has been refinanced by
a (POUND)550 million syndicated credit facility. This
credit facility consists of four tranches which
are: Tranche A a (POUND)150 million 364 day revolving
credit with a one-year extension option; Tranche B
a (POUND)130 million 5 year term loan; Tranche C a (POUND)50
million 5 year revolving credit facility and
Tranche D a (POUND)220 million 5 year revolving credit
facility. Tranches A and B have been drawn down to
repay the 1997 Credit Facility and Tranches C and D
have replaced existing committed bank facilities.
Year 2000 Problem
A potentially world-wide problem has arisen
with computer programs and micro-processing chips
due to the method used to represent the year part
of a date. This may lead systems and equipment to
wrongly interpret dates falling after December 31,
1999. In addition, certain systems may fail to
detect that the year 2000 is a leap year.
Company State of Readiness:
The company has established a program which
addresses both computer hardware and software e.g.
mainframe, servers and applications, and embedded
chips e.g. in the electricity distribution network
, which are being tested, and repaired or replaced
as necessary.
Work has been prioritized in accordance with
business risk. The highest priority has been given
to those activities which potentially impact on
safety and/or continuity of electricity supply to
customers.
The problem is also being addressed with third
parties that the Company has material relationships
with, chiefly suppliers, customers and government
organizations and regulators. Assurances are being
sought from key suppliers regarding their state of
Year 2000 readiness.
The company is actively involved in national
forums with other members of the electricity
industry and other utilities such as gas,
telecommunications and water to share good practice
and to provide consolidated information to the UK
Department of Trade and Industry and to the UK
Electricity Industry Regulator regarding progress.
Progress on readiness of critical systems is
shown below.
I T Systems Non-I T Systems
Year 2000 Program Completion Completion
Phases Date/ Date/
Estimated Estimated
Completion Percentage Completion Percentage
Date Complete Date Complete
Program Initiation Phase
Mobilization of the October 30, 100% October 30, 100%
Program, including 1997 1997
establishing awareness,
structure and budgets and:
Performance of High Level
Business Impact Analysis
including establishing key
issues for each business
area.
Project Scoping Phase
Sizing the problems, March 31, 100% May 31, 100%
including gathering 1998 1998
detailed inventory
information and
additional risk analysis
and:
Determining costed
business solutions,
including examination of
options to achieve date
conformance in the time
required.
Project Delivery Phase
Management of the March 31, 50% June 1, 85%
implementation cycle and 1999 1999
delivery of the project.
Costs to Address the Company's Year 2000 Issue
The company has expended (POUND)5 million to
September 30, 1998 on the Year 2000 Program and
estimates spending an additional (POUND)15 million to
achieve Year 2000 readiness. Of this (POUND)20 million,
approximately (POUND)15 million will be expensed as
incurred and (POUND)5 million will be capitalized. The
company intends to fund these expenditures through
internal sources. Although significant , the cost
of becoming Year 2000 ready is not expected to have
a material impact on the Company's results of
operations, cash flows or financial condition.
Risks of the Company's Year 2000 Issues
The applications posing the greatest business
risk to the Company's operations should they
experience Year 2000 problems are the power
distribution systems, telecommunications systems,
energy trading systems and billing systems. The
potential problems related to erroneous processing
by, or failure of, these systems are power service
interruptions to customers, interrupted revenue
collection and poor customer relations.
As discussed the company is monitoring its
relationships with third parties, such as suppliers
(including the generators). However these third
parties nonetheless represent a risk that cannot be
assessed with precision or controlled with
certainty.
Due to the complexity of the problem and the
interdependent nature of systems, if the company's
corrective actions, and/or the actions of others
not affiliated with Yorkshire, fail for critical
applications, Year 2000 - related issues may
materially adversely affect Yorkshire.
Company's Contingency Plans
The company is currently developing contingency
plans to address possible Year 2000 failure of
equipment or critical suppliers. A risk based
approach has been adopted in the development of
contingency plans on a case-by-case basis and shall
be complete by the end of September 1999.
PART II. OTHER INFORMATION
Item 5. Other Information
On September 14, 1998 the domestic electricity
market opened up to competition in the UK. From
that date more than 750,000 customers in certain
geographic areas, including some customers supplied
by Yorkshire, were able to choose their electricity
supplier. Over the coming months choice will
spread to other customers so that all 24 million
homes and 2 million small firms across the country
will have that choice.
Yorkshire was one of only 4 PESs to meet the
scheduled target date for the opening of the
domestic market.
Recently proposed combinations involving (i)
Southern Electric plc and Scottish Hydro-Electric
plc and (ii) PowerGen plc and East Midlands
Electricity plc have raised a number of regulatory
and competitive issues in the UK electric utilities
industry. The consummation, or failure to
consummate, these combinations and the resolution
of the attendant regulatory and competitive issues
may change the conduct of Yorkshire's business in
the future. The nature and magnitude of any such
change cannot be determined at this time.
On September 24, 1998 the Secretary of State
for Trade and Industry announced the appointment of
Callum McCarthy as the next Director General of Gas
Supply from November 1, 1998 and Director General
of Electricity Supply from January 1, 1999.
Mr McCarthy will be appointed as the first Energy
Regulator for Great Britain subject to legislation
to amalgamate the regulatory regime for gas and
electricity. Both appointments will run until
October 31, 2003.
Reference is made to Form 10-Q for the quarter
ended June 30, 1998, Part II. Item 5. "Other
Information", for a review of the preliminary
conclusions and discussion relating to a UK
Government review of energy sources for power
generation. On October 8, 1998 the UK Government
issued the conclusions of this review in a White
Paper: "Conclusions on the Review of Energy Sources
for Power Generation and Government Response to
Fourth and Fifth Reports of the Trade and Industry
Committee".
The White Paper has been presented by the UK
Government as a radical program to reform
electricity trading arrangements, forming part of a
key government policy to ensure secure, diverse and
sustainable supplies of energy at competitive
prices.
The reform program comprises:
1. reform of the electricity trading
arrangements in England and Wales;
2. seeking opportunities for divestment by the
major coal-fired generators to ensure competition
in, and more intensive use of, coal-fired flexible
plant;
3. pressing forward with competition in
electricity supply for all customers;
4. a proper regulatory framework separating
distribution from supply activities;
5. resolving the technical issues about the
growth of gas;
6. continuing to press for open energy markets
in Europe.
On October 21, 1998 the UK Government published
a Consultation Paper in relation to modernizing the
framework for utility regulation entitled: "Public
Consultation Paper on the Future of Gas and
Electricity Regulation". This Consultation Paper
further describes the reform program identified
above. Comments on this consultation paper have
been requested by November 16, 1998.
Reference is made to Form 10-K Part I Item 1
"Affiliate Businesses and Other Investments -
Power Generation" and "Business Restructuring". In
1998 Yorkshire reached conditional agreement to
sell its 75% share and loan interests in RPG to
IVO. IVO is a subsidiary of Imatran Voima Oy, part
of Finland's energy group Forum. IVO already owned
25% of RPG. The transaction, which is part of
Yorkshire's larger strategy to reduce debt by
divesting generation assets, is expected to be
completed by December 30, 1998. RPG owns Brigg
power station, a 272-megawatt combined cycle, gas-
fired plant located in North Lincolnshire, England.
Yorkshire will continue to own 191.4 megawatts of
generating capacity after the sale of RPG and is in
the process of evaluating indicative offers for its
remaining generation assets.
LEGAL PROCEEDINGS
Reference is made to Form 10-K Part I "Legal
Proceedings". In case of the ongoing litigation
with respect to another corporation's use of
actuarial surpluses declared in the Electricity
Supply Pension Scheme, the court's decision in
favor of the corporation has been appealed. The
appeal hearing took place on October 26, 1998. The
matter remains pending.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 10.1 - Settlement Agreement for the
Electricity Industry in
Scotland, dated as of
August 14, 1998.
Exhibit 10.2 - Agreements for (POUND)550 million
Credit
Facility, each dated July 22,
1998, for
Yorkshire Power Group Limited,
among
Yorkshire Power Group Limited
and the
banks' names therein.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the
quarter ended September 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
YORKSHIRE POWER GROUP LIMITED
BY:
BY:/S/ Armando A. Pena
Armando A. Pena
Chief Financial Officer and Director
DATE BY: November 12, 1998
</TABLE>
Exhibit 10.1 - Settlement Agreement for the
Electricity Industry in Scotland, dated as of
August 14, 1998.
_______________________________________________
SETTLEMENT AGREEMENT
for the Electricity Industry in Scotland
_______________________________________________
(1) SCOTTISH ELECTRICITY
SETTLEMENTS LIMITED
(1) SCOTTISH HYDRO-ELECTRIC plc
(1) SCOTTISH POWER plc
(1) THE SUPPLIERS
named herein
and
(1) THE GENERATORS
named herein
Agreement
among
(1) SCOTTISH ELECTRICITY SETTLEMENTS LIMITED (registered
number SC169212) a company registered in Scotland having
its registered office at 8th Floor, Delta House, 50 West
Nile Street, Glasgow G1 2NQ ("Scottish Settlements");
(1) SCOTTISH HYDRO-ELECTRIC plc (registered number SC117119)
a company registered in Scotland having its registered
office at 10 Dunkeld Road, Perth PH1 5WA ("Scottish
Hydro-Electric");
(1) SCOTTISH POWER plc (registered number SC117120) a company
registered in Scotland having its registered office at 1
Atlantic Quay, Glasgow G2 8SP ("ScottishPower");
(1) THE PERSONS whose names, registered numbers and
registered or principal offices are set out in Schedule
4, Chapter 3 ("Founder Suppliers"); and
(1) THE PERSONS whose names, registered numbers and
registered or principal offices are set out in Schedule
4, Chapter 4 ("Founder Generators").
WHEREAS:-
(A) In conjunction and co-operation with each other, the
Scottish Companies are required to prepare a form of
agreement to be known as the "Settlement Agreement for
Scotland", pursuant to condition 24 of Part V of their
respective Licences;
(A) condition 24 of Part V of each of the Scottish Hydro-
Electric Licence and the ScottishPower Licence sets out
the requirements relating to the Settlement Agreement for
Scotland;
(A) this Agreement has been entered into in order to fulfil
the Licence obligations referred to in Recitals (A) and
(B);
(A) condition 12 of Part II of the Second Tier Supply Licence
granted to each of the Founder Suppliers obliges the
licensee to become a Party to and thereafter comply with
the provisions of this Agreement insofar as the same
shall apply to it in its capacity as a Private
Electricity Supplier;
(A) it is a condition of the Generation Licence granted to
each of the Founder Generators (other than the Scottish
Companies) to become a Party to and thereafter comply
with the provisions of this Agreement insofar as the same
shall apply to it in its capacity as a Generator Party;
(A) this Agreement sets out, inter alia, the rules and
procedures for the operation of a Central Allocation
System in respect of the Area and corresponding
Authorised Area of each Scottish Company with the intent
that this Agreement shall be and shall remain nominated
by the Director as fulfilling the objectives set out in
condition 24 of Part V of the Scottish Hydro-Electric
Licence and the ScottishPower Licence; and
(A) in relation to this Agreement each of the Secretary of
State and the Director enjoys the rights, powers and
authorities conferred upon him, inter alia, by the Act
and the Licences.
NOW IT IS HEREBY AGREED as set out on the following pages of
this Agreement.
Part I: Preliminary
1. Definitions and interpretation
1.1 Definitions: In this Agreement (including the Recitals
and the Schedules) except where the context otherwise
requires, words and phrases will have the meanings set
out in Schedule 1 (Definitions).
1.2 Interpretation: In this Agreement:-
1.2.1 references to the masculine shall include the
feminine and references in the singular shall
include references in the plural and vice versa;
1.2.2 references to the word "include" or "including"
are to be construed without limitation;
1.2.3 save as otherwise expressly provided references
to time are to local time;
1.2.4 except where the context otherwise requires,
references to a particular Recital, Part, Clause,
Schedule, Chapter, Section or Guideline shall be
a reference to that Recital, Part, Clause,
Schedule, Chapter, Section or Guideline in or to
this Agreement;
1.2.5 except where the context otherwise requires,
references in a Schedule to a particular Chapter,
Section, Annex or Appendix shall be a reference
to that Chapter, Section, Annex or Appendix in or
to that Schedule; and
1.2.6 the table of contents, the headings to each of
the Parts, Clauses, Schedules, Chapters,
Sections, Guidelines, Annexes and Appendices are
inserted for convenience only and shall be
ignored in construing this Agreement.
1.3 Construction of certain references: In this Agreement,
except where the context otherwise requires, any
reference to:-
1.3.1 an act of Parliament or any part or section or
other provision of or schedule to an act of
Parliament shall be construed at the particular
time as including a reference to any
modification, extension or re-enactment thereof
then in force and to all instruments, orders or
regulations then in force and made under or
deriving validity from the relevant act of
Parliament;
1.3.2 another agreement or any deed or other
instrument shall be construed as a reference to
that other agreement, deed or other instrument
as the same may have been or may from time to
time be amended, varied, supplemented or
novated;
1.3.3 for all purposes of this Agreement, no Party
shall be an affiliate or a related undertaking
of any other Party only by reason of all or any
of the share capital of any such Party being
owned directly or indirectly by the Secretary of
State.
1.4 Hierarchy in this Agreement: Save as expressly provided,
Parts I to X of this Agreement shall have precedence over
the Schedules.
1.4.1 In this Agreement in the event of an
inconsistency the following order of precedence
shall apply:-
1.4.1.1 as between Schedule 9 (Transitional
Arrangements) and the other
provisions of this Agreement,
Schedule 9 shall prevail during the
Transition Period;
1.4.1.2 as between the Rules and the other
provisions of this Agreement the
Rules shall prevail (subject always
to Clause 1.4.1.6);
1.4.1.3 as between the other provisions of
this Agreement and the Market
Procedures, Service Requirements or
Metering Codes of Practice the other
provisions of this Agreement shall
prevail;
1.4.1.4 as between the Service Requirements
and the Market Procedures and
Metering Codes of Practice the
Service Requirements shall prevail;
1.4.1.5 as between Schedule 3 (Non
Qualifying Parties) and the
Guidelines, Schedule 3 shall
prevail; and
1.4.1.6 as between any other provisions of
this Agreement (other than Schedule
3) the Guildelines shall prevail.
1.5 External inconsistencies: No Party shall be deemed to be
in breach of this Agreement to the extent that any of the
provisions of this Agreement cannot be carried out
because of any conflicting obligation imposed upon that
Party under any Licence granted to that Party under the
Act.
1.6 Conflict with the MRA: 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 and the Master
Registration Agreement but recognises that it will not in
all circumstances be possible to avoid inconsistency or
conflict and in the event of any such inconsistency or
conflict Clause 1.7 will apply.
1.7 Priorities: Notwithstanding Clause 1.5 if at any time
there is a conflict between the MRA Priority Provisions
(as interpreted in the context of the Master Registration
Agreement) and any similar provisions of this Agreement
(as defined in and interpreted in the context of this
Agreement) the Parties agree that:-
1.7.1 if and for so long as a Party complies with the
MRA Priority Provisions under the Master
Registration Agreement it will not be in breach
of its obligations under this Agreement in
respect of those provisions of this Agreement
which are in conflict with the MRA Priority
Provisions; and
1.7.2 until such time as such conflict is resolved
through the procedures set out in Clause 9 of
the Master Registration Agreement and the
applicable procedures under this Agreement, the
MRA Priority Provisions shall prevail over those
provisions of this Agreement which are in
conflict with the MRA Priority Provisions
provided that nothing in this Clause 1.7 or
Clause 9.2 of the Master Registration Agreement
shall prejudice the form or content of any
proposed change to resolve the conflict.
2. Term
2.1 Term: This Agreement shall have effect from the 14
August 1998 ("Signing Date") and shall continue
thereafter unless and until terminated in accordance with
its terms.
20
Shepherd & Wedderburn WS
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ET
155 St Vincent Street
Glasgow
G2 5NR
Tel: 0131-228 9900
Fax: 0131-228 1222
Tel: 0141-566 9900
Fax: 0141-565 1222
? Scottish Electricity Settlements Limited
7
Settlement Agreement for Scotland 14 August 1998
Settlement Agreement for Scotland 14 August 1998
Part II: Objects and Nature of Obligations
1. Objects and purpose of this Agreement
1.1 Objects and purpose: The objects and purpose of this
Agreement are:-
1.1.1 to enable Private Electricity Suppliers to have
their volumetric purchases of electricity from
Generator Parties and from parties to the
Pooling and Settlement Agreement correctly
allocated to them;
1.1.2 to enable Private Electricity Suppliers and
Generator Parties other than the Scottish
Companies to have their volumetric residual
electricity requirements and provisions
correctly allocated to them;
1.1.3 to enable Public Electricity Suppliers and
Private Electricity Suppliers to have their
volumetric supplies of electricity to customers
correctly allocated to them;
1.1.4 to facilitate the calculation of accurate
information regarding the aggregate amount of
electricity provided to each Scottish Company by
itself in its capacity as a Generator Party; and
1.1.5 to provide for such other matters ancillary to
those specified in Clauses 3.1.1 to 3.1.4 as are
or may be appropriate to facilitate competition
in electricity supply in Scotland.
1.2 Interpretation: In the construction and interpretation
of this Agreement due regard shall be had to the
principal objects and purpose set out in Clause 3.1.
1.3 Exercise of rights: In exercising its rights under this
Agreement each Party shall exercise and enforce such
rights and perform its obligations in good faith having
due regard to the principal objects and purpose set out
in Clause 3.1.
2. Nature of obligations
2.1 Obligations contractually binding: Each Party
acknowledges and agrees that it is bound to each other
Party as a matter of contract and will comply with its
obligations under this Agreement and under any agreement
entered into pursuant to this Agreement (whether by or on
behalf of any Party). For the avoidance of doubt, the
following agreements are not agreements entered into
pursuant to this Agreement:-
2.1.1 a bilateral agreement for the sale and purchase
of electricity;
2.1.2 a Connection Agreement; and
2.1.3 a Use of System Agreement.
2.2 Parties' obligations: Save as otherwise expressly
provided in this Agreement no Party shall be responsible
for the obligations or liabilities of any other Party.
The failure of any Party to carry out all or any of its
obligations under this Agreement shall not relieve any
other Party of all or any of its obligations hereunder.
3. Transitional arrangements
3.1 Transitional arrangements: The Parties shall comply with
the provisions of Schedule 9 (Transitional Arrangements).
3.2 Commencement of trading: The Effective Trading Date for
each Authorised Area shall be the earliest date specified
(and not subsequently withdrawn or varied to a later
date) in any direction or variation issued by the
Director pursuant to Condition 3 of the Licence held by
any Second Tier Supplier in relation to the supply of
electricity to any premises within that Authorised Area.
1
10
Settlement Agreement for Scotland 14 August 1998
Part III: Admission, Resignation and Removal of Parties other
than Scottish Settlements
1. Additional Parties
1.1 General: Subject to the following provisions of this
Clause 6, the Parties shall admit as an additional party
to this Agreement any person who applies to be admitted
in the capacity or capacities requested by the Applicant
(the "New Party") or any Party who applies to be re-
admitted in a changed capacity.
1.2 Admission Application: An Applicant pursuant to Clause
6.1 shall complete an Admission Application and shall
deliver it to Scottish Settlements together with the
appropriate Standard Charge (which shall be non-
refundable) and other documents (if any) specified in the
Admission Application.
1.3 Admission Conditions:
1.3.1 The Admission Conditions required to be
fulfilled by an Applicant prior to it being
admitted as a Supplier are:-
1.3.1.1 the due completion and the delivery
to Scottish Settlements of an
Admission Application in the form
set out in Schedule 4, Chapter 5;
and
1.3.1.2 either:-
(i) it holding (and not having
received any notice of
intention to revoke from the
Director) or having made an
application for a Second Tier
Supply Licence and that
application not having been
rejected; or
(ii) it being exempt from the
requirement to hold a Second
Tier Supply Licence; and
1.3.1.3 the execution of any other agreement
and document or the doing of such
further acts as may be required
under Clause 6.5.
1.3.2 The Admission Conditions required to be
fulfilled by an Applicant prior to it being
admitted as a Generator Party are:-
1.3.2.1 the due completion and the delivery
to Scottish Settlements of an
Admission Application in the form
set out in Schedule 4, Chapter 6;
and
1.3.2.2 either:-
(i) it holding (and not having
received any notice of
intention to revoke from the
Director) or having made an
application for a Generation
Licence and that application
not having been rejected; or
(ii) it being exempt from the
requirement to hold a
Generation Licence; or
(iii) it holding (and not having
received any notice of
intention to revoke from the
Director) or having made an
application for a Second Tier
Supply Licence and that
application not having been
rejected; or
(iv) it being exempt from the
requirement to hold a Second
Tier Supply Licence; and
1.3.2.3 in respect of each Registrable
Generation Site (other than
Registrable Generation Sites
registered to the Host Company)
which, at the time of its admission
in accordance with this Part, will
require to be registered in respect
of that Applicant in a Generation
Registration Service before it can
begin marketing the output from that
Registrable Generation Site under
this Agreement either:-
(i) it having entered into or
procured that the relevant Non
Trading Generator has entered
into Connection Agreement(s)
with the appropriate Scottish
Company or Companies; or
(ii) it having provided documentary
evidence from the relevant
parties that bona fide
negotiations to enter into
such Connection Agreement(s)
have been undertaken and
specified matters remain to be
resolved; and
where appropriate either:-
(iii) it having entered into or
procured that the relevant Non
Trading Generators have
entered into Use of System
Agreement(s) with the
appropriate Scottish Company
or Companies; or
(iv) it having provided documentary
evidence from the relevant
Parties that bona fide
negotiations to enter into
such Use of System
Agreement(s) have been
undertaken and specified
matters remain to be resolved;
and
1.3.2.4 execution of any other agreement and
document or the doing of such
further acts as may be required
under Clause 6.5.
1.3.3 The Admission Conditions required to be
fulfilled by an Applicant prior to being admitted
as a Non Trading Generator are:-
1.3.3.1 the due completion and the delivery
to Scottish Settlements of an
Admission Application in the form
set out in Schedule 4 Chapter 6A;
1.3.3.2 it holding (and not having received
any notice of intention to revoke
from the Director) or being exempt
from the requirement to hold a
Generation Licence; and
1.3.3.3 the execution of any other agreement
and document or the doing of such
further acts as may be required
under Clause 6.5.
1.4 Scottish Settlements response to Admission Application:
1.4.1 Within seven (7) days of receipt by Scottish
Settlements of any Admission Application it shall
notify (for information only) the Director of
such receipt.
1.4.2 Within thirty (30) days of receipt by Scottish
Settlements of a completed Admission Application
in accordance with Clause 6.2 from an Applicant,
Scottish Settlements shall notify the Applicant
and the Director either:-
1.4.2.1 that the Applicant shall be admitted
as a Party to this Agreement (either
as a New Party or accepted in its
changed or additional capacity in
accordance with Clause 6.8); or
1.4.2.2 that the Applicant has not fulfilled
the relevant Admission Conditions
(and such notification shall specify
which of the Admission Conditions
have not been fulfilled), in which
case the Applicant's Admission
Application shall lapse (but without
prejudice to any new Admission
Application it may make thereafter).
1.4.3 If Scottish Settlements shall fail to notify the
Applicant and the Director in accordance with
Clause 6.4.2 the Applicant may within twenty
eight (28) days after the expiry of the said
period refer the matter to the Director.
1.4.4 In the event that the Applicant is not satisfied
with the notification referred to in Clause 6.4.2
above, the Applicant may ask Scottish Settlements
for a further explanation. If, in the opinion of
the Applicant, a satisfactory response is not
received within ten (10) Working Days, the
Applicant may refer the matter to the Director
for resolution and Scottish Settlements will
comply with any such resolution made by the
Director.
1.4.5 Within fourteen (14) days after the issue of a
notification in terms of Clause 6.4.2.1 Scottish
Settlements shall (subject as hereinafter
provided):-
1.4.5.1 prepare or cause to be prepared an
Accession Agreement and shall have
signed the Accession Agreement on
behalf of all Parties and have it
delivered to the Applicant. The
Applicant shall also execute and
deliver the Accession Agreement to
Scottish Settlements within fourteen
(14) days of receipt of the same and
the Applicant (other than any
Applicant to be admitted as a Non
Trading Generator) shall become a
Party for all purposes of this
Agreement with effect from the date
specified in such Accession
Agreement;
1.4.5.2 where there is to be a change of
capacity (in accordance with Clause
6.8) prepare or cause to be prepared
within the timescales specified in
this Clause a notice accepting the
change of capacity in respect of an
Applicant specifying the date from
which the changed capacity shall be
recognised and in the case of a Non
Trading Generator the date on which
it shall become a Party for all
purposes of this Agreement;
in each case Scottish Settlements shall promptly
notify all Parties and the Director of the
execution and delivery of each Accession
Agreement or notice of acceptance of change of
capacity. Where the Applicant is to be admitted
as a Non Trading Generator the Applicant shall
become a party to this Agreement with effect
from the date specified in the Accession
Agreement but only the provisions of Clause 6.9
shall apply to such Non Trading Generator.
1.4.6 Each Party and Non Trading Generator hereby
authorises and instructs Scottish Settlements
and each person authorised for the purpose by
Scottish Settlements to sign on its behalf
Accession Agreements or issue a notice of
changed or additional capacity and undertakes
not to withdraw, qualify or revoke such
authority and instruction at any time.
1.5 Additional agreements: Upon and as a condition of
admission as a Party, an Applicant shall from time to
time execute and deliver such agreements and such further
agreements and documents and shall do all such other
acts, matters and things as Scottish Settlements, with
the consent of the Director, may reasonably require.
1.6 Application fees: All fees received by Scottish
Settlements in respect of any application by an Applicant
to become a Party shall be used to defray the costs and
expenses of Scottish Settlements. The application fee
shall be specified as a Standard Charge.
1.7 Compliance: Each Party and each Non Trading Generator
shall procure that for so long as it is a Party (or a Non
Trading Generator) it shall at all times satisfy or
otherwise comply with the Admission Conditions and
undertakings set out in its Admission Application (or in
the case of a Founder Signatory set out in its letter of
undertaking to Scottish Settlements) applicable to it
(and/or such further or other conditions as Scottish
Settlements may from time to time reasonably specify
under Clause 6.5) and upon request from time to time
shall promptly provide such evidence as Scottish
Settlements may reasonably require of such satisfaction
and compliance.
1.8 Additional capacity: Any Party may, upon application to
Scottish Settlements and satisfaction of the relevant
Admission Conditions specified in Clause 6.3 and such
conditions as Scottish Settlements may reasonably
require, change or add to the capacity(ies) in which it
participates as a Party. Any Non Trading Generator who
wishes to apply to participate in the capacity of a
Generator Party shall comply with the provisions of
Clause 6.9 below.
1.9 Conditions applying to Non Trading Generators:
1.9.1 Save as expressly otherwise provided in this
Clause 6.9, a Non Trading Generator shall not be
entitled to any of the rights and benefits and
shall not be subject to any of the obligations of
this Agreement.
1.9.2 Each Non Trading Generator shall have the right
to attend at each general meeting of SEF Members
and shall have the right to speak (but not to
vote thereat) and, accordingly each Non Trading
Generator shall be a Recognised Organisation.
1.9.3 Each Non Trading Generator shall be bound by the
provisions of Clause 125 (Confidentiality) and
Clause 126 (Release of information) as if it were
a full Party to this Agreement.
1.9.4 Where a Non Trading Generator wishes to become a
Party to this Agreement for all purposes such Non
Trading Generator shall only be entitled to do so
on admission in the capacity of a Generator Party
and in accordance with the remaining provisions
of this Clause 6.9.
1.9.5 The Admission Conditions required to be
fulfilled by a Non Trading Generator prior to
being admitted in the changed capacity of a
Generator Party are:-
1.9.5.1 the due completion and the delivery
to Scottish Settlements of an
Admission Application in the form
set out in Schedule 4, Chapter 6B;
and
1.9.5.2 it continuing to hold (and not
having received any notice of
intention to revoke from the
Director) a Generation Licence; and
1.9.5.3 in respect of each Registrable
Generation Site which, at the time
of its change of capacity in
accordance with this Part will
require to be registered in respect
of that Applicant in a Generation
Registration Service before it can
begin marketing the output from that
Registrable Generation Site under
this Agreement either:-
(i) it having entered into or
procured that any other
relevant Non Trading Generator
has entered into Connection
Agreement(s) with the
appropriate Scottish Company
or Companies; or
(ii) it having provided documentary
evidence from the relevant
parties that bona fide
negotiations to enter into
such Connection Agreement(s)
have been undertaken and
specified matters remain to be
resolved; and
where appropriate either:-
(iii) it having entered into or
procured that any other
relevant Non Trading Generator
has entered into Use of System
Agreement(s) with the
appropriate Scottish Company
or Companies; or
(iv) it having provided documentary
evidence from the relevant
Parties that bona fide
negotiations to enter into
such Use of System
Agreement(s) have been
undertaken and specified
matters remain to be resolved;
and
1.9.5.4 the execution of any other agreement
and document or the doing of such
further acts as may be required
under Clause 6.5.
1.9.6 On receipt of any Admission Application pursuant
to this Clause 6.9, the provisions of Clause 6.4
shall have effect and, with effect from the date
specified in the relevant notice of change of
capacity issued in accordance with Clause 6.4.5,
the Non Trading Generator shall cease to be a Non
Trading Generator for the purposes of this
Agreement and shall become a Party for all
purposes of this Agreement.
2. Resignation and release of Parties or Non Trading
Generators
2.1 Resignation: Subject as provided in Clause 7.3:-
2.1.1 a Party (other than Scottish Settlements) or a
Non Trading Generator shall be entitled at any
time to resign as a Party (or Non Trading
Generator) by delivering a Resignation Notice to
Scottish Settlements; and
2.1.2 such resignation shall take effect from the date
specified in the Resignation Notice which in any
event shall be no earlier than twenty eight (28)
days after receipt of the Resignation Notice by
Scottish Settlements. In the event that no date
is specified in the Resignation Notice such
resignation shall take effect twenty eight (28)
days after receipt of the Resignation Notice by
Scottish Settlements.
2.2 Restrictions on resignation: A Party (or Non Trading
Generator) may not resign (and any Resignation Notice
delivered pursuant to Clause 7.1.1 shall lapse and be of
no effect) unless:-
2.2.1 as at the date its resignation would otherwise
become effective in terms of Clause 7.1.2, all
sums due under this Agreement (excluding for the
avoidance of doubt sums due under any bilateral
contracts for the sale or supply of electricity)
from such Party to Scottish Settlements or any
other Party and notified for the purposes of
Clause 7.3 by Scottish Settlements to such Party
prior to that date have been paid in full; and
2.2.2 it would not be a breach of any Licence
condition applicable to such Party (or Non
Trading Generator) so to resign; and
2.2.3 such other notice has been given as required
under this Agreement.
2.3 Notification: Promptly after receipt by Scottish
Settlements of a duly completed Resignation Notice from a
Party (or Non Trading Generator), if Scottish Settlements
is aware that:-
2.3.1 the Party (or Non Trading Generator) may not
resign in terms of Clause 7.2 then Scottish
Settlements shall notify that Party or Non
Trading Generator that it may not resign; and
2.3.2 the Party (or Non Trading Generator) may resign,
then Scottish Settlements shall notify (for
information only) all of the other Parties, Non
Trading Generators and the Director of receipt of
the completed Resignation Notice and the name of
such Party (or Non-trading Generator) wishing to
resign.
2.4 Release as a Party (or Non-trading Generator): Without
prejudice to Clauses 127 (Default by Parties other than
Scottish Settlements) and 128 (Termination) and its
accrued rights and liabilities under this Agreement upon
a Party's (or Non Trading Generator's) resignation
becoming effective in accordance with Clause 7.1:-
2.4.1 such Party (or Non Trading Generator) shall be
automatically released and discharged from all
its obligations and liabilities under this
Agreement; and
2.4.2 each of the other Parties shall be automatically
released and discharged from its obligations and
liabilities to such Party (or Non Trading
Generator) under this Agreement, for the
avoidance of doubt any Dispute which relates to
an accrued right or liability can be raised via
the Disputes Process by a former Party or Non
Trading Generator after release as a Party or Non
Trading Generator.
64
24
Settlement Agreement for Scotland 14 August 1998
Part IV: Role and Function of Scottish Settlements
1. Powers and Responsibilities of Scottish Settlements
1.1 General power: Scottish Settlements shall, as between
itself and the other Parties, exercise overall supervision
of the Central Allocation System and its operations as
specified in this Agreement. In fulfilling its duties as
operator of the Central Allocation System, Scottish
Settlements shall act impartially and show no undue
preference to any Party or Parties.
1.2 Specific powers and responsibilities: Subject as otherwise
provided in this Agreement, the powers and responsibilities
of Scottish Settlements shall include (without
limitation):-
1.2.1 the specific powers, duties and responsibilities
set out in Part IX (Governance of this Agreement);
1.2.2 the power to appoint and remove Agents and/or an
Operating Agent to carry out the functions
specified for Scottish Settlements under this
Agreement including Supply Allocation, Generation
Allocation, Profiling Services, Market Domain Data
Services and the System Support Help Desk;
1.2.3 monitoring on a regular basis the performance of
its Agents as may be provided in any agreements
entered into in terms of Clause 8.2.2;
1.2.4 administration of applications by New Parties to
be admitted as parties to this Agreement in
accordance with Clause 6 (Additional Parties);
1.2.5 appointing and removing the Market Auditor, and
instructing the Market Auditor to conduct audits,
reviews, tests and checks and the monitoring and
review thereof, all in accordance with Schedule 6
(Role of the Market Auditor);
1.2.6 recovery of costs as set out in this Agreement;
1.2.7 securing and retaining ownership and/or licences
of relevant intellectual property rights regarding
the operation of the Central Allocation System and
any other activity pursuant to this Agreement;
1.2.8 carrying out or procuring the carrying out of its
obligations relating to metering as set out in
Schedule 5 (Metering) and elsewhere in this
Agreement in consultation with the PAAP;
1.2.9 being a party to and participating in the User
Group established pursuant to the DTSA;
1.2.10 being a party to the Master Registration Agreement
and participating in the MEC and MRA Forum
established pursuant to that Agreement, to the
extent permitted therein;
1.2.11 considering the impact upon the Central Allocation
System of any proposed changes to the MRA Priority
Provisions and providing such information to the
relevant forum under the Master Registration
Agreement; and
1.2.12 performing, or procuring the performance of, the
functions of Entry Process co-ordination in terms
of Market Procedure MP-204, MP-511, MP-512 and MP-
513.
1.3 Central Allocation System Operation: Scottish Settlements
shall or shall procure that its Agent shall in overseeing
the operation of the Central Allocation System have
operational duties as specified in this Agreement including
the:
1.3.1 capture, input, review and Validation of data in
accordance with Schedule 2 (Rules), and the
relevant Market Procedure(s);
1.3.2 provision of estimated information and provisional
determinations where data required for Initial
Runs and Reconciliation Runs is not available or
is the subject of a Dispute in accordance with
Part IX (Governance of this Agreement);
1.3.3 provision of information to the Parties, subject
to the provisions of Clause 125(Confidentiality),
in accordance with the relevant Rules and Market
Procedure(s) to enable bilateral settlement;
1.3.4 maintenance of records as required by this
Agreement and the Market Auditor; and
1.3.5 provision of market level data (as agreed from
time to time between Scottish Settlements and the
Director).
1.4 Review of Central Allocation System and Modification
Management: Scottish Settlements is required to:
1.4.1 make Modification Proposals in terms of Part IX
if, in the opinion of Scottish Settlements, so
doing will promote the objectives of this
Agreement;
1.4.2 accept, evaluate and, where necessary, act upon
any notification which alleges any defect in the
Central Allocation System, procedures or
arrangements. In response to any such
notification, Scottish Settlements will be obliged
to take such steps as may be reasonably necessary
to ensure that the Central Allocation System
complies with the rules and procedures as set out
or referred to in this Agreement, and to advise
Parties in writing (where practical in advance) of
any such steps taken. Where practical, Scottish
Settlements shall permit Parties to comment on any
such proposed steps;
1.4.3 manage changes to this Agreement and the Central
Allocation System in accordance with Part IX; and
1.4.4 use its reasonable endeavours to ensure that
implementation of any changes to the Central
Allocation System are carried out in a co-
ordinated manner.
1.5 Administrative/Secretarial Function: Scottish Settlements
is required to:
1.5.1 provide or procure the provision of secretarial
and chairmanship services of all committees
established under this Agreement including the
Panels; and
1.5.2 ensure that the business of the committees
referred to in 8.5.1 above is carried out in
conformity with this Agreement.
1.6 Reporting: Scottish Settlements shall report annually to
the SEF on the operation of the Central Allocation System.
Such report (the "Annual Report") will include (without
limitation):
1.6.1 a report issued by the Modification Panel on the
business of the Modification Panel in the previous
Relevant Year to include details of all
outstanding and pending work of that Panel and on
the progress of any reference to Scottish
Settlements or any Review Work Group;
1.6.2 a report issued by the Disputes Panel on the
business of the Disputes Panel in the previous
Relevant Year to include details of all
outstanding and pending work of that Panel and any
matters of precedent arising from the work of that
Panel;
1.6.3 a report issued by the PAAP on the business of the
PAAP in the previous Relevant Year to include
details of all outstanding and pending work of
that Panel;
1.6.4 a report issued by the FAP in terms of Clause 123
(Reports);
1.6.5 a report issued by any other committees that may
be constituted from time to time by modifications
to this Agreement; and
1.6.6 a copy of the last audited accounts of Scottish
Settlements.
Where sections of reports prepared in terms of this Clause
require to be issued by a Panel, or committee in terms of
Clause 8.6.5, and such approval of the section is either
not obtained or not reached by unanimous resolution of such
Panel, or such committee, the views of the dissenting Panel
Members, or the dissenting members of such committee, shall
also be reflected in the report. In the event that the
Panel, or such committee fails to agree on the contents of
the report, the reports shall reflect the views expressed
by all the Panel Members or committee members.
1.7 Operating Agent Responsibilities: Scottish Settlements
shall be responsible for every act, breach, omission,
neglect and failure of the Operating Agent. Where any
right is stated in this Agreement to be exercisable by the
Operating Agent, it shall also be capable of exercise by
Scottish Settlements.
1.8 Market Domain Data Service: Scottish Settlements shall
procure the provision of the Market Domain Data Service by
the Market Domain Data Agent with effect from the first
Effective Trading Date.
1.9 Market Domain Data: Scottish Settlements shall:-
1.9.1 where any Market Participant requests a change
to Market Domain Data, which does not require
any change to the services to be provided by the
Market Domain Data Agent, or any Modification to
this Agreement, use its reasonable endeavours to
the extent permitted by any contract entered or
to be entered into with the Market Domain Data
Agent to co-ordinate the implementation of such
change with the Market Domain Data Agent;
1.9.2 where any Market Participant requests a change
to Market Domain Data, which requires any change
to the services to be provided by the Market
Domain Data Agent or any Modification to this
Agreement:-
1.9.2.1 use its reasonable endeavours to the
extent permitted by any contract
entered or to be entered into with
the Market Domain Data Agent to co-
ordinate the implementation of such
change with the Market Domain Data
Agent; and
1.9.2.2 raise a Review Proposal in respect
of the proposed change, and, if it
considers it appropriate following
consideration of the Review
Proposal, raise a Modification
Proposal in respect of the proposed
change.
1.10 Master Registration Agreement: Where a Party which is not
a party to the Master Registration Agreement wishes to make
any appeal pursuant to the Master Registration Agreement,
that Party may request Scottish Settlements on behalf of
and at the cost of that Party, where Scottish Settlements
has power to do so in terms of the Master Registration
Agreement, to lodge the appeal in terms of the Master
Registration Agreement. Scottish Settlements shall, where
it has received notice from the relevant Party with
sufficient time for it to meet the timescales for lodging
an appeal pursuant to the Master Registration Agreement,
lodge any such appeal in its capacity as a party to the
Master Registration Agreement, save where Scottish
Settlements, in its sole opinion, acting reasonably, deems
the request to be frivolous or vexatious or not in
accordance with the objects of this Agreement. In any
appeal so lodged Scottish Settlements may at its sole
discretion choose to be represented by the Party or Parties
making the request pursuant to this Clause 8.10.
1.11 Budget: Scottish Settlements shall prepare an annual
budget to be provided to the FAP for consultation in
accordance with Part IX prior to being sent to the Director
for approval and shall determine the Audit Plan for the
Market Auditor which is to be sent to the FAP for
consultation in accordance with Part IX.
1.12 Determinations: In the event that Scottish Settlements is
required in terms of this Agreement to determine values for
data items used in the Allocation process, to clarify the
nature or extent of a Party's obligations under this
Agreement or to calculate an amount referred to in Schedule
8 (Liquidated Damages and Performance Levels), Scottish
Settlements shall maintain a record of such determination,
decision or calculation for such period as is appropriate
in the circumstances of each case and shall make such
record available to any Party on request therefor.
2. Termination of the Appointment of Scottish Settlements
2.1 Termination: The appointment of Scottish Settlements by
Scottish Hydro-Electric and ScottishPower may be terminated
either by the resignation of Scottish Settlements in
accordance with Clause 10 (Resignation by Scottish
Settlements) or by the removal of Scottish Settlements in
accordance with Clauses 11 (Removal of Scottish Settlements
by Consent) and/or 12 (Removal of Scottish Settlements).
2.2 Provisions: he Parties agree and acknowledge that it is
their intention to follow the provisions set out in this
Agreement for the removal and replacement of Scottish
Settlements. However, the Parties agree and acknowledge
that the provisions set out in this Agreement for the
removal and replacement of Scottish Settlements may be
subject to variation if:
2.2.1 the Director directs that the provisions are to be
varied; or
2.2.2 all the Parties and the Director agree.
3. Resignation by Scottish Settlements
3.1 Resignation procedure: After consultation between Scottish
Settlements and the other Parties, and the Director having
given his prior written consent, Scottish Settlements may
give three (3) months' notice in writing (the "Scottish
Settlements Resignation Notice") to the other Parties and
the Director of its intention to resign on a specified
date. The Scottish Settlements Resignation Notice shall
include reasons for such resignation. The appointment of
Scottish Settlements shall terminate on the date specified
in the Scottish Settlements Resignation Notice provided
that a successor to Scottish Settlements has been appointed
in accordance with Clause 13 (Appointment of successor to
Scottish Settlements) failing which the appointment of
Scottish Settlements shall not terminate until the date
such successor is appointed.
4. Removal of Scottish Settlements by consent
4.1 Removal procedure: Scottish Settlements may be removed at
any time where:-
4.1.1 Scottish Hydro-Electric and ScottishPower after
consultation with and providing reasons to the
Parties, request the Director's consent so to do;
and
4.1.2 the Director has given his prior written consent.
4.2 Removal: In the event that Scottish Settlements is removed
in terms of Clause 11.1, such removal shall take effect on
the date to which the Director has given his consent.
5. Removal of Scottish Settlements
5.1 Breach of obligations capable of remedy: If Scottish
Settlements fails in any material respect to perform or
comply with any of the obligations expressed to be assumed
by it under this Agreement and such failure is capable of
remedy, all the other Parties acting collectively and
unanimously shall have the right to give notice in writing
(the "Remediable Removal Notice") to Scottish Settlements
giving details of the relevant failure and requiring that:-
5.1.1 such failure be remedied within thirty (30) days
(or such longer period as may be necessary but in
any event within ninety (90) days or any longer
period as may be reasonable and agreed between
Scottish Settlements and the other Parties) from
the date of receipt by Scottish Settlements of the
Remediable Removal Notice; or
5.1.2 in the event that a longer period is agreed in
terms of Clause 12.1.1, that within thirty (30)
days from the said date of receipt Scottish
Settlements agree a timetable with the Parties for
the remedy of such failure (such agreement not to
be unreasonably withheld).
5.2 Breach of obligations incapable of remedy or failure to
remedy: If Scottish Settlements fails in any material
respect to perform or comply with any of the obligations
expressed to be assumed by it under this Agreement and such
failure is incapable of remedy or if Scottish Settlements
shall have failed to comply with any requirement of a
Remediable Removal Notice within the time specified in
such Notice or within any timetable agreed between the
Parties in accordance with Clause 12.1 above, all the
other Parties acting collectively and unanimously shall
have the right to give notice in writing (in this Clause 12
the "Irremediable Removal Notice") to Scottish Settlements
giving details of the relevant failure and stating that
Scottish Settlements is in breach of the terms of this
Agreement and such breach is either incapable of remedy or
remains unremedied after the time specified or agreed for
remedy.
5.3 Insolvency: If Scottish Settlements:-
5.3.1 shall go into liquidation whether compulsory or
voluntary (except for the purposes of a bona fide
reconstruction or amalgamation); or
5.3.2 makes a composition with its creditors; or
5.3.3 is unable to pay its debts (within the meaning of
section 123(1) of the Insolvency Act 1986) or if
any voluntary arrangement is proposed in relation
to it under Section 1 of that Act. For the
purposes of this sub-clause, section 123(1)(a) of
the Insolvency Act 1986 shall have effect as if
for "Pound 750" there was substituted "Pound 250,000"; or
5.3.4 has a receiver (which shall include an
administrative receiver within the meaning of
section 251 of the Insolvency Act 1986) of the
whole or any material part of its assets or
undertaking appointed; or
5.3.5 has an administrative order under section 8 of the
Insolvency Act 1986 made in relation to it,
the provisions of Clause 12.2 shall apply.
5.4 Removal: Scottish Settlements shall be deemed to be
removed and shall cease to be a Party:-
5.4.1 with effect from the date of receipt by Scottish
Settlements of an Irremediable Removal Notice in
terms of Clause 12.2 above or such later date as
may be specified in the Irremediable Removal
Notice; or
5.4.2 with effect from the date of occurrence of any
of the events specified in Clause 12.3 above.
5.5 Discharge: Subject to Clauses 14.1 and 14.2, with effect
from the Termination Date Scottish Settlements shall (save
as regards any rights and liabilities accrued as at the
date of its resignation or removal) be discharged from any
further obligation and shall have no further rights under
this Agreement. For the avoidance of doubt any Dispute
which relates to an accrued right or liability may be
raised via the Disputes Process by Scottish Settlements
after the Termination Date.
6. Appointment of successor to Scottish Settlements
6.1 Appointment mechanism: In the event that Scottish
Settlements resigns in accordance with Clause 10
(Resignation by Scottish Settlements) or is removed in
accordance with Clauses 11 (Removal of Scottish Settlements
by Consent) or 12 (Removal of Scottish Settlements),
Scottish Hydro-Electric and/or ScottishPower, with the
approval of the Director, shall appoint a person or persons
agreed between them as being suitable as successor to
Scottish Settlements.
7. Transfer of Services, Responsibilities and Assets
7.1 Transfer of services, responsibilities and assets: Upon a
successor being appointed in terms of Clause 13.1 and
accepting such appointment Scottish Settlements shall:-
7.1.1 grant to a nominee of Scottish Hydro-Electric and
ScottishPower (who may be the Scottish Settlements
successor) an unrestricted, non-exclusive,
perpetual and transferable licence of all CAS
Software, all related documentation and other
similar intellectual property belonging to
Scottish Settlements free of charge, to use, copy,
adapt and translate such CAS Software and other
property for any purpose related to the operation
of the Central Allocation System;
7.1.2 use all reasonable endeavours to novate or procure
the novation of, any licence or other agreement to
use and/or maintain the CAS Software to such
successor;
7.1.3 transfer to such successor all hardware belonging
to Scottish Settlements and essential to such
successor to carry out such successor's duties and
responsibilities under this Agreement and which is
not otherwise readily obtainable by such
successor;
7.1.4 make over to such successor copies of all such
records, manuals and data and other information
not referred to in Clause 14.1.1 and in the
ownership or under the control of Scottish
Settlements relating to the operation and
necessary for the proper functioning of the
Central Allocation System and the Panels;
7.1.5 in so far as permitted by the terms thereof assign
or novate to any successor its rights and
obligations in terms of any agreement with an
Agent or Operating Agent or other third party
which is necessary for such successor to operate
the Central Allocation System in accordance with
this Agreement; and
7.1.6 without prejudice to the foregoing provisions of
this Clause 14.1, transfer or otherwise make
available to such successor all assets (excluding
heritable and leasehold property), equipment,
facilities, rights, know-how and transitional
assistance which it possesses and which is
necessary for such successor to have to operate
the Central Allocation System in accordance with
this Agreement and which is not otherwise readily
obtainable by such successor;
in each case on such reasonable terms (other than as to price) as
may be agreed (and in default of agreement the Dispute
shall be referred to the Disputes Panel in accordance with
Part IX). Scottish Settlements further agrees to co-
operate with any such successor and the other Parties so
that the transfer of duties, services, responsibilities,
assets and know-how to such successor is carried out
causing as little disruption to the operation of the
Central Allocation System and inconvenience to the other
Parties as is practical in all the circumstances.
7.2 Transitional Services: During the period of six (6) months
from the Termination Date (or such other period as may be
agreed between the Parties), the Parties (excluding
Scottish Settlements) acting collectively and unanimously
may require Scottish Settlements to provide or procure the
provision of, inter alia, the following services:-
7.2.1 training and systems support for any successor to
Scottish Settlements appointed in terms of Clause
13 (Appointment of successor to Scottish
Settlements) above;
7.2.2 parallel running with any such successor;
7.2.3 move, relocate or deliver to such successor the
assets referred to in Clause 14.1 above;
7.2.4 provide any successor with procedural or practice
information not already recorded in writing and
delivered; and/or
7.2.5 use reasonable endeavours to make available such
employees for the purposes set out in Clauses
14.2.1 to 14.2.4 above.
8. Asset Transfer Costs
8.1 Payments to Scottish Settlements on Resignation or
Removal: In the event that Scottish Settlements resigns
in terms of Clause 10 or is removed in terms of Clauses
11 or 12.4, Scottish Settlements shall be entitled to
receive payment from any successor(s). The amount of the
payment to be made under this Clause 15 shall:
8.1.1 insofar as it relates to assets, be fixed at a
level which is equivalent to the outstanding
revenue (after adjusting for approved finance
costs) that Scottish Settlements would have
received in accordance with the guidelines
referred to in Clause 62.3 (Development Costs);
and
8.1.2 be determined by Scottish Settlements with the
approval of the Director.
9. Escrow Arrangements
9.1 Scottish Settlements Escrow Agreement: No later than six
(6) months after the Signing Date (or such later date as
Scottish Hydro-Electric and ScottishPower may agree in
writing) Scottish Settlements (for itself and on behalf of
the Scottish Companies) shall enter into and deliver an
escrow agreement (the "Scottish Settlements Escrow
Agreement") in the form to be agreed between Scottish
Hydro-Electric and ScottishPower with a reputable escrow
agent (the "SAS Custodian"). The Scottish Settlements
Escrow Agreement shall provide for Scottish Hydro-Electric
and ScottishPower to have access to, and the right to make
use of, the materials set out below in the event of the
resignation or removal of Scottish Settlements. Forthwith
upon entering into the Scottish Settlements Escrow
Agreement Scottish Settlements shall deposit with the SAS
Custodian to the extent then in existence (and, if not in
existence, as soon as possible after it comes into
existence):-
9.1.1 a copy of all the source code, object code and
load (machine executable) modules relating to
Central Allocation System beneficially owned by it
together with all job control language and
licensed software system tables, each in a machine
readable form and the source code and relevant job
control language in a hard copy form;
9.1.2 a copy of all related manuals and other associated
documentation including:-
9.1.2.1 any user requirement documents
together with all associated
authorised change requests;
9.1.2.2 any functional specification documents
associated with those documents
described in Clause 16.1.2.1 above,
together with all authorised change
requests associated with the relevant
functional specification;
9.1.2.3 to the extent available to Scottish
Settlements, any design specification
documents associated with those
documents described in Clauses
16.1.2.1 and 16.1.2.2 above, together
with all authorised change requests
associated with the relevant design
specification;
9.1.2.4 any program and/or user guides
prepared to assist in the day to day
operation and future development of
the computer programs (including
records of test cases together with
the associated test input and output
data used for validation purposes);
9.1.2.5 any relevant test strategy schedules
and acceptance test schedules as
specified for functional and
operational end to end testing;
9.1.2.6 any relevant test acceptance
certificates and reports for all tests
recording comments and observations
made on the appropriate tests where
such tests are commissioned by
Scottish Settlements;
9.1.2.7 any relevant acceptance certificates
and Market Auditor's reports, together
with any reports recording such
acceptance and the Market Auditor's
observations and comments on the
tests;
9.1.2.8 any relevant compilation or detailed
operating procedures required in
connection with any of the relevant
clauses in this Clause 16.1
9.1.2.9 all software licences for the Central
Allocation System licensed to Scottish
Settlements; and
9.1.2.10 a list detailing all versions of CAS
Software licensed to Scottish
Settlements (including operational
systems and compilers) used in
creating such versions of the object
code detailing the version numbers
used and any program temporary fixes
or equivalent modes; and
9.1.3 a copy of all historical data (including all
transaction, reference and audit data and changes
to standing data) relating to the Central
Allocation System operations of Scottish
Settlements over the preceding seven (7) years or,
if shorter, over the period from the Signing Date.
9.1.4 All the material referred to in Clauses 16.1.1,
16.1.2 and 16.1.3 above is hereafter together
referred to in this Agreement as the "SAS
Material".
9.2 Updating: Scottish Settlements shall ensure that the SAS
Material deposited with the SAS Custodian is kept fully up-
to-date in accordance with the terms of and subject to the
conditions of the Scottish Settlements Escrow Agreement.
67
42
Settlement Agreement for Scotland 14 August 1998
Part V: Duties of the Scottish Companies
1. Introduction
1.1 General: The provisions of this Part shall have effect
with respect to the provision of certain services by the
Scottish Companies in relation to Registration, System
Data Provision Service, Grid Control Centres, metering,
Data Collection, the provision of Line Loss Factors,
Transformer Loss Factors, Transmission Loss Multipliers
and other information and the performance of certain
other additional responsibilities.
2. Compliance and information provision
2.1 General: Each Scottish Company shall comply with the
provisions of this Agreement to the extent applicable to
it.
2.2 Systems and information provision: Without limitation to
Clause 18.1, each Scottish Company shall:-
2.2.1 have and maintain in place such personnel,
systems, contracts and procedures as are
necessary to enable it to comply with such
provisions;
2.2.2 subject always to Clause 126 (Release of
information), provide to any Party or any third
party, such data, schedules, reports and other
information required to be provided by it
pursuant to the terms of this Agreement; and
2.2.3 retain appropriate records and data held by it
for Allocation purposes securely for a period of
not less than seven (7) years after the Final
Reconciliation Run for the Settlement Day to
which the records or data relate.
2.3 Market Domain Data: Each Scottish Company shall and
shall procure that its Agents shall:-
2.3.1 provide to Scottish Settlements such Market
Domain Data as is required from that Scottish
Company and its Agents fifteen (15) Working Days
prior to the Effective Trading Date; and
2.3.2 forthwith on becoming aware of any amendments to
such Market Domain Data being necessary or any
additional Market Domain Data being required from
that Scottish Company and/or its Agents, provide
to Scottish Settlements such amended and/or
additional Market Domain Data,
and each Scottish Company shall ensure such data is
complete and correct in all respects.
2.4 Accuracy of Information: Each Scottish Company shall use
its reasonable endeavours to ensure that any data items
for which it is responsible pursuant to this Agreement
are complete and accurate.
2.5 Data Catalogue: Each Scottish Company shall or shall
procure that its Agents comply with the Data Transfer
Catalogue Requirements when sending data which has a
corresponding Data Transfer Catalogue flow.
2.6 Second of January: Notwithstanding the provisions of
Section 1.5 of Schedule 8 (Liquidated Damages and
Performance Levels) and Clause 87 (Urgent Response) and
Clause 89.8 of Part IX (Governance of this Agreement)
each Scottish Company shall use reasonable endeavours to
ensure that any obligation that it or any of its Agents
is required to perform shall be performed in accordance
with the timescales specified in this Agreement,
providing that nothing in this Clause 18.6 shall require
a Scottish Company or any of its Agents to perform any of
its obligations under this Agreement that it is required
to perform on a Working Day on the second of January or
when the second of January is not a Working Day on the
next Working Day thereafter.
3. Installation of metering
3.1 Installation of metering before the Effective Trading
Date: In respect of any Metering System at any Bulk
Supply Point which is operational as at the relevant
Effective Trading Date (other than a Bulk Supply Point at
a Grid-connected Customer Site or a Grid-connected
Composite Site) the relevant Scottish Company shall
install or procure the installation of Half Hourly
Metering Equipment (if the same has not already been
installed) in accordance with the relevant Metering Code
of Practice and Schedule 5 (Metering) prior to the
relevant Effective Trading Date.
3.2 Installation of metering after the Effective Trading
Date: In respect of any Metering System at any Bulk
Supply Point other than one which was operational as at
the Effective Trading Date (other than a Bulk Supply
Point at a Grid-connected Customer Site or a Grid-
connected Composite Site) in respect of which a Scottish
Company has or is to have an effective registration in
its Bulk Supply Point Registration Service, that Scottish
Company shall install or procure the installation of Half
Hourly Metering Equipment in accordance with the relevant
Metering Code of Practice and Schedule 5 (Metering) no
later than the date of such registration.
4. Co-operation with Market Auditor
4.1 Co-operation with Market Auditor: Each Scottish Company
shall co-operate with the Market Auditor at all times and
provide all such information and assistance as is from
time to time reasonably required of that Scottish Company
by the Market Auditor in fulfilling its obligations
pursuant to Schedule 6 (Role of the Market Auditor).
5. Registration Services, System Data Provision Service and
Grid Control Centres
5.1 Registration Services: Each Scottish Company shall:-
5.1.1 operate and maintain a Generation Registration
Service for its Area in accordance with the
applicable Rules, the relevant Market
Procedure(s), including MP-201 and Service
Requirement S515;
5.1.2 operate and maintain a Bulk Supply Point
Registration Service for its Area in accordance
with the applicable Rules, the relevant Market
Procedure(s), including MP-201 and Service
Requirement S515;
5.1.3 operate and maintain a Grid-connected Power
Stations (Import Registers) Registration Service
for its Area in accordance with the applicable
Rules, the relevant Market Procedure(s),
including MP-201 and Service Requirement S515.
5.2 System Data Provision Service: Each Scottish Company (or
any person duly authorised to act on its behalf) shall
operate and maintain a System Data Provision Service for
its Area in accordance with the applicable Rules, the
relevant Market Procedure(s), including MP-301 and
Service Requirement S500.
5.3 Grid Control Centres: Each Scottish Company shall
procure that its Grid Control Centre does such acts and
provides such data and other information in accordance
with the applicable Rules, the relevant Market
Procedure(s), including MP-702 and Service Requirement
S590.
6. Provision of services
6.1 Provision of services to Generator Parties: In relation
to each Grid-connected Generation Site registered to a
Generator Party (or a Non Trading Generator) in its
Generation Registration Service, each Scottish Company
(or any Accredited person duly authorised to act on its
behalf) shall offer to enter into an agreement for the
provision of Data Collection services to such Generator
Party (or Non Trading Generator) on request by such
Generator Party (or Non Trading Generator).
6.2 Provision of Metering Point information: Each Scottish
Company shall provide Scottish Settlements with a report,
in a format to be agreed between the Scottish Companies
and Scottish Settlements and on an agreed day every
month, which report shall detail by Supplier Identifier
the number of Metering Points registered in that Scottish
Company's PES Registration Service, as at the date ten
(10) Working Days before the said agreed day.
7. Scottish Company Entry Processes
7.1 Scottish Company Entry Processes: Each Scottish Company
shall ensure that it has satisfied the requirements of
the Scottish Company Entry Process in respect of any
requirement to repeat the Scottish Company Entry Process
due to a change in that Scottish Company's systems and
has submitted any readiness confirmation required to the
Entry Process Co-ordinator before commencement of live
operation of those changed systems with the Allocation
System.
8. Metering services for Bulk Supply Points
8.1 General: This Clause 24 sets out the rights and
obligations of each Scottish Company with respect to
Meter Operation for Bulk Supply Points which rights and
obligations are in addition to any other rights and
obligations detailed in Schedule 5 (Metering).
8.2 Appointment of Meter Operators for Bulk Supply
Points: Subject to Clause 24.8 each Scottish Company
shall, in relation to each Metering System at a Bulk
Supply Point in respect of which it has an effective
registration in its Bulk Supply Point Registration
Service (other than a Bulk Supply Point at a Grid-
connected Customer Site or a Grid-connected Composite
Site), ensure that a Meter Operator is appointed with
effect from the time when such registration first takes
full effect and that such appointment is maintained for
so long as it remains so registered.
8.3 Functions of Meter Operators for Bulk Supply Points: The
principal functions of a Meter Operator appointed
pursuant to Clause 24.2 shall be to install, inspect and
maintain (repairing and replacing as necessary),
commission, test, provide and maintain technical details
of, change, Energise and De-energise Meters, take Meter
readings, investigate suspected faults and invalid data
and test and provide reports in respect of such
activities, in respect of Metering Equipment at Bulk
Supply Points (other than a Bulk Supply Point at a Grid-
connected Customer Site or a Grid-connected Composite
Site) in accordance with the relevant Market
Procedure(s), including MP-502 and Service Requirement
S510 and relevant Metering Codes of Practice or any
Derogation.
8.4 Registration: Each Scottish Company shall register each
Meter Operator which is appointed from time to time in
respect of a Metering System at a Bulk Supply Point in
its Bulk Supply Point Registration Service.
8.5 Choice of Meter Operators for Bulk Supply Points: Each
Scottish Company shall determine the identity of each
Meter Operator appointed pursuant to Clause 24.2 for
Metering Systems at each Bulk Supply Point registered in
its Bulk Supply Point Registration Service (other than a
Bulk Supply Point at a Grid-connected Customer Site or a
Grid-connected Composite Site).
8.6 Provision of information: Each Scottish Company shall,
without prejudice to the requirements of Clauses 18.2.2
and 24.11 and promptly after registration in respect of a
particular Metering System takes full effect or (as the
case may be) following a change in the Meter Operator
appointed in relation to a Metering System at a Bulk
Supply Point send to the relevant Meter Operator (unless
otherwise agreed with the relevant Meter Operator):-
8.6.1 details of such Meter Operator's registration in
a Bulk Supply Point Registration Service in
relation to that Bulk Supply Point, the related
Bulk Supply Point Identifier and the Identifier
for the BSP Data Collector related to that Bulk
Supply Point; and
8.6.2 confirmation of the time and date with effect
from which that Meter Operator's appointment in
relation to such Bulk Supply Point is to take
effect.
8.7 Replacement of Meter Operators for Bulk Supply Points:
8.7.1 Subject to Clause 24.5 each Scottish Company may
arrange for any Meter Operator for a Bulk Supply
Point (other than a Bulk Supply Point at a Grid-
connected Customer Site or a Grid-connected
Composite Site) for which it is responsible to
be removed from time to time provided that a
replacement Meter Operator shall have been
appointed with effect from the date of removal
of the removed Meter Operator. Each Scottish
Company shall ensure that the appointment of any
Meter Operator for which it is responsible shall
automatically terminate on withdrawal of the
Accreditation (where applicable) of the relevant
Meter Operator; and
8.7.2 Subject to Clause 24.5 each Scottish Company
shall ensure that there are appropriate
arrangements in place in compliance with the
Service Requirement S510 with each Meter
Operator for a Bulk Supply Point (other than a
Bulk Supply Point at a Grid-connected Customer
Site or a Grid-connected Composite Site) for
which it is responsible from time to time to
enable any replacement Meter Operator for which
it is responsible to take over the functions of
a Meter Operator whose appointment has expired
or been terminated, including arrangements for
the transfer of relevant data to such
replacement Meter Operator.
8.8 Responsibility of Scottish Companies: Each Scottish
Company shall be responsible for every act, breach,
omission, neglect and failure of each Meter Operator for
a Bulk Supply Point (other than a Bulk Supply Point at a
Grid-connected Customer Site or a Grid-connected
Composite Site) appointed by it pursuant to Clause 24.2
in relation to their appointment as a Meter Operator for
a Bulk Supply Point and shall itself comply, and procure
compliance by each such Meter Operator, with this
Agreement including the Rules, the relevant Market
Procedure(s), including MP-502, Service Requirement S510
and Metering Codes of Practice or any Derogation.
8.9 Assistance to Meter Operators for Bulk Supply
Points: Each Scottish Company shall, in accordance with
the relevant Market Procedure(s), including MP-502 and/or
Service Requirement S510 and/or the relevant Metering
Codes of Practice, take such actions and provide such
information as is reasonably necessary to enable each
Meter Operator for Bulk Supply Points (other than a Bulk
Supply Point at a Grid-connected Customer Site or a Grid-
connected Composite Site), for which it is responsible to
discharge its functions in accordance with the relevant
Market Procedure(s), including MP-502 and/or Service
Requirement S510 and/or the relevant Metering Codes of
Practice or any Derogation.
8.10 Performance of duties by Scottish
Companies: Notwithstanding the duty of appointment
contained in Clause 24.2 a Scottish Company may, instead
of securing that a Meter Operator is appointed in
relation to a Metering System at a Bulk Supply Point
(other than a Bulk Supply Point at a Grid-connected
Customer Site or a Grid-connected Composite Site),
perform the relevant function itself provided that it is
and remains Accredited for the relevant function, in
which event the provisions of this Part V shall apply and
be interpreted on the basis that the Scottish Company
shall (in its capacity as a Meter Operator) itself
perform the obligations with which it would otherwise be
required to ensure compliance by the relevant Meter
Operator.
8.11 Access to records: Each Scottish Company shall use
reasonable endeavours to ensure that all records and data
held by each Meter Operator for a Bulk Supply Point
(other than a Bulk Supply Point at a Grid-connected
Customer Site or a Grid-connected Composite Site)
appointed by that Scottish Company pursuant to Clause
24.2 are accessible to the Market Auditor and to any
other person authorised to have access to all such
records and data under this Agreement.
8.12 Service Levels: Each Scottish Company shall (as
appropriate) meet or procure that the relevant Meter
Operator meets the Service Level specified in Service
Requirement S510 in relation to each Bulk Supply Point
(other than a Bulk Supply Point at a Grid-connected
Customer Site or a Grid-connected Composite Site)
registered with full effect in its Bulk Supply Point
Registration Service.
9. Data Collection services for Bulk Supply Points
9.1 Appointment as BSP Data Collector for Bulk Supply
Points: Each Scottish Company shall, in relation to a
Metering System at each Bulk Supply Point registered in
its Bulk Supply Point Registration Service, ensure that
it (or a person duly authorised to act on its behalf)
obtains and maintains Accreditation as a Data Collector
and acts as the BSP Data Collector.
9.2 Functions of BSP Data Collectors for Bulk Supply
Points: The principal functions of each Scottish Company
acting as a BSP Data Collector for a Bulk Supply Point
pursuant to Clause 25.1 shall be to collect, check,
validate, provide estimates, report faults, update,
process and provide and investigate inconsistencies in
metering data in relation to Metering Equipment at Bulk
Supply Points, in accordance with the relevant Market
Procedure(s), including MP-502 and Service Requirement(s)
S530 or any Derogation.
9.3 Registration: Each Scottish Company shall ensure that it
is registered as the BSP Data Collector in respect of
Metering Systems at each Bulk Supply Point registered in
its Bulk Supply Point Registration Service.
9.4 Responsibility of Scottish Companies: Each Scottish
Company shall in carrying out its obligations as a BSP
Data Collector for Bulk Supply Points pursuant to Clause
25.2 comply with applicable Rules, the relevant Market
Procedure(s), including MP-502, Service Requirement S530
and Metering Codes of Practice or any Derogation.
9.5 Access to Records: Each Scottish Company shall use
reasonable endeavours to ensure that all records and data
held by each Scottish Company in respect of its
activities as a BSP Data Collector for Bulk Supply Points
pursuant to Clause 25.1 are accessible to the Market
Auditor and to any other person authorised to have access
to all such records and data under this Agreement.
9.6 Access for Data Collectors: In respect of a Metering
System registered in its Bulk Supply Point Registration
Service a Scottish Company shall use reasonable
endeavours to secure that the appointed BSP Data
Collector has such access to the relevant meters as the
BSP Data Collector reasonably requires in order to read
them all within the timescales required for Allocation.
9.7 Service Levels: Each Scottish Company shall meet the
Service Levels specified in Service Requirement S530 in
relation to each Bulk Supply Point effectively registered
in its Bulk Supply Point Registration Service.
10. Radio Teleswitch Service Access Providers
10.1 Radio Teleswitch Service Access Providers: Each Scottish
Company (or a person duly authorised to act on its
behalf) shall obtain and maintain Accreditation as a
Radio Teleswitch Service Access Provider to the extent
that such Accreditation is available and shall act as the
Radio Teleswitch Service Access Provider for all
Suppliers who request such Scottish Company to act on
their behalf as Radio Teleswitch Service Access Provider.
11. Performance Assurance and Scottish Company Liquidated
Damages
11.1 Performance Assurance: Each Scottish Company shall:-
11.1.1 provide, or procure the provision of, such
reports to Scottish Settlements as may from time
to time be reasonably required by it in order to
enable Scottish Settlements to review compliance
by that Scottish Company and by each Agent for
which that Scottish Company is responsible with
the relevant provisions of this Agreement,
including this Part V, the Rules, Service
Requirements S500, S510, S515, S530 and S590,
the relevant Market Procedure(s), including MP-
01, MP-201, MP-301, MP-702 and MP-502 and the
Metering Codes of Practice or any Derogation;
and
11.1.2 provide the PAAP with access to all of its
records, data and other information (and those
of its Agents) as may reasonably be required by
the PAAP to carry out its functions in
accordance with Clause 89 (Proceedings of PAAP)
or otherwise pursuant to this Agreement or
procure that such access is provided.
11.2 Scottish Company Liquidated Damages: Without prejudice
to any other right of other Parties (other than in
respect of claims for damages for loss), a Scottish
Company who fails to comply with the reporting
requirements imposed on it pursuant to Clause 27.1.1 or
with any of the Performance Levels set out in Schedule 8
(Liquidated Damages and Performance Levels) shall be
liable to the relevant Liquidated Damages payment, if
any, set out in Schedule 8, to be payable in accordance
with Schedule 8.
12. Line Loss Factors, Transformer Loss Factors and
Transmission Loss Multipliers
12.1 Scottish Companies to provide Line Loss Factors,
Transformer Loss Factors and Transmission Loss
Multipliers: Each Scottish Company shall be responsible
for providing to the appropriate parties :-
12.1.1 Line Loss Factors;
12.1.2 Transformer Loss Factors; and
12.1.3 Transmission Loss Multipliers;
all in accordance with the applicable Rules, the relevant
Market Procedure(s), including MP-301 and MP-528 and
Service Requirement S500.
13. Notification in relation to seals
13.1 Notification of breaking and remaking of seals: Each
Scottish Company shall, with respect to any Half Hourly
Metering System notify the Associated Responsible Party
if any seal relating to that Metering System has been, or
is likely to be, broken by that Scottish Company for more
than 24 hours or which is, or is due to be, remade, in
all cases as soon as is reasonably practicable
(including, if reasonably practicable, before breaking or
remaking such seal), stating, in the case of notification
of a breaking of a seal, the reason for breaking such
seal.
14. Profile Administrator
14.1 Profile Administrator: Each Scottish Company shall:-
14.1.1 co-operate with the Profile Administrator in the
performance of the Scottish Company's
obligations under the Profile Administrator
Contract and under any undertaking provided by
the Scottish Company pursuant to the Profile
Administrator Contract;
14.1.2 co-operate with the Profile Administrator in the
performance of the Scottish Company's
obligations under the Profile Services Agreement
and under any undertaking provided by the
Scottish Company pursuant to the Profile
Services Agreement;
14.1.3 provide such information as the Profile
Administrator may reasonably require in the
performance of its obligations pursuant to the
Profile Administrator Contract and the Profile
Services Agreement; and
14.1.4 forthwith upon request comply with any
directions as may from time to time reasonably
be made by Scottish Settlements in respect of
the Profile Administrator Contract and/or the
Profile Services Agreement.
15. Master Registration Agreement
15.1 Provision of Assistance: Each Scottish Company shall and
shall procure that each of its Agents shall consider the
impact upon it of any proposed changes to the MRA
Priority Provisions and shall provide any relevant
information relating to such changes to Scottish
Settlements in order to enable Scottish Settlements to
comply with its obligations pursuant to the Master
Registration Agreement. Scottish Settlements shall be
entitled to rely on all information given to it by either
Scottish Company or its Agents pursuant to this Clause
31.
16. Assistance
16.1 Assistance in relation to Queries: Each Scottish Company
shall provide and shall use all reasonable endeavours to
procure that each Meter Operator appointed by it, in
relation to a Metering System at a Bulk Supply Point
registered in its Bulk Supply Point Registration Service
(other than a Bulk Supply Point at a Grid-connected
Customer Site or a Grid-connected Composite Site), its
System Data Provision Service and its Grid Control Centre
provides all reasonable assistance and support to the
Systems Support Help Desk or Scottish Settlements (as
appropriate) as is required for the resolution of any
Query pursuant to Schedule 10 (Operational and Other
Queries and Requests for Information Procedure).
16.2 Assistance to Scottish Settlements: Each Scottish
Company shall provide and shall use all reasonable
endeavours to procure that each of its Agents, its System
Data Provision Service and its Grid Control Centre
provides all reasonable assistance and support to
Scottish Settlements in carrying out its duties under
Parts IV and IX (including without limitation carrying
out impact assessments regarding the effect of proposed
modifications or system changes if reasonably required to
do so by Scottish Settlements), and in relation to the
co-ordination of change.
16.3 Assistance to Entry Process Co-ordinator: Each Scottish
Company shall provide and shall use all reasonable
endeavours to procure that its Agents, its System Data
Provision Service and its Grid Control Centre provides
all reasonable assistance and support to the Entry
Process Co-ordinator with a view to ensuring appropriate
testing environments are available.
17. Non Qualifying Parties
17.1 Schedule 3: Each Scottish Company shall comply with its
obligations set out in Schedule 3 (Non Qualifying
Parties).
67
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Settlement Agreement for Scotland 14 August 1998
Part VI: Duties of Suppliers
1. Introduction
1.1 General: Subject to Clause 34.2, the provisions of this
Part shall have effect with respect to certain
responsibilities of Suppliers in respect of any Supplier
Hub in an Authorised Area in relation to which a Supplier
is a Qualifying Supplier and with respect to the
responsibilities of such Suppliers in relation to their
appointment of Meter Operators, Data Collectors, and Data
Aggregators for such Supplier Hub in that Authorised
Area.
1.2 Non Qualifying Suppliers: The provisions of this Part
shall not apply in respect of any Supplier Hub in an
Authorised Area in relation to which a Supplier is a Non
Qualifying Supplier and the provisions of Schedule 3 (Non
Qualifying Parties) shall apply to such Supplier in
respect of any such Supplier Hub in that Authorised Area
until such Supplier becomes a Qualifying Supplier in
respect of that Supplier Hub in that Authorised Area.
2. Compliance and information provision
2.1 General: Each Supplier shall comply with the provisions
of this Agreement to the extent applicable to it.
2.2 Systems and information provision: Without limitation to
Clause 35.1, each Supplier shall:-
2.2.1 have and maintain in place such personnel,
systems, contracts and procedures as are
necessary to enable it to comply with such
provisions; and
2.2.2 subject always to Clause 126 (Release of
information) provide to any Party or any third
party, such data, schedules, reports and other
information required to be provided by it
pursuant to the terms of this Agreement.
2.3 Market Domain Data: Each Supplier shall and shall
procure that its Supplier Agents shall:-
2.3.1 provide to Scottish Settlements such Market
Domain Data as is required from that Supplier
and its Supplier Agents fifteen (15) Working
Days prior to that Supplier's first registration
in a PES Registration Service for either
Scottish Company's Authorised Area; and
2.3.2 forthwith on becoming aware of any amendments to
such Market Domain Data being necessary or any
additional Market Domain Data being required
from that Supplier and/or its Supplier Agents,
provide Scottish Settlements with such
additional and/or amended Market Domain Data,
and any Supplier shall ensure or procure its Supplier Agents
ensure such data is complete and correct in all respects.
2.4 Accuracy of information: Each Supplier shall use its
reasonable endeavours to ensure that any data items for
which it is responsible pursuant to this Agreement are
complete and accurate.
2.5 Data transfer: Each Supplier shall or shall procure that
its Supplier Agents comply with the Data Transfer
Catalogue Requirements when sending data which has a
corresponding Data Transfer Catalogue flow.
2.6 Second of January: Notwithstanding the provisions of
Section 1.5 of Schedule 8 (Liquidated Damages and
Performance Levels) and Clauses 87 (Urgent Response) and
89.8 of Part IX (Governance of this Agreement) each
Supplier shall use reasonable endeavours to ensure that
any obligation that it or any of its Agents is required
to perform shall be performed within the timescales
specified in this Agreement, providing that nothing in
this Clause 35.6 shall require a Supplier or any of its
Agents to perform any of its obligations under this
Agreement that it is required to perform on a Working Day
on the second of January or when the second of January is
not a Working Day on the first Working Day thereafter.
3. Installation of metering
3.1 Installation of Mandatory Half Hourly Metering Equipment
for Customers above 100kW before the Effective Trading
Date: In respect of any Metering System at 100kW
Premises in relation to which a Supplier is registered in
a PES Registration Service prior to the Effective Trading
Date, that Supplier shall install Half Hourly Metering
Equipment (if the same has not already been installed) in
accordance with the relevant Metering Code of Practice
and Schedule 5 (Metering) prior to the Effective Trading
Date. Provided always that:-
3.1.1 there shall be no obligation to install such
Metering Equipment in respect of any Site
relating to an Unmetered Supply; and
3.1.2 the Supplier shall only be obliged to use its
reasonable endeavours to comply with the
provisions of this Clause 36.1 where the
relevant Premises have become 100kW Premises
during the period of three months immediately
prior to the Effective Trading Date.
3.2 Installation of Mandatory Half Hourly Metering Equipment
for Customers above 100 kW after the Effective Trading
Date: In respect of any Metering System at 100 kW
Premises in relation to which a Supplier is or is to be
registered in a PES Registration Service after the
Effective Trading Date, that Supplier shall use all
reasonable endeavours to install Half Hourly Metering
Equipment (if the same has not already been installed) in
accordance with the relevant Metering Code of Practice
and Schedule 5 (Metering) no later than the date on which
such registration first takes full effect. Provided
always that there shall be no obligation to install such
Metering Equipment in respect of Sites relating to
Unmetered Supplies.
3.3 Installation of metering for Customers of 100kW or less
before the Effective Trading Date: In respect of any
Metering System at any premises other than 100kW Premises
in relation to which a Supplier is registered in a PES
Registration Service prior to the Effective Trading Date,
that Supplier shall install Non Half Hourly Metering
Equipment (if not already installed) or (at its
discretion) Half Hourly Metering Equipment in accordance
with the relevant Metering Code of Practice and Schedule
5 (Metering) prior to the Effective Trading Date.
Provided always that there shall be no obligation to
install such Metering Equipment in respect of any Site
relating to Unmetered Supplies.
3.4 Installation of metering for Customers of 100 kW or less
after the Effective Trading Date: In respect of any
Metering System at any premises other than 100 kW
Premises in relation to which a Supplier is or is to be
registered in a PES Registration Service after the
Effective Trading Date, that Supplier shall use all
reasonable endeavours to install Non Half Hourly Metering
Equipment (if not already installed) or (at its
discretion) Half Hourly Metering Equipment in accordance
with the relevant Metering Code of Practice and Schedule
5 (Metering). Provided always that there shall be no
obligation to install such Metering Equipment in respect
of any Site relating to Unmetered Supplies.
4. Co-operation with Market Auditor
4.1 Co-operation with Market Auditor: Each Supplier shall
and shall procure that its Supplier Agents co-operate
with the Market Auditor at all times and provide all such
information and assistance as is from time to time
reasonably required of that Supplier or its Supplier
Agents by the Market Auditor in fulfilling its
obligations pursuant to Schedule 6 (Role of the Market
Auditor).
5. PES Registration Service
5.1 PES Registration Service: A Supplier which intends to
supply electricity measured by a Metering System shall
sign and comply with the provisions of the Master
Registration Agreement.
5.2 Supplier Identifiers:
5.2.1 If and to the extent that a Supplier is to act
on behalf of a supplier with an exemption under
the Act which is not a Party for the purposes of
this Agreement that Supplier shall be entitled,
insofar as is possible having regard to any
other relevant agreement, to have additional
Supplier Identifiers without limit in number for
each such Supplier with such exemptions for the
purpose of Allocation under this Agreement.
5.2.2 To the extent that a Supplier completes the
Supplier Entry Process in an Authorised Area in
respect of one or more Supplier Hubs but has not
yet completed the Supplier Entry Process, for
that Authorised Area in respect of one or more
other Supplier Hubs then, that Supplier shall be
entitled, insofar as is possible having regard
to any other relevant agreement and in respect
only of each such Supplier Hub, to have an
additional Supplier Identifier (up to a maximum
of two (2) only) for the purpose of Allocation
under this Agreement.
5.2.3 In the event that a Supplier has any additional
Supplier Identifiers in accordance with Clauses
38.2.1 and 38.2.2 that Supplier shall, in
respect of each such additional Supplier
Identifier, be deemed to be a Second Tier
Supplier for the purposes of this Agreement.
6. Supplier Agents
6.1 Appointment of Supplier Agents: Subject to Clauses 40.3,
41.2 and 42.2 each Supplier shall, in relation to each
Metering System in respect of which it has an effective
registration in a PES Registration Service, secure that
the following are appointed, and that such appointments
are (where applicable) recorded in the relevant PES
Registration Service, with effect from the time when such
registration first takes effect and that an appointment
of each of the following is maintained so long as the
Supplier remains so registered:-
6.1.1 unless the Metering System relates to an
Unmetered Supply, a Meter Operator;
6.1.2 a Data Collector;
6.1.3 a Data Aggregator; and
6.1.4 where applicable, a Radio Teleswitch Service
Access Provider.
6.2 Supplier Entry Processes: Each Supplier shall ensure
that it and each of its Supplier Agents in respect of a
particular Supplier Hub within an Authorised Area has
satisfied the requirements of the Supplier Entry
Process:-
6.2.1 in the case of initial entry (except for a Non
Qualifying Supplier) prior to any registration
of that Supplier in respect of a Metering System
in the PES Registration Service relating to a
Supplier Hub in that Authorised Area; and
6.2.2 in respect of any requirement to repeat the
Supplier Entry Process due to a change in that
Supplier or any of its Supplier Agents' systems
relating to a Supplier Hub before live operation
of those changed systems with other Allocation
Systems, and
in each case has submitted any readiness confirmation required
to the Entry Process Co-ordinator.
6.3 Replacement of Supplier Agents: Subject to Clauses 40.3,
41.2 and 42.2, each Supplier:-
6.3.1 may arrange for any Supplier Agent for which it
is responsible to be removed from time to time
provided that a replacement Supplier Agent shall
have been appointed with effect from the date of
removal of the removed Supplier Agent. Each
Supplier shall ensure that the appointment of a
Supplier Agent for which it is responsible shall
terminate on withdrawal of the Accreditation
(where applicable) of the relevant Supplier
Agent; and
6.3.2 shall ensure that there are appropriate
arrangements in place in compliance with Service
Requirement(s) S510, S520, S530, S540 and S550
with each Supplier Agent for which it is
responsible from time to time to enable any
replacement Supplier Agent for which it is
responsible to take over the functions of a
Supplier Agent whose appointment has expired or
been terminated, including arrangements for the
transfer of relevant data to such replacement
Supplier Agent.
6.4 Responsibility of Suppliers: Each Supplier shall be
responsible for every act, breach, omission, neglect and
failure of each Supplier Agent appointed pursuant to
Clause 39.1 in relation to their appointment as a
Supplier Agent and shall itself comply, and procure
compliance by each such Supplier Agent, with this
Agreement including applicable Rules, relevant Market
Procedure(s), including MP-502, MP-503, MP-504 and MP-
505, Service Requirement(s) S510, S520, S530, S540 and
S550 and Metering Codes of Practice or any Derogation;
6.5 Performance Assurance: Each Supplier shall:-
6.5.1 provide, or procure the provision of, such
reports to Scottish Settlements as may from time
to time be reasonably required in accordance with
the relevant Market Procedure(s), including MP-
532, or otherwise by it in order to enable
Scottish Settlements to review compliance by that
Supplier and by each Supplier Agent for which
that Supplier is responsible with the relevant
provisions of this Agreement, including this Part
VI, Service Requirements S510, S520, S530, S540
and S550, relevant Market Procedure(s), including
MP-01, MP-502, MP-503, MP-504 and MP-505 and the
Metering Codes of Practice or any Derogation; and
6.5.2 provide or procure the provision of access for
the PAAP to all of its records, data and other
information (and those of its Supplier Agents) as
may reasonably be required by the PAAP to carry
out its functions in accordance with Clause 89
(Proceedings of PAAP) and relevant Market
Procedure(s), including MP-532, or otherwise
pursuant to this Agreement.
6.6 Supplier Liquidated Damages: Without prejudice to any
other right of other Parties (other than in respect of
claims for damages for loss), a Supplier who fails to
comply with the reporting requirements imposed on it
pursuant to Clause 39.5.1, with Clause 44.1 or (as the
case may be) Clause 44.2 or with any of the Performance
Levels shall be liable to the relevant Liquidated Damages
payment set out in Schedule 8 (Liquidated Damages and
Performance Levels), to be payable in accordance with
Schedule 8.
6.7 Assistance to Supplier Agents: Each Supplier shall, in
accordance with the relevant Market Procedure(s),
including MP-502, MP-503, MP-504 and MP-505 and/or
Service Requirement(s) S510, S520, S530, S540 and S550
and/or the relevant Metering Codes of Practice, take such
actions and provide such information as is reasonably
necessary to enable each Supplier Agent for which it is
responsible to discharge its functions in accordance with
this Agreement including relevant Market Procedure(s),
including MP-502, MP-503, MP-504 and MP-505 and/or
Service Requirement(s) S510, S520, S530, S540 and S550
and/or the relevant Metering Codes of Practice or any
Derogation.
6.8 Performance of duties as Meter Operator, Data Collector
or Data Aggregator by Supplier: Notwithstanding the duty
contained in Clause 39.1, but subject always to Clauses
40.3.2, 41.2.2, 41.2.3 and 42.2.2, a Supplier may,
instead of securing that a Meter Operator, Data Collector
or Data Aggregator is appointed in relation to each
Metering System registered to it, perform the relevant
function or functions itself provided that it is and
remains Accredited for the relevant function or
functions, in which event the provisions of this Part VI
shall apply and be interpreted on the basis that the
Supplier shall (in its capacity as a Meter Operator, Data
Collector or Data Aggregator) itself perform the
obligations of which it would otherwise be required to
ensure compliance by the relevant Supplier Agent.
6.9 Performance of duties as Radio Teleswitch Service Access
Provider by Supplier: Notwithstanding the duty contained
in Clause 39.1, a Supplier may, instead of securing that
a Radio Teleswitch Service Access Provider is appointed
in relation to each Metering System registered to it
which incorporates a Radio Teleswitch perform the
relevant function itself provided that the Supplier is
and remains Accredited to the extent that such
Accreditation is available as a Radio Teleswitch Service
Access Provider, in which event the provisions of this
Part VI shall apply and be interpreted on the basis that
the Supplier shall itself (in its capacity as a Radio
Teleswitch Service Access Provider) perform the
obligations of which it would otherwise be required to
ensure compliance by the relevant Radio Teleswitch
Service Access Provider.
6.10 Access to records: Each Supplier shall use reasonable
endeavours to ensure that all records and data held by
each Supplier Agent consequent on his appointment by that
Supplier are accessible to the Market Auditor and to any
other person authorised to have access to all such
records and data under this Agreement.
7. Meter Operation
7.1 General: This Clause 40 sets out the rights and
obligations of each Supplier with respect to Meter
Operation which rights and obligations are in addition to
any other rights and obligations detailed in Schedule 5
(Metering).
7.2 Functions of Meter Operators: The principal functions of
a Meter Operator appointed pursuant to Clause 39.1 shall
be to install, inspect, maintain (repairing and replacing
as necessary), commission, test, provide and maintain
technical details of, change, Energise and De-energise
Meters, take Meter readings, investigate suspected faults
and invalid data and test and provide reports in respect
of such activities, in respect of Metering Equipment, in
accordance with the relevant Market Procedure(s),
including MP-502 and Service Requirement(s) S510 and
Metering Codes of Practice or any Derogation.
7.3 Choice of Meter Operators: The identity of each Meter
Operator for which a Supplier is responsible shall be
determined by that Supplier save that:-
7.3.1 there must be no more than one appointment
pursuant to Clause 39.1 of a Meter Operator in
effect at any time in relation to a particular
Metering System in respect of any particular
period; and
7.3.2 a Supplier shall secure that (unless otherwise
agreed by the Director) the functions of a Meter
Operator in relation to those Non Half Hourly
Metering Systems registered to it in a PES
Registration Service shall only be performed by
the Host Company (or any Accredited person duly
authorised to act on its behalf) in respect of
the period beginning with the Signing Date and
ending on 31 March 2000 or such other date
determined by the Director.
7.4 Provision of information: Each Supplier shall, without
prejudice to the requirements of Clauses 35.2.2 and 39.10
promptly after its registration in respect of a
particular Metering System first takes full effect or (as
the case may be) following a change in the Meter Operator
appointed in relation to a particular Metering System,
send to the relevant Meter Operator for each Metering
System registered to it in a PES Registration Service
(unless otherwise agreed with the relevant Meter
Operator):-
7.4.1 details of such Meter Operator's registration in
a PES Registration Service in relation to that
Metering System, the related Metering System
Identifier, the Identifiers for the Data
Collector and where appropriate BSP Data
Collector and Scottish Company related to that
Metering System and the relevant Supplier
Identifier; and
7.4.2 confirmation of the time and date with effect
from which that Meter Operator's appointment in
relation to such Metering System is to take
effect.
7.5 Service Levels: Each Supplier shall (as appropriate)
meet, or procure that the relevant Meter Operator meets,
the relevant Service Levels specified in Service
Requirement S510 in relation to the Metering Systems in
respect of which its registration first takes full effect
in a PES Registration Service.
8. Data Collection
8.1 Functions of Data Collectors: The principal functions of
a Data Collector appointed pursuant to Clause 39.1 shall
be to collect, check, validate, provide estimates, report
faults, update, process, provide and investigate
inconsistencies in metering data in relation to Metering
Systems and to provide such metering data to the relevant
Data Aggregator, in accordance with the relevant Market
Procedure(s), including MP-502 and MP-504 and Service
Requirement(s) S520 and S530 or any Derogation.
8.2 Choice of Data Collector: The identity of each Data
Collector for which a Supplier is responsible shall be
determined by that Supplier save that:-
8.2.1 there must be no more than one appointment
pursuant to Clause 39.1 of a Data Collector by a
Supplier in effect at any time in relation to a
particular Metering System in respect of any
particular period;
8.2.2 a Supplier shall secure that (unless otherwise
agreed by the Director) the functions of a Data
Collector in relation to those Non Half Hourly
Metering Systems registered to it in a PES
Registration Service shall only be performed by
the Host Company (or any Accredited person duly
authorised on its behalf) in respect of the
period beginning with the Signing Date and
ending on 31 March 2000 or such other date
determined by the Director; and
8.2.3 each Supplier agrees that (unless otherwise
agreed by the Director) for the purposes of this
Agreement no-one other than the Scottish Company
(or any Accredited person duly authorised to act
on its behalf) may be appointed pursuant to
Clause 39.1 as the Data Collector in relation to
any Metering System at a Grid-connected Customer
Site or a Grid-connected Composite Site which,
in each case, is registered to that Supplier in
a PES Registration Service.
8.3 Provision of information: Each Supplier shall, without
prejudice to the requirements of Clauses 35.2.2 and 39.4,
send to the relevant Data Collector for each Metering
System registered to it in a PES Registration Service:-
8.3.1 promptly after its registration in respect of a
particular Metering System becomes effective or
(as the case may be) following a change in Data
Collector appointed in relation to a particular
Metering System (unless otherwise agreed with
the relevant Data Collector):-
8.3.1.1 details of such Data Collector's
registration in a PES Registration
Service in relation to a Metering
System, the related Metering System
Identifier and the Identifiers for
the Meter Operator, Data Aggregator
and Scottish Company related to that
Metering System and the relevant
Supplier Identifier; and
8.3.1.2 confirmation of the date with effect
from which that Data Collector's
appointment in relation to such
Metering System is to take effect;
and
8.3.1.3 any data in respect of consumption
at a Metering System received by it
directly from Customers (which shall
be sent promptly after receiving
such information), in order to
enable the relevant Data Collector
to validate and process such
information.
8.4 Access for Data Collectors: In respect of a Metering
System in relation to which it is effectively registered
in a PES Registration Service a Supplier shall use
reasonable endeavours to secure that the appointed Data
Collector has such access to the relevant Meters as the
Data Collector reasonably requires in order to read them
all within the timescales required for Allocation.
8.5 Service Levels: Each Supplier shall (as appropriate)
meet, or procure that the relevant Data Collector meets,
the relevant Service Levels specified in Service
Requirement(s) S520 and S530 in relation to the Metering
Systems in respect of which it is effectively registered
in a PES Registration Service.
9. Data Aggregation
9.1 Functions of Data Aggregator: The principal functions of
a Data Aggregator appointed pursuant to Clause 39.1 shall
be to receive, check, enter, update, aggregate and
provide metering data and report on invalid, inconsistent
or missing metering data received from Data Collectors
and provide such aggregated data to the Operating Agent,
in accordance with the relevant Market Procedure(s),
including MP-503 and MP-505 and Service Requirement(s)
S540 and S550 or any Derogation.
9.2 Choice of Data Aggregator: Each Supplier shall be
entitled to appoint a Data Aggregator of its choice save
that:-
9.2.1 a Supplier shall not appoint more than one Data
Aggregator pursuant to Clause 39.1 at any time
in relation to a particular Metering System in
respect of any particular period; and
9.2.2 a Supplier shall secure that (unless otherwise
agreed by the Director) the functions of a Data
Aggregator in relation to those Non Half Hourly
Metering Systems registered to it in a PES
Registration Service shall only be performed by
the Host Company (or any Accredited person duly
authorised to act on its behalf) in respect of
the period beginning with the Signing Date and
ending on 31 March 2000 or such other date
determined by the Director.
9.3 Provision of information: Each Supplier shall, without
prejudice to the requirements of Clauses 35.2.2 and 39.4,
promptly after its registration in respect of a
particular Metering System first takes full effect or (as
the case may be) following a change in Data Aggregator
appointed in relation to a particular Metering System,
send to the relevant Data Aggregator for each Metering
System registered to it in a PES Registration Service
(unless otherwise agreed with the relevant Data
Aggregator):-
9.3.1 details of such Data Aggregator's registration
in a PES Registration Service in relation to a
Metering System, the related Metering System
Identifier and the Identifiers for the Data
Collector and Scottish Company related to that
Metering System and the relevant Supplier
Identifier; and
9.3.2 confirmation of the start of the period for
which the Data Aggregator is appointed.
9.4 Service Levels: Each Supplier shall (as appropriate)
meet, or procure that the relevant Data Aggregator meets,
the relevant Service Levels specified in Service
Requirement(s) S540 and S550 in relation to the Metering
Systems in respect of which it is effectively registered
in a PES Registration Service.
9.5 Investigation of anomalies: A Supplier shall ensure that
any material anomaly reported to it by a Data Aggregator
appointed by it in accordance with Clause 39.1 in
relation to data received by that Data Aggregator from
Data Collectors for which the Supplier is responsible is
recorded and investigated and that a record is kept of
the action (if any) taken to prevent a recurrence of the
anomaly during the next Supply Reconciliation Run and
shall ensure that all such details are provided to the
PAAP. For this purpose, a "material anomaly" is one
which is required to be so recorded and investigated in
accordance with the relevant Service Requirements or one
which the Supplier appreciates or should reasonably
appreciate will have an impact on the quality of data for
Allocation purposes.
10. Radio Teleswitch service access provision
10.1 Functions of Radio Teleswitch Service Access
Provider: The functions of a Radio Teleswitch Service
Access Provider appointed pursuant to Clause 39.1 shall
be to monitor messages concerning contact switching times
sent to a Metering System for which the related Metering
Equipment is equipped with a Radio Teleswitch and to
provide details of those messages to Scottish Settlements
(by such means and in accordance with such Service
Requirements as may from time to time be approved by
Scottish Settlements).
10.2 Choice of Radio Teleswitch Service Access Provider: Each
Supplier shall be entitled to appoint a Radio Teleswitch
Service Access Provider (who must be Accredited to the
extent that such Accreditation is available) of its
choice save that there must at any time be no more than
one Radio Teleswitch Service Provider appointed in
relation to a particular Metering System in respect of
any particular period.
10.3 Group Code Sponsors: Without prejudice to the duty in
Clause 39.1 and Clause 39.9 a Supplier may, instead of
securing that a Radio Teleswitch Service Access Provider
is appointed in relation to each Metering System
registered to it for which the related Metering Equipment
is equipped with a Radio Teleswitch, use the Group
Code(s) of a Group Code Sponsor who has appointed a Radio
Teleswitch Service Access Provider in relation to such
Group Code(s).
11. Provision of data
11.1 Provision of data - 100 kW Premises: In respect of each
Metering System at 100 kW Premises in relation to which
it is registered in a PES Registration Service, a
Supplier shall promptly submit or procure the submission
of:-
11.1.1 the appropriate data (as specified by Market
Procedure MP-503) by Supplier Identifier to the
Operating Agent;
11.1.2 the appropriate SDP Data Inputs (as specified in
the relevant Market Procedure(s) including MP-
502) by the relevant Data Collector appointed by
it to the relevant SDP Service, before each
Initial Supply Settlement Run in accordance with
the relevant Market Procedure(s), including MP-
502 and MP-503.
11.2 Provision of data - non-100 kW Premises: In respect of
any Metering System at premises other than 100 kW
Premises in relation to which it is registered in a PES
Registration Service, each Supplier shall submit or
procure the submission of:-
11.2.1 the appropriate data (as specified by the
relevant Market Procedure(s), including MP-503)
by Supplier Identifier to the Operating Agent;
and
11.2.2 appropriate SDP Data Inputs (as specified in the
relevant Market Procedure(s), including MP-503)
by the relevant Data Collector appointed by it
to the relevant SDP Service,
in each case promptly after collection of such data and, in any
event, before the relevant Final Supply Reconciliation
Run in accordance with the relevant Market Procedure(s),
including MP-502, MP-503 and MP-505;
11.3 Provision of data - commencement or cessation of
trading: A Supplier shall (to the extent that it has not
already done so in accordance with the Supplier Entry
Process) submit, or procure the submission to the
Operating Agent of, appropriate details of each
Authorised Area in which the Supplier commences or ceases
trading, in accordance with the relevant Market
Procedure(s).
12. Additional responsibilities
12.1 Profile Classes:
12.1.1 a Supplier shall allocate a Profile Class to a
new Non Half Hourly Metering System in relation
to which it is registered in a PES Registration
Service in accordance with the relevant Market
Procedure(s), including MP-516;
12.1.2 if any change is required to a Profile Class a
Supplier shall change the Profile Class of any
Non Half Hourly Metering System in relation to
which it is registered in a PES Registration
Service in accordance with the relevant Market
Procedure(s), including MP-516; and
12.1.3 a Supplier shall use reasonable endeavours to
ensure that the relevant Data Collector
allocates a Profile Class to a Half Hourly
Metering System in relation to which it is
registered in a PES Registration Service for the
purposes of data estimation by the Data
Collector in accordance with the relevant Market
Procedure(s), including MP-516.
12.2 Profile Administrator: Each Supplier shall:-
12.2.1 co-operate with the Profile Administrator in the
performance of the Supplier's obligations under
the Profile Administrator Contract and under any
undertaking provided by the Supplier pursuant to
the Profile Administrator Contract;
12.2.2 co-operate with the Profile Administrator in the
performance of the Supplier's obligations under
the Profile Services Agreement and under any
undertaking provided by the Supplier pursuant to
the Profile Services Agreement;
12.2.3 provide such information as the Profile
Administrator may reasonably require in the
performance of its obligations pursuant to the
Profile Administrator Contract and the Profile
Services Agreement; and
12.2.4 comply with any directions as may from time to
time reasonably be made by Scottish Settlements
in respect of the Profile Administrator Contract
and/or the Profile Services Agreement.
12.3 Provision of teleswitch switching instructions: In
relation to each Teleswitch Group in which it has
Metering Systems for which it is responsible, a Supplier
shall (where applicable) ensure that the teleswitch
switching instructions and changes thereto are provided
to the Radio Teleswitch Service Access Provider in
accordance with the Radio Teleswitch Agreement.
12.4 Trading of Supplies recorded by Half Hourly Meters: A
Supplier shall not change the basis of supply in respect
of a Metering Point which is traded for Allocation
purposes on a Half Hourly basis to one which is traded on
a Non Half Hourly basis unless the relevant Meter is
replaced by a Non Half Hourly Meter or its Half Hourly
function is permanently disabled.
13. Master Registration Agreement
13.1 Provision of Assistance: Each Supplier shall and shall
procure that each of its Supplier Agents shall consider
the impact upon it of any proposed changes to the MRA
Priority Provisions and shall provide any relevant
information relating to such changes to Scottish
Settlements in order to enable Scottish Settlements to
comply with its obligations pursuant to the Master
Registration Agreement. Scottish Settlements shall be
entitled to rely on all information given to it by any
Supplier or any Supplier Agents pursuant to this Clause
46.
14. Residual Requirements
14.1 Adequate generation sources: Each Supplier shall use all
reasonable endeavours to have in place adequate
arrangements to obtain supplies of electricity by
Supplier Programmed Transfer, Import from the Pool or
from a Generator Party pursuant to a Trading Relationship
or any combination of them.
14.2 Top-Up and Spill: Each Supplier other than Scottish
Hydro-Electric or ScottishPower acting as a Supplier in
its own Authorised Area, agrees to use all reasonable
endeavours to minimise the amount of Top-Up required by
them and Spill supplied by them.
15. Supplier Force Majeure
15.1 Supplier Force Majeure: A Supplier shall not be liable
to any other Party for delay or failure in performing its
obligations under this Part, to the extent that such
delay or failure results from or is caused directly by
any event or circumstance beyond the reasonable control
of the Supplier including:-
15.1.1 act of public enemy, war declared or undeclared,
threat of war, terrorist act, blockade,
revolution, riot, insurrection, civil commotion,
public demonstration, sabotage or act of
vandalism;
15.1.2 strikes, lockouts or other industrial
disturbances;
15.1.3 lightning, storm, accumulation of snow or ice,
earthquake, fire, flood or act of God;
15.1.4 explosion, fault or failure of plant or
machinery which (in each case) could not have
been prevented by a Reasonable and Prudent
Operator;
15.1.5 governmental restraint, act of Parliament, other
legislation, bye law and Directive (not being
any order, rule, regulation or direction under
Section 32, 33, 34 or 35 of the Act);
15.1.6 a failure by:-
15.1.6.1 the Operating Agent to provide Daily
Profile Coefficients to a Data
Collector for which the Supplier is
responsible; or
15.1.6.2 the Market Domain Data Agent to
distribute Market Domain Data;
15.1.7 the provision to the Supplier or any Supplier
Agent for which it is responsible by:-
15.1.7.1 the Operating Agent of Daily Profile
Coefficients; or
15.1.7.2 the Market Domain Data Agent of any
Market Domain Data,
which in each case is incorrect in any material
respect;
15.1.8 until 31st March 2000 or such other date
determined by the Director, a design fault or
error in the Non Half Hourly Data Aggregation
System or the Non Half Hourly Data Collection
System; or
15.1.9 a failure in the communication network or method
used by the Supplier Agent in accordance with
the relevant Service Requirements and Market
Procedures provided the Supplier has first used
reasonable endeavours to ensure that its
Supplier Agent has used any reasonable
alternative method of communication available,
("Supplier Force Majeure"), provided that this
Clause 48 is subject to compliance by the
Supplier and its Supplier Agents in all respects
with the disaster recovery provisions from time
to time set out in the applicable Service
Requirements. Lack of funds shall not be
interpreted as a circumstance beyond a
Supplier's reasonable control.
15.2 Mitigation: A Supplier which is affected by Supplier
Force Majeure shall give immediate notice to Scottish
Settlements, shall use all reasonable endeavours to
mitigate the impact of the Supplier Force Majeure and to
remedy as soon as practicable its inability to perform,
and shall provide notice to Scottish Settlements within
one Working Day of the Supplier Force Majeure being
resolved or ceasing to apply. This shall be without
prejudice to the disaster recovery provisions from time
to time set out in the applicable Service Requirements.
16. Assistance
16.1 Assistance in relation to Queries: Each Supplier shall
provide and shall use all reasonable endeavours to
procure that each Supplier Agent from time to time
appointed by it in respect of a Metering System
registered to that Supplier in a PES Registration Service
provides all reasonable assistance and support to the
System Support Help Desk or Scottish Settlements (as
appropriate) as is required for the resolution of a Query
pursuant to Schedule 10 (Queries and Requests for
Information Procedures).
16.2 Assistance to Scottish Settlements: Each Supplier shall
provide and shall use all reasonable endeavours to
procure that each Supplier Agent from time to time
appointed by it provides all reasonable assistance and
support to Scottish Settlements in carrying out its
duties under Parts IV and IX (including without
limitation carrying out any impact assessment regarding
the affect of proposed modifications or systems changes
if reasonably required to do so by Scottish Settlements),
and in relation to the co-ordination of change.
16.3 Assistance in relation to Entry Process Co-
ordinator: Each Supplier shall provide and shall use all
reasonable endeavours to procure that each Supplier Agent
from time to time appointed by it provides all reasonable
assistance and support to the Entry Process Co-ordinator
with a view to ensuring that appropriate testing
environments are available.
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Settlement Agreement for Scotland 14 August 1998
Part VII: Duties of Generator Parties
1. Introduction
1.1 General: The provisions of this Part shall have effect
with respect to certain responsibilities of each
Generator Party in an Area in relation to which a
Generator Party is a Qualifying Generator Party and with
respect to the responsibilities of each such Generator
Party in relation to their appointment of Meter Operators
and Data Collectors in that Area.
1.2 Non Qualifying Generator: The provisions of this Part
shall not apply in respect of any Generator Party in an
Area in relation to which a Generator Party is a Non
Qualifying Generator Party and the provisions of
Schedule 3 (Non Qualifying Parties) shall apply to such
Generator Party in that Area.
2. Compliance and information provision
2.1 General: Each Generator Party shall comply with the
provisions of this Agreement to the extent applicable to
it.
2.2 Generator Identifier: For the avoidance of doubt, a
Generator Party shall have only one Generator Identifier
for the purposes of this Agreement.
2.3 Systems and information provision: Without limitation to
Clause 50.1, each Generator Party shall:-
2.3.1 have and maintain in place such personnel,
systems, contracts and procedures as are
necessary to enable it to comply with such
provisions; and
2.3.2 subject always to Clause 126 (Release of
information) provide to any Party or any third
party, such data, schedules, reports and other
information required to be provided by it
pursuant to the terms of this Agreement.
2.4 Market Domain Data: Each Generator Party shall and shall
procure that its Agents shall:-
2.4.1 provide to Scottish Settlements such Market
Domain Data as is required from that Generator
Party and its Agents fifteen (15) Working Days
prior to that Generator Party's first
registration in a Generation Registration
Service for either Scottish Company's Area; and
2.4.2 forthwith on becoming aware of any amendments to
such Market Domain Data being necessary or any
additional Market Domain Data being required
from that Generator Party and/or its Generator
Agents, provide to Scottish Settlements such
amended and/or additional Market Domain Data,
and each Generator Party shall ensure such data is complete and
correct in all respects.
2.5 Accuracy of information: Each Generator Party shall use
its reasonable endeavours to ensure that any data items
for which it is responsible pursuant to this Agreement
are complete and accurate.
2.6 Data transfer: Each Generator Party shall or shall
procure that each Generator Agent appointed by it
complies with the Data Transfer Catalogue Requirements
when sending data which has a corresponding Data Transfer
Catalogue flow.
2.7 Second of January: Notwithstanding the provisions of
Section 1.5 of Schedule 8 (Liquidated Damages and
Performance Levels) and Clauses 87 (Urgent Response) and
89.8 of Part IX (Governance of this Agreement), each
Generator Party shall use reasonable endeavours to ensure
that any obligation that it or any Agent is required to
perform shall be performed within the timescales
specified in this Agreement, providing that nothing in
this Clause 51.7 shall require a Generator Party or any
of its Agents to perform any of its obligations under
this Agreement that it is required to perform on a
Working Day on the second of January or when the second
of January is not a Working Day on the first Working Day
thereafter.
3. Installation of metering
3.1 Installation of metering for Registrable Generation Sites
before Effective Trading Date: In respect of any
Metering System at a Registrable Generation Site which is
to be operational from and after the Effective Trading
Date, the relevant Generator Party shall install or
procure the installation of Half Hourly Metering
Equipment (if the same has not already been installed) in
accordance with the relevant Metering Code of Practice
and Schedule 5 (Metering) prior to the Effective Trading
Date.
3.2 Installation of Mandatory Half Hourly metering for
Registrable Generation Sites after Effective Trading
Date: Each Generator Party shall use all reasonable
endeavours to install or procure the installation of Half
Hourly Metering Equipment at each Registrable Generation
Site registered or to be registered to it in a Generation
Registration Service after the Effective Trading Date in
accordance with the relevant Metering Code of Practice
and Schedule 5 (Metering).
3.3 Installation of metering for Registrable Import Registers
before Effective Trading Date: In respect of any
Metering System comprising a Registrable Import Register
which is operational as at the Effective Trading Date,
the relevant Generator Party shall install or procure the
installation of Half Hourly Metering Equipment (if the
same has not already been installed) in accordance with
the relevant Metering Code of Practice and Schedule 5
(Metering) prior to the Effective Trading Date.
3.4 Installation of Mandatory Half Hourly Metering for
Registrable Import Registers: Each Generator Party shall
use all reasonable endeavours to install or procure the
installation of Half Hourly Metering Equipment at
Metering Systems comprising a Registrable Import Register
registered or to be registered to it in a Grid-connected
Power Stations (Import Registers) Registration Service
after the Effective Trading Date in accordance with the
relevant Metering Code of Practice and Schedule 5
(Metering).
4. Co-operation with Market Auditor
4.1 Co-operation with Market Auditor: Each Generator Party
shall co-operate with the Market Auditor at all times and
provide all such information and assistance as is from
time to time reasonably required of that Generator Party
by the Market Auditor in fulfilling its obligations
pursuant to Schedule 6 (Role of the Market Auditor).
5. Generator Agents
5.1 Appointment of Generator Agents: Subject to Clauses 55.3
and 56.4 each Generator Party shall, in relation to:-
5.1.1 each Metering System at a Registrable Generation
Site registered to it in a Generation
Registration Service with the exception of
Metering Systems at such Registrable Generation
Sites which are Composite Sites and which
comprise an Import Register or Import Registers;
and
5.1.2 each Metering System comprising a Registrable
Import Register registered to it in a Grid-
connected Power Stations (Import Registers)
Registration Service,
secure that the following are appointed, and information
is provided to ensure that such appointments are (where
applicable) recorded in the relevant Generation
Registration Service or, as the case may be, Grid-
connected Power Stations (Import Registers) Registration
Service with effect from the time when such registration
first takes full effect and that an appointment of each
of the following is maintained so long as the Generator
Party remains so registered:-
5.1.3 a Meter Operator; and
5.1.4 a Data Collector.
5.2 Generator Entry Processes: Each Generator Party shall
ensure that it and each of its Generator Agents within an
Area has satisfied the requirements of the Generator
Entry Processes:-
5.2.1 in the case of initial entry (except in the case
of a Non Qualifying Generator) prior to any
registration of that Generator Party or its
Generator Agents in the Generation Registration
Service, Bulk Supply Point Registration Service,
or the Grid-connected Power Stations (Import
Registers) Registration Service in that Area;
and
5.2.2 in respect of any requirement to repeat the
Generator Entry Processes due to a change in
that Generator Party's or any of its Generator
Agents' systems before live operation of those
changed systems with other Allocation Systems,
and in each case has submitted any readiness confirmation
required to the Entry Process Co-ordinator.
5.3 Replacement of Generator Agents: Subject to Clauses 55.3
and 56.2 each Generator Party:-
5.3.1 may arrange for any Generator Agent for which it
is responsible to be removed from time to time
provided that a replacement Generator Agent
shall have been appointed with effect from the
date of removal of the removed Generator Agent.
Each Generator Party shall ensure that the
appointment of a Generator Agent for which it is
responsible shall terminate on withdrawal of the
Accreditation (where applicable) of the relevant
Generator Agent; and
5.3.2 shall ensure that there are appropriate
arrangements in place in compliance with Service
Requirement S510 and S530 with each Generator
Agent for which it is responsible from time to
time to enable any replacement Generator Agent
for which it is responsible to take over the
functions of a Generator Agent whose appointment
has expired or been terminated, including
arrangements for the transfer of relevant data
to such replacement Generator Agent.
5.4 Responsibility of Generator Parties: Each Generator
Party shall be responsible for every act, breach,
omission, neglect and failure of each Generator Agent
appointed pursuant to Clause 54.1.1 in relation to their
appointment as a Generator Agent and shall itself comply,
and procure compliance by each such Generator Agent, with
this Agreement including the relevant Service
Requirements, relevant Market Procedures, relevant
Metering Codes of Practice and applicable Rules or any
Derogation.
5.5 Performance Assurance: Each Generator Party shall:-
5.5.1 provide, or procure the provision of, such
reports to Scottish Settlements as may from time
to time be reasonably required by it in order to
enable Scottish Settlements to review compliance
by that Generator Party and by each Generator
Agent for which that Generator Party is
responsible with the relevant provisions of this
Agreement, including this Part VII, Service
Requirements S510 and S530, relevant Market
Procedures including MP-01 and MP-502 and the
Metering Codes of Practice or any Derogation;
and
5.5.2 provide or procure the provisions of access for
the PAAP to all of its records, data and other
information (and those of any Generator Agent
appointed by it) as may reasonably be required
by the PAAP to carry out its functions in
accordance with Clause 89 (Proceedings of PAAP)
or otherwise pursuant to this Agreement.
5.6 Generator Party Liquidated Damages: Without prejudice to
any other right of other Parties (other than in respect
of claims for damages for loss), a Generator Party who
fails to comply with the reporting requirements imposed
on it pursuant to Clause 54.5.1, with Clause 60.1 or (as
the case may be) Clause 60.2 or with any of the
Performance Levels shall be liable to the relevant
Liquidated Damages payment, if any, set out in and to be
payable in accordance with Schedule 8 (Liquidated Damages
and Performance Levels).
5.7 Assistance to Generator Agents: Each Generator Party
shall, in accordance with the relevant Market Procedure
and/or Service Requirement(s) and/or the relevant
Metering Codes of Practice, take such actions and provide
such information as is reasonably necessary to enable
each Generator Agent for which it is responsible to
discharge its functions in accordance with this Agreement
including the relevant Market Procedure(s) and/or Service
Requirement(s) and/or the relevant Metering Codes of
Practice or any Derogation.
5.8 Performance of duties by Generator
Party: Notwithstanding the duty contained in Clause
54.1, a Generator Party may, instead of securing that a
Meter Operator and/or Data Collector is appointed in
relation to each relevant Metering System at a
Registrable Generation Site registered to it in a
Generation Registration Service and each Metering System
comprising a Registrable Import Register registered to it
in a Grid-connected Power Stations (Import Registers)
Registration Service, perform the relevant function or
functions itself provided that it is and remains
Accredited for the relevant function or functions, in
which event the provisions of this Part VII shall apply
and be interpreted on the basis that the Generator Party
shall (in its capacity as a Meter Operator and/or Data
Collector) itself perform the obligations which it would
otherwise be required to ensure compliance by the
relevant Generator Agent.
5.9 Access to records: Each Generator Party shall use
reasonable endeavours to ensure that all records and data
held by each Generator Agent consequent on his
appointment by that Generator Party are accessible to the
Market Auditor and to any other person authorised to have
access to all such records and data under this Agreement.
6. Meter Operation
6.1 General: This Clause 55 sets out the rights and
obligations of each Generator Party in respect of Meter
Operation which rights and obligations are in addition to
any other rights and obligations detailed in Schedule 5
(Metering).
6.2 Functions of Meter Operators: The principal functions of
a Meter Operator appointed pursuant to Clause 54.1 shall
be to install, inspect, maintain (repairing and replacing
as necessary), commission, provide and maintain technical
details of, change, Energise and De-energise Meters, take
Meter readings, investigate suspected faults and invalid
data and text and provide reports in respect of such
activities, maintain, and rectify faults in respect of,
Metering Equipment, in accordance with the relevant
Market Procedure(s), including MP-502 and Service
Requirement S510 and Metering Codes of Practice or any
Derogation.
6.3 Choice of Meter Operators: The identity of each Meter
Operator for which a Generator Party is responsible shall
be determined by that Generator Party save that there
must be no more than one appointment of a Meter Operator
in effect at any time in relation to a particular
Metering System in respect of any particular period.
6.4 Service Levels: Each Generator Party shall (as
appropriate) meet, or procure that the relevant Meter
Operator meets, the relevant Service Levels specified in
Service Requirement S510 in relation to any Metering
System in respect of which it is required to ensure the
appointment of a Meter Operator.
7. Data Collection
7.1 Functions of Data Collectors: The principal functions of
a Data Collector appointed pursuant to Clause 54.1 shall
be to collect, check, validate, provide estimates, report
faults, update, process, provide and investigate
inconsistencies in metering data in relation to Metering
Equipment, in accordance with the relevant Market
Procedure(s), including MP-502 and Service Requirement
S530 or any Derogation.
7.2 SDP Data Inputs: Each Generator Party shall procure that
each Data Collector for which it is responsible shall
submit the appropriate SDP Data Inputs to the relevant
Scottish Company in accordance with the relevant Market
Procedure(s), including MP-502 and, in particular, within
the timescales set out therein.
7.3 Reconciliation of SDP Data Inputs: Each Generator Party
shall procure that each Data Collector for which it is
responsible shall carry out Meter Advance Reconciliations
in accordance with the relevant Market Procedure(s),
including MP-502.
7.4 Choice of Data Collector: The identity of each Data
Collector for which a Generator Party is responsible
shall be determined by that Generator Party save that:-
7.4.1 there must be no more than one appointment of a
Data Collector by a Generator Party in effect at
any time in relation to a particular Metering
System in respect of any Trading Day;
7.4.2 each Generator Party agrees that no-one other
than the Host Company (or any Accredited person
duly authorised to act on its behalf) may be
appointed pursuant to Clause 54.1 as the Data
Collector in relation to any Metering System at
a Grid-connected Generation Site registered to
that Generator Party in a Generation
Registration Service, other than such a Metering
System which comprises a Registrable Import
Register registered to that Generator Party in a
Grid-connected Power Stations (Import Registers)
Registration Service and no other Import
Register or Export Register;
7.5 Access for Data Collectors: In respect of a Metering
System in relation to which it is effectively registered
in a Generation Registration Service or Grid-connected
Power Station (Import Registers) Registration Service a
Generator Party shall use reasonable endeavours to secure
that the appointed Data Collector has such access to the
relevant Meters as the Data Collector reasonably requires
in order to read them all within the timescales required
for Allocation.
7.6 Service Levels: Each Generator Party shall (as
appropriate) meet, or procure that the relevant Data
Collector meets the relevant Service Levels specified in
Service Requirement S530 in relation to the Metering
Systems in respect of which it is required to ensure the
appointment of a Data Collector.
8. Master Registration Agreement
8.1 Provision of Assistance: Each Generator Party shall
consider and shall procure that its Generator Agents
consider the impact upon it of any proposed changes to
the MRA Priority Provisions and shall provide any
relevant information relating to such changes to Scottish
Settlements in order to enable Scottish Settlements to
comply with its obligations pursuant to the Master
Registration Agreement. Scottish Settlements shall be
entitled to rely on all information given to it by any
Generator Party or its Generator Agent pursuant to this
Clause 57.
9. Assistance
9.1 Assistance in relation to Queries: Each Generator Party
shall provide and shall use all reasonable endeavours to
procure that each Generator Agent from time to time
appointed by it in respect of each Registrable Generation
Site and/or Registrable Import Registers registered to
that Generator Party in a Generation Registration Service
or a Grid-connected Power Stations (Import Registers)
Registration Service provides all reasonable assistance
and support to the Systems Support Help Desk or Scottish
Settlements (as appropriate) as is required for the
resolution of any Query pursuant to Schedule 10 (Queries
and Requests for Information Procedures).
9.2 Assistance to Scottish Settlements: Each Generator Party
shall provide and shall use all reasonable endeavours to
procure that each Generator Agent from time to time
appointed by it provides all reasonable assistance and
support to Scottish Settlements in carrying out its
duties under Parts IV (Role and Function of Scottish
Settlements) and IX (Governance of this Agreement)
(including carrying out impact assessments regarding the
effect of proposed modifications or system changes if
reasonably required to do so by Scottish Settlements),
and in relation to the co-ordination of change.
9.3 Assistance in relation to Entry Process Co-
ordinator: Each Generator Party shall provide and shall
use all reasonable endeavours to procure that each
Generator Agent from time to time appointed by it
provides all reasonable assistance and support to the
Entry Process Co-ordinator with a view to ensuring that
appropriate testing environments are available.
10. Residual Requirements
10.1 Adequate Supply arrangements: Each Generator Party shall
use all reasonable endeavours to have in place adequate
arrangements to supply its output by way of Generator
Trades, Generator Programmed Transfers, Exports through
the Pool or to Suppliers pursuant to a Trading
Relationship or any combination of them.
10.2 Top-up and Spill: Each Generator Party, other than
Scottish Hydro-Electric or ScottishPower acting as a
Generator Party in its own Area, agrees to use all
reasonable endeavours to minimise the amount of Top-up
required by them and Spill supplied by them.
11. Provision of data
11.1 Provision of data - 100 kW Premises: In respect of each
Metering System at 100 kW Premises registered to it in a
Generation Registration Service or a Grid-connected Power
Stations (Import Register) Registration Service, each
Generator Party shall procure the prompt submission of
the appropriate SDP Data Inputs (as specified by the
relevant Market Procedure(s), including MP-502) by the
relevant Data Collector appointed by it to the relevant
SDP Service in accordance with the timescales provided
for in accordance with the relevant Market Procedure(s),
including MP-502.
11.2 Provision of data - non-100 kW Premises: In respect of
any Metering System at any premises other than 100 kW
Premises registered to it in a Generation Registration
Service or a Grid-connected Power Stations (Import
Register) Registration Service, each Generator Party
shall procure the submission of the appropriate SDP Data
Inputs (as specified by the relevant Market Procedure(s),
including MP-502) by the relevant Data Collector
appointed by it to the relevant SDP Service promptly
after collection of such data in accordance with the
relevant Market Procedure(s), including MP-502.
12. Generator Force Majeure
12.1 Generator Force Majeure: A Generator Party shall not be
liable to any other Party for delay or failure in
performing its obligations under this Part, to the extent
that such delay or failure results from or is caused
directly by any event or circumstance beyond the
reasonable control of the Generator Party including:-
12.1.1 act of public enemy, war declared or undeclared,
threat of war, terrorist act, blockade,
revolution, riot, insurrection, civil commotion,
public demonstration, sabotage or act of
vandalism;
12.1.2 strikes, lockouts or other industrial
disturbances;
12.1.3 lightning, storm, accumulation of snow or ice,
earthquake, fire, flood or act of God;
12.1.4 explosion, fault or failure of plant or
machinery which (in each case) could not have
been prevented by a Reasonable and Prudent
Operator;
12.1.5 governmental restraint, act of Parliament, other
legislation, bye law and Directive (not being
any order, rule, regulation or direction under
Section 32, 33, 34 or 35 of the Act);
12.1.6 a design fault or error in the systems used by
the Generator Party's Agents relating to Data
Collection at Grid Connected Generation Sites
until such time as this is no longer a monopoly
service;
12.1.7 a failure in the communication network or method
used by the Generator Party's Agent in
accordance with the relevant Service
Requirements and Market Procedures provided the
Generator Party has first used reasonable
endeavours to ensure that its Generator Agent
has used any reasonable alternative method of
communication available,
("Generator Force Majeure"), provided that this Clause 61.1 is
subject to compliance by the Generator Party and its
Generator Agents in all respects with the disaster
recovery provisions from time to time set out in the
applicable Service Requirements. Lack of funds shall not
be interpreted as a circumstance beyond a Generator
Party's reasonable control.
12.2 Mitigation: A Generator Party which is affected by
Generator Force Majeure shall give immediate notice to
Scottish Settlements, shall use all reasonable endeavours
to mitigate the impact of the Generator Force Majeure and
to remedy as soon as practicable its inability to
perform, and shall provide notice to Scottish Settlements
within one Working Day of the Generator Force Majeure
being resolved or ceasing to apply. This shall be
without prejudice to the disaster recovery provisions
from time to time set out in the applicable Service
Requirements.
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Settlement Agreement for Scotland 14 August 1998
Part VIII: Charging/Cost Recovery
1. Settlement Charges
1.1 Total Cost Recovery: The total amount of costs which are
recoverable through Settlement Charges in any Relevant
Year ("Total Cost Recovery") shall be the total of the
recoverable operating costs calculated in terms of Clause
62.2 (as adjusted in terms of Clause 63.2) and, from the
last Effective Trading Date, the recoverable development
costs in terms of Clause 62.3.
1.2 Operating Costs: The recoverable operating costs shall
be calculated in respect of any Relevant Year or other
period as the total of the following costs:-
1.2.1 the lesser of (i) the recoverable amount as
agreed by Scottish Settlements with the
Director in respect of Core Services, after
consultation with the FAP in terms of Part IX
or (ii) the actual costs incurred in respect
of Core Services;
1.2.2 the total Ordered Costs incurred by Scottish
Settlements in the Relevant Year;
1.2.3 the total Certification Costs incurred by
Scottish Settlements in the Relevant Year;
1.2.4 the aggregate finance and interest costs
(allowing for any interest earned) incurred
by Scottish Settlements in the Relevant Year
or other period; and
1.2.5 the aggregate taxation costs (allowing for
any rebate in taxation) incurred by or paid
in respect of the activities of Scottish
Settlements in the Relevant Year or other
period.
1.3 Development Costs: The recoverable development costs in
respect of any Relevant Year or other period shall be
agreed by Scottish Settlements with the Director in
accordance with guidelines approved by the Director and
published by Scottish Settlements from time to time.
1.4 Intellectual Property Revenue: In the event that
Scottish Settlements receives any income from the
licensing of any intellectual property rights owned by it
in terms of Clause 8.2.7, such income (after deduction of
the costs of entering into any such licence) shall, in
each Relevant Year or other period during the Cost
Recovery Period be divided equally and paid to the
Scottish Companies. In each Relevant Year or other period
after the end of the Cost Recovery Period, any such
income (after deduction of the costs of entering into any
such licence) shall be deducted from Total Cost Recovery
in the calculation of Settlement Charges payable by all
Parties in terms of this Part VIII for the Relevant Year
or other period.
2. Charging Structure
2.1 Charging: Scottish Settlements shall set for the
Relevant Year or other period Charges for Generator
Parties and Suppliers in accordance with the procedures
set out in this Agreement.
2.2 Correction Factor: In the event that there is any
difference between the amount recovered by Scottish
Settlements in respect of any Relevant Year, and Total
Cost Recovery for that Relevant Year, the Total Cost
Recovery for the following Relevant Year and, where
appropriate, any subsequent Relevant Years shall be
adjusted as follows:-
2.2.1 where the actual amount of Settlement Charges
and Standard Charges (referred to in Clause
63.4) accrued is less than Total Cost Recovery
then Total Cost Recovery for the following
Relevant Year shall be increased by an amount
equal to the shortfall; or
2.2.2 where the actual amount recovered exceeds Total
Cost Recovery then Total Cost Recovery for the
following Relevant Year shall be reduced by an
amount equal to the excess.
2.3 Division of Settlement Charges: Scottish Settlements
shall charge Settlement Charges as follows:
2.3.1 Generator Parties shall pay Settlement
Charges on the basis of kWh of Adjusted
Output to the intent that Generator Parties
bear 30% of the Total Cost Recovery in any
Relevant Year;
2.3.2 Suppliers to Half Hourly metered Customers
shall pay Settlement Charges on the basis of
a figure in Pound per MSID agreed between
Scottish Settlements and the Director from
time to time after consultation with the FAP;
and
2.3.3 Suppliers to Non-Half Hourly Customers shall
pay Settlement Charges on the basis of per
kWh of the Supplier BSP Group Purchases
supplied by the Supplier to its Non-Half
Hourly Customers, to the intent that
Suppliers of both Half-Hourly and Non-Half
Hourly Customers bear 70% of the Total Cost
Recovery in any Relevant Year.
2.4 Standard Charges: Scottish Settlements shall be entitled
to charge for standard services in accordance with a
schedule of standard charges agreed between Scottish
Settlements and the Director from time to time after
consultation with the FAP (the "Standard Charges") and
published by Scottish Settlements.
2.5 Other Charges: In the case of any other services not
covered by Settlement Charges or Standard Charges,
Scottish Settlements shall agree a charge for the
relevant service with the purchaser.
3. Recovery of Total Cost Recovery
3.1 Collection of Total Cost Recovery: The due proportion
(determined in accordance with Clause 63.3) of Total Cost
Recovery payable by each Party shall be recovered by
payments from each Party in respect of each Initial Run.
3.2 Reconciliation of Charges: The due proportion of Total
Cost Recovery payable by each Party shall be recalculated
at Reconciliation Runs determined by Scottish Settlements
and notified to the FAP and any increases or decreases in
the amounts payable by each Party shall be reflected in
the next invoice prepared for such Party in terms of
Clause 64.3.
3.3 Invoicing: Scottish Settlements shall prepare for each
month an invoice for each Party detailing:
3.3.1 the due proportion of Total Cost Recovery
payable by such Party in respect of that month
and the basis of calculation of such proportion;
3.3.2 any adjustments to previous invoices arising as
a result of Reconciliation Runs in terms of
Clause 64.2;
3.3.3 any Standard Charges or other charges payable by
such Party in terms of Clauses 63.4 and 63.5;
3.3.4 any Liquidated Damages payable by such Party in
terms of Clause 89 (Proceedings of PAAP);
3.3.5 any amounts to be deducted in terms of Clause
62.4; and
3.3.6 the total amount payable by such Party and any
Value Added Tax payable thereon.
Each invoice shall be despatched to each Party at least twenty
one (21) days prior to the due date for payment or, as
the case may be, other period agreed between the Parties
and notified to the FAP. Such invoice shall be paid no
later than the due date for payment unless otherwise
agreed with Scottish Settlements.
3.4 Payment: Each Party shall pay all amounts due hereunder
by electronic transfer to a bank account specified from
time to time by Scottish Settlements in sterling in
cleared funds in full without set off or counterclaim,
withholding or deduction of any kind whatsoever but
without prejudice to any other remedy. All charges are
exclusive of United Kingdom Value Added Tax which shall
be added to such charges, if applicable.
3.5 Withholding on Disputes: Subject to Clause 113 (Powers
of Disputes Panel), no Party may withhold payment of any
invoiced amount in the event of any Dispute being raised
regarding Charges in any month or period.
3.6 Interest on non-payment: If any amount due to Scottish
Settlements in terms of this Agreement is not received on
the due date the Party required to pay such amount shall
pay interest to Scottish Settlements on such amount from
and including the date of default to the date of actual
payment (whether after or before judgement) at the rate
which is two (2) per cent. per annum above the base rate
from time to time of the Royal Bank of Scotland during
each period of default.
105
Settlement Agreement for Scotland 14 August 1998
Part IX: Governance of this Agreement
1. The Scottish Electricity Forum ("SEF")
1.1 Establishment: The Parties to this Agreement hereby
establish the SEF upon the terms and subject to the
conditions of this Agreement.
2. Membership of the SEF
2.1 Membership Entitlement: Each Party to this Agreement
shall, on becoming a Party to this Agreement, become a
member of the SEF with the entitlement to be represented at
all meetings of the SEF.
2.2 Removal: An SEF Member shall cease to be a member of the
SEF on the date of its ceasing to be a Party to this
Agreement.
2.3 SEF Objectives: The objectives of the SEF will be:
2.3.1 to elect or appoint individuals to sit on each of
the Panels; and
2.3.2 to provide a forum for discussion among Market
Participants and each Recognised Organisation in
respect of the operation and development of the
Central Allocation System and the objects of this
Agreement including consideration of reports from
each Panel, Review Work Group and the Market
Auditor.
2.4 Secretary: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a representative
of a SEF Member) as the Secretary of the SEF, and may
remove and replace such individual so appointed from time
to time.
2.5 Selection of Panel Members: The SEF shall from time to
time in accordance with this Part IX, elect or appoint
individuals to be the members of the following:-
2.5.1 the Modification Panel;
2.5.2 the Disputes Panel;
2.5.3 the Performance Assurance and Accreditation Panel
("PAAP"); and
2.5.4 the Finance and Audit Panel ("FAP").
The term of office of Panel Members shall subject to Clause 66.11
be until the next annual general meeting of the SEF or the
next extraordinary general meeting of the SEF at which
Panel Members are chosen, provided that no Disputes Panel
Member may be nominated, elected or appointed to serve
contemporaneously on the Modification Panel, PAAP or FAP
(including as an Alternate).
2.6 Panel Election Procedure: The procedures set out in this
Clause 66.6 shall apply to the election of Panel Members
by SEF Members other than Scottish Settlements, members of
the Scottish Hydro-Electric Group and members of the
Scottish Power Group ("Non-Scottish Company Members") to
the Panels referred to in Clause 66.5.
2.6.1 Consistent with the voting rights referred to in
Clause 69 (Voting) each Non-Scottish Company
Member shall be entitled, by notice to the
Secretary given no earlier than ninety (90) days
before the day of and no later than twenty four
(24) hours before the stated commencement time of
the annual general meeting or relevant
extraordinary general meeting of the SEF, to
nominate for each Panel in order of preference up
to four (4) individuals (each a "Panel Nominee")
to be Panel Members. A Panel Nominee need not be
an officer or employee of an SEF Member. Any such
proposal to be valid shall be accompanied by a
written statement from the relevant Panel Nominee
stating that he is aware of the proposal and would
be prepared to serve as a Panel Member if elected.
2.6.2 At the annual general meeting (or, as the case may
be, extraordinary general meeting) the Secretary
shall circulate (or cause to be circulated) to all
SEF Members and the Director a list of the names
of each first preference Panel Nominee and of the
Non-Scottish Company Members who proposed them
(the "Panel Nominee List"). The Panel Nominee
List shall also be circulated at the annual
general meeting or, as the case may be,
extraordinary general meeting to each SEF Member
present in person.
2.6.3 At the annual general meeting or (as the case may
be) extraordinary general meeting of SEF Members
held to appoint Panel Members and in the event
that the number of Panel Nominees exceeds the
number of Panel Members to be elected or appointed
by the Non-Scottish Company Members, the following
procedures shall be applied in sequence:-
2.6.3.1 each Non-Scottish Company Member shall
be given a voting paper for each Panel
(in this Clause 66.6, a "Voting
Paper") with the name of every Panel
Nominee who appears on the Panel
Nominee List for that Panel;
2.6.3.2 subject to Clauses 66.6.3.3 and
66.6.3.4 below, a Non-Scottish Company
Member shall rank each Panel Nominee
on its Voting Paper in order of
preference by marking the Panel
Nominee which is its first choice for
membership of the relevant Panel (its
"Preferred Panel Nominee") with the
number "1" and continuing numbering
sequentially in order of preference
until it is indifferent as to the
preference it accords to any remaining
Panel Nominees, at which point no
further preferences should be marked.
The same preference may not be
expressed by a Non-Scottish Company
Member for more than one Panel
Nominee;
2.6.3.3 if a Non-Scottish Company Member has
proposed a Panel Nominee in accordance
with Clause 66.6.1, then such Non-
Scottish Company Member must choose
that Panel Nominee as its Preferred
Panel Nominee;
2.6.3.4 the Secretary shall collect in each
Voting Paper and for each Preferred
Panel Nominee shall calculate the
number of Weighted Votes cast by those
Non-Scottish Company Members in his
favour and for this purpose each Non-
Scottish Company Member shall be
deemed to have cast all its Weighted
Votes in favour of its Preferred Panel
Nominee;
2.6.3.5 the Secretary shall prepare a list
(the "Panel Preference List") ranking
the Preferred Panel Nominees in order
according to the number of Weighted
Votes cast for each such Preferred
Panel Nominee, with the Preferred
Panel Nominee with the greatest number
of Weighted Votes being at the head of
the list;
2.6.3.6 the Panel Nominee whose name appears
last on the Panel Preference List
shall be removed from the Panel
Preference List and shall take no
further part in the election process
for the Panel Members and the
Secretary shall transfer the Weighted
Votes of all those Non-Scottish
Company Members who voted for that
Panel Nominee to the second preference
Panel Nominee(s) on the relevant
Voting Papers. The Secretary shall
then prepare a revised Panel
Preference List and the procedure set
out in this Clause 66.6.3.6 shall be
repeated as often as may be necessary
until the number of Panel Nominees on
the Panel Preference List equals the
number of Panel Members to be elected
by the Non-Scottish Company Members
(on each occasion the Panel Nominee
whose name appears last on the Panel
Preference List being removed from it
and the Secretary transferring the
Weighted Votes of all those Non-
Scottish Company Members attributable
to that Panel Nominee to the Panel
Nominee(s) who is the Non-Scottish
Company Members next respective
preference);
2.6.3.7 if, at any point in the procedure set
out in Clause 66.6.3.6, the Weighted
Votes cast in favour of the Panel
Nominees ranked at the bottom of the
Panel Preference List are equal, then
the Panel Nominee to be removed from
the Panel Preference List shall be the
Panel Nominee with the least first
preferences. In the event that the
first preferences are equal reference
shall be made to second preferences
and repeated in relation to each
subsequent preference until either a
Panel Nominee can be eliminated or the
preferences are exhausted. In the
event that all preferences are equal
the Panel Nominee to be removed from
the Panel Preference List shall be
decided by the drawing of lots in a
manner to be determined by the SEF
Chairman;
2.6.3.8 if no further preference is expressed
on a Voting Paper to be redistributed,
that Voting Paper shall be discarded.
If the next preference expressed on a
Voting Paper is for a Panel Nominee
who has already been removed from the
Panel Preference List then the next
preference again shall be referred
to;
2.6.3.9 once the procedure set out in Clause
66.6.3.6 above results in a number of
Panel Nominees on the Panel Preference
List which is equal to the number of
Panel Members to be elected by the
Non-Scottish Company Members, then
those Panel Nominees on the Panel
Preference List shall be elected to
the relevant Panel.
2.7 Spoilt Paper: If any Voting Paper is incorrectly completed
or otherwise spoilt, Scottish Settlements shall take no
account of it or of the preferences purported to be
expressed in the conduct of the procedures set out in
Clause 66.6.
2.8 Default Appointment: If the procedures set out in this
Clause 66 shall result in a number of first preference
Panel Nominees which is equal to the prescribed number of
Panel Members permitted, then those Panel Nominees shall be
appointed to the relevant Panel without the requirement for
a vote. In the event that the number of first preference
Panel Nominees is less than the prescribed number of
Panel Members permitted then those first preference Panel
Nominees shall be appointed to the relevant Panel.
Thereafter, reference shall be had to the next preference
Panel Nominees, and for the purposes of electing or
appointing Panel Members to the remaining seats on the
relevant Panel, the procedures set out in this Clause 66
for electing or appointing Panel Members shall be
followed in relation to such Panel Nominees as if they
were the first preference Panel Nominees. This procedure
shall be repeated in relation to each following
preference of Panel Nominees until all available seats on
the relevant Panel are filled. In the event that the
total number of Panel Nominees is less than the prescribed
number of Panel Members permitted on any Panel, Scottish
Settlements shall, after consultation with those
representatives present at the relevant meeting, appoint in
its sole discretion individuals (who may include employees
of Scottish Settlements, Scottish Hydro-Electric and
ScottishPower) to represent the Non-Scottish Company
Members such that the Panel shall have the prescribed
number of Panel Members. Panel Members so appointed shall,
subject to Clauses 66.10 and 66.11, serve until the next
annual general meeting or extraordinary general meeting at
which Panel Members are appointed of the SEF.
2.9 Notification to SEF Members: Scottish Settlements shall
promptly notify all SEF Members and the Director of the
appointment and removal of any Panel Member.
2.10 Vacation of Office by Panel Members: The office of a Panel
Member shall be vacated if:-
2.10.1 he becomes of unsound mind or a patient for any
purpose of any statute relating to mental health;
or
2.10.2 he and his Alternate fail to attend more than
three consecutive meetings of the requisite Panel;
or
2.10.3 he resigns his office by giving prior written
notice of not less than twenty eight (28) days
delivered to Scottish Settlements; or
2.10.4 he dies.
2.11 Removal of Panel Member: All SEF Members whose Weighted
Votes were cast in favour of a Panel Member in an election
pursuant to Clause 66.6 may, at any time and from time to
time, agree acting collectively and unanimously that such
Panel Member shall be removed and replaced by another
individual. Such removal and replacement shall be notified
to the relevant Panel Member, the Secretary of the relevant
Panel and to the Secretary of the SEF and shall take effect
on notice being received by the Secretary of the SEF,
provided that no such notice shall be given during any
meeting of the relevant Panel.
2.12 Election of Replacement Panel Members: At the time of the
vacation of office of a Panel Member elected or appointed
by a Non-Scottish Company Member (for the purposes of this
Clause 66 an "Outgoing Panel Member") or as soon as it is
reasonably practicable thereafter, a replacement Panel
Member shall be agreed by the relevant SEF Members and,
failing such agreement, shall be elected following the
procedures set out in Clause 66.6, provided that only SEF
Members whose Weighted Votes were cast in favour of the
Outgoing Panel Member in an election pursuant to Clause
66.6, may take part in the election or agreement of a
replacement Panel Member pursuant to this Clause 66.12.
2.13 Scottish Hydro-Electric and ScottishPower Panel
Members: Scottish Hydro-Electric and ScottishPower shall
be entitled to nominate and appoint representatives to each
Panel, in accordance with its appointee entitlement to the
relevant Panel, without the operation of any voting or
other selection procedure. Scottish Hydro-Electric and
ScottishPower shall notify the Secretary of such
appointments fourteen (14) days prior to the relevant
general meeting of the SEF. In the event that the total
number of representatives to be appointed to any Panel by
Scottish Hydro-Electric and ScottishPower is an odd number,
Scottish Hydro-Electric and/or ScottishPower shall further
nominate one person to serve for the period of time until
the next appointment of Panel Members at which point the
other shall nominate a person to serve for the next period.
In the event that a Panel Member appointed in terms of this
Clause 66.13 vacates his office in terms of Clause 66.10,
then whichever Scottish Company appointed such Panel Member
shall appoint a replacement Panel Member by notifying the
Secretary and the secretary of the relevant Panel of such
appointment.
2.14 Alternates:
2.14.1 Each Panel Member shall have the power to appoint
one person at any time (who may be an existing
member of that Panel or an existing Alternate of a
member of that Panel) to be his alternate
("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 of the relevant Panel
in advance of the next meeting of the Panel
concerned. The secretary shall inform all other
Panel Members of such appointment. If his
appointor so requests, an Alternate shall be
entitled to receive notice of all meetings of the
Panel or of sub-committees or sub-groups of which
his appointor is a member. Unless provided
otherwise in this Agreement, he shall also be
entitled to attend, speak and vote in place of the
appointing Panel Member at any part of a meeting
at which the Panel Member appointing him is not
personally present and at such meeting or part of
a meeting to exercise and discharge all the
functions, powers and duties of his appointor as a
Panel Member and for the purposes of the
proceedings at the meeting the provisions of this
Part IX shall apply as if he were a Panel Member.
2.14.2 An Alternate shall ipso facto cease to be an
Alternate if his appointor ceases for any reason
to be a Panel Member.
2.14.3 References in this Agreement to a Panel Member
shall, unless the context otherwise requires,
include his duly appointed Alternate.
2.15 Experience: SEF Members shall nominate or appoint Panel
Members with due regard to the need for relevant experience
of individuals sitting on each Panel.
2.16 Confidentiality: Panel Members elected or appointed in
terms of this Clause 66 and any Alternates or others
attending a Panel meeting shall, before taking their place
on the relevant Panel, sign a confidentiality undertaking
in the form set out in Schedule 11 which shall include
(without limitation) an obligation on Panel Members not to
disclose information which is likely to cause a change in
the price of the shares of any Party or Agent. Any members
of a Work Group shall also sign such an undertaking prior
to taking their place on the relevant Work Group.
2.17 Conflict of Interest: In the event that any meeting of a
Panel requires to consider an issue which concerns the
employer of a Panel Member, such Panel Member shall
immediately inform the chairman and Panel Members of the
relevant Panel of his interest and the chairman shall
ensure that any such interest ("Conflict of Interest") is
noted in the minutes of the meeting. For the purposes of
this Clause 66.17 the term "employer" shall be taken to
include any affiliate, related undertaking or Agent of such
employer from time to time, provided that, for this purpose
only, Scottish Settlements shall not be considered an
affiliate, related undertaking or Agent of either of the
Scottish Companies.
3. SEF Meetings
3.1 Location: Meetings of the SEF shall be held in Scotland.
3.2 Annual General Meeting: Once in July of each calendar year
the SEF Members shall hold a general meeting as their
annual general meeting in addition to any other meetings of
SEF Members in that year, and notices calling such general
meetings shall specify it as the annual general meeting. At
each annual general meeting the SEF Members shall be
required to consider the following, namely:-
3.2.1 the Annual Report, which report shall include:-
3.2.1.1 reports from Panels as provided for in
Clause 8.6;
3.2.1.2 a review of the operation of the
Central Allocation System during the
previous Relevant Year; and
3.2.1.3 such other information or matters as
Scottish Settlements shall consider
appropriate;
3.2.1.4 details of the budget and operating
costs for the previous and present
Relevant Year; and
3.2.1.5 details of Scottish Settlements'
proposed priorities for development of
this Agreement over the following
Relevant Year;
3.2.2 the selection of Panel Members pursuant to Clause
66 (Membership of the SEF);
3.2.3 a report prepared by the Market Auditor on the
operation of the Central Allocation System over
the previous Relevant Year and other relevant
matters;
3.2.4 such matters relating to the operation of this
Agreement as any SEF Member present in person may
wish to raise at such meeting, notice of which has
been given to the Secretary no later than seven
(7) days before the date of such meeting, it being
acknowledged and agreed that failure by a SEF
Member so to notify shall not prejudice the right
of any SEF Member to ask questions at such meeting
on any matter then before such meeting;
3.2.5 a report by the Director if so requested by the
Director;
3.2.6 the last audited accounts of Scottish Settlements;
and
3.2.7 such other matters as Scottish Settlements sees
fit to propose and of which notice has been given
in accordance with Clause 67.5.
3.3 General Meetings: All general meetings of SEF Members
other than annual general meetings shall be extraordinary
general meetings.
3.4 Calling meetings: Unless otherwise provided in this
Agreement, all general meetings of SEF Members shall be
called by twenty-one (21) days' notice in writing at the
least, provided that a general meeting of SEF Members
shall, notwithstanding that it is called by shorter notice,
be deemed to have been duly called if it is so agreed in
writing by all the SEF Members.
3.5 Convening Meeting:
3.5.1 An annual general meeting of the SEF shall be
convened by Scottish Settlements and any notice
convening such a meeting shall set out or append
details of any such matters as are referred to in
Clause 67.2 and shall be accompanied by a copy of
the reports referred to in Clause 67.2 and any
other relevant documentation. Scottish
Settlements shall use its reasonable endeavours to
notify SEF Members in advance of the relevant
annual general meeting of any such matters
referred to in Clause 67.2.4 of which Scottish
Settlements has received notice in accordance with
that Clause.
3.5.2 Extraordinary general meetings shall be convened
by Scottish Settlements:-
3.5.2.1 where Scottish Settlements considers
such a meeting to be necessary; or
3.5.2.2 within one month of receipt of a SEF
Members' requisition if Scottish
Settlements considers that such a
meeting is merited.
3.5.3 An SEF Members' requisition shall state the
objects of the meeting and must be signed by or on
behalf of the requisitionists and deposited at the
office of Scottish Settlements, and may consist of
several documents in like form each signed by one
or more requisitionists. If Scottish Settlements
does not within thirty (30) days from the date of
the deposit of the requisition proceed duly to
convene an extraordinary general meeting for a
date not later than sixty (60) days after the said
date of deposit, the requisitionists may
themselves convene a meeting, but any meeting to
be convened shall not be held after the expiration
of ninety (90) days from such date of deposit. A
meeting convened under this Clause 67.5.3 by
requisitionists shall be convened in the same
manner, as nearly as possible, as that in which
meetings are to be convened by Scottish
Settlements.
3.6 Notice of General Meetings: Any notice convening any
general meeting of SEF Members shall be exclusive of both
the day on which it is served or deemed to be served and of
the day for which it is given, and shall specify the place,
the day and the hour of the meeting and the draft agenda
for such meeting and shall be given to all SEF Members, the
Director, the Market Auditor, and any Recognised
Organisation which requests it. The accidental omission to
give notice of a meeting to, or the non-receipt of notice
of a meeting by, any person entitled to receive notice
shall not invalidate the proceedings at that meeting. For
the purposes of this Clause 67.6 and Clause 68.5 the
Scottish Electricity Consumers' Committees shall be deemed
to be Recognised Organisations.
3.7 Proxies: Any Non-Scottish Company Member entitled to
attend and vote at any general meeting of SEF Members shall
be entitled to appoint another person (whether a SEF Member
or not) as its proxy to attend, speak and vote in its
place.
3.8 Authentication of proxy: The instrument appointing a proxy
shall be in writing either under seal or under the hand of
an officer or attorney duly authorised. A proxy need not
be an employee of a SEF Member.
3.9 Deposit of proxy: The instrument appointing a proxy and
the power of attorney or other authority, if any, under
which it is signed or a certified copy of that power or
authority shall be deposited at the office of Scottish
Settlements or at such other place within Scotland as is
specified by Scottish Settlements, not less than ten (10)
Working Days before the time for holding the meeting or
adjourned meeting, at which the person named in the
instrument proposes to vote, and in default the instrument
of proxy shall not be treated as valid.
3.10 Form of proxy: An instrument appointing a proxy shall be
in the following form or a form as near thereto as
circumstances admit:-
"SETTLEMENT AGREEMENT FOR THE ELECTRICITY INDUSTRY IN SCOTLAND
We, , of ,
being an Non-Scottish Company Member (as defined in the
above mentioned Agreement), hereby appoint
of or,
failing him, of
, as our proxy to vote for us on
our behalf at the [annual or extraordinary, as the case may
be] general meeting of SEF Members, to be held on the
day of
19 , and at any adjournment thereof.
Signed this day of
19 ."
3.11 Proxy valid: A vote given in accordance with the terms of
an instrument of proxy shall be valid notwithstanding the
previous revocation of the proxy or of the authority under
which the proxy was executed, provided that no intimation
in writing of such revocation shall have been received by
Scottish Settlements at its office on the day before the
commencement of the meeting or adjourned meeting at which
the proxy is used.
4. Proceedings at SEF General Meetings
4.1 Quorum: No Panel Members shall be elected or appointed at
any general meeting of SEF Members unless a quorum of SEF
Members is present at the time when the meeting proceeds to
business. Save as herein otherwise provided, a quorum
shall be SEF Members present in person representing:-
4.1.1 Scottish Hydro-Electric and ScottishPower
respectively; and
4.1.2 30 per cent. or more of the aggregate number of
Weighted Votes to which Non-Scottish Company
Members are entitled under Clause 69.1.
4.2 Lack of quorum: If within half an hour from the time
appointed for the general meeting a quorum is not present,
the meeting shall stand adjourned to the same day in the
next week, at the same time and place or to such other day
and at such other time and place as Scottish Settlements
may determine, and if at the adjourned meeting a quorum is
not present within half an hour from the time appointed for
the meeting, those SEF Members present in person or by
proxy shall constitute a quorum for the purposes of that
general meeting only.
4.3 Chairman: Scottish Settlements' representative shall
preside as independent chairman at every general meeting
and separate general meeting of SEF Members ("SEF
Chairman") or, if there is no SEF Chairman or if he shall
not be present within fifteen (15) minutes after the time
appointed for the holding of the meeting or is unwilling to
act, the SEF Members present shall choose one of their
number to be SEF Chairman of the meeting. The SEF Chairman
shall not have a vote at any meetings of the SEF.
4.4 Adjournments: The SEF Chairman may, with the consent of
any general meeting of SEF Members at which a quorum is
present (and shall if so directed by the meeting) adjourn
the meeting from time to time and from place to place, but
no business shall be transacted at any adjourned meeting
other than the business left unfinished at the meeting from
which the adjournment took place. When a meeting is
adjourned for thirty (30) days or more, notice of the
adjourned meeting shall be given as in the case of an
original meeting. Save as aforesaid, it shall not be
necessary to give any notice of an adjournment or of the
business to be transacted at an adjourned meeting.
4.5 Representation of non-SEF Members and Advisors: Each of
the non-SEF Members referred to in Clause 67.6 shall have
the right to attend at each general meeting of SEF Members,
and each of them shall have the right to speak (but not to
vote) thereat. Any person or body attending a meeting may
be accompanied by any advisors that person or body
requires.
4.6 Minutes: The Secretary shall prepare minutes of all
general meetings of SEF Members and shall circulate copies
thereof to all SEF Members and the non-SEF Members
attending the relevant general meeting as soon as
practicable (and in any event within fourteen (14) days)
after the relevant meeting has been held.
4.7 Written Resolution: Any matter on the agenda for an
extraordinary general meeting may be decided outwith such
general meeting by written resolution signed on behalf of
all relevant SEF Members by their representatives for such
meeting. In particular, any decision in terms of Clause
66.11, may be taken by written resolution.
5. Voting
5.1 Weighted Votes for Panel Election: In respect of any
Relevant Year each Non Scottish Company Member shall be
entitled in that capacity to one vote for each MWh of
Energy Traded falling in the previous Relevant Year, with
the number of MWh being rounded up or down (0.5 or over
being rounded upward to the nearest whole number), in
accordance with the following formula:-
WV =
"WV" is the total number of Weighted Votes of the relevant Non
Scottish Company Member for the Relevant Year;
"Energy Traded" is the total of the relevant Non-Scottish Company
Member's Energy Traded as calculated in terms of Clause
69.2 and 69.3 for the months from October to March
(inclusive) in the previous Relevant Year; and
"Total Energy Traded" is the aggregate summation of the Energy
Traded for the previous Relevant Year.
5.2 If the Non Scottish Company Member is an Independent
Generator the Energy Traded will be calculated as the total
of the Independent Generator's Adjusted Output as
calculated in the Initial Run in both Scottish Hydro-
Electric's and ScottishPower's Areas for each Half Hour for
the months from October to March (inclusive) in the
previous Relevant Year as adjusted by any Reconciliation
Runs computed up to the last day of the following May.
5.3 If the Non Scottish Company Member is a Second Tier
Supplier the Energy Traded will be calculated as the total
of the Supplier's Supplier BSP Group Purchases as
calculated in the Initial Run in both BSP Groups for each
Settlement Period in the months from October to March
(inclusive) in the previous Relevant Year as adjusted by
any Reconciliation Runs computed up to the last day of the
following May.
5.4 Records: Scottish Settlements shall maintain, and retain
for a period of not less than seven (7) years, a register
recording the Weighted Votes of a Non-Scottish Company
Member, which register shall be made available to any Party
by Scottish Settlements on payment of the relevant Standard
Charge.
5.5 Voting on a poll: Voting in respect of Non Scottish
Company Members shall only be by way of a poll. On a poll
votes must be given personally or by proxy.
5.6 Objections: No objection shall be raised to the
qualification of any voter except at the meeting or
adjourned meeting at which the vote objected to is given or
tendered, and every vote not disallowed at such meeting
shall be valid for all purposes. Any such objection made
shall be referred to the SEF Chairman whose decision shall
be final and conclusive.
5.7 Scrutiny: At each meeting at which a Non Scottish Company
Member casts a vote, the Secretary or another person
specifically appointed for the purpose by Scottish
Settlements shall ensure that proper scrutiny of all such
votes takes place, such that it is entirely satisfied that
every vote cast was so cast properly and in accordance with
all relevant provisions of this Agreement and any other
applicable agreement between all SEF Members or rules or
regulations governing such votes.
5.8 Corporation acting by representatives at meetings: Any
company, corporation, partnership, firm, joint venture,
trust, association or other organisation which is a SEF
Member may by resolution of its directors or other
governing body authorise such person as it thinks fit to
act as its representative at any general meeting of SEF
Members, and references in this Agreement to a SEF Member
acting in person (howsoever expressed) shall be deemed to
include SEF Members acting by their duly authorised
representatives.
5.9 Appeals: Any SEF Member who believes that the calculation
of their Weighted Votes has been carried out incorrectly
may appeal the matter to Scottish Settlements. In the
event that the matter cannot be resolved to the
satisfaction of the relevant SEF Member, that SEF Member
may raise a Dispute. In the event that the Dispute cannot
be resolved before any SEF general meeting, the relevant
SEF Member shall be deemed to have the Weighted Votes as
calculated by Scottish Settlements.
5.10 Allocation of Votes to Non-Trading Parties: If there are
less than four Non Scottish Company Members with Energy
Traded (in the case of elections to the Modification
Panel) or less than three Non Scottish Company Members
with Energy Traded (in the case of elections for any
other panel), Weighted Votes shall be calculated as
follows:
5.10.1 when electing members of the Modification Panel,
and in the event that the number of Non Scottish
Company Members who have Energy Traded is less
than four, an initial calculation of Weighted
Votes shall be carried out according to Clause
69.1 provided that as a result of this initial
calculation, no Non Scottish Company Member
shall be entitled to Weighted Votes exceeding
25% of the total available votes. The remainder
of the total available votes shall then be
divided equally between all Non Scottish Company
Members who are, at the time of the relevant
meeting, parties to a Trading Relationship. For
the avoidance of doubt, this includes those
Parties who have Energy Traded and who
participated in the initial calculation of
Weighted Votes;
5.10.2 in electing members to a Panel which has three
(3) Non Scottish Company Members, and in the
event that the number of Non Scottish Company
Members who have Energy Traded is less than
three, an initial calculation of Weighted Votes
shall be carried out according to Clause 69.1
provided that as a result of this initial
calculation, no Non Scottish Company Members
shall be entitled to Weighted Votes exceeding
33% of the total available votes. The remainder
of the total available votes shall then be
divided equally between all Non Scottish Company
Members who are, at the time of the relevant
meeting, parties to a Trading Relationship. For
the avoidance of doubt, this includes those
Parties who have Energy Traded and who
participated in the initial calculation of
Weighted Votes.
5.10.3 In the event that no Non Scottish Company
Members have any Energy Traded in terms of
Clause 69.1, then each Non Scottish Company
Member who is at the time of the relevant
meeting a party to a Trading Relationship shall
be entitled to one vote.
5.11 Provision of Information: For the avoidance of doubt,
all information required for the calculation of votes in
terms of this Clause 69 shall be provided by Scottish
Settlements.
6. The Modification Panel
6.1 Establishment: The Parties to this Agreement hereby
establish the Modification Panel.
6.2 Functions: The functions of the Modification Panel are:
6.2.1 to review the contents of this Agreement and the
MRA Requirements within the purpose and objectives
stated in Part II;
6.2.2 to express the views of Market Participants on the
contents of this Agreement and the MRA Priority
Provisions by:
6.2.2.1 considering and voting upon any
proposal for a review of a section of
this Agreement (a "Review Proposal");
or
6.2.2.2 considering and voting upon any
proposal for modification of this
Agreement (a "Modification Proposal");
6.2.3 to give adequate publicity to matters brought
before it as set out in this Agreement;
6.2.4 to consider and comment upon any Modification
Report produced by Scottish Settlements related to
the implementation or otherwise of a Modification
Proposal or Review Proposal for this Agreement in
order to provide the Director with the views of
the Modification Panel;
6.2.5 to consider changes to the MRA Priority Provisions
in accordance with the Master Registration
Agreement; and
6.2.6 to report to Scottish Settlements, the Market
Auditor and the Director on the activities of the
Modification Panel.
6.3 Members: The members of the Modification Panel
("Modification Panel Members") shall be:
6.3.1 one representative appointed by Scottish
Settlements as a non-Voting Modification Panel
Member;
6.3.2 two (2) representatives of Scottish Hydro-Electric
each as a Voting Modification Panel Member
appointed in terms of Clause 66.13;
6.3.3 two (2) representatives of ScottishPower each as a
Voting Modification Panel Member appointed in
accordance with Clause 66.13; and
6.3.4 four (4) representatives of Non-Scottish Company
Members, each as a Voting Modification Panel
Member elected in accordance with Clause 66.6, or
appointed in terms of Clause 66.8.
6.4 Chairman: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a representative
appointed in terms of Clause 70.3.1) as the independent
chairman of the Modification Panel, and may remove and
replace such individual so appointed from time to time.
The chairman shall not be entitled to vote at any meeting
of the Modification Panel. The chairman will preside at
meetings of the Modification Panel. In the event that the
chairman is not present within fifteen (15) minutes of the
start of any meeting, those Modification Panel Members
present shall appoint an individual to act as chairman for
such meeting. The chairman's functions will include
(without limitation):-
6.4.1 to preserve order at meetings and to conduct
proceedings in a proper manner;
6.4.2 to call on Modification Panel Members and non-
member representatives to speak at the meeting and
to regulate discussion in an impartial manner;
6.4.3 to curtail discussion and put a resolution to a
vote at any stage of the meeting, provided all
Modification Panel Members and non-member
representatives present have been given reasonable
opportunity to speak on the subject matter of the
resolution;
6.4.4 to put any resolution to a vote at the conclusion
of the meeting, provided all Modification Panel
Members and non-member representatives present
have been given reasonable opportunity to speak on
the subject matter of the resolution ; and
6.4.5 to dissolve or adjourn the meeting with the
consent of all Modification Panel Members and non-
member representatives present.
6.5 Secretary: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a representative
appointed in terms of Clause 70.3.1) as the secretary of
the Modification Panel ("Modification Panel Secretary"),
and may remove and replace such individual so appointed
from time to time. The Modification Panel Secretary shall
not be entitled to vote at any meeting of the Modification
Panel. In the event that the Modification Panel Secretary
is not present within fifteen (15) minutes of the start of
any meeting, those Modification Panel Members present shall
appoint an individual to act as Modification Panel
Secretary for such meeting.
6.6 Non-Member Representatives: At every meeting of the
Modification Panel the following non-member representatives
may attend and shall be entitled to receive all
documentation relating to such meetings:-
6.6.1 a representative of the Market Auditor shall be
entitled to attend and to speak at any such
meeting, but shall have no voting rights and shall
not be included in the membership of the
Modification Panel;
6.6.2 a representative of the Director shall be entitled
to attend and speak at any such meeting, but shall
have no voting rights and shall not be included in
the membership of the Modification Panel; and
6.6.3 subject to the prior agreement of the chairman of
the Modification Panel, representatives of any
Recognised Organisations shall be entitled to
attend and, if invited by the chairman, to speak
at any such meeting, but shall have no voting
rights and shall not be included in the membership
of the Modifications Panel, provided that, for the
purposes of this Clause 70.6.3 only, the Pool
shall be deemed to be a Recognised Organisation.
6.7 Additional Representatives: Unless the Modification
Panel resolves otherwise the chairman of the Modification
Panel either of his own volition or on the request of any
Modification Panel Member (provided the chairman
considers such request to be appropriate) and/or any
Proposer may require the presence at any meeting of an
individual to speak to particular items on the agenda.
Any such individual shall be entitled to attend and speak
to such particular items at the relevant meeting but
shall have no vote and shall not be included in the
membership of the Modification Panel. Any such
individual attending as an additional representative
shall require to execute a confidentiality undertaking in
terms of Clause 66.16.
6.8 Powers of Alternates: Alternates in respect of the
Modification Panel shall have the following rights and
obligations in addition to those set out in Clause 66
(Membership of the SEF):-
6.8.1 Alternates once nominated may not sit
contemporaneously as a Disputes Panel Member until
their appointment as an Alternate is removed. Such
appointment or removal shall not take effect until
notice has been received by the Modification Panel
Secretary;
6.8.2 in the event that any notice requires to be sent
to the Modification Panel Members, such notice
shall also be sent to any Alternate who has from
time to time been notified to the Modification
Panel Secretary in accordance with Clause 66.14.1;
and
6.8.3 an Alternate may sign written resolutions pursuant
to Clause 71.8, provided that if an Alternate and
the Panel Member who appointed him shall sign a
written resolution the signature of the Panel
Member shall be effective and the signature of the
Alternate shall be disregarded.
7. Meetings of the Modification Panel
7.1 Purpose: Meetings of the Modification Panel will provide a
forum in which Modification Proposals and Review Proposals
can be discussed pursuant to and in accordance with the
modification procedures and review procedures set out in
this Agreement. Other than as expressly provided in this
Agreement, the Modification Panel shall have no ability to
determine any matter and no competence to discharge any
function or to exercise any power.
7.2 Frequency of Meetings: Meetings of the Modification Panel
shall be convened to take place not less than once a month
unless there is no business which would require such a
meeting to be convened. In any event, a meeting of the
Modification Panel shall take place within six months of
the date of the last meeting.
7.3 Notice Convening Meetings: Meetings of the Modification
Panel shall be convened by the Modification Panel Secretary
as follows:-
7.3.1 meetings will be convened on not less than
fourteen (14) days notice; and
7.3.2 every notice convening a meeting of the
Modification Panel shall specify the place, day
and time of the meeting and enclose an agenda
together with all available relevant materials.
Each Modification Panel Member shall be entitled
to receive such notice, agenda and all relevant
materials and at the same time as such notice,
agenda and all relevant materials are despatched a
copy of the notice, agenda and all relevant
materials shall be sent to the Director, the
Market Auditor and any Recognised Organisation
which requests them.
7.4 Short Notice: The Modification Panel may determine that
the next following meeting of the Modification Panel be
convened on shorter notice than specified in Clause 71.3.1
and where the Modification Panel shall so determine the
Modification Panel Secretary shall convene a meeting of the
Modification Panel in accordance with that determination.
Meetings of the Modification Panel may also be convened on
short notice if all Members agree in writing that such
meeting is to be convened on shorter notice than that set
out in Clause 71.3.1. In either case the meeting so
convened shall be deemed to have been duly and properly
convened notwithstanding the short notice period.
7.5 Quorum: Modification Panel Members present at any meeting
of the Modification Panel who are capable of exercising
four (4) votes shall form a quorum provided that two (2) of
the Modification Panel Members comprising such a quorum
shall be representatives of Non-Scottish Company Members,
one (1) shall be a representative of Scottish Hydro-
Electric and one (1) shall be a representative of
ScottishPower. Any such meeting shall be competent to
discharge any functions of the Modifications Panel. In the
event that a quorum as defined in this Clause 71.5 is not
present within fifteen (15) minutes of the time specified
in the notice of meeting for the commencement of such
meeting or shall cease to be present during the course of
the meeting, the meeting shall be adjourned and the
Modification Panel Secretary shall reconvene the meeting
within seven (7) days. Any business conducted prior to a
meeting ceasing to be quorate shall be validly concluded.
In the event that a quorum is not present at any reconvened
meeting the Modification Panel Members present in person or
by Alternate at such meeting shall be deemed to constitute
a quorum for the purposes of such meeting only.
7.6 Conduct of Meetings: At any meeting of the Modification
Panel:-
7.6.1 any resolution shall be determined on a vote
decided by a show of hands or by such other method
as the chairman of the Modification Panel may
earlier have decided from time to time;
7.6.2 save where expressly provided otherwise in this
Agreement, any such vote shall be decided by a
simple majority of the members present and voting,
provided always that a quorum is present in
accordance with Clause 71.5; and
7.6.3 Modification Panel Members elected or appointed in
terms of Clauses 66.6, 66.8 and Section 2 of
Schedule 9 shall, subject to Clause 66.17,
represent all views put to them by Non-Scottish
Company Members.
7.6.4 in any such vote referred to in Clause 71.6.1,
each Modification Panel Member shall have regard
to the promotion of the objects of this Agreement,
provided that Modification Panel Members shall not
be prevented from reflecting the interests of the
SEF Members which they represent in any discussion
at such meeting.
7.7 Location of Meetings: Meetings of the Modification Panel
shall be held in Scotland, unless otherwise agreed by
unanimous resolution of the Modification Panel.
7.8 Written Resolutions: A resolution in writing signed by all
the Modification Panel Members (or their Alternates) shall
be valid and effective for the purposes of discharging any
function requiring a determination of the Modification
Panel. All such resolutions shall be treated as if the
relevant resolution had been passed at a duly convened
meeting of the Modification Panel. The Modification Panel
Secretary shall send copies of any such resolution to any
non-member representatives in terms of Clause 70.6.
7.9 Minutes: The Modification Panel Secretary shall ensure
that minutes are taken of the meetings of the Modification
Panel, and that the attendance at such meeting of any
Modification Panel Member or non-member representative in
terms of Clause 70.6 shall be recorded. Following any such
meeting the Modification Panel Secretary shall within ten
(10) Working Days of the date of any such meeting, send
copies of such minutes to every Modification Panel Member,
all Parties, the Director, the Market Auditor, to any such
non-member representatives and to any Recognised
Organisation which requests a copy.
7.10 Provision of Information: The Modification Panel shall be
entitled to instruct the Modification Panel Secretary to
circulate, subject to any confidentiality requirements of
Clauses 66.16 and 125 (Confidentiality), to any person,
copies of any document which is related to, or derives
from, any proceeding of the Modification Panel in terms of
this Part IX.
7.11 Information from Parties and Agents
7.11.1 Each Party shall provide and shall procure that
any Agent appointed by it shall provide such data,
reports and other information to the Modification
Panel or any Work Group as is reasonably required
by the Panel or Work Group for the purposes of
fulfilling its functions set out in this
Agreement.
7.11.2 Save in any case where the Director has expressly
required provision of the information, each Party
shall be entitled to withhold information
requested from it by the Modification Panel and/or
Work Group in the event that such information is
commercially sensitive.
7.11.3 In the event that the Modification Panel, Scottish
Settlements or any Work Group cannot progress a
Review Proposal or Modification Proposal due to
insufficient information, the matter may be
referred by Scottish Settlements to the Director.
8. Modification Proposals
8.1 Proposers: A Modification Proposal may be submitted to the
Modification Panel Secretary by:-
8.1.1 any SEF Member;
8.1.2 Scottish Settlements;
8.1.3 any Work Group; or
8.1.4 the Disputes Panel, the PAAP or the FAP.
In any of the above cases the Proposer shall be the body
submitting the Modification Proposal itself or any
Modification Panel Member nominated by it.
8.2 No Modification Proposal may propose the modification
directly or indirectly of, or the introduction of any
provision which pursues in whole or in part any object or
purpose not contained in, Clause 3 (Objects and purpose of
this Agreement).-
8.3 Form of Modification Proposals: Each Modification Proposal
submitted in accordance with Clause 72.1 above shall:-
8.3.1 be in writing;
8.3.2 contain a reference to all principal relevant
parts of this Agreement and (if relevant) the
Master Registration Agreement, to which it refers;
8.3.3 contain a description (in reasonable but not
excessive detail) of its objects and purpose and
the basis upon which the body submitting the
Modification Proposal considers that it would
better achieve the stated objectives of this
Agreement;
8.3.4 if the body submitting the Modification Proposal
considers that it should be treated as urgent,
contain a statement to this effect;
8.3.5 in any event, contain a statement of the views of
the body submitting the Modification Proposal as
to the timescale(s) within which such proposal
should be implemented; and
8.3.6 include any supporting information or
documentation relevant to the Modification
Proposal.
8.4 Initial Meeting: Upon receipt of a Modification Proposal,
the Modification Panel Secretary shall:-
8.4.1 add the Modification Proposal to the next unissued
agenda for a meeting of the Modification Panel or
convene a meeting of the Modification Panel in
accordance with Clause 71 (Meetings of the
Modification Panel) all at the discretion of the
Modification Panel Secretary; and
8.4.2 together with the notice of such meeting,
circulate such Modification Proposal to all
Modification Panel Members, to the Director, the
Market Auditor and to all SEF Members.
8.5 Written Submissions: SEF Members may make written
submissions in response to any Modification Proposal. Such
written submissions shall be provided to the Modification
Panel Secretary not less than seven (7) days prior to the
date of any initial meeting convened in terms of Clause
72.4.1. The Modification Panel Secretary shall circulate
copies of such written responses to all Modification Panel
Members, to the Director, to the Market Auditor and to all
SEF Members prior to any such meeting.
8.6 Determination on Modification Proposals: After initial
consideration by the Modification Panel of any Modification
Proposal and any written submissions, supporting
documentation and/or representations from the Proposer:-
8.6.1 the Modification Panel may resolve, taking account
of the Settlements Budget, that the Modification
Proposal:-
8.6.1.1 be implemented and referred to
Scottish Settlements for preparation
of a Modification Report in accordance
with Clause 74 (Modification Reports);
8.6.1.2 be abandoned, in which case the
provisions of Clause 75 (Proposals
abandoned by Modification Panel) shall
apply;
8.6.1.3 be referred to Scottish Settlements
for further consideration of the
specific proposal in terms of Clause
78 (Referral to Scottish Settlements);
or
8.6.1.4 be referred to a Review Work Group for
further consideration of the wider
context of the Modification Proposal
in accordance with Clause 79 (Review
Work Groups);
8.6.2 if the Modification Panel shall have failed to
reach a determination due to a deadlock situation
or otherwise within ninety (90) days of the date
of receipt of the Modification Proposal, then the
Modification Panel shall be deemed to have decided
that the Modification Proposal be abandoned.
8.7 Systems Impact: In the event that, in the opinion of
Scottish Settlements, a Modification Proposal is likely to
affect the Central Allocation System and/or CAS Software,
Scottish Settlements shall use its reasonable endeavours to
obtain from the Operating Agent and any suppliers of
Software or other contractor an initial assessment of the
costs and timescale of implementing the Modification
Proposal. Scottish Settlements shall, where practical,
provide any such assessment to the Modification Panel
Members at a meeting convened in terms of Clause 72.4,
failing which such assessment shall be circulated to each
Modification Panel Member.
9. Urgent Modification Proposals
9.1 Determination of Target Date: In the event that
implementation or consideration of a Modification Proposal
is deemed by Scottish Settlements at any time to be
urgently required to maintain the integrity of the Central
Allocation System (an "Urgent Modification"), Scottish
Settlements shall make such changes to the procedure for
evaluating such Urgent Modification or stipulate a date by
which the implementation of the Modification Proposal shall
be completed (the "Target Date"). In doing so Scottish
Settlements shall keep the Director advised of such
changes.
9.2 Programme of Work: Scottish Settlements may prepare and
commence a programme of work to implement any Urgent
Modification. In preparing and carrying out any such
programme of work, Scottish Settlements shall use
reasonable endeavours to comply with the purpose and
objectives of the relevant Modification Proposal. In doing
so Scottish Settlements shall keep the Director advised of
such programme of work.
9.3 Urgent Modification Report: Scottish Settlements shall,
within five (5) Working Days of taking any action in terms
of this Clause 73, notify all SEF Members that such action
has been commenced and shall prepare and submit a
Modification Report for any Urgent Modification in
accordance with Clause 74.1. Such a Modification Report
shall be prepared as soon as reasonably practicable and
shall be circulated by the Modification Panel Secretary in
accordance with Clause 74.4.
9.4 Ratification by the Director: A Modification Report
prepared in terms of Clause 73.3 above shall be subject to
ratification only by the Director. In the event that the
Director does not ratify any such Modification Report,
Scottish Settlements shall immediately cease the programme
of work referred to in Clause 73.2 above, and restore any
modified items to their original state.
10. Modification Reports
10.1 Preparation of Modification Reports: In the event that the
Modification Panel requires the preparation of a
Modification Report in terms of Clause 72.6.1.1, Scottish
Settlements shall prepare such a Modification Report within
the timescale stipulated by the Modifications Panel which
shall contain:-
10.1.1 the Modification Proposal to which it relates,
together with all supporting documentation and any
written submission made to the Modification Panel
Secretary in terms of Clause 72.5;
10.1.2 a statement from Scottish Settlements on the
consistency of the Modification Proposal with the
stated objectives of this Agreement;
10.1.3 a budget for implementation of the Modification
Proposal;
10.1.4 a recommendation from Scottish Settlements as to
whether the Modification Proposal should be
implemented; and
10.1.5 a recommendation as to whether any Entry Processes
require to be undertaken again by any Market
Participants in relation to such Modification
Proposal.
10.2 Contents of Report: In any Modification Report prepared in
terms of Clause 74.1, Scottish Settlements may, where it
considers it appropriate, include any of the following:-
10.2.1 advice from the solicitors to Scottish Settlements
as to any necessary amendments or revisals to this
Agreement required to implement the relevant
Modification Proposal;
10.2.2 a statement from Scottish Settlements on the
possible effects that the Modification Proposal
may have on the operation of the Central
Allocation System;
10.2.3 a statement from Scottish Settlements of the
potential consequences of implementation of the
Modification Proposal, which may include (without
limitation):-
10.2.3.1 the potential operational and/or
financial consequences for the
operation of this Agreement;
10.2.3.2 the likely impact on computer and
other operational systems including
the Data Transfer Network;
10.2.3.3 the administrative implications; and
10.2.3.4 the likely capital cost and operating
cost implications for Scottish
Settlements;
10.2.4 an opinion from the Market Auditor on the audit
implications of the Modification Proposal;
10.2.5 a detailed breakdown of the tasks required,
including any associated testing, to implement the
proposal;
10.2.6 an implementation plan detailing proposed
timescales for each task required and a total
proposed timescale for implementation of the
Modification Proposal (taking account of any
requirement to liaise with the relevant forum
under the Master Registration Agreement); and/or
10.2.7 details of the reports that Scottish Settlements
would propose to make throughout the
implementation of the Modification Proposal.
10.3 Submission of the Modification Report: On completion of a
Modification Report by Scottish Settlements, the Report
shall be submitted forthwith to the Modification Panel
Secretary who shall:-
10.3.1 amend the next unissued agenda of any forthcoming
meeting of the Modification Panel, allowing
sufficient time for comment on the Modification
Report, for the purposes of discussing the
Modification Report; and
10.3.2 distribute the Modification Report to SEF Members,
Modification Panel Members, the Director and the
Market Auditor and, where appropriate, to the
Certification Agent.
SEF Members may provide written responses to the Modification
Report which shall be provided to the Modification Panel
Secretary not less than seven (7) days prior to the date of
the meeting of the Modification Panel at which the
Modification Report is to be discussed. The Modification
Panel Secretary shall circulate such written responses to
all SEF Members, Modification Panel Members, the Director
and Market Auditor.
10.4 Acceptance of Modification Report: At any meeting of the
Modification Panel convened to discuss a Modification
Report, the Modification Panel shall:-
10.4.1 consider the Modification Report and any responses
thereto from SEF Members; and
10.4.2 resolve whether the recommendation by Scottish
Settlements in the Modification Report as to
whether or not the Modification Proposal should be
implemented should be ratified by the Modification
Panel.
10.5 Submission to the Director: Following a resolution of the
Modification Panel in terms of Clause 74.4, Scottish
Settlements shall amend the Modification Report to include
the resolution with details of votes cast but shall not be
required to make any other alteration. The amended
Modification Report shall then be submitted to the
Modification Panel Secretary who shall submit it to the
Director for a determination in terms of Clause 76
(Determination by the Director) and circulate it to all SEF
Members, Modification Panel Members, the Market Auditor
and, where appropriate, to the Certification Agent.
11. Proposals Abandoned by Modification Panel
11.1 Report by Scottish Settlements: In the event that the
Modification Panel resolves, in terms of Clauses 72.6.1.2
or 72.6.2, to recommend that a Modification Proposal be
abandoned, Scottish Settlements shall within fourteen (14)
days prepare a report which shall include:-
11.1.1 the Modification Proposal to which it relates,
together with all supporting documentation and any
written submission made to the Modification Panel
Secretary in terms of Clause 72.5;
11.1.2 a statement from Scottish Settlements on the
consistency of the Modification Proposal with the
stated objectives of this Agreement;
11.1.3 a recommendation from Scottish Settlements as to
whether the Modification Proposal should be
implemented.
11.2 Contents of Report: In any report prepared in terms of
Clause 75.1, Scottish Settlements may, where it considers
it appropriate, include any of the following:-
11.2.1 a statement from Scottish Settlements on the
possible effects that the Modification Proposal
may have on the operation of the Central
Allocation System and related matters;
11.2.2 a statement from Scottish Settlements of the
likely consequences of implementation of the
Modification Proposal for the Central Allocation
Systems; and/or
11.2.3 details of any determination of the Modification
Panel.
11.3 Circulation of Report: On completion of a report in terms
of Clause 75.1, Scottish Settlements shall submit such
report to the Modification Panel Secretary who shall
distribute the report to all Parties, the Market Auditor,
Director and members of the Modification Panel and, where
appropriate, the Certification Agent. SEF Members may
provide written responses to any such report which shall be
provided to the Modification Panel Secretary not less than
twenty one (21) days after the date of the meeting of the
Modification Panel at which the resolution electing to
recommend the abandonment of the Modification Proposal was
passed. If required to do so by the Director the
Modification Panel Secretary shall circulate such written
responses to all Parties, the Market Auditor and members of
the Modification Panel.
12. Determination by the Director
12.1 Determination: No Modification Proposal shall be abandoned
or implemented on the recommendation or otherwise of the
Modification Panel alone. The Modification Panel Secretary
shall ensure that the Director is sent any Modification
Report or report in terms of Clause 75.1, any resolution of
the Modification Panel and any written representations
submitted by SEF Members and any other information which
the Director requests which is held by the Modification
Panel. The Director shall consider such reports,
resolutions and representations and shall determine:-
12.1.1 that the Modification Proposal is to be abandoned;
or
12.1.2 that the Modification Proposal should be referred
to Scottish Settlements for further consideration
in terms of Clause 78 (Referral to Scottish
Settlements); or
12.1.3 subject to Clause 76.5, that the Modification
Proposal should be implemented.
12.2 Implementation: In the event that the Director determines
that the Modification Proposal should be implemented,
Scottish Settlements shall, subject to Clauses 76.4 and
76.7, carry out such implementation in accordance with the
implementation plan in the Modification Report, or as
otherwise agreed with the Director. In the event that a
report in terms of Clause 75.1 has been provided to the
Director and the Director determines that the Modification
Proposal should be implemented, the Director and Scottish
Settlements shall, subject to Clauses 76.4 and 76.7, agree
an implementation plan.
12.3 Variation: In the event that the Director determines that
a Modification Proposal should be implemented in terms of
this Clause 76, this Agreement shall, subject to Clauses
76.4 and 76.7, be deemed to be varied with effect from the
date specified by the Director, without any requirement for
further action unless required by the Director.
12.4 Change Co-ordination: Modifications and changes to the
Master Registration Agreement shall be co-ordinated as
follows:-
12.4.1 Control over Change: the Parties agree that no
change shall be made to any provision of this
Agreement which relates to or affects the MRA
Priority Provisions without first ensuring that
the relevant changes to the MRA Priority
Provisions under the Master Registration
Agreement have been approved under the Master
Registration Agreement; and
12.4.2 Implementation of Changes: Parties shall, and
shall procure that their Agents shall, co-
operate with Scottish Settlements in the co-
ordination and implementation of any changes to
this Agreement. The Parties agree that where
changes to any provision of this Agreement are
approved for implementation under this Agreement
and such changes relate to or affect the MRA
Priority Provisions, they shall use all
reasonable endeavours to ensure that any changes
to this Agreement and the Master Registration
Agreement are made with effect from the same
date.
12.4.3 Disagreement on Change: where either:-
12.4.3.1 a Modification Proposal to a
provision of this Agreement which
relates to or affects the MRA
Priority Provisions is accepted
pursuant to the procedures set out
in this Agreement and the equivalent
change request is rejected by the
relevant forum under the Master
Registration Agreement; or
12.4.3.2 a Modification Proposal relating to
any provision of this Agreement
which relates to or affects the MRA
Priority Provisions is rejected
pursuant to procedures set out in
this Agreement but the equivalent
change request is accepted by the
relevant forum under the Master
Registration Agreement,
the relevant provisions of this Agreement and/or the
Master Registration Agreement shall not be
amended pursuant to the Modification Proposal.
12.4.4 Co-ordination of Changes: Scottish Settlements
shall be responsible for liaising with the
relevant forum under the Master Registration
Agreement to ensure co-ordination of the
implementation of changes to the MRA Priority
Provisions.
12.5 Abandoned Proposals: The Director shall not be entitled to
determine that a Modification Proposal in respect of which
a report has been issued pursuant to Clause 75.1 shall be
implemented unless he has first determined that the
interests of the Proposer or any Party would otherwise be
unfairly prejudiced.
12.6 Notification: Any determination by the Director shall be
notified by the Modification Panel Secretary to all SEF
Members. Modification Panel Members and the Market Auditor.
12.7 Modifications to Part IX: In respect of any Modification
Proposal which:-
12.7.1 proposes the modification directly or indirectly
of any Clauses contained in Part IX of this
Agreement; and
12.7.2 the Director has determined should be implemented
in terms of Clauses 76.1 or 76.5,
Scottish Settlements shall only implement such Modification
Proposal where Parties representing the greater of either
(i) the ninety five per cent (95%) of the sum of the
Supplier Traded Volume and Generator Traded Volume or (ii)
the sum of the Scottish Companies' Supplier Traded Volume
and Generator Traded Volume plus one per cent (1%) of the
sum referred to in (i) all for the preceding Relevant Year
have agreed to such Modification Proposal in writing.
13. Review Proposals
13.1 Proposers: A Review Proposal may be submitted to the
Modification Panel Secretary by:-
13.1.1 any SEF Member;
13.1.2 Scottish Settlements;
13.1.3 any Work Group; or
13.1.4 the Disputes Panel, the PAAP or the FAP.
In any of the above cases the proposer of the Review Proposal
("Proposer") shall be the body submitting the Review
Proposal itself or any Modification Panel Member nominated
by it.
13.2 Form of Review Proposals: Each Review Proposal submitted
in accordance with Clause 77.1 above shall:-
13.2.1 be in writing;
13.2.2 contain a reference to all principal relevant
parts of this Agreement to which it refers;
13.2.3 contain a description (in reasonable but not
excessive detail) of its nature and purpose and
the basis upon which the Proposer considers that
it would better achieve the stated objectives of
this Agreement;
13.2.4 if the Proposer considers that it should be
treated as urgent, contain a reasoned statement to
this effect;
13.2.5 in any event, contain a statement of the views of
the Proposer as to the timescale(s) within which
such proposal should be implemented; and
13.2.6 include any supporting information or
documentation relevant to the Review Proposal.
13.3 Reference to Review Work Group: On receipt of a Review
Proposal, the Modification Panel Secretary shall add the
Review Proposal to the next unissued agenda for a meeting
of the Modification Panel or convene a meeting of the
Modification Panel, all at the discretion of the
Modification Panel Secretary for the purposes of either:-
13.3.1 establishing a Review Work Group in terms of
Clause 79 (Review Work Groups); or
13.3.2 resolving to recommend to the Director that the
Review Proposal be abandoned.
14. Referral to Scottish Settlements
14.1 Submissions: In the event that a Modification Proposal
is referred to Scottish Settlements in terms of Clauses
72.6.1.3 or 76.1.2, any SEF Member or the Market Auditor
may make written representations to Scottish Settlements
within 21 days after the date of such referral and
Scottish Settlements shall have regard to those
submissions.
14.2 Consultation: When considering the Modification
Proposal, Scottish Settlements shall consult with any
body, organisation or person stipulated by the
Modification Panel and may consult with any other body,
organisation or person Scottish Settlements shall
consider appropriate.
14.3 Return to Modification Panel: On completing its
consideration of the Modification Proposal Scottish
Settlements shall:
14.3.1 return the Modification Proposal to the
Modification Panel with any minor modifications
necessary and a document setting out the merits
of the Modification Proposal as amended,
together with all submissions received in
accordance with Clause 78.1; or
14.3.2 submit a replacement Modification Proposal to the
Modification Panel, together with a recommendation
that the original Modification Proposal be
abandoned and a document setting out the merits of
the replacement Modification Proposal; or
14.3.3 submit a Review Proposal to the Modification
Panel, having regard to the Settlements Budget set
from time to time; or
14.3.4 report to the Modification Panel that the
Modification Proposal discloses no basis upon
which to alter the terms of this Agreement.
14.4 Document setting out the merits: When preparing a
document setting out the merits of the Modification
Proposal in terms of Clauses 78.3.1 or 78.3.2 Scottish
Settlements may include in the document:
14.4.1 a statement on the consistency of the Modification
Proposal with the stated objectives of this
Agreement;
14.4.2 a statement on the possible effects that the
Modification Proposal may have on the operation of
the Central Allocation System; and/or
14.4.3 a statement of the potential consequences of
implementation of the Modification Proposal, which
may include (without limitation):-
14.4.3.1 the potential operational and/or
financial consequences for the
operation of this Agreement;
14.4.3.2 the likely impact on computer and
other operational systems including
the Data Transfer Network;
14.4.3.3 the administrative implications; and
14.4.3.4 the likely capital cost and operating
cost implications for Scottish
Settlements.
15. Review Work Groups
15.1 Establishment: In the event that a Modification Proposal
is referred to a Review Work Group in terms of Clause
72.6.1.4 or a Review Proposal is referred to a Review Work
Group in terms of Clause 77.3, a Review Work Group shall be
established in the following manner:-
15.1.1 The Modification Panel Secretary shall convene a
meeting of the Modification Panel for the purposes
of establishing a Review Work Group, details of
which shall be provided to the Proposer.
15.1.2 Scottish Settlements shall prepare draft terms of
reference for such Review Work Group which shall
include (without limitation):-
15.1.2.1 the scope and extent of the review to
be undertaken;
15.1.2.2 a timescale for completion of the
terms of reference;
15.1.2.3 a budget;
15.1.2.4 the members of the Review Work Group;
and
15.1.2.5 the obligations of the Review Work
Group in relation to reporting to the
Modification Panel.
15.1.3 The draft terms of reference shall be submitted to
the Modification Panel Secretary who shall, not
less than fourteen (14) days prior to the relevant
meeting of the Modification Panel, circulate them
to all Modification Panel Members, and all SEF
Members together with the Director and Market
Auditor. The Modification Panel Members, the
Market Auditor, and all Parties to this Agreement
shall be entitled to submit written
representations on the draft terms of reference to
the Modification Panel Secretary, who shall
circulate such representations in similar fashion.
Provided that such representations shall be
submitted to the Modification Panel Secretary not
less than seven (7) days prior to the date of the
relevant meeting of the Modification Panel who
shall distribute them to the Modification Panel
Members, SEF Members, the Director and Market
Auditor.
15.1.4 The Modification Panel may, taking account of the
then current Settlements Budget, resolve that the
Review Work Group be established in accordance
with the draft terms of reference or such other
terms of reference as the Modification Panel may
stipulate.
15.1.5 In the event that the Modification Panel fails to
agree on the establishment of a Review Work Group
or the terms of reference thereof, Scottish
Settlements shall provide a written recommendation
to the Director, who shall determine the terms of
reference, if any.
15.1.6 The Modification Panel Secretary shall circulate
details of the resolution of the Modification
Panel to all Parties to this Agreement, the
Director and Market Auditor.
15.1.7 SEF Members and/or Modification Panel Members may
from time to time request an amendment to the
terms of reference of a Review Work Group by
submitting such a request to the Modification
Panel Secretary for consideration by the
Modification Panel.
15.2 Conduct of Business: Each Review Work Group shall be
chaired by Scottish Settlements or such other person or
body as nominated by Scottish Settlements from time to
time. All minutes of proceedings of a Review Work Group
shall be provided to the Modification Panel Secretary.
15.3 Completion of Terms of Reference: A Review Work Group
shall consider the Review Proposal or Modification Proposal
in accordance with its terms of reference, and having
regard to the Settlement Budget set from time to time,
shall:-
15.3.1 submit one or more Modification Proposals to the
Modification Panel;
15.3.2 submit a further Review Proposal to the
Modification Panel;
15.3.3 report to the Modification Panel that the Review
Proposal discloses no basis upon which to alter
the terms of this Agreement; or
15.3.4 submit a report to the SEF to allow wider debate
of the issues raised by the Review Proposal and
the terms of reference of the Review Work Group.
15.4 Relationship with Modification Panel: Each Review Work
Group may, from time to time:-
15.4.1 seek clarification of any matter arising from the
Modification Proposal or Review Proposal or from
its terms of reference from the Modification
Panel; or
15.4.2 submit to the Modification Panel a request for an
amendment to its terms of reference and/or the
timescales or budget detailed therein.
Such requests shall be submitted to the Modification Panel
Secretary who shall include the requests on the next
unissued agenda of a meeting of the Modification Panel, and
shall circulate details of the request to all members of
the Modification Panel, the Director, the Market Auditor
and all Parties to this Agreement not less than five (5)
Working Days prior to such meeting.
15.5 Response to Requests: The Modification Panel shall
consider any request from a Review Work Group in terms of
Clause 79.4, having regard to issues from time to time.
Any resolution of the Modification Panel in such request
shall be circulated by the Modification Panel Secretary to
the Parties to this Agreement and to the Director and
Market Auditor within five (5) Working Days of the relevant
meeting.
16. Withdrawal of Proposals
16.1 Withdrawal of Modification Proposed: The Proposer of a
Modification Proposal may, at any time prior to
consideration of such proposal by the Modification Panel,
by notice in writing to the Modification Panel Secretary,
withdraw such Modification Proposal.
16.2 Withdrawal of Review Proposal: The Proposer of a Review
Proposal may at any time prior to the meeting of the
Modification Panel convened in terms of Clause 77.3, by
notice in writing to the Modification Panel Secretary,
withdraw such Review Proposal.
16.3 Notification: On receipt of any notice in terms of this
Clause 80, the Modification Panel Secretary shall notify
each SEF Member, the Director, the Market Auditor and
Modification Panel Member of such withdrawal within
fourteen (14) days.
17. Master Registration Agreement
17.1 Change Co-ordination: The Parties to this Agreement
agree that any changes to this Agreement which will
affect the MRA Priority Provisions or cause the MRA
Priority Provisions to be inconsistent with this
Agreement shall be proposed and considered in accordance
with the Modification Process as varied by this Clause
81.
17.2 Notification to MEC: In the event that a Modification
Proposal is submitted which, if implemented, will affect
the MRA Priority Provisions, the Modification Panel
Secretary shall ensure that a copy of the Modification
Proposal is provided to the MEC forthwith, indicating the
timescale for submitting comments. The MEC may then
provide comments to the Modification Panel Secretary.
The Modifications Panel Secretary shall ensure that
copies of any comments received from the MEC are
circulated to all Modification Panel Members, SEF
Members, the Director and the Market Auditor forthwith ,
and shall in addition circulate all written submissions
received to the MEC.
17.3 Circulation of Reports: Scottish Settlements shall
ensure that copies of any Modification Report or report
in terms of Clause 75 (Proposals abandoned by
Modification Panel), together with relevant parts of
minutes of meetings of the Modification Panel are
provided to the MEC where they relate to a Modification
Proposal which will affect the MRA Priority Provisions.
17.4 Notification of Determination: The Modification Panel
Secretary shall notify the MEC of any determination by
the Director in terms of Clause 76 (Determination by the
Director).
18. Reporting
18.1 The Modification Panel Secretary will submit at the end
of each month a written report in respect of the
preceding month both to Scottish Settlements and to each
Modification Panel Member setting out:-
18.1.1 information on the number and type of
Modification Proposals and Review Proposals
made; and
18.1.2 information on the progress of all Modification
and Review Proposals under consideration by the
Modification Panel.
18.2 Copies of the report referred to in Clause 82.1 above
will be provided to the Parties, Director and Market
Auditor by the Modification Panel Secretary on request.
18.3 The Modification Panel Secretary will prepare the
modification section of the draft Annual Report by
Scottish Settlements to the SEF, setting out the
following information in respect of the preceding year
ended 31 March:-
18.3.1 information on the number and type of
Modification Proposals and Review Proposals
made; and
18.3.2 information on the progress of all Modification
and Review Proposals under consideration by the
Modification Panel, including details of all
outstanding and pending work of the Modification
Panel and on the progress of any reference to
Scottish Settlements or any Review Work Group;
and
18.3.3 any other matters the Modification Panel
considers appropriate.
18.4 Modification Panel Members must have the opportunity to
approve the draft modification section before it is
incorporated in the Annual Report. In the event that
unanimous approval cannot be obtained or no decision can
be reached, the provisions of Clause 8.6 shall apply.
19. Variation of Procedure
19.1 Scottish Settlements Right to Vary: The Modifications
Panel may resolve from time to time that Scottish
Settlements shall be entitled to exclude or vary any step
or otherwise alter the procedure for Modification and/or
Review of this Agreement set out above. Where any such
resolution is not unanimous, it shall not be implemented
without the approval of the Director.
19.2 Director's Approval: No variation in terms of Clause 83.1
shall have effect to remove the requirement for a
determination by the Director in terms of Clause 76
(Determination by the Director).
20. The Performance Assurance and Accreditation Panel ("PAAP")
20.1 Establishment: The Parties to this Agreement hereby
establish the PAAP.
20.2 Performance Assurance Functions: The functions of the PAAP
are to:
20.2.1 give effect to the objects and terms of this
Agreement;
20.2.2 receive information about the failure by any
Market Participant to perform its obligations
under this Agreement;
20.2.3 agree with the defaulting Party the remedial
action to be undertaken, or require the Party to
take certain remedial action;
20.2.4 consider and respond to applications for
derogations in terms of Clause 93 (Derogations);
20.2.5 acting as the Accreditation Authority withdraw the
Accreditation and/or Certification of any Market
Participant if appropriate;
20.2.6 declare an Event of Default where it has power to
do so in terms of Clauses 89 (Proceedings of PAAP)
and 127 (Default by Parties other than Scottish
Settlements), and in its discretion request
Scottish Settlements to give notice to the Party
to cease to be a Party to this Agreement in
accordance with Clause 127;
20.2.7 report to Scottish Settlements, the Market Auditor
and the Director on the activities of the PAAP;
20.2.8 submit Modification Proposals or Review Proposals
where the PAAP resolves that these are
appropriate, including modification to the
performance assurance arrangements;
20.2.9 carry out or procure the carrying out of its
supervisory functions in relation to Metering as
set out in Schedule 5 (Metering) to this
Agreement, in consultation with the FAP from time
to time in relation to audit implications.
Provided that the PAAP shall consult the FAP at
least once in every Relevant Year;
20.2.10 process and consider applications for Derogations
under this Agreement and the Master Registration
Agreement in terms of Clause 93 (Derogations);
and
20.2.11 establish transitional and other arrangements for
Liquidated Damages in accordance with Schedule 8
(Liquidated Damages and Performance Levels).
20.3 Accreditation Authority Functions: The PAAP shall act as,
and perform the functions of, the Accreditation Authority.
The functions of the Accreditation Authority shall be as
set out in Clauses 94 (The Accreditation Authority) to 99
(Limitation of Liability of the Accreditation Authority) of
this Part IX and Schedule 18 (Market Procedure for
Accreditation and Certification) and shall include such
power and authorities as may be necessary or incidental to
the performance of such functions.
20.4 Entry Process Functions: The PAAP shall carry out the
functions in relation to Entry Processes as specified in
this Part IX and in Market Procedure MP-204 in Schedule
14 (Market Procedures for Generation Allocation), MP-512
in Schedule 15 (Market Procedures for Supply Allocation)
and MP-511 and MP-513 in Schedule 16 (Market Procedures
for SA and GA).
20.5 Members: The PAAP Members shall be:-
20.5.1 three representatives of the Scottish Companies;
and
20.5.2 three representatives of Non-Scottish Company
Members.
The PAAP Members shall be appointed and elected in accordance
with Clause 66 (Membership of the SEF).
20.6 Chairman: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a PAAP Member) as
the independent chairman of the PAAP, and may remove and
replace such individual so appointed from time to time.
The chairman will preside at meetings of the PAAP. In the
event that the chairman is not present within fifteen (15)
minutes of the start of any meeting, those PAAP Members
present shall appoint an individual to act as chairman for
such meeting. The chairman's functions will include
(without limitation):-
20.6.1 to preserve order at meetings and to conduct
proceedings in a proper manner;
20.6.2 to call on PAAP Members and non-member
representatives to speak at the meeting and to
regulate discussion in an impartial manner;
20.6.3 to call and remove additional representatives to
or from the meeting and to call upon them to speak
at the meeting to particular items on the agenda;
20.6.4 to curtail discussion and put a resolution to a
vote at any stage of the meeting, provided all
PAAP Members, non-member representatives and any
additional representatives called by the Chairman
present have been given reasonable opportunity to
speak on the subject matter of the resolution;
20.6.5 to put any resolution to a vote at the conclusion
of the meeting, provided all PAAP Members, non-
member representatives and any additional
representatives called by the Chairman present
have been given reasonable opportunity to speak on
the subject matter of the resolution ; and
20.6.6 to dissolve or adjourn the meeting with the
consent of all PAAP Members and non-member
representatives present.
20.7 Secretary: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a PAAP Member) as
the secretary of the PAAP (the "PAAP Secretary"), and may
remove and replace such individual so appointed from time
to time. In the event that the PAAP Secretary is not
present within fifteen (15) minutes of the start of any
meeting, those PAAP Members present shall appoint an
individual to act as PAAP Secretary for such meeting.
20.8 Non-member representatives: At every meeting of the PAAP
the following non-member representatives may attend and
shall be entitled to receive all documentation relating to
such meetings:-
20.8.1 a representative of the Market Auditor shall be
entitled to attend and speak at any such meeting,
but shall have no voting rights and shall not be
included in the membership of the PAAP; and
20.8.2 a representative of the Director shall be entitled
to attend and speak at any such meeting, but shall
have no voting rights and shall not be included in
the membership of the PAAP.
20.9 Additional Representatives: Unless the PAAP resolves
otherwise the chairman of the PAAP, of his own volition
or on the request of any PAAP Member (provided the
chairman considers any such request to be appropriate),
and/or any Party whose performance is being discussed may
require the presence at any meeting of an individual to
speak to particular items on the agenda. Any such
individual shall be entitled to attend and speak to such
agenda items at the relevant meeting but shall have no
vote and shall not be included in the membership of the
PAAP. Any such individual attending as an additional
representative shall require to execute a confidentiality
undertaking in terms of Clause 66.16.
20.10 Powers of Alternates: Alternates in respect of the PAAP
Members shall have the following rights and obligations in
addition to those set out in Clause 66 (Membership of the
SEF):-
20.10.1 Alternates once appointed may not sit
contemporaneously as a Disputes Panel Member until
their appointment as an Alternate is removed. Such
appointment or removal shall not take effect until
notice has been received by the PAAP Secretary;
and
20.10.2 in the event that any notice requires to be sent
to the PAAP Members, such notice shall also be
sent to any Alternate who has from time to time
been notified to the PAAP Secretary in accordance
with Clause 66.14.1.
21. Meetings of the PAAP
21.1 Purpose: Meetings of the PAAP will provide a forum in
which failure to meet any obligation in terms of this
Agreement under this Agreement can be addressed pursuant to
and in accordance with procedures set out in this Agreement
and/or for the PAAP to fulfil its role as the Accreditation
Authority. Other than as expressly provided in this
Agreement, the PAAP shall have no ability to determine any
matter and no competence to discharge any function or to
exercise any power.
21.2 Frequency of Meetings: Meetings of the PAAP shall take
place not less than once a month unless there is no
business to be performed at any such meeting.
21.3 Notice Convening Meetings: Meetings of the PAAP shall be
convened by the PAAP Secretary as follows:-
21.3.1 meetings will be convened on not less than
fourteen (14) days notice; and
21.3.2 every notice convening a meeting of the PAAP shall
specify the place, day and time of the meeting and
enclose an agenda together with all relevant
materials. Each PAAP Member shall be entitled to
receive such notice and agenda and all relevant
materials and at the same time as such notice is
despatched a copy of the notice and agenda and all
relevant materials shall be sent to the Director
and the Market Auditor.
21.4 Short Notice: The PAAP may at any meeting of the Panel
determine by simple majority that the next following
meeting of the PAAP may be convened on shorter notice than
specified in Clause 85.3.1 and where the PAAP shall so
determine the PAAP Secretary shall convene a meeting of the
PAAP in accordance with that determination.
21.5 Quorum: PAAP Members present at any meeting of the PAAP
who are capable of exercising four (4) votes shall form a
quorum provided that one (1) of the PAAP Members comprising
such a quorum shall be a representative of Scottish Hydro-
Electric and one (1) shall be a representative of
ScottishPower and two shall be representatives of the Non-
Scottish Company Members. Any such meeting shall be
competent to discharge any functions of the PAAP. In the
event that a quorum as defined in this Clause 85.5 is not
present within fifteen (15) minutes of the time specified
in the notice of meeting for the commencement of such
meeting or shall cease to be present during the course of
the meeting, the meeting shall be adjourned and the PAAP
Secretary shall reconvene the meeting within seven (7)
days. Any business conducted prior to a meeting ceasing to
be quorate shall be validly concluded. In the event that a
quorum is not present at any reconvened meeting, the PAAP
Members present shall be deemed to constitute a quorum for
the purposes of such meeting only.
21.6 Conduct of Meetings: At any meeting of the PAAP:-
21.6.1 any resolution shall be determined on a vote
decided by a show of hands or by such other method
as the chairman of the PAAP may earlier decide
from time to time, provided that the chairman
shall not have any entitlement to vote;
21.6.2 save where expressly provided otherwise in this
Agreement, any such vote shall be decided by a
simple majority of the PAAP Members present and
voting, provided always that a quorum is present
in accordance with Clause 85.5; and
21.6.3 in any such vote referred to in Clause 85.6.2, the
PAAP Members shall have regard to the objects of
this Agreement.
21.7 Conflicts of Interest: A PAAP Member shall be required to
act independently of the interests of his employer and of
those SEF Members whose interests he represents. In
particular, but without prejudice to the generality of the
foregoing:
21.7.1 a PAAP Member shall declare to the PAAP and to the
chairman of the PAAP any Conflict of Interest
which arises and the chairman of the PAAP shall
ensure that such Conflict of Interest is noted in
the minutes of the meeting; and
21.7.2 a PAAP Member shall not disclose to his employer
confidential information which he has received in
his capacity as a PAAP Member unless:
21.7.2.1 required to do so by any Competent
Authority or by law;
21.7.2.2 in order for his employer to comply
with the conditions of any Licence
with which his employer is required to
comply;
21.7.2.3 required to do so by any stock
exchange or regulatory authority or
the Panel on Take-overs and Mergers;
or
21.7.2.4 pursuant to the arbitration rules of
the Electricity Arbitration
Association or pursuant to any
judicial or other arbitral process or
tribunal having jurisdiction in
relation to him or his employer,
in any of which events the PAAP Member shall first be required to
give written notice of the required disclosure to the PAAP.
For the purposes of this Clause 85.7, 'employer' shall be
taken to include any affiliate, related undertaking or
Agent of such employer, provided that, for the purpose of
this Clause only, Scottish Settlements shall not be
considered an affiliate, related undertaking or Agent of
either of the Scottish Companies.
21.8 Location of Meetings: Meetings of the PAAP shall be held
in Scotland, unless otherwise agreed by unanimous
resolution of the PAAP.
21.9 Minutes: The PAAP Secretary shall ensure that minutes are
taken of any meeting of the PAAP, and that the attendance
at such meeting of any PAAP Member or representatives of
the Director or Market Auditor shall be recorded.
Following any such meeting the PAAP Secretary shall within
ten (10) days of the date of any such meeting, send copies
of such minutes to every PAAP Member and to the Director
and Market Auditor.
21.10 Provision of Information: The PAAP shall be entitled to
instruct the PAAP Secretary to circulate to any person
copies of any document which is related to, or derives
from, any proceeding of the PAAP in terms of this Part IX
provided that the PAAP may require the PAAP Secretary to
obtain from any such person, a confidentiality undertaking
in a form to be approved by the PAAP.
21.11 Information from Parties and Agents:
21.11.1 Each Party shall provide and shall procure that
any Agent appointed by it shall provide such data,
reports and other information to the PAAP as is
reasonably required by the PAAP for the purposes
of fulfilling its functions set out in this
Agreement.
21.11.2 Save in any case where the Director has expressly
required provision of the information, each Party
shall be entitled to withhold information
requested from it or its Agent by the PAAP in the
event that such information is commercially
sensitive.
21.11.3 In the event that a Party wishes to withhold
information in terms of Clause 85.11.2, such Party
shall notify the PAAP Secretary and the Director
of their intention to withhold such information,
and detail the reasons therefor. In the event
that the Director requires the Party to provide
such information to the Director, the Director may
advise the PAAP on how to proceed.
21.11.4 In the event that the PAAP cannot progress its
work due to insufficient information, the matter
may be referred by the PAAP Secretary to the
Director.
21.11.5 The Director may request from the PAAP Secretary
information held by the PAAP in connection with
the referral to the Director under Clause 85.11.4.
22. Notification of Failure to Perform and Reports from Panels
22.1 Notifications: Failure to perform any obligation in terms
of this Agreement may be notified to the PAAP Secretary in
the following manner:-
22.1.1 a written report by Scottish Settlements;
22.1.2 a written report from the Market Auditor, in
accordance with the Market Auditor's
responsibilities under this Agreement, including
as a result of an investigation requested by the
PAAP;
22.1.3 a written report submitted by any Party outlining
the circumstances and details of a failure to
perform by any Market Participant;
22.1.4 in consequence of the results of any re-
Certification process under Clause 97.4 or any
other re-Certification process that may be
implemented from time to time;
22.1.5 written notice from the Director; or
22.1.6 written report from any Panel.
22.2 Costs: In the event that a Party provided the PAAP
Secretary with a report in terms of Clause 86.1.3 which
report proves to be unfounded as resolved by the PAAP, the
PAAP may, without prejudice to any other remedy or right
available, require the relevant Party to meet the costs of
any investigation resulting from such report.
23. Urgent Response
23.1 Action by PAAP Secretary: On receipt of the notification
referred to in Clause 86.1 the PAAP Secretary will consider
whether an urgent response ("Urgent Response") is required.
This will only apply where the integrity of the Central
Allocation System is or is likely to be jeopardised or
fraudulent intent is indicated. In those circumstances,
the PAAP Secretary may take any action which would have
been available to the PAAP as the PAAP Secretary sees fit
to protect the Central Allocation System. The PAAP
Secretary will immediately notify the Party involved and
the PAAP Members, and confirm the action taken to the
Director and the Market Auditor. The response will be
reviewed at the next PAAP meeting, and the Party may appeal
to the Director against the action taken pursuant to the
Urgent Response. The Director may request from the PAAP
Secretary information held by the PAAP in connection with
the referral to the Director under this Clause 87.1.
23.2 In the event that the Director, as a result of any appeal,
instructs Scottish Settlements to take any remedial action,
Scottish Settlements shall follow such instructions.
23.3 Second of January: In considering any investigation or
response in terms of this Clause 87 or otherwise in terms
of this Part IX the PAAP Secretary shall have regard to the
fact that, notwithstanding any provision of this Agreement,
the second day of January in any year (or, where the second
day of January is not a Working Day, the first Working Day
thereafter) need not be treated by Parties as a Working
Day.
24. Investigation
24.1 Preliminary Investigation: In circumstances other than
those requiring an Urgent Response, the PAAP Secretary
shall inform the non-performing Party, and ascertain from
such Party:-
24.1.1 whether circumstances detailed in the notification
under Clause 86.1 have been remedied;
24.1.2 whether the failure to perform has been persistent
or material; and
24.1.3 whether loss appears to have been incurred by
other Market Participant(s) as a result of the
failure to perform.
24.2 If in the view of the PAAP Secretary the circumstances
detailed in the notification under Clause 86.1 have not
been remedied to the reasonable satisfaction of the PAAP
Secretary, the PAAP Secretary will endeavour to expedite
the procurement by the relevant Party of a remedy.
24.3 If the circumstances detailed in the notification under
Clause 86.1 have been remedied, the failure to perform has
not been persistent or material, and no loss appears to
have been incurred by other Market Participant(s) as a
result of the failure to perform, the PAAP Secretary will
note the occurrence of the failure to perform and report it
to the next meeting of the PAAP. In deciding whether to
refer the matter to the PAAP, the PAAP Secretary will be
under an obligation to act reasonably. A Party may insist
that non-performance by another Party is referred to the
PAAP.
24.4 If the circumstances detailed in the notification have not
been remedied, or the failure to perform has been
persistent or material, or it appears that loss has been
incurred by other Market Participant(s) as a result of the
failure to perform, the Secretary will refer the matter to
the PAAP.
24.5 The PAAP Members will be informed of the identity of the
Party failing to perform.
25. Proceedings of PAAP
25.1 Investigation: Following receipt of the notification
referred to in Clause 86.1, where the PAAP Secretary has
referred the matter to the PAAP and where an Urgent
Response is not required:-
25.1.1 the Party which has, according to the notification
failed to perform will be asked by notice in
writing to attend a meeting of the PAAP and
invited to clarify the circumstances of the
alleged failure to perform, in writing or by
personal representation. The PAAP may also
request information from any other relevant Party
regarding the failure to perform and any loss
incurred as a result of that failure.
25.1.2 The PAAP may require the non-performing Party to
provide, within any timescale specified by the
PAAP for provision of same:-
25.1.2.1 at that Party's expense, a report on
its performance in carrying out its
activities under this Agreement;
25.1.2.2 at that Party's expense, a report on
the performance of any Agent appointed
to carry out those activities; and
25.1.2.3 its data and reports for audit by the
Market Auditor. The cost of such
audit shall be reimbursed by the Party
to Scottish Settlements if he is found
not to be performing to the required
standard.
25.1.3 The PAAP may request that the Market Auditor or
Scottish Settlements undertakes an investigation
of the non-performing Party's compliance with this
Agreement and the performance of its Agents. The
investigation may include an assessment of any
losses incurred by Market Participants as a
result, including related administrative costs.
The Market Auditor or Scottish Settlements shall
produce a report which shall be delivered to the
PAAP Secretary within the timescale specified by
the PAAP who shall circulate the report to all
PAAP Members within two (2) Working Days of
receipt.
25.1.4 In the event that a report is requested from the
Market Auditor or Scottish Settlements in terms of
Clause 89.1.3 and the non-performing Party is
found to have failed in performance of any
obligation under this Agreement then the PAAP may
resolve that the non-performing Party shall bear
the costs of the Market Auditor or Scottish
Settlements.
25.2 PAAP Response:
25.2.1 Within twenty (20) Working Days of receipt by the
PAAP of any items requested in terms of Clause
89.1, the PAAP may resolve to respond by:-
25.2.1.1 taking no action; or
25.2.1.2 undertaking a Level One Response in
terms of Clause 89.2.2 to be followed
sequentially if the PAAP so resolves
by undertaking a Level Two Response in
terms of Clause 89.5.
In each case the PAAP shall base its response on the
information provided to it and the PAAP Secretary
shall notify the non-performing Party of the
resolution of the PAAP.
25.2.2 Level One Response: The PAAP may:
25.2.2.1 agree the course of action with the
non-performing Party and issue a
formal notice (a "Notice to Remedy")
to the Party proposing a reasonable
course of remedial action (which may
include removal or replacement of its
Agent) to be taken by him (and his
Agent(s) if relevant) and the
timescale; or
25.2.2.2 if no agreement is reached with the
relevant Party within a reasonable
timescale as specified by the PAAP
having regard to the circumstances of
the failure to perform:-
(i) require that the Party provide
to the PAAP, within a specified
time limit, a proposal (a
"Proposal for Remedy"), setting
out a course of remedial action
to be taken by him (and his
Agent(s) if relevant) and the
timescale; and
(ii) consider a Proposal for Remedy
and either
(a) confirm it as a Notice to
Remedy, or
(b) if no acceptable Proposal
for Remedy is made by the
Party within the
specified time limit,
issue a Notice to Remedy.
25.3 In the event that any non-performing Party is found by the
PAAP to have failed in the performance of any Performance
Level which is set out in Schedule 8 (Liquidated Damages
and Performance Levels), the PAAP may levy the appropriate
Liquidated Damages on such non-performing Party as detailed
in Schedule 8 as follows:-
25.3.1 the PAAP Secretary shall calculate the
Liquidated Damages and interest, where
applicable which may be levied; and
25.3.2 the Liquidated Damages so calculated and
interest, where applicable shall be included in
any invoice issued for the non-performing Party
in terms of Part VIII.
25.4 The PAAP may resolve that the Market Auditor monitor
implementation of the Notice to Remedy or Proposal to
Remedy, at the expense of the relevant non-performing
Party. If the non-performance is not remedied within the
timescale specified in the Notice to Remedy, the Market
Auditor will report this to the PAAP Secretary and the PAAP
may make a Level Two Response.
25.5 Level Two Response: If a Party has failed to comply with a
Level One Response from the PAAP within the timescale set
out in any Notice to Remedy, the Level Two Response may
comprise all or any of the following actions.
25.5.1 The PAAP acting as the Accreditation Authority may
withdraw Accreditation of the relevant Market
Participant(s) and impose conditions on those
Market Participant(s) to be fulfilled prior to any
further application for Accreditation. Any such
conditions must be reasonable in all the
circumstances. A copy of any notice withdrawing
Accreditation in accordance with this Clause will
also be addressed to the Managing Director or Chief
Executive of the relevant Party. The PAAP will
formally notify the Director of any such action.
25.5.2 The PAAP may declare such failure to be an Event of
Default in terms of Clause 127 (Default by Parties
other than Scottish Settlements).
25.5.3 If a Party or its Agent has had Accreditation
withdrawn, and is subject, within one year after
re-obtaining Accreditation, to a further
investigation by the PAAP, this may be regarded as
a persistent breach of this Agreement and the PAAP
may declare an Event of Default in terms of Clause
127 (Default by Parties other than Scottish
Settlements). The PAAP shall serve a notice
wherein the Party will be invited to demonstrate to
the PAAP the steps it has taken (which may include
removal or replacement of its Agent) to ensure that
such non-performance is not likely to recur. A
copy of any such notice will also be addressed to
the Managing Director or Chief Executive of the
non-performing Party.
25.5.4 The PAAP may resolve to take no further action in
which event the PAAP Secretary shall notify the
non-performing Party of such resolution.
25.5.5 The PAAP may, where appropriate, resolve to
instruct Scottish Settlements to take any action it
has power to take in terms of this Agreement.
25.6 Persistent or Material Breach: In the event that the PAAP
resolves that a notification of failure to perform in
respect of a Party, which notification gives rise to a
Notice to Remedy being issued by the PAAP Secretary, should
be regarded as a persistent or material breach of this
Agreement and an Event of Default in terms of Clause 127
(Default by Parties other than Scottish Settlements), the
PAAP shall serve a notice to this effect on the non-
performing Party. A copy of any such notice will also be
addressed to the Managing Director or Chief Executive of
the relevant Party.
25.7 If, following a notice in terms of Clause 89.5.3 or Clause
89.6 above, the Party or its Agent cannot satisfy the PAAP
that such non-performance is not likely to recur, the PAAP
may:
25.7.1 declare an Event of Default under the this
Agreement, and
25.7.2 require Scottish Settlements to give notice to the
relevant Party to cease to be a Party in terms of
Clause 127.2.
A copy of any such request will also be addressed to the Managing
Director or Chief Executive of the Party.
25.8 Second of January: In considering any investigation or
response in terms of this Clause 89 or otherwise in terms
of this Part IX the PAAP shall have regard to the fact
that, notwithstanding any provision of this Agreement, the
second day of January in any year (or, where the second day
of January is not a Working Day, the first Working Day
thereafter) need not be treated by Parties as a Working
Day.
26. Failure of Panel Members to Agree
26.1 If the PAAP Members are unable to agree a decision in
terms of Clauses 86 (Notification of Failure to Perform
and Reports from Panels) to 89 (Proceedings of PAAP) by
majority, the matter shall be referred to an independent
arbiter. Such independent arbiter shall be appointed by
resolution of the PAAP subject to agreement with the
relevant Party. In the event that the PAAP and the
relevant Party are unable to agree on the appointment of
an independent arbiter within fourteen (14) days of the
date when the matter first came before the PAAP for such
decision, then the matter shall be referred to the
Chartered Institute of Arbitrators (Arbiters) for the
appointment of an arbiter and the Dispute shall be
resolved in accordance with the rules of the Chartered
Institute of Arbitrators (Arbiters).
27. Appeals
27.1 Appeals: A Party may appeal any decision of the PAAP
relating to Clauses 86 (Notification of Failure to Perform
and Reports from Panels) to 90 (Failure of Panel Members to
Agree) to the Disputes Panel.
27.2 Disputes: Failure to reach agreement with a non-performing
Party on a course of action will not constitute grounds for
raising a dispute under the Disputes Procedure. A non-
performing Party may query, and subsequently raise a
Dispute regarding, the terms of a Notice to Remedy.
27.3 Suspension: A notice withdrawing a non-performing Party's
or its Agent's Accreditation in terms of Clause 89.5.1
shall not have effect until the final resolution of any
Dispute or Appeal in terms of this Clause 91, provided
that:-
27.3.1 such Dispute or appeal has been raised or
commenced by the relevant Party within seven (7)
days of the receipt of such notice; and
27.3.2 the Director has not stated that Accreditation
should be removed until the Dispute or Appeal is
resolved.
28. Reporting
28.1 The PAAP Secretary will provide by the end of each month a
written status report in respect of the preceding month to
Scottish Settlements circulated to each PAAP Member,
setting out:
28.1.1 the circumstances of each notification noted but
not referred to the PAAP in terms of Clause 88.3;
and
28.1.2 for each notification referred to the PAAP in
terms of Clause 88.4:
28.1.2.1 brief details of the failure to
perform, and
28.1.2.2 details of the PAAP actions in
response to such failure to perform,
including timescales.
28.2 The PAAP Secretary will prepare a summary of the status
report referred to in Clause 92.1 to be circulated to each
PAAP Member, all Parties, the Director, the Market Auditor
and, if requested, to any Recognised Organisation.
28.3 The PAAP will have discretion to direct that the identity
of the non-performing Party should be disclosed in any such
summary of the status report, taking into account the
degree of co-operation and initiative shown by such non-
performing Party in resolving the failure to perform.
28.4 The PAAP Secretary will prepare the draft PAAP section of
the Annual Report setting out:-
28.4.1 a summary of information in respect of the
business of the PAAP during the preceding year
ended 31 March including details of all
outstanding and pending work of the PAAP; and
28.4.2 any other matter the PAAP deems appropriate.
28.5 PAAP Members must have the opportunity to approve the draft
section before it is incorporated in the Annual Report. In
the event that unanimous approval can not be obtained or no
decision can be reached, the provisions of Clause 8.6 shall
apply.
29. Derogations
29.1 Applications for Derogations: Any Market Participant or
person proposing to become a Market Participant
("Derogation Applicant") shall be entitled to apply at
any time and from time to time, for a derogation from any
obligation which is, or may be, placed upon it in terms
of this Agreement. Such applications shall be made in
writing to the PAAP Secretary, in a form to be set by the
PAAP Secretary from time to time, which shall include:-
29.1.1 the specific obligation from which the
Derogation Applicant seek to be released;
29.1.2 the reasons for the application;
29.1.3 a detailed justification for the application;
29.1.4 the period of time for which the Derogation is
sought;
29.1.5 details of the action the Derogation Applicant
shall take to become compliant with the relevant
obligation, the costs and timescales involved
and any circumstances which may affect the
Derogation Applicant's ability to achieve
compliance;
29.1.6 details of the anticipated cost to the
Derogation Applicant of compliance without the
Derogation applied for;
29.1.7 the Derogation Applicant's view as to why the
derogation requested would not impose
significant extra costs or risks on Scottish
Settlements or other Market Participants;
29.1.8 details of any derogations obtained in terms of
the Pooling and Settlement Agreement which
relate to similar circumstances to the
Derogation applied for; and
29.1.9 any further supporting documentation the
Derogation Applicant wishes to include.
Any application which does not include the above items shall be
disregarded by the PAAP Secretary.
29.2 Initial Meeting: Upon receipt of an application in terms
of Clause 93.1, the PAAP Secretary shall:-
29.2.1 add consideration of the application to the next
unissued agenda for a meeting of the PAAP, or
convene a meeting for consideration of the
application, all at the discretion of the PAAP
Secretary; and
29.2.2 together with the notice of such meeting,
circulate such application to the Market
Participants, the Certification Agents, the
Market Auditor and the Director.
29.3 Written Submissions: Market Participants, the
Certification Agents, Scottish Settlements, and the
Market Auditor may make written submissions in response
to any application for a Derogation. Such written
submissions shall be provided to the PAAP Secretary
within such timescale as may be specified by the PAAP
Secretary. The PAAP Secretary shall circulate copies of
such written responses to all PAAP Members, the Market
Participants, the Certification Agents, the Market
Auditor and the Director prior to any such meeting.
29.4 Determination of Applications for Derogations: The PAAP,
after consideration of the application, any written
submissions and the results of any impact assessment, may
resolve to and thereby:-
29.4.1 grant a Derogation (subject to any conditions
that the PAAP thinks fit);
29.4.2 reject the application; or
29.4.3 postpone a decision on the application to the
next PAAP meeting, but no further, and/or
request further comments in writing from any
person.
29.5 In considering any application for a Derogation the PAAP
shall have regard to the following (without limitation):-
29.5.1 whether the Derogation applied for would
threaten the integrity of the Central Allocation
System;
29.5.2 whether the risks introduced by the proposed
Derogation would be acceptable to the Parties to
this Agreement;
29.5.3 whether the Derogation applied for would place
significant extra additional costs on Scottish
Settlements or other Market Participants;
29.5.4 whether the obligation from which a Derogation
is sought can be met by the Derogation Applicant
within a period of time acceptable to the
Parties to this Agreement; and
29.5.5 whether the cost to the Derogation Applicant of
meeting the obligation would be reasonable
having regard to the nature of the obligation
and the Derogation Applicant.
29.6 Resolutions Granting Derogations: Any resolution
granting a Derogation in terms of Clause 93.4 shall
include (without limitation):-
29.6.1 details of the specific obligations under this
Agreement from which Derogation has been
granted;
29.6.2 any conditions attaching to the grant of
Derogation, including any requirements to take
action to comply with the obligations in respect
of which the Derogation is granted; and
29.6.3 the dates on which the Derogation is to take
effect and terminate.
29.7 Resolutions Rejecting Derogation Applications: Any
resolution of the PAAP rejecting an application shall
include (without limitation):-
29.7.1 reasons for the rejection; and
29.7.2 details of any steps that the Derogation
Applicant may take which may allow another
application to succeed.
29.8 Previous Resolutions: In considering any application for
a Derogation the PAAP may have regard to any previous
resolution on Derogation applications but shall not be
bound to follow any previous decision. The PAAP
Secretary shall maintain a record of all resolutions of
the PAAP on Derogation applications which shall be made
available to any Derogation Applicant or Party on
request.
29.9 Reconsideration of Derogations: The PAAP Secretary,
Scottish Settlements or any Party may request the PAAP to
reconsider any Derogation granted from time to time, on
the basis that such Derogation is, or will become,
contrary to the interests of Market Participants in
general. In the event that the PAAP resolves to
reconsider the Derogation, the PAAP Secretary shall
invite written comments from the Market Participants, the
Certification Agents and the Market Auditor and shall
circulate any such comments to the PAAP Members. After
consideration of these comments the PAAP may resolve:-
29.9.1 to withdraw the Derogation with effect from a
specified date;
29.9.2 to amend the Derogation with effect from a
specified date; or
29.9.3 not to alter the Derogation.
29.10 Notification of Resolution: The PAAP Secretary shall
circulate any resolution of the PAAP in terms of Clauses
93.4, 93.7 or 93.9 to the Derogation Applicant, all
Market Participants, the Certification Agents, the Market
Auditor and the Director.
29.11 Effect of Derogation: Any Party to whom Derogation has
been granted in terms of this Clause 93 shall not for the
period of the Derogation be required to comply with any
specific obligations in respect of which, and only to the
extent to which, a Derogation has been granted, but shall
be required to comply with any modified obligations which
are specified as a condition of such Derogation.
29.12 MRA Derogations: The PAAP shall consider applications in
terms of the Master Registration Agreement for
Derogations in relation to the MRA Priority Provisions.
Any resolution of the PAAP on such application shall be
notified to the relevant forum under the Master
Registration Agreement by the PAAP Secretary.
29.13 Appeal Procedure: If a Derogation Applicant is
dissatisfied with any decision of the PAAP in relation to
an application, the sole and exclusive remedy of the
Derogation Applicant shall be to refer the matter for
determination under the Disputes Procedure. After having
exhausted the Disputes Procedure, the Derogation
Applicant may refer the matter to the Director for a
determination. The Director may request from the PAAP
Secretary information held by the PAAP in connection with
a referral to the Director under this Clause 93.13.
30. The Accreditation Authority
30.1 The PAAP shall act as, and shall perform the functions of,
the Accreditation Authority pursuant to Clause 84.3.
30.2 Categories of Applicant: On the terms and subject to the
conditions of this Agreement, the Accreditation Authority
shall be responsible for the Certification of each
Certification System of, and the Accreditation of, any
Applicants falling within the following categories, unless
otherwise agreed with the Director:
30.2.1 PES Registration Service providers;
30.2.2 Generation Registration Service providers
including Grid Connected Power Stations (Import
Registers) Registration Service providers;
30.2.3 Non Half Hourly Data Collectors;
30.2.4 Non Half Hourly Data Aggregators;
30.2.5 Meter Operators (Supply Allocation);
30.2.6 Meter Operators (Generation Allocation);
30.2.7 Half Hourly Data Collectors (Supply Allocation);
30.2.8 Half Hourly Data Collectors (Generation
Allocation);
30.2.9 Half Hourly Data Aggregators;
30.2.10 System Data Provision Service including Bulk
Supply Point Registration Service providers;
30.2.11 Grid Control Centre generation allocation
interfaces;
30.2.12 Data Transfer Service providers; and
30.2.13 such other categories of person, if any, as the
Accreditation Authority, with the prior written
consent of the Director, may determine.
30.3 Subject to the provisions of Clause 91.3, a decision duly
made at a meeting of the PAAP acting as the Accreditation
Authority shall (unless otherwise determined by the PAAP
acting as the Accreditation Authority or otherwise provided
by the terms of the decision) have immediate effect.
30.4 Delegation: The PAAP acting as the Accreditation Authority
shall:-
30.4.1 have the right at any time and from time to time
to delegate or procure the delegation of all or
any part of the day to day administration of the
Accreditation Process to an Agent. For the
avoidance of doubt, this shall not include the
taking of any decision as to whether the
Certification Systems of an applicant (or any of
them) should be Certified or the Applicant
should be Accredited; and
30.4.2 be responsible for every act, breach, omission,
neglect and/or failure of such Agent.
30.5 Responsibilities owed to Parties alone: The
responsibilities of the Accreditation Authority are owed
exclusively to Parties, and to no other person. In
particular, but without prejudice to the generality of the
foregoing, Parties shall be required to satisfy themselves
as to the financial condition and prospects and the
management and operational ability of any Accredited person
and shall not rely on the fact of Accreditation (or the
lack of Accreditation) as, or infer therefrom, any
representation, warranty or other statement or indication
on the part of the Accreditation Authority or the
Certification Agent that the Accredited person has any or
any particular financial condition or prospects or level of
management or operational ability.
31. Role of PAAP Secretary
31.1 Functions of PAAP Secretary: The PAAP Secretary shall:-
31.1.1 in addition to the other functions of the PAAP
Secretary set out in this Agreement, perform
such functions associated with the day-to-day
administration of the Accreditation Process as
are delegated to it from time to time by the
PAAP. A list of any such delegated functions
will be made available by the PAAP Secretary on
request; and
31.1.2 keep confidential information that it receives
on terms agreed from time to time by it with the
PAAP.
32. The Certification Agent
32.1 Appointment and removal of Certification Agent: The
Accreditation Authority hereby authorises the appointment
and/or removal, by Scottish Settlements in terms of Clause
96.2, of Certification Agents on behalf of all Parties.
The first Certification Agents shall be Deloitte & Touche
for Generation Allocation purposes and
PricewaterhouseCoopers for Supply Allocation purposes.
Scottish Settlements shall on behalf of the Accreditation
Authority agree, amend and substitute the terms of
engagement of the Certification Agent including, but not
limited to, provisions relating to limitations and/or
exclusion of liability.
32.2 Parties' authorisation: The Parties hereby irrevocably and
unconditionally authorise Scottish Settlements, in
consultation with the Accreditation Authority, to appoint
and remove, and to agree, amend and substitute the terms of
engagement of, the Certification Agents as authorised by
the Accreditation Authority on their behalf and undertake
not to withdraw or change that authority.
32.3 Functions of Certification Agent: The functions of the
Certification Agent shall be:
32.3.1 to prepare the self-assessment certification
returns to be completed by each Applicant and the
supporting documentation (including guidance
notes) to be used by the Certification Agent in
the Certification Process (together the
"Certification Documentation"), to submit the
Certification Documentation to the Accreditation
Authority for approval and to revise (and resubmit
for approval) the Certification Documentation in
accordance with the instructions of the
Accreditation Authority from time to time;
32.3.2 to carry out the Certification Process in
accordance with applicable Scots law, the terms
set out in this Part IX and Schedule 18 and the
approved Certification Documentation;
32.3.3 to exercise the skill, care and diligence in the
preparation and revision of the Certification
Documentation (recognising that the Certification
Agent is required to give effect to the
instructions of the Accreditation Authority under
Clause 96.3.1) and in the performance of the
Certification Process reasonably to be expected of
a firm of accountants (or to such other standard
of skill, care and diligence as may be agreed by
the Accreditation Authority with the Certification
Agent from time to time); and
32.3.4 in respect of each application for Accreditation,
to deliver an opinion of the Certification Agent
addressed to the PAAP Secretary as to whether the
Applicant's Certification Systems have met the
Certification Requirements in terms of Market
Procedure MP-621.
32.4 Responsibilities owed to Accreditation Authority: The
responsibilities of the Certification Agent are owed
exclusively to Scottish Settlements, the Accreditation
Authority for itself and the Parties collectively and to no
other person.
32.5 Confidentiality undertaking: Before commencing the
Certification Process with respect to the Certification
Systems of any Applicant, the Certification Agent shall
execute a confidentiality undertaking in favour of such
Applicant in such form as may from time to time be agreed
by the PAAP acting as the Accreditation Authority with the
Certification Agent.
33. The Certification Process and Accreditation Process
33.1 The Certification Process and Accreditation Process:
33.1.1 The Certification Process and the Accreditation
Process shall be conducted in accordance with
Market Procedure MP-621.
33.1.2 The PAAP Secretary shall provide copies of the
latest version of this Agreement and relevant
Market Procedures together with such other
information as the PAAP shall direct from time to
time to Applicants, PAAP members and to the
Certification Agents.
33.1.3 The PAAP Secretary shall, subject to Clause 98.2,
provide each Applicant with a copy of all opinions
of the Certification Agent in relation to the
Certification System(s) of that Applicant
delivered pursuant to Clause 96.3.4 at the same
time as the PAAP Secretary notifies such Applicant
whether its Certification System(s) has (have)
been Certified and/or (as the case may be) such
Applicant has been Accredited. The PAAP Secretary
shall not, unless otherwise resolved by the PAAP,
provide to, or permit the provision to an
Applicant a copy of any such opinion at any time
before it gives such notification.
33.1.4 The Accreditation Authority shall make available
to the Director all information held by the
Accreditation Authority which the Director
reasonably requests for the purposes of any appeal
in terms of Clause 97.7.
33.2 No Certification: The Accreditation Authority shall not
Certify the Certification System of any Applicant unless
the Certification Agent has provided an opinion in terms of
Sections 1.6.1.2(i) or 1.6.1.2(iii) of Schedule 18
(provided that any corrective steps required have been
implemented) in relation to that Certification System.
33.3 Loss of Certified or Accredited status: The Accreditation
Authority shall have the right at any time and from time to
time for reasons including, without limitation, the
provisions of Clause 89.5 in accordance with Market
Procedure MP-621:
33.3.1 to remove the Certification of all or any of the
Certification System(s) of any person, whereupon
such Certification System(s) shall cease to be
Certified; and/or
33.3.2 to remove the Accreditation of any person,
whereupon, subject to Clause 91.3, such person
shall cease to be Accredited.
33.4 Re-certification: Each person who has been Accredited
shall be required as directed by the Accreditation
Authority to have some or all of its Certification Systems
re-Certified in accordance with this Agreement, including
Market Procedure MP-621. If any such Certification System
is not so re-Certified, such person's Accreditation shall
automatically lapse.
33.5 Fees and expenses:
33.5.1 Scottish Settlements shall determine, in
consultation with the Accreditation Authority and
with the consent of the Director, and publish to
Applicants and to those persons who have been
Accredited a menu of certification fees which
shall be charged directly to Applicants for the
purposes of Certification as Standard Charges.
Scottish Settlements, in consultation with the
Accreditation Authority shall have the right to
revise such fees from time to time, such revisals
to be approved by the Director.
33.5.2 Each Applicant shall pay its own costs and
expenses incurred in connection with the
Certification Process and the Accreditation
Process.
33.6 Applicants bound by this Agreement: Applicants shall agree
to be bound by the Certification Process, the Accreditation
Process, the provisions of this Agreement and Market
Procedure MP-621 by the execution of a letter of agreement
in form and content satisfactory to the Accreditation
Authority.
33.7 Appeal Procedure: If an Applicant is dissatisfied for any
reason (including on the grounds that the Applicant
disagrees with the final opinion of the Certification Agent
in relation to one or more of its Certification Systems)
with the decision of the Accreditation Authority in
relation to Accreditation or removal of Accreditation, the
sole and exclusive remedy of the Applicant shall be to
refer the matter for determination under the Disputes
Procedure. After having exhausted the Disputes Procedure,
the Applicant may refer the matter to the Director. The
determination of the Director shall be final, conclusive
and binding on the Applicant, the Accreditation Authority
and all Parties.
33.8 Failure of Panel Members to Agree: If the PAAP Members are
unable to reach a decision in terms of the Certification
Process and/or the Accreditation Process, the PAAP shall be
deemed to have decided against the relevant Party and such
Party shall be entitled to appeal such decision in terms of
Clause 97.7 as if it were the Applicant referred to
therein.
33.9 Reapplication: Nothing in this Agreement shall prevent any
Applicant whose Certification Systems have been refused
Certification or Accreditation, or any Party or Applicant
who has had Accreditation removed, from applying for
Accreditation at any time.
34. Applicant's Responsibilities
34.1 Applicant's warranty and undertakings: In each letter in
terms of Clause 97.6 each Applicant shall represent,
warrant and undertake to each of the Parties (for itself
and as trustee and agent for the Accreditation Authority
and the Certification Agent) that:
34.1.1 all information supplied by or on behalf of the
Applicant to the Accreditation Authority, or the
Certification Agent in connection with the
Certification Process or the Accreditation Process
is true, complete and accurate and not misleading
because of any omission or ambiguity or for any
other reason, subject to any disclosure made to
and accepted by the Accreditation Authority in
writing in advance of the provision of the
relevant information to the Accreditation
Authority, or (as the case may be) the
Certification Agent;
34.1.2 completion of all documentation by or on behalf of
the Applicant in connection with the Certification
Process or the Accreditation Process is and will
remain the sole responsibility of the Applicant;
34.1.3 the Applicant will duly complete all such
documentation and provide all the information
required thereunder within the time periods
prescribed by Market Procedure MP-621; and
34.1.4 the Applicant has had the opportunity to take its
own legal and other professional advice regarding
the Certification Process and the Accreditation
Process;
34.1.5 it will confirm in writing to the Accreditation
Authority (for itself and on behalf of all the
Parties, the Accreditation Authority and the
Certification Agent) in accordance with Market
Procedure MP-621 that each of the other
representations, warranties and undertakings in
this Clause 98.1 are true and have been complied
with as at the date on which it has been notified
that its application(s) for Certification and/or
Accreditation will be considered by the
Accreditation Authority; and
34.1.6 the Applicant will co-operate fully with the
Accreditation Authority, the PAAP Secretary and
the Certification Agent in the Certification
Process and the Accreditation Process and, without
prejudice to the generality of the foregoing,
shall permit each of them reasonable access to the
Applicant's business records, working papers and
employees for the purpose of each such process
upon not less than three (3) Working Days' advance
notice.
34.2 No reliance by Applicant: The Applicant shall acknowledge
and agree in the letter in terms of Clause 97.6 that:
34.2.1 it shall not, and shall not be entitled to, place
any reliance on any working papers, opinion,
report or other documentation prepared by or for
(or any oral or written interpretation of, or any
oral or written advice given in relation to, any
such working papers, opinion, report or other
documentation by) the Accreditation Authority, or
the Certification Agent in connection with the
Certification Process or the Accreditation Process
unless such working papers, opinion, report or
other documentation is expressly addressed to such
Applicant; and
34.2.2 it shall keep confidential on the terms set out in
Clause 125 (Confidentiality) any working papers,
opinions, report or other documentation referred
to in Clause 98.2.1 unless such working papers,
opinion, report or other documentation are
expressly addressed to such Applicant.
35. Limitation of Liability of the Accreditation Authority
35.1 Limitation of liability: Each Applicant, each person who
has (or whose Certification System(s) have) been
Certified or Accredited (or whose Certification or
Accreditation has been removed or has lapsed) and each
Party (each an "Interested Person") agrees that:
35.1.1 the total liability of the Accreditation
Authority to any and all Interested Persons
whether in contract, delict (including
negligence or breach of statutory duty) or
otherwise arising directly or indirectly out of
or in connection with the Certification Process
or the Accreditation Process (including the
contents of any opinion or report prepared by
the Accreditation Authority) shall not exceed
(Pound)250,000 for each event or series of related
events giving rise to such liability;
35.1.2 the Accreditation Authority shall not be liable
to any Interested Person for any loss of profit,
loss of revenue, loss of contract, loss of
goodwill or any indirect or consequential loss
arising from or in connection with the
Certification Process or the Accreditation
Process;
35.1.3 Clauses 99.1.1 and 99.1.2 shall not exclude or
limit the liability of the Accreditation
Authority for fraud;
35.1.4 the exclusions from and limitations of liability
of the Accreditation Authority and the other
Parties under this Clause 99 shall not apply to
death of or personal injury to any individual
caused by the negligence of the Accreditation
Authority;
35.1.5 the exclusions from and limitations of liability
of the Accreditation Authority under this Clause
99 are reasonable because of (amongst other
matters) the likelihood that the amount of
damages awardable to the Interested Person from
the Accreditation Authority would otherwise be
disproportionate to the charges made in
connection with the Certification Process or the
Accreditation Process and because of the limited
resources and expertise of the Accreditation
Authority; and
35.1.6 the exclusions from and limitations of liability
of the Certification Agents are set out in terms
of their engagement referred to in Clause 96.1
and shall apply to this Agreement as if the same
were set out in full herein.
36. Entry Process Decisions
36.1 Entry Process Functions: The PAAP shall perform the
decision making functions in relation to Entry Processes
as set out in the relevant Market Procedure(s), including
MP-204, MP-512, MP-511 and MP-513.
36.2 Notification of PAAP decision: Following any resolution
of the PAAP in relation to the Entry Processes the PAAP
Secretary shall:-
36.2.1 where the PAAP has resolved that the relevant
Party has failed the relevant Entry Process,
notify the relevant Party, Scottish Settlements,
the Director and the Market Auditor of such
resolution;
36.2.2 where the PAAP has resolved that the relevant
Party has successfully completed the relevant
Entry Process without requirement for any
readiness confirmation to be submitted, notify
all Parties, Scottish Settlements, the Director
and the Market Auditor of such resolution,
together with details of the Authorised Date;
36.2.3 where the PAAP has resolved that the relevant
Party has successfully completed the relevant
Entry Process subject to such Party submitting a
readiness confirmation in accordance with the
relevant Market Procedure, notify all Parties,
Scottish Settlements, the Director and the
Market Auditor, together with details of the
readiness confirmation required and the
Authorised Date.
36.3 Responsibilities owed to Parties alone: The
responsibilities of the PAAP in relation to Entry
Processes are owed exclusively to Parties, and to no
other person. Parties shall be required to satisfy
themselves as to the financial condition and prospects and
the management and operational ability of any person and
shall not rely on the fact of any decision by the PAAP as,
or infer therefrom, any representation, warranty or other
statement or indication on the part of the PAAP or the
Entry Process Co-ordinator that any person has any or any
particular financial condition or prospects or level of
management or operational ability.
37. Role of PAAP Secretary
37.1 Functions of PAAP Secretary: The PAAP Secretary shall:-
37.1.1 in addition to the other functions of the PAAP
Secretary set out in this Agreement, perform
such functions associated with the day-to-day
administration of the Entry Process as are
delegated to it from time to time by the PAAP.
A copy of any such delegated functions will be
made available by the PAAP Secretary on request;
and
37.1.2 keep confidential information that it receives
on terms agreed from time to time by it with the
PAAP.
38. The Entry Processes
38.1 The Entry Processes: The Entry Processes shall be
conducted in accordance with Market Procedures MP-204, MP-
511, MP-512 and MP-513.
38.2 Failure of Panel Members to Agree: If the PAAP Members
are unable to agree a decision in terms of the Entry
Processes by majority, the PAAP shall be deemed to have
decided that the relevant Party has failed the relevant
Entry Process.
38.3 Appeal Procedure: If any Party is dissatisfied for any
reason with any decision of the PAAP in terms of the Entry
Processes, the sole and exclusive remedy of such Party
shall be to refer the matter for determination to the
Director. The determination of the Director shall be
final, conclusive and binding on the relevant Party, the
PAAP and all Parties.
39. Limitation of Liability of the PAAP in relation to Entry
Processes
39.1 Limitation of liability: Each Party agrees that:
39.1.1 the total liability of the PAAP to any and all
Parties whether in contract, delict (including
negligence or breach of statutory duty) or
otherwise arising directly or indirectly out of
or in connection with the Entry Processes
(including the contents of any opinion or report
prepared by the PAAP) shall not exceed (Pound)250,000
for each event or series of events giving rise
to such liability;
39.1.2 the PAAP shall not be liable to any Party for
any loss of profit, loss of revenue, loss of
contract, loss of goodwill or any indirect or
consequential loss arising from or in connection
with the Entry Processes;
39.1.3 Clauses 103.1.1 and 103.1.2 shall not exclude or
limit the liability of the PAAP for fraud;
39.1.4 the exclusions from and limitations of liability
of the PAAP and the other Parties under this
Clause 103 shall not apply to death of or
personal injury to any individual caused by the
negligence of the PAAP; and
39.1.5 the exclusions from and limitations of liability
of the PAAP under this Clause 103 are reasonable
because of (amongst other matters) the
likelihood that the amount of damages awardable
to any Party from the PAAP would otherwise be
disproportionate to the charges made in
connection with the Entry Processes and because
of the limited resources and expertise of the
PAAP.
40. Variation of Procedure
40.1 Scottish Settlements Right to Vary: The PAAP may resolve
from time to time, that Scottish Settlements shall be
entitled to exclude or vary any step or otherwise alter the
procedure for the Performance Assurance and Accreditation
Process set out above. Where any such resolution is not
unanimous, it shall not be implemented without the approval
of the Director.
41. The Disputes Panel for Scotland ("Disputes Panel")
41.1 Establishment: The Parties to this Agreement hereby
establish the Disputes Panel.
41.2 Function: The functions of the Disputes Panel are:
41.2.1 investigating and resolving in a consistent manner
all Disputes arising from this Agreement;
41.2.2 monitoring the operation of and recommending
modification of the Market Procedures set out in
Schedule 17 (Market Procedures for CAS Queries and
Requests for Information) in accordance with the
provisions of Part IX; and
41.2.3 submission of Modification Proposals or Review
Proposals where the Disputes Panel resolves that
these would be appropriate.
41.3 Members: The Disputes Panel members shall be:-
41.3.1 three representatives of the Scottish Companies;
and
41.3.2 three representatives of Non-Scottish Company
Members.
The Disputes Panel Members shall be appointed and elected in
accordance with Clause 66 (Membership of the SEF).
41.4 Chairman: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a Disputes Panel
Member) as the independent chairman of the Disputes Panel,
and may remove and replace such individual so appointed
from time to time. The chairman will preside at meetings
of the Disputes Panel. In the event that the chairman is
not present within fifteen (15) minutes of the start of any
meeting, those Dispute Panel Members present shall appoint
an individual to act as chairman for such meeting. The
chairman's functions will include without limitation:-
41.4.1 to preserve order at meetings and to conduct
proceedings in a proper manner;
41.4.2 to call on Disputes Panel Members and non-member
representatives to speak at the meeting and to
regulate discussion in an impartial manner;
41.4.3 to call and remove additional representatives to
or from the meeting and to call upon them to speak
at the meeting to particular items on the agenda;
41.4.4 to curtail discussion and put a resolution to a
vote at any stage of the meeting, provided all
Disputes Panel Members, non-member representatives
and any additional representatives called by the
chairman present have been given reasonable
opportunity to speak on the subject matter of the
resolution;
41.4.5 to put any resolution to a vote at the conclusion
of the meeting, provided all Disputes Panel
Members, non-member representatives and any
additional representatives called by the chairman
present have been given reasonable opportunity to
speak on the subject matter of the resolution;
and
41.4.6 to dissolve or adjourn the meeting with the
consent of all Disputes Panel Members and non-
member representatives present.
41.5 Secretary: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a Disputes Panel
Member) as the secretary of the Disputes Panel (the
"Disputes Panel Secretary"), and may remove and replace
such individual so appointed from time to time. In the
event that the Disputes Panel Secretary is not present
within fifteen (15) minutes of the start of any meeting,
those Disputes Panel Members present shall appoint an
individual to act as Disputes Panel Secretary for such
meeting.
41.6 Non-member Representatives: At every meeting of the
Disputes Panel the following non-member representatives may
attend and shall be entitled to receive all documentation
relating to such meetings:-
41.6.1 a representative of Market Auditor shall be
entitled to attend and speak at any such meeting,
but shall have no voting rights and shall not be
included in the membership of the Disputes Panel;
and
41.6.2 the Director shall be entitled to attend and speak
at any such meeting, but shall have no voting
rights and shall not be included in the membership
of the Disputes Panel.
41.7 Additional Representatives: Unless the Disputes Panel
resolves otherwise the chairman of the Disputes Panel
either of his own volition or on the request of any
Disputes Panel Member (provided the chairman considers
such request to be appropriate) and/or any Party to a
Dispute may require the presence at any meeting of an
individual to speak to particular items on the agenda.
Any such individual shall be entitled to attend and speak
to such particular items at the relevant meeting but
shall have no vote and shall not be included in the
membership of the Disputes Panel. Any such individual
attending as an additional representative required by a
Party shall require to execute a confidentiality
undertaking in terms of Clause 66.16.
41.8 Powers of Alternates: Alternates in respect of the
Disputes Panel shall have the following rights and
obligations in addition to those set out in Clause 66
(Membership of the SEF):-
41.8.1 Alternates once appointed may not sit
contemporaneously as a Disputes Panel Member until
their appointment as an Alternate is removed.
Such appointment or removal shall not take effect
until notice has been received by the Disputes
Panel Secretary;
41.8.2 in the event that any notice requires to be sent
to the Disputes Panel Members, such notice shall
also be sent to any Alternate who has from time to
time been notified to the Disputes Panel Secretary
in accordance with Clause 66.14.1; and
41.8.3 an Alternate may attend and participate in any
part of a meeting or take part in a decision in
terms of Clause 106.4 of the Disputes Panel which
is attended by the Disputes Panel Member (in his
capacity as a member of the Disputes Panel) who
appointed him provided that such Disputes Panel
Member does not participate in that part of such
meeting or decision in terms of Clause 106.4.
42. Meetings of the Disputes Panel
42.1 Purpose: Meetings of the Disputes Panel will provide a
forum in which Disputes can be discussed pursuant to and in
accordance with the procedures set out in this Agreement.
Other than as expressly provided in this Agreement, the
Disputes Panel shall have no ability to determine any
matter and no competence to discharge any function or to
exercise any power.
42.2 Frequency of Meetings: Meetings of the Disputes Panel
shall be arranged with a view to facilitating resolution of
Disputes in time to fit with Settlement Runs and shall be
convened to take place no less than once a month unless
there is no business which would require such a meeting to
be convened.
42.3 Notice Convening Meetings: Subject to Clause 106.2
meetings of the Disputes Panel shall be convened by the
Disputes Panel Secretary as follows:-
42.3.1 meetings will be, subject to the provisions of
Clauses 106.3 and 106.5, convened on not less than
ten (10) Working Days' notice;
42.3.2 every notice convening a meeting of the Disputes
Panel shall specify the place, day and time of the
meeting and enclose an agenda together with all
available relevant materials. Each Disputes Panel
Member shall be entitled to receive such notice
and agenda and all available relevant materials
and at the same time as such notice is despatched
a copy of the notice and agenda and all available
relevant materials shall be sent to the Director
and Market Auditor; and
42.3.3 meetings may be convened on shorter notice than
that specified in Clause 106.3.1 provided that:-
42.3.3.1 a quorum of the Disputes Panel
has agreed in writing that a
meeting so convened shall be
valid; and
42.3.3.2 notice of the venue, time and
date of the meeting is sent to
each Disputes Panel Member in
such a manner that it is capable
of being received prior to the
commencement of the meeting.
42.4 Decisions by Telephone or other Electronic Means: In the
event that the Disputes Panel Secretary considers it
appropriate, and that no input from any additional
representatives in terms of Clause 105.7 is required, a
decision may be taken by telephone or other electronic
means in the following manner:-
42.4.1 The Disputes Panel Secretary shall distribute by
facsimile or other electronic means (having regard
to confidentiality) to each Disputes Panel Member,
all documentation received relating to the
Dispute; and
42.4.2 The Disputes Panel meeting shall be held by
telephone or other electronic means where all
Disputes Panel Members attending the meeting can
speak to and hear each other.
42.5 Quorum: Disputes Panel Members present at any meeting of
the Disputes Panel who are capable of exercising four (4)
votes shall form a quorum provided that one (1) of the
Disputes Panel Members comprising such a quorum shall be a
representative of Scottish Hydro-Electric and one (1) shall
be a representative of ScottishPower and that two shall be
representatives of Non-Scottish Company Members. Any such
meeting shall be competent to discharge any functions of
the Disputes Panel. In the event that a quorum as defined
in this Clause 106.5 is not present within fifteen (15)
minutes of the time specified in the notice of meeting for
the commencement of such meeting or shall cease to be
present during the course of the meeting, the meeting shall
be adjourned and the Secretary shall reconvene the meeting
within seven (7) days. In the event that a quorum is not
present at any reconvened meeting the Disputes Panel
Members present shall constitute a quorum for that meeting
only.
42.6 Postponement of Decisions: In the event that at any
meeting of the Disputes Panel, including an adjourned
meeting in terms of Clause 106.5, there are less than six
(6) Disputes Panel Members present, a Party to any Dispute
to be decided on at such meeting may require the Disputes
Panel Secretary to defer a decision on such Dispute to a
subsequent meeting of the Disputes Panel, or to an
independent arbiter. Such independent arbiter shall be
appointed by agreement between the Parties to the
Dispute. In the event that they are unable to agree on
the appointment of an independent arbiter within ten (10)
Working Days of the date when the matter first came
before the Disputes Panel for such decision, then the
matter shall be referred by either Party to the Institute
of Chartered Arbitrators/Arbiters for the appointment of
an arbiter, and the Dispute shall be resolved in
accordance with the rules of the Institute of Chartered
Arbitrators/Arbiters.
42.7 Conduct of Meetings: At any meeting of the Disputes
Panel:-
42.7.1 any resolution shall be determined on a vote
decided by a show of hands or by such other method
as the Chairman may decide from time to time
provided that the Chairman shall have no
entitlement to vote;
42.7.2 save where expressly provided otherwise in this
Agreement, any such vote shall be decided by a
simple majority of the members present and voting,
provided always that a quorum is present in
accordance with Clause 106.5; and
42.7.3 in any such vote referred to in Clause 106.7.1,
the Disputes Panel Members shall have regard to
the objects of this Agreement.
42.8 Location of Meetings: Meetings of the Disputes Panel shall
be held in Scotland, unless otherwise agreed by unanimous
resolution of the Disputes Panel, except where such meeting
is held in terms of Clause 106.4.
42.9 Minutes: The Disputes Panel Secretary shall ensure that
minutes are taken of the meetings of the Disputes Panel,
and that the attendance at such meeting of any Disputes
Panel Member or representative of the Director or Market
Auditor shall be recorded. Following any such meeting the
Disputes Panel Secretary shall within ten (10) Working Days
of the date of any such meeting, send copies of such
minutes to every Disputes Panel Member and to the Director
and Market Auditor.
42.10 Provision of Information: The Disputes Panel shall be
entitled to instruct the Disputes Panel Secretary to
circulate to any person copies of any document which is
related to, or derives from, any proceeding of the Disputes
Panel in terms of this Part IX provided that the Disputes
Panel may require the Disputes Panel Secretary to obtain
from any such person a confidentiality undertaking in a
form to be approved by the Disputes Panel.
42.11 Information from Parties and Agents:
42.11.1 Each Party shall provide and shall procure that
any Agent appointed by it shall provide such data,
reports and other information to the Disputes
Panel as is reasonably required by the Disputes
Panel for the purposes of fulfilling its functions
set out in this Agreement.
42.11.2 Save in any case where the Director has expressly
required provision of the information, each Party
shall be entitled to withhold information
requested from it or its Agent by the Disputes
Panel in the event that such information is
commercially sensitive.
42.11.3 In the event that a Party wishes to withhold
information in terms of Clause 106.11.2, such
Party shall notify the Disputes Panel Secretary
and the Director of their intention to withhold
such information, and detail the reasons therefor.
In the event that the Director requires the Party
to provide such information to the Director, the
Director may advise the Disputes Panel on how to
proceed.
42.11.4 In the event that the Disputes Panel cannot
progress its work due to insufficient information,
the matter may be referred by the Dispute Panel
Secretary to the Director.
43. Raising a Dispute
43.1 Raising a Dispute: A Party may raise a Dispute by giving
notice in such form as may be prescribed by Scottish
Settlements from time to time to the Disputes Panel
Secretary to this effect, provided that one or more of
the following conditions are fulfilled:
43.1.1 it is a matter which shall have first been
raised as a CAS Query and shall have completed
the relevant processes under Schedule 10
(Queries and Requests for Information
Procedures) and the relevant Market
Procedure(s), including MP-610 and MP- 611;
43.1.2 it is an appeal against a decision of the PAAP;
or
43.1.3 it is another matter directly referred to the
Disputes Panel under this Agreement.
Provided that where a party wishes to raise a Dispute in
relation to data from Metering Systems registered in a
PES Registration System or Generation Registration System
and subject to Allocation or Market Domain Data, or data
from the Bulk Supply Point Registration Service or Grid-
connected Power Stations (Import Registers) Registration
Service, they may not do so unless the processes set out
in Schedule 10 (Queries and Requests for Information
Procedures) and the relevant Market Procedure(s),
including MP-610 and MP-611 have been completed.
43.2 Unjustified Disputes: If the Disputes Panel resolves
that a Dispute raised by a Party is of a vexatious or
frivolous nature, the Disputes Panel may require the
Party raising such Dispute to pay to Scottish Settlements
a sum as a Standard Charge towards the cost of
administration of any such Dispute.
43.3 Written Information: The Disputes Panel Secretary shall
endeavour to obtain from the Parties to the Dispute all
relevant written information and representations and
shall, subject to Clause 109.3, include the Dispute on
the next unissued agenda for a next meeting of the
Disputes Panel.
43.4 Representations: Representations by Parties to a Dispute
shall be in writing, and may be supported by
representations in person at a meeting of the Disputes
Panel, provided that the Disputes Panel Secretary shall
be notified of the identity of the person(s) representing
such Parties not less than One (1) Working Day prior to
the date of the meeting.
43.5 MRA Disputes: Where a Dispute affects the MRA Priority
Provisions, the Dispute shall be dealt with as follows:
43.5.1 where the Dispute relates to the MRA Priority
Provisions and is capable of being heard in
terms of the Master Registration Agreement, and
the Party raising the dispute is a party to the
Master Registration Agreement the Party shall
raise it under the Master Registration Agreement
and such Dispute shall not be raised under this
Agreement; and
43.5.2 where the Dispute relates only to the MRA
Priority Provisions and the Party raising it is
not a party to the Master Registration Agreement
the Party shall raise it under this Agreement.
44. Conflicts of Interest
44.1 A Disputes Panel Member shall be required to act
independently of the interests of his employer and of those
SEF Members who elected or nominated him. In particular,
but without prejudice to the generality of the foregoing:
44.1.1 a Disputes Panel Member shall declare to the
Disputes Panel and the Disputes Panel chairman any
Conflict of Interest which arises and the chairman
of the Disputes Panel shall ensure that such
Conflict of Interest is noted in the minutes of
the meeting; and
44.1.2 a Disputes Panel Member shall not disclose to his
employer confidential information which he has
received in his capacity as a Disputes Panel
Member unless:
44.1.2.1 required to do so by any Competent
Authority or by law;
44.1.2.2 in order for his employer to comply
with the conditions of any Licence
with which his employer is required to
comply;
44.1.2.3 required to do so by any stock
exchange or regulatory authority or
the Panel on Take-overs and Mergers;
or
44.1.2.4 pursuant to the arbitration rules of
the Electricity Arbitration
Association or pursuant to any
judicial or other arbitral process or
tribunal having jurisdiction in
relation to him or his employer,
in any of which events the Disputes Panel Member shall first be
required to give written notice of the required disclosure
to the Disputes Panel. For the purposes of this Clause
108, "employer" shall be taken to include any affiliate,
relating undertaking or Agent of such employer, provided
that, for the purpose of this Clause only, Scottish
Settlements shall not be considered an affiliate, related
undertaking or Agent of either of the Scottish Companies.
45. Procedural Matters
45.1 The Disputes Panel meeting may also consider procedural
issues and other matters relating to the resolution of
Disputes. Minutes of this part of the meeting will only
be provided to Parties by the Disputes Panel Secretary on
request.
45.2 Scottish Settlements, on behalf of the Parties to the
Dispute, shall estimate and agree the materiality of the
Dispute. If no agreement is reached the matter shall be
referred to the Disputes Panel to determine the
materiality of the Dispute.
45.3 The Disputes Panel Secretary may postpone or cancel any
meeting of the Disputes Panel and defer any Disputes
except in the following cases:-
45.3.1 the materiality of any such deferred Dispute is
likely to exceed 2GWh;
45.3.2 the materiality for all such deferred Disputes
is likely to exceed 4GWh;
45.3.3 the circumstances of the Dispute are likely to
recur until a decision is reached by the
Disputes Panel;
45.3.4 the Disputes Panel Secretary believes that the
circumstances are such that the Dispute should
not be deferred; and/or
45.3.5 the next Reconciliation Run in respect of an
affected Trading Day is the Final Reconciliation
Run.
45.4 The Disputes Panel Secretary shall provide Disputes Panel
Members with a list of all deferred Disputes and shall,
where the Disputes Panel so resolves, include any such
Dispute on the agenda for the next meeting of the
Disputes Panel.
46. Failure to Reach a Majority Decision
46.1 In the event that the Disputes Panel fails to reach a
majority decision on a Dispute, the Disputes Panel may:-
46.1.1 except where the circumstances detailed in Clause
109.3 apply, defer the decision to a future
meeting, and request further evidence to be
provided to it; or
46.1.2 refer the Dispute to an independent arbiter for a
decision. Such independent arbiter shall be
appointed by agreement between the Parties to
the Dispute. In the event that they are unable
to agree on the appointment of an independent
arbiter within ten (10) Working Days of the date
when the matter first came before the Disputes
Panel for such decision, then the matter shall
be referred to the Chartered Institute of
Arbitrators (Arbiters) for the appointment of an
arbiter, and the Dispute shall be resolved in
accordance with the rules of the Chartered
Institute of Arbitrators (Arbiters).
47. Appeals
47.1 A party to a Dispute may appeal a decision of the
Disputes Panel to independent arbitration. Disputing
Parties may agree an independent arbiter (which may
include the Director) among themselves. In the event
that such agreement cannot be reached within ten (10)
Working Days of the relevant decision of the Disputes
Panel, the matter will be referred to the Chartered
Institute of Arbitrators(Arbiters) for the appointment of
an arbiter, and the Dispute shall be resolved in
accordance with the rules of the Chartered Institute of
Arbitrators (Arbiters).
48. Precedents
48.1 The Disputes Panel Secretary will maintain a register
(the "Scottish Precedents Register") of Disputes Panel
decisions, including a summary of arguments presented,
and any procedures or principles formulated by the
Disputes Panel for future resolution of Disputes. The
Disputes Panel Secretary will consult with the Parties to
a Dispute on the wording relating to their Dispute, with
a view to maintaining the confidentiality of the Parties
involved. Access to or copies of the Scottish Precedents
Register will be provided to Parties on payment of fees
set by Scottish Settlements from time to time to Scottish
Settlements.
48.2 No previous decision of the Disputes Panel shall serve to
bind the Disputes Panel in future decisions. The
Disputes Panel may have regard to the Scottish Precedents
Register in making any decision, but shall not be
required to do so.
49. Powers of Disputes Panel
49.1 Where the materiality of the Dispute is, in the opinion
of the Disputes Panel, sufficiently large in relation to
the costs of re-running the Central Allocation System,
the Disputes Panel may, in the following circumstances
only, decide that an Additional Run should be performed:
49.1.1 a Dispute raised before a Final Reconciliation
Run has been resolved but the required change(s)
has not been implemented in the Final
Reconciliation Run;
49.1.2 the Disputes Panel or independent arbiter was
unable to resolve a Dispute in time for
implementation of any required changes prior to
the Final Reconciliation Run and states so in
its findings where appropriate; or
49.1.3 the Dispute has arisen in the Final
Reconciliation Run and the cause of the Dispute
was not present in the previous Reconciliation
Run.
In each such case, the Disputes Panel may resolve as to who is
to bear the cost of any such Additional Run, and the
relevant Party shall pay such amounts as may be resolved
by the Disputes Panel.
49.2 If one or more conditions set out in 113.1 above apply,
but the Disputes Panel has decided that an Additional Run
is not appropriate, the following method of apportionment
shall be applied, unless the Disputes Panel resolves
otherwise:
49.2.1 the Disputes Panel shall recommend to Scottish
Settlements the basis on which apportionment is
to be made. Scottish Settlements shall notify
the affected Parties;
49.2.2 the Disputes Panel will from time to time advise
Scottish Settlements or its Agent of the
Supplier Identifiers and Generator Identifiers
for which volumes are to be apportioned;
49.2.3 Scottish Settlements (unless otherwise advised
by the Disputes Panel) shall calculate the
apportionment for each Supplier and Generator
and the total allocation to Suppliers and from
Generators for the duration of, or the periods
affected by, the Dispute as advised by the
Disputes Panel;
49.2.4 Scottish Settlements shall calculate the
percentage of the total allocation for each
Supplier and apportion the disputed volume
accordingly;
49.2.5 Scottish Settlements shall calculate the
percentage of the total allocation for each
Generator and apportion the disputed volume
accordingly; and
49.2.6 Scottish Settlements shall provide the affected
Parties with sufficient detail of the method of
apportionment to allow for verification.
49.3 The Disputes Panel may resolve, pursuant to Clause 64.5
(Withholding on Disputes), that in respect of a Dispute
between Scottish Settlements and any other Party, the
relevant Party may withhold payment of any amount
invoiced by Scottish Settlements.
50. Reporting
50.1 Scottish Settlements will report to the Disputes Panel
Secretary on the number and type of CAS Queries raised
with the System Support Helpdesk, in order to assist in
identification of sections of this Agreement requiring
referral to the Modifications Panel.
50.2 The Disputes Panel Secretary will submit by the end of
each month a written report in respect of the preceding
month to Scottish Settlements circulated to each Disputes
Panel Member setting out:-
50.2.1 information on the number and type of Queries
handled by the System Support Helpdesk and by
Scottish Settlements;
50.2.2 information on the number and type of Disputes
considered, with brief details as set out in the
Scottish Precedents Register; and
50.2.3 procedures or principles agreed by the Disputes
Panel for use in the future resolution of
disputes.
50.3 Copies of the report referred to in Clause 114.2 above
will be provided to the Parties and the Director by the
Disputes Panel Secretary on request.
50.4 The Disputes Panel Secretary will prepare the draft
Queries and Disputes section of the Annual Report,
setting out the following information in respect of the
preceding year ended 31 March:-
50.4.1 information on the number and type of CAS
Queries raised with the System Support Helpdesk;
50.4.2 information on the number and type of Disputes
considered including details of outstanding and
pending work of the Disputes Panel;
50.4.3 procedures agreed by the Disputes Panel for use
in the future resolution of Disputes; and
50.4.4 any other matter the Disputes Panel deems
appropriate.
50.5 Members of the Disputes Panel must approve the draft
section before it is incorporated in the Annual Report.
In the event that unanimous approval can not be obtained
or no decision can be reached, the provisions of Clause
8.6 shall apply.
51. Variation of Procedure
51.1 Scottish Settlements Right to Vary: The Disputes Panel
may, from time to time, resolve that Scottish Settlements
shall be entitled to exclude or vary any step or
otherwise alter the procedure for Queries and/or Disputes
set out above.
51.2 Failure to Agree: Where any such resolution under Clause
115.1 is not unanimous the Disputes Panel shall be deemed
to have decided against the resolution.
51.3 Appeal Procedure: If any Party is dissatisfied for any
reason with any decision of the Disputes Panel in terms
of Clause 115.2, the sole and exclusive remedy of such
Party shall be to refer the matter for determination to
the Director. The determination of the Director shall be
final, conclusive and binding on the relevant Party, the
Disputes Panel and all Parties.
52. The Finance and Audit Panel ("FAP")
52.1 Establishment: The Parties to this Agreement hereby
establish the FAP.
52.2 Functions - The functions of the FAP are to review and
comment in terms of Clause 118 (Role of the FAP) on:
52.2.1 the appointment, removal and Audit Plan of the
Market Auditor;
52.2.2 Scottish Settlements' annual operating budgets and
proposed Settlement Charges; and
52.2.3 the annual report and any interim report of the
Market Auditor;
52.2.4 proposals in relation to Metering when requested
by the PAAP in terms of Clause 84.2.9;
52.2.5 any proposal from Scottish Settlements for
modification of this Agreement to require Security
Cover;
52.2.6 the form of confidentiality undertaking to be
executed by the Market Auditor in terms of
Schedule 6, Section 1.7.
52.3 The FAP may submit Modification Proposals or Review
Proposals where the FAP judges that these are appropriate.
52.4 Members: The FAP Members shall be:
52.4.1 three representatives of the Scottish Companies;
and
52.4.2 three representatives of Non-Scottish Company
Members.
The FAP Members shall be appointed and elected in accordance with
Clause 66 (Membership of the SEF). Nominees for membership
of the FAP will be expected to have financial and audit
experience commensurate with the role envisaged for the
FAP.
52.5 Chairman: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than a FAP Member) as
the independent chairman of the FAP, and may remove and
replace such individual so appointed from time to time.
The chairman will preside at meetings of the FAP. In the
event that the chairman is not present within fifteen (15)
minutes of the start of any meeting, those FAP members
present shall appoint an individual to act as chairman for
such meeting. The chairman's functions will include
(without limitation):-
52.5.1 to preserve order at meetings and to conduct
proceedings in a proper manner;
52.5.2 to call on FAP Members and Non-member
representatives to speak at the meeting and to
regulate discussion in an impartial manner;
52.5.3 to call and remove additional representatives to
or from the meeting and to call upon them to speak
at the meeting to particular items on the agenda;
52.5.4 to curtail discussion and put a resolution to a
vote at any stage of the meeting, provided all FAP
Members, non-member representatives and any
additional representatives called by the chairman
present have been given reasonable opportunity to
speak on the subject matter of the resolution;
52.5.5 to put any resolution to a vote at the conclusion
of the meeting, provided all FAP Members, non-
member representatives and any additional
representatives called by the chairman present
have been given reasonable opportunity to speak on
the subject matter of the resolution; and
52.5.6 to dissolve or adjourn the meeting with the
consent of all FAP Members and non-member
representatives present.
52.6 Secretary: Scottish Settlements shall, from time to time,
appoint an individual (being a representative of Scottish
Settlements and an individual other than an FAP Member) as
the secretary of the FAP (the "FAP Secretary"), and may
remove and replace such individual so appointed from time
to time. In the event that the FAP Secretary is not
present within fifteen (15) minutes of the start of any
meeting, those FAP Members present shall appoint an
individual to act as FAP Secretary for that meeting.
52.7 Non-member Representatives: Subject to Clause 117.2 at
every meeting of the FAP the following non-member
representatives may attend and shall be entitled to receive
all documentation relating to such meetings:-
52.7.1 a representative of the Market Auditor shall be
entitled to attend and to speak at any such
meeting, but shall have no voting rights and shall
not be included in the membership of the FAP; and
52.7.2 a representative of the Director shall be entitled
to attend and speak at any such meeting, but shall
have no voting rights and shall not be included in
the membership of the FAP.
52.8 Additional Representatives: Unless otherwise resolved by
the FAP the Chairman of the FAP either of his own
volition or on the request of any FAP Member (provided
the chairman considers any such request to be
appropriate) may require the presence at any meeting of
an individual to speak to particular items on the agenda.
Any such individual shall be entitled to attend and speak
at the relevant meeting but shall have no vote and shall
not be included in the membership of the FAP. Any such
individual attending as an additional representative
shall require to execute a confidentiality undertaking in
terms of Clause 66.16.
52.9 Powers of Alternates: Alternates in respect of the FAP
shall have the following rights and obligations:-
52.9.1 Alternates may not sit contemporaneously as a
member of the Disputes Panel until their
appointment as an Alternate is removed. Such
appointment or removal shall not take effect until
notice has been received by the FAP Secretary;
and
52.9.2 in the event that any notice requires to be sent
to the FAP Members, such notice shall also be sent
to any Alternate who has from time to time been
notified to the FAP Secretary in accordance with
Clause 116.9.1.
53. Meetings of the FAP
53.1 Purpose: Meetings of the FAP will provide a forum in which
the functions of the FAP set out in Clause 116.2 and 116.3
can be discussed pursuant to and in accordance with the
procedures set out in this Agreement. Other than as
expressly provided in this Agreement, the FAP shall have no
ability to determine any matter and no competence to
discharge any function or to exercise any power.
53.2 Frequency of Meetings: The FAP Secretary shall convene
meetings of the FAP on notice not less frequently than
three times per annum unless there is no matter as an
agenda item for the FAP to discuss. The Market Auditor may
only attend and speak at any part of any such meeting of
the FAP which deals with the Audit Plan, or Scottish
Settlement's proposed operating budgets and settlement
charges, at the discretion of FAP Members. The Director
may attend and speak at any part of the meeting.
53.3 Notice Convening Meetings: Meetings of the FAP shall be
convened by the FAP Secretary as follows:-
53.3.1 meetings will be convened on not less than
fourteen (14) days notice; and
53.3.2 every notice convening a meeting of the FAP shall
specify the place, day and time of the meeting and
enclose an agenda together with all relevant
materials. Each FAP Member shall be entitled to
receive such notice and at the same time as such
notice is despatched a copy of the notice and
agenda and relevant materials shall be sent to the
Director and Market Auditor.
53.4 Short Notice: The FAP may at any meeting of the FAP
determine by simple majority that the next following
meeting of the FAP be convened on shorter notice than
specified in Clause 117.3 and where the FAP shall so
determine the FAP Secretary shall convene a meeting of the
FAP in accordance with that determination. Meetings of the
FAP may also be convened on short notice if all FAP Members
agree in writing before the commencement of the meeting
that the FAP Secretary is to convene a meeting on shorter
notice than that set out in Clause 117.3. In either case
the meeting so convened shall be deemed to have been duly
and properly convened notwithstanding the short notice
period.
53.5 Quorum: Four (4) FAP Members present at any meeting of the
FAP shall form a quorum provided that one (1) of the FAP
Members comprising such a quorum shall be a representative
of Scottish Hydro-Electric and one (1) shall be a
representative of ScottishPower and two (2) shall be
representatives of Non-Scottish Company Members. Any such
meeting shall be competent to discharge any functions of
the FAP. In the event that a quorum as defined in this
Clause 117.5 is not present within fifteen (15) minutes of
the time specified in the notice of meeting for the
commencement of such meeting or shall cease to be present
during the course of the meeting, the meeting shall be
adjourned and the FAP Secretary shall reconvene the meeting
within 7 days. In the event that a quorum is not present
at any reconvened meeting the FAP Members present shall
constitute a quorum for such meeting only.
53.6 Conduct of Meetings: At any meeting of the FAP:-
53.6.1 any resolution shall be determined on a vote
decided by a show of hands or by such other method
as the Chairman may earlier decide from time to
time, provided that the Chairman shall not have
any entitlement to vote;
53.6.2 save where expressly provided otherwise in this
Agreement, any such vote shall be decided by a
simple majority of the FAP Members present and
voting, provided always that a quorum is present
in accordance with Clause 117.5; and
53.6.3 in any such vote referred to in Clause 117.6.2,
the FAP Members shall have regard to the objects
of this Agreement.
53.7 Failure to Reach a Decision: In the event that a decision
cannot be reached in terms of Clause 117.6 this shall be
stated in the minutes prepared in terms of Clause 117.9.
53.8 Location of Meetings: Meetings of the FAP shall be held in
Scotland, unless otherwise agreed by unanimous resolution
of the FAP.
53.9 Minutes: The Secretary shall ensure that minutes are taken
of any meeting of the FAP, and that the attendance at such
meeting of any FAP Member or representative of the Director
or Market Auditor shall be recorded. Following any such
meeting the FAP Secretary shall within ten (10) Working
Days of the date of any such meeting, send copies of such
minutes to every FAP Member and to the Director and the
Market Auditor.
53.10 Provision of Information: The FAP shall be entitled to
instruct the FAP Secretary to circulate to any person,
copies of any document which is related to, or derives
from, any proceeding of the FAP in terms of this Part IX of
this Agreement provide that the FAP may require the FAP
Secretary to obtain from any such person a confidentiality
undertaking in a form to be approved by the FAP.
53.11 Information from Parties and Agents: Scottish
Settlements shall, on the request of the FAP, provide
such information as is reasonable to allow the FAP to
review the Audit Plan, and will provide the FAP in each
year with its proposed operating budgets and charges for
the subsequent financial year together with such
information as is reasonable to allow the FAP to review
such budgets in terms of Clause 118 (Role of the FAP).
54. Role of the FAP
54.1 Items of Business: Scottish Settlements shall submit to
the FAP Secretary the following items of business:-
54.1.1 an Audit Plan defining the scope of the Market
Auditor's work programme in the next period
stipulated in the Audit Plan;
54.1.2 the annual report of the Market Auditor and any
interim report of the Market Auditor;
54.1.3 the proposed annual operating budget and proposed
level of Settlement Charges, together with details
of the estimated operating costs for the current
Relevant Year, details of forecasted Energy Traded
for the current year, and details of the actual
operating costs in the preceding Relevant Year;
and
54.1.4 any proposal for modification of this Agreement to
require Security Cover.
54.2 Initial Meeting: Upon receipt of an item of business the
FAP Secretary shall:
54.2.1 add the item of business to the next unissued
agenda for a meeting of the FAP in accordance with
Clause 117 (Meetings of the FAP) all at the
discretion of the FAP Secretary; and
54.2.2 together with the notice of such meeting, circulate
such item of business to all FAP Members, to the
Director and Market Auditor.
54.3 Determination on an item of business: After consideration
by the FAP of any item of business the FAP may:-
54.3.1 by unanimous resolution of all FAP Members present
and voting resolve that the item of business:-
54.3.1.1 be approved and referred to Scottish
Settlements; or
54.3.1.2 have approval withheld and referred to
Scottish Settlements;
54.3.2 by majority resolution resolve that the item of
business:-
54.3.2.1 be approved subject to comment and
referred to Scottish Settlements; or
54.3.2.2 be approved and referred to Scottish
Settlements; or
54.3.2.3 have approval withheld and referred to
Scottish Settlements.
54.3.3 Referral to Scottish Settlements: Scottish
Settlements will take account of any resolution of
the FAP but will not be bound by such resolution.
In submitting any item of business to the Director
Scottish Settlements will include the resolution of
the FAP together with a note of any dissenting view
expressed.
55. The Budget Setting Process
55.1 The Settlements Budget will be set annually, in accordance
with the following procedure:
55.1.1 Not later than 3 months prior to the first day of
each Relevant Year the chairman of each of the
Panels will present the initial Panel Budget to
the relevant Panel Members for their comments to
be received within 14 days of presentation of the
initial Panel Budget;
55.1.2 the chairman of each of the Panels will revise the
Initial Panel Budget to reflect any comments
received where deemed appropriate. The revised
Panel Budget will be passed to Scottish
Settlements not more than fourteen (14) days after
receipt of the relevant Panel Members' comments;
55.1.3 Scottish Settlements shall collate the revised
Panel Budgets received from the chairman of each
of the Panels and add other budgetary data to form
the proposed Settlements Budget;
55.1.4 Scottish Settlements within fourteen (14) days of
receipt of the last of the revised Panel Budgets
shall send the proposed Settlements Budget to the
FAP for review at the next appropriately convened
FAP meeting. The FAP may decide either to:
55.1.4.1 accept the proposed Settlements
Budget; or
55.1.4.2 reject the proposed Settlements
Budget;
55.1.5 if the FAP accepts the proposed Settlements
Budget, Scottish Settlements shall within seven
(7) days of the FAP decision Scottish Settlement
shall send the proposed Settlements Budget and
supporting documentation to the Director together
with any further information requested by the
Director which is held by Scottish Settlements;
55.1.6 if the FAP rejects the proposed Settlements
Budget, it will indicate how it should be
modified;
55.1.6.1 in the event of the rejection by the
FAP as previously described, within
fourteen (14) days of notification by
the FAP Scottish Settlement shall
develop a modified Settlements Budget
taking into account such of the FAP
comments (if any) as it deems
appropriate;
55.1.6.2 Scottish Settlements within fourteen
(14) days of the FAP decision shall
send the modified Settlements Budget
to the Director with supporting
documentation including an explanatory
note of the FAP comments together with
any further information requested by
the Director which is held by Scottish
Settlements;
55.1.7 if no decision is reached by the FAP within twenty
one (21) days of receipt by it from Scottish
Settlements of the proposed Settlements Budget,
Scottish Settlements shall send the proposed
Settlements Budget to the Director with a note
explaining that no decision has been reached by
the FAP;
55.1.8 on receipt of either the proposed Settlements
Budget or modified Settlements Budget, the
Director shall review and determine the approved
Settlements Budget;
55.1.9 within 14 days of receipt of the Director's
determination Scottish Settlements shall
disaggregate the approved Settlements Budget in so
far as it relates to each Panel and notify it to
each relevant Panel Member; and
55.1.10 each Party has the ability at any time to make
representations to the Director during the process
described in this Clause.
56. The Budget Control Process
56.1 The Parties through their representatives on the Panels
will endeavour to manage the Panel expenditure within the
financial limits set by Scottish Settlements and approved
by the Director.
56.2 Variations: In the event that Scottish Settlements becomes
aware of a material change in financial circumstances from
those assumed during the budgetary process Scottish
Settlements will present its views to the FAP at the next
appropriately convened meeting. The FAP will consider
whether any amendment to the Settlements Budget is
required. The FAP's decision will, within 14 days of the
relevant FAP meeting, then be passed to the Director by
Scottish Settlements. The Director may approve or reject
the FAP's decision and notify the FAP of his determination.
If the FAP fail to reach any decision as to the amendment
required then Scottish Settlements shall be entitled to
notify the Director with a note explaining that the FAP
have failed to take a decision.
56.3 Cost over-runs: Budget over-runs shall be administered as
follows:-
56.3.1 Scottish Settlements at regular intervals shall
provide the chairman of each Panel and Panel
Members with a projection of the expenditure of
the relevant Panel against the Settlements Budget
(on a cumulative basis, single months basis, and
expected annual basis;)
56.3.2 if the chairman of the Panel reasonably believes
the relevant Panel will exceed its budget the
chairman shall consider what Remedial Action might
be taken. Such Remedial Action will require to be
competent for the Panel to deliver and considered
reasonable by the chairman;
56.3.3 the chairman of the relevant Panel shall circulate
the Remedial Action to the Panel which then
discusses it at the next appropriately convened
meeting;
56.3.4 within fourteen (14) days of the relevant Panel
meeting, the chairman of the Panel shall revise
his view of the projected Panel Budget overspend
and develop an Amended Remedial Action in the
light of Panel comments;
56.3.4.1 if the chairman of the Panel then
reasonably expects the relevant Panel
not to exceed the financial limits as
set out in the Settlements Budget he
shall within 14 days of the relevant
Panel decision advise Scottish
Settlements and the Panel Member
accordingly; or
56.3.4.2 if the chairman of the Panel still
reasonably expects the relevant Panel
to exceed the relevant financial
limits set out in the Settlements
Budget then the chairman shall so
advise the FAP and Scottish
Settlements within fourteen (14) days
of the relevant Panel decision;
56.3.5 having received information on the Settlements
Budget and proposed Amended Remedial Action from
the chairman of the relevant Panel, the FAP shall
consider it at the next appropriately convened
meeting;
56.3.6 if the FAP decide that the projected Panel budget
overspend will not lead to an overall overspend in
the Settlements Budget the FAP may consider
changes to the Amended Remedial Action;
56.3.6.1 if the FAP decides to amend the
Amended Remedial Action these
amendments shall be notified within
fourteen (14) days of its decision to
Scottish Settlements who in turn shall
notify the relevant Panel Members and
Panel chairman within fourteen (14)
days of the FAP decision; or
56.3.6.2 if the FAP cannot reach a decision
then the Director will determine the
position in accordance with a
timescale agreed with Scottish
Settlements after being notified by
Scottish Settlements of the FAP's
failure to reach a decision;
56.3.7 if the FAP decides that the projected Panel Budget
overspend will lead to an overall overspend in the
Settlements Budget, the FAP may consider changes
to the Amended Remedial Action and shall refer the
matter to the Director and provide its view on
such amendments within 14 days of its
recommendation and notify Scottish Settlements;
and
56.3.8 the Director may approve or reject the FAP
recommendation. Having received the Director's
determination, Scottish Settlements shall notify
the Panel Members including the FAP and Panel
Chairs within 7 days of that determination.
57. Audit Plan
57.1 An Audit Plan is required to be determined by Scottish
Settlements in order to define the scope of the Market
Auditor's work programme in the next Relevant Year or such
other period as may be set by Scottish Settlements. The
FAP will, in terms of Clause 118 (Role of the FAP),
consider the proposed Audit Plan for the next Relevant Year
in terms of its scope, cost and priorities. The Audit Plan
will be determined by Scottish Settlements after
consultation with the Market Auditor reflecting the
operational experience of the current operational year and
of previous years, and the anticipated costs of providing
the Market Auditor's services.
57.2 Scottish Settlements shall provide such information as is
reasonable to allow the FAP to review the Audit Plan, and
will meet any reasonable request for additional information
by the FAP.
58. Appointment of Market Auditor
58.1 Appointment and removal of Market Auditor: The FAP shall
from time to time, authorise the appointment and/or
removal, by Scottish Settlements in terms of Clause 122.2,
of a Market Auditor on behalf of all Parties. The first
Market Auditor shall be Deloitte & Touche. Scottish
Settlements shall, following consultation with the FAP, on
behalf of the FAP agree, amend and substitute the terms of
engagement of the Market Auditor.
58.2 Parties' authorisation: The Parties hereby irrevocably and
unconditionally authorise Scottish Settlements, following
consultation with the FAP, to appoint and remove, and to
agree, amend and substitute the terms of engagement of the
Market Auditor, as authorised by the FAP on their behalf
and undertake not to withdraw or change that authority.
59. Reports
59.1 Annual Report: The FAP Secretary will prepare the finance
and audit section of the draft Annual Report by Scottish
Settlements to the SEF, setting out the following
information in respect of the preceding year ended 31
March:-
59.1.1 information on the items of business before the
FAP and the resolutions made thereon; and
59.1.2 any other information the FAP considers
appropriate.
Such report shall also include the view of the FAP on the budget
for Scottish Settlements for the following Relevant Year.
59.2 Approval of Report: FAP Members must have the opportunity
to approve the draft finance and audit section before it is
incorporated in the Annual Report. In the event that
unanimous approval can not be obtained or no decision can
be reached, the provisions of Clause 8.6 shall apply.
60. Variation of Procedure
60.1 Scottish Settlements Right to Vary: The FAP may, from time
to time, unanimously resolve that Scottish Settlements
shall be entitled to exclude or vary any step or otherwise
alter the procedure and operation of the FAP as set out
above. Where any such resolution is not unanimous, it
shall not be implemented without the approval of the
Director.
234
Settlement Agreement for Scotland 14 August 1998
Part X: General Terms
1. Confidentiality
1.1 Interpretation: For the avoidance of doubt, data and
other information which any Party or Non Trading
Generator is permitted or obliged to divulge or publish
pursuant to this Agreement or any Nominated Agreement
shall not necessarily be regarded as being in the public
domain by reason of being so divulged or published.
1.2 General confidentiality obligations: Each Party or Non
Trading Generator (the "Receiving Party") hereby
undertakes with each other Party or Non Trading Generator
that it shall preserve the confidentiality of, and shall
not directly or indirectly Disclose or use Confidential
Information. The exceptions to these obligations are set
out in Clause 125.3.
1.3 Exceptions: A Receiving Party shall be entitled to
Disclose or use for its own purposes Confidential
Information if and to the extent that one or more of the
following apply:-
1.3.1 the Receiving Party is required or permitted to
Disclose or use Confidential Information pursuant
to the terms of a Nominated Agreement, to the
extent of such requirement or permission; or
1.3.2 the Receiving 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 (this shall include (without
limitation) release by Scottish Settlements to
any Agent carrying out entry testing on behalf
of the Pool, of the results of a Party's Entry
Process Tests, and release to or by Scottish
Settlements of information related to volumes of
energy traded to the extent the same is required
for the purposes of calculating Supplier Traded
Volumes or Generator Traded Volumes); or
1.3.3 the person to whose affairs the Confidential
Information relates has given its prior written
consent to the Disclosure or use, to the extent
of such consent; or
1.3.4 the Confidential Information, before it is
furnished to the Receiving Party, is in the
public domain; or
1.3.5 the Confidential Information, after it is
furnished to the Receiving Party:-
1.3.5.1 is acquired by the Receiving Party
in circumstances in which this Clause
does not apply; or
1.3.5.2 is acquired by the Receiving Party
in circumstances in which this
Clause does apply and thereafter
ceases to be subject to the
restrictions imposed by this Clause;
or
1.3.5.3 enters the public domain,
and in any such case as set out in Clause 125.3.5
otherwise than as a result of:-
(i) a breach by the Receiving Party
of its obligations under this
Clause; or
(ii) a breach by the person who
disclosed that Confidential
Information of that person's
confidentiality obligation and
the Receiving Party is aware of
such breach; or
1.3.6 the Receiving Party is required or permitted to
Disclose Confidential Information to any
person:-
1.3.6.1 in compliance with any provision of
any Relevant Instrument; or
1.3.6.2 in compliance with any other
requirement of law or of a Competent
Authority; or
1.3.6.3 in response to a requirement of any
stock exchange or regulatory
authority or the Panel on Take-overs
and Mergers; or
1.3.6.4 pursuant to the arbitration rules
for the Chartered Institute of
Arbitrators (Arbiters) or pursuant
to any judicial or other arbitration
process or tribunal with
jurisdiction in relation to the
Receiving Party including any
disputes committee established under
the terms of this Agreement, the
Pooling and Settlement Agreement or
the Master Registration Agreement;
or
1.3.7 the Receiving Party Discloses Confidential
Information to
1.3.7.1 its affiliates or related
undertakings, employees, directors,
agents, consultants and professional
advisers; or
1.3.7.2 the employees, directors, agents,
consultants and professional
advisers of its affiliates or
related undertakings; or
1.3.7.3 any Relevant Exempt Supplier where
the Receiving Party is a Supplier;
or
1.3.7.4 any Third Party who owns or operates
any of the Registrable Generation
Sites registered to a Generator
Party in the relevant Registration
Service where the Receiving Party is
that Generator Party,
in each case on the basis set out in Clause 125.7
(but as if references therein to "Receiving
Party" were to the relevant affiliate or related
undertaking, Relevant Exempt Supplier or Third
Party); or
1.3.8 the Receiving Party Discloses Confidential
Information to the Director; or
1.3.9 the Receiving Party is a Scottish Company and
the Confidential Information relates to
information in respect of a Customer which
information the relevant Scottish Company has
previously acquired through its Distribution
Business, to the extent that Disclosure is made
by the Scottish Company to the person who
supplied electricity to the relevant Customer at
the time the Confidential Information was
acquired by the Scottish Company.
1.4 Continuing nature of confidentiality: Confidential
Information which a Party or Non Trading Generator is
permitted or obliged to Disclose or use pursuant to
Clause 125.3.6 shall not cease to be regarded as
Confidential Information in all other circumstances by
virtue of such Disclosure or use.
1.5 Licence related provisions: Each Party agrees that where
a Scottish Company Discloses or uses Confidential
Information in accordance with Clause 125.3.6, such
information need not be treated as confidential to the
extent of such Disclosure or use for the purposes of
Condition 9 of Part V of the Scottish Hydro-Electric
Licence and the ScottishPower Licence respectively.
1.6 No commercial advantage: Each Scottish Company agrees
not to use any Confidential Information in a manner which
may obtain for that Scottish Company any commercial
advantage in the operation of its supply or second-tier
supply business except in relation to any Confidential
Information which it holds in respect of a Customer and
which information was previously acquired through its
Distribution Business where the relevant Scottish Company
supplied electricity to the relevant Customer at the time
the Confidential Information was acquired by the relevant
Scottish Company.
1.7 Internal procedures: With effect from the Signing Date
each Receiving Party shall adopt procedures within its
organisation for ensuring confidentiality of all
Confidential Information which it is obliged to preserve
as confidential under Clause 125.2. These procedures
are:-
1.7.1 the Confidential Information will be
disseminated within the Receiving Party only on
a "need to know" basis;
1.7.2 employees, directors, agents, consultants and
professional advisers of the Receiving Party in
receipt of Confidential Information will be made
fully aware of and bound to comply with the
Receiving Party's obligations of confidence in
relation thereto; and
1.7.3 any copies of Confidential Information, whether
in hard copy or computerised form, will clearly
identify the Confidential Information as
confidential.
1.8 Affiliate or related undertaking: Each Receiving Party
shall procure that each of its affiliates and related
undertakings observes the restrictions in Clauses 125.2,
125.3 and 125.7 (and if such affiliate or related
undertaking is a Public Electricity Supplier Clauses
125.5 and 125.6) as if in each such Clause there was
substituted for the name of the Receiving Party the name
of such affiliate or related undertaking.
1.9 Confidentiality for Agents: The terms of engagement for
any Agent appointed by a Party after execution by them of
this Agreement or an Accession Agreement shall include
provisions to ensure that such Agent complies with any
obligations of Confidentiality which apply to such Party
or its Agents under this Agreement, any Nominated
Agreement or concerning any Nominated Agreement or the
affairs of any Party or Non Trading Generator.
1.10 The Panels and Confidentiality: Each Party and Non
Trading Generator acknowledges that, for each of the
Panels and Panel Members properly to carry out their
duties and responsibilities under this Agreement they may
decide or be obliged to keep confidential to them
matters, reports, data and other information produced by
or for or made available to or held by, the Panels or
Panel Members and in any such case Panel Members shall
neither disclose the same to any Party which they
represent nor be required by such Party or Non Trading
Generator so to disclose. Each Party and Non Trading
Generator agrees to respect the position of the Panels
and Panel Members accordingly.
1.11 Audits: Where any Party (excluding Scottish Settlements)
or its Agent (which, only for the purpose of this Clause,
includes the Market Auditor acting in terms of Schedule 6
(Role of the Market Auditor), Section 1.3.3 requires
access for the purpose of any audit to data held on or
generated by the Central Allocation System to which that
Party or Agent would not otherwise be entitled to access
then no Disclosure will be made unless such Party or
Agent:-
1.11.1 delivers to Scottish Settlements the prior
written consent of the Party to whose affairs
the data or information relates; and
1.11.2 hereby indemnifies and holds harmless Scottish
Settlements against any claim in respect of any
breach of this Clause 125 (Confidentiality).
2. Release of information
2.1 Copies of Agreement: Each Party and Non Trading
Generator agrees that Scottish Settlements shall be at
liberty to provide copies of this Agreement and any
Supplemental Agreement to each other Party or Non Trading
Generator or to Third Parties, subject to the charge for
the same as a Standard Charge and each Party and Non
Trading Generator consents to Disclosure by any other
Party or Non Trading Generator of the fact that it is a
signatory or has acceded to this Agreement.
2.2 General release of data: At the request of any Panel or
any person who is not a Party and against payment by or
on behalf of the person to whom the data or other
information is to be released of a Standard Charge,
Scottish Settlements shall provide to the person
requesting the same, data and other information received
by Scottish Settlements in or derived from the operation
of the Central Allocation System provided that:-
2.2.1 the Rules specify that such data or other
information may be so released; or
2.2.2 the Party to whose affairs such data or other
information relates has given its prior consent
in writing to such disclosure; or
2.2.3 each Party and Non Trading Generator agrees to
the release of data and other information in the
circumstances described in Clause 126.1.
2.3 Market level data: Nothing in this Agreement will
prevent the publication by Scottish Settlements of market
level data (as agreed from time to time between Scottish
Settlements and the Director) from Central Allocation
System output.
2.4 Provision of data and information to Scottish Settlements
and the Market Auditor and each of the Panels: Each of
the Parties and Non Trading Generators other than
Scottish Settlements agrees, subject to any relevant
confidentiality restriction binding on it, to provide and
procure that any Agent appointed by it provides Scottish
Settlements and/or its Agents and/or the Market Auditor
and/or each Panel, as appropriate, with all data and
other information reasonably requested by Scottish
Settlements, its Agents or the Market Auditor or one or
more of the Panel and necessary for Scottish Settlements
its Agents or the Market Auditor or one or more of the
Panels as appropriate properly to carry out its or their
duties and responsibilities under this Agreement. Unless
provided for in this Agreement no Party or Non Trading
Generator will be obliged to provide commercially
sensitive information (other than to the Director or the
Market Auditor if required by them) if the Party deems
that this would be detrimental to its commercial
interests. Any dispute regarding such commercial
sensitivity may be referred to the Director.
2.5 Director: Scottish Settlements and each Party who is
exempt from the requirement to hold a Licence under the
Act agrees to provide the Director with any information
held by it which the Director requires to fulfil any
function pursuant to this Agreement.
2.6 Reporting breach: Each Party acknowledges and agrees
that no Party or Non Trading Generator shall be in breach
of any obligation of confidentiality owed by it pursuant
to this Agreement in reporting under Clauses 127 (Default
by Parties other than Scottish Settlements) and 86
(Notification of Failure to Perform and Reports from
Panels) any breach of this Agreement or its belief that
any such breach has occurred.
2.7 Applications for Derogations, Accreditation and
Certification: Nothing in Clause 125 (Confidentiality)
will prevent information regarding applications for
Derogations, Accreditation or Certification being made
available to any Party, Agent or Panel.
2.8 Surviving Clauses: Notwithstanding any other provision
of this Agreement, the provisions of these Clauses 125
and 126 and Clauses 99 (Limitation of Liability of the
Accreditation Authority) and 103 (Limitation of Liability
of the PAAP in relation to Entry Processes) shall without
limit in time continue to bind a person after its
cessation as a Party for whatever reason and shall
survive termination of this Agreement.
3. Default by Parties other than Scottish Settlements
3.1 Default (1): In relation to any Party other than
Scottish Settlements at any time after the occurrence of
any of the events referred to in Clause 127.3.1 and
127.3.2 below and so long as such event continues
unremedied or unwaived by the Injured Party:-
3.1.1 upon reaching a bona fide conclusion that the
reason for the failure by the Defaulting Party
under Clause 127.3.1 is other than
administrative or banking error (having taken
into account the representations, if any, of the
Defaulting Party made within 24 hours after
request therefor is made to the Defaulting Party
on behalf of the Injured Party, which request
the Injured Party shall be obliged to make) the
Injured Party may request the PAAP by notice
(copied to Scottish Settlements, the Director
and the Defaulting Party) to declare such event
an Event of Default;
3.1.2 upon receipt of a request in terms of Clause
127.1.1 the PAAP may declare an Event of
Default; and
3.1.3 where the PAAP has declared an Event of Default
in terms of Clause 127.1.2 or Clause 89
(Proceedings of PAAP), the PAAP may require
Scottish Settlements to serve notice on the
Defaulting Party (copied to the Director and
each other Party), that the Defaulting Party
shall cease to be a Party with effect from the
date specified in that notice.
3.2 Default (2): In relation to any Party other than
Scottish Settlements at any time after the occurrence of
any of the events referred to in Clauses 127.3 and 127.4,
except any of the events referred to in Clauses 127.3.1
and 127.3.2, and so long as such event continues
unremedied or unwaived or on receipt of a requirement
from the PAAP under Clauses 127.1.3 or 89 (Proceedings of
PAAP) Scottish Settlements shall by notice to the
Defaulting Party (copied to the Director and each other
Party) require the Defaulting Party to cease to be a
Party to this Agreement with effect from the date
specified in that notice.
3.3 Events of Default (1): The events referred to in the
foregoing provisions of this Clause 127 are:-
3.3.1 the Party (other than Scottish Settlements) in
question (the "Defaulting Party") shall fail to
pay in the manner provided in this Agreement or
any agreement entered into pursuant to this
Agreement (whether by or on behalf of such
Party) any sum payable by it to any Party within
twenty (20) Working Days after its due date; or
3.3.2 the Defaulting Party shall fail in any material
respect to perform or comply with any of its
other obligations under this Agreement or any
agreement entered into pursuant to this
Agreement (whether by or on behalf of such
Party); or
3.3.3 the Defaulting Party fails to maintain Use of
System Agreements or Connection Agreements (as
appropriate) or fails to provide satisfactory
evidence on request by Scottish Settlements of
continued negotiations in respect of any such
Use of System Agreement or Connection Agreement
with the appropriate Scottish Company; or
3.3.4 the Defaulting Party has completed the relevant
Entry Process and fails:-
3.3.4.1 in the case of a Generator Party, to
maintain Residual Contracts with the
relevant Scottish Company; and
3.3.4.2 in the case of a Supplier, either
(i) to maintain a Total Demand
Contract; or
(ii) to maintain a Residual
Contract,
in each case with the relevant Host
Company, in each Authorised Area; or
3.3.5 the Defaulting Party fails to comply with the
terms of Clause 6.5 or any agreement or document
entered into pursuant to that Clause or fails to
do any other act in terms of Clause 6.5; or
3.3.6 the Defaulting Party is a Non Qualifying
Supplier who fails to become a Qualifying
Supplier by the Schedule 3 Expiry Date; or
3.3.7 the Defaulting Party is a Non Qualifying
Generator Party who fails to become a Qualifying
Generator Party by the Schedule 3 Expiry Date;
or
3.3.8 the Defaulting Party fails to complete any Entry
Processes required for re-entry.
3.4 Events of Default (2): The events referred to in the
foregoing provision of Clause 127 are also:-
3.4.1 the Defaulting Party is unable to pay its debts
(within the meaning of section 123(1) or (2) of
the Insolvency Act 1986 subject as hereinafter
provided) or if any voluntary agreement is
proposed in relation to it under section 1 of
that Act shall go into liquidation whether
compulsory or voluntary (other than for the
purpose of a bona fide reconstruction or
amalgamation);
3.4.2 the Defaulting Party has a receiver, as defined
in section 70 of the Insolvency Act 1986, (which
expression shall include an administrative
receiver within the meaning of section 251 of
the Insolvency Act 1986) of the whole or any
material part of its assets or undertaking
appointed;
3.4.3 the Defaulting Party has an administration order
under section 8 of the Insolvency Act 1986 made
in relation to it;
3.4.4 the Defaulting Party passes any resolution for
winding-up;
3.4.5 the Defaulting Party becomes subject to an order
for winding-up by a court of competent
jurisdiction;
3.4.6 the Defaulting Party makes a composition with
its creditors; or
3.4.7 anything analogous to the foregoing occurs in
relation to any jurisdiction to which the
Defaulting Party is subject; or
3.4.8 the Licence (if any) granted to the Defaulting
Party is determined or revoked or otherwise
ceases to be in force for any reason whatsoever
or the Licence referred to in the relevant
Admission Application is not granted within
three months (3) after the delivery to Scottish
Settlements of the Admission Application.
For the purposes of paragraph 127.4.1 above section
123(1)(a) of the Insolvency Act 1986 shall have effect as
if for "(Pound)750" there was substituted (Pound)250,000 (or such
higher figure as the Director may from time to time
determine by notice in writing) and further the
Defaulting Party shall not be deemed to be unable to pay
its debts for the purposes of paragraph 127.4.1 above if
any such demand as is mentioned in the said section is
being contested in good faith by the Defaulting Party
with recourse to all appropriate measures and procedures.
3.5 Default clarification: In any such case for whatever
reason and whether or not within the control of the
Defaulting Party the events referred to in Clauses 127.3
and 127.4 above are Events of Default.
3.6 Right of Appeal: In the event that Scottish Settlements
gives notice under Clause 127.1.1 the Defaulting Party
may appeal to the Disputes Panel within fourteen (14)
days. The said notice will have effect at the end of the
fourteen (14) day period unless the Director otherwise
directs.
3.7 Accrued rights and liabilities: The cessation of a
person as a Party for whatever reason shall not prejudice
its accrued rights and liabilities under this Agreement
as at the date of its cessation or its rights and
liabilities under this Agreement which may accrue in
relation to the period during which it was a Party or any
of that person's obligations under this Agreement which
are expressed to continue notwithstanding such cessation.
4. Termination
4.1 Termination as a Party other than Scottish
Settlements: A Party other than Scottish Settlements
shall cease to be a Party only:-
4.1.1 in the circumstances and to the extent specified
in Clause 7 (Resignation and Release of Parties
or Non Trading Generators); or
4.1.2 in the circumstances and to the extent specified
in Clauses 127.1.2 and 127.2.
4.2 Termination of this Agreement: This Agreement may be
terminated by agreement in writing of all the Parties
with consent in writing of the Director to take effect
from the later of the date agreed between the Parties and
the date of the said consent of the Director.
4.3 Survival: Without prejudice to any other provision of
this Agreement, notwithstanding termination as a Party or
termination of this Agreement, Clauses 99 (Limitation of
Liability of the Accreditation Authority), 103
(Limitation of Liability of the PAAP in relation to Entry
Processes), 125 (Confidentiality), 126 (Release of
Information) and 132 (Limitation of Liability) will
survive without limitation of time.
5. Force Majeure
5.1 Force Majeure: Where a Party ("Non-Performing Party") is
unable to carry out all or any of its obligations under
this Agreement by reason of Force Majeure:
5.1.1 the Agreement shall remain in effect, but
5.1.1.1 the Non-Performing Party's relevant
obligations; and
5.1.1.2 any other obligations (not being
payment obligations) of such other
Parties owed inter se which the
relevant Party is unable to carry out
directly as a result of the
suspension of the Non-Performing
Party's obligations,
shall be suspended for a period equal to the
event of Force Majeure provided that:-
(i) the suspension of performance
is of no greater scope and of
no longer duration than is
required by the Force Majeure;
and
(ii) no obligations of any Party
are excused as a result of the
Force Majeure; and
(iii) in respect of such suspension
of the Non-Performing Party's
obligations:-
(a) where that Party is not
Scottish Settlements,
that Party gives
Scottish Settlements
(which shall promptly
inform each other Party,
the Market Auditor and
the Director) prompt
notice describing the
circumstances of Force
Majeure, including the
nature of the
occurrence and its
expected duration, and
that Non
Performing Party
continues to furnish
daily reports with
respect thereto during
the period of Force
Majeure; or
(b) where that Party is
Scottish Settlements,
then Scottish
Settlements gives each
other Party, the Market
Auditor and the Director
prompt notice describing
the circumstances of
Force Majeure, including
the nature of the
occurrence and its
expected duration, and
continues to furnish
daily reports with
respect thereto during
the period of Force
Majeure,
and in each case, the Non Performing Party uses
all reasonable efforts to remedy its inability
to perform its obligations.
5.2 Discussions: As soon as practicable after the occurrence
of the Force Majeure the Non-Performing Party shall
discuss with Scottish Settlements how best to continue
its operations and give effect to its obligations so far
as possible in accordance with this Agreement.
6. Notices
6.1 Addresses: Save as otherwise expressly provided in this
Agreement any notice or other communication to be given
by one Party to another under or in connection with the
matters contemplated by this Agreement and any
Supplemental Agreement shall be addressed to the
recipient and sent to the address or facsimile number or
email address of such other Party or Non Trading
Generator given in Schedule 4 Chapters 1, 2, 3, 3A, 4,
4A, 4B and 4C to this Agreement.
6.2 Scottish Settlements Panels: Any notice or other
communication to be given to the Modification Panel,
PAAP, Disputes Panel or FAP under or in connection with
the matters contemplated by this Agreement shall be sent
to the Secretary for the relevant Panel at the address or
facsimile number or email address given for Scottish
Settlements in Schedule 4 Chapter 1 to this Agreement.
6.3 Deemed receipt: Save as otherwise expressly provided in
this Agreement any notice or other communication to be
given by any Party to any other Party under or in
connection with the matters contemplated by this
Agreement shall be in writing and shall be given by
letter delivered by hand or sent by first class prepaid
post (airmail if overseas) or facsimile or email or where
required by this Agreement by the Data Transfer Network
and shall be deemed to have been received:-
6.3.1 in the case of delivery by hand when delivered;
or
6.3.2 in the case of first class prepaid post on the
second Working Day following the day of posting
or if sent airmail overseas or from overseas on
the fifth Working Day following the day of
posting; or
6.3.3 in the case of facsimile, on acknowledgement by
the addressee's facsimile receiving equipment
(where such acknowledgement occurs before 1700
hours on the Working Day of such acknowledgement
and in any other case on the Working Day
following the Working Day of acknowledgement);
or
6.3.4 in the case of email on the first Working Day
after receipt by the sender of a "receipt" email
or of an email or other written communication
from the party to whom such email was addressed
confirming that the same has been received. If
no such receipt occurs by the time by which the
communication should have been sent, the
communication must be sent again by an
alternative method permitted for that
communication and within the timescale specified
for that communication; or
6.3.5 in the case of information required to be sent
via the Data Transfer Network when the sender
receives the Unique Reference Number for the
communication which was sent (where such Unique
Reference Number is received before 1700 hours
on the Working Day of such receipt, and in all
other cases the next Working Day following
receipt of the Unique Reference Number).
6.4 Additional methods of communication: Notwithstanding the
foregoing, any Party shall be entitled to apply to
Scottish Settlements for permission to use additional
methods of communication to those specified above for the
sole purpose of receiving notices and communications
addressed to it. If such application is approved by
Scottish Settlements, then Scottish Settlements shall
notify all Parties in accordance with Clauses 130.1 and
130.3 of the terms of the successful application. Such
notice shall specify the date of deemed receipt for
notices and communications given by the additional method
of communication to the applicant Party. Scottish
Settlements shall have regard to the speed of the
additional method of communication in stipulating the
date of deemed receipt. Scottish Settlements may notify
all other Parties of additional methods of communication
to those specified above for the sole purpose of
receiving notices and communications addressed to it.
Such notice shall specify the date of deemed receipt
accepted by Scottish Settlements.
7. Disputes
7.1 Disputes: Any dispute arising between the Parties (or
between a Party and a former Party when it relates to any
of the former Party's accrued rights and liabilities
under the Agreement before the former Party ceased to be
a Party) under this Agreement will, notwithstanding the
provisions of Clause 140 (Governing Law), be dealt with
under Clauses 107 (Raising a Dispute) to 114 (Reporting)
subject to any contrary provision of the Act or any
Licence or the rights, powers, duties and obligation of
the Director or the Secretary of State under the Act, any
licence or otherwise howsoever.
8. Limitation of liability
8.1 Liquidated Damages: Parties will be liable to pay any
Liquidated Damages due under Schedule 8 (Liquidated
Damages and Performance Levels). The total aggregate
liability for Liquidated Damages is set out in Schedule
8.
8.2 Limitation of liability: Subject to Clauses 132.1,
132.3, 132.4 and 132.5 and save where any provision of
this Agreement provides for an indemnity, each Party
agrees and acknowledges that no Party (the "Party
Liable") or any of its officers, employees or agents
shall be liable to any of the other Parties for loss
arising from any breach of this Agreement other than for
loss directly resulting from such breach and which at the
date of this Agreement was reasonably foreseeable as not
unlikely to occur in the ordinary course of events from
such breach in respect of:-
8.2.1 physical damage to the property of any other
Party or its or their respective officers,
employees or agents; and/or
8.2.2 the liability of any such Party to any other
person for loss in respect of physical damage to
the property of any other person.
8.3 Commencement of trading: Subject as hereinafter provided
nothing in this Agreement shall exclude or limit the
liability of a Party if such Party operates on a live
basis and interfaces with any settlement systems except
to the extent the same is required or permitted for
testing purposes in any particular capacity prior to PAAP
taking a decision in favour of admitting that Party in
such capacity in accordance with Clause 100 (Entry
Process Decisions) or, in the case of any Party which
intends to trade immediately from and after the Effective
Trading Date in an Authorised Area, prior to the Director
making a direction pursuant to that Party's Licence. In
each case such Party shall indemnify and keep indemnified
each other Party, its officers, employees or agents from
and against any loss or liability which any such other
Party, its officers, employees or agents may suffer or
incur directly as a result of such default. A Party's
liability in terms of this Clause 132.3 for any event or
series of related events shall not exceed one million
pounds ((Pound)1,000,000). For the avoidance of doubt where a
Non Qualifying Supplier interfaces with any settlement
systems via a Qualifying Party the provisions of this
Clause 132.3 shall not apply.
8.4 Overall Market Testing: With respect to Overall Market
Testing, for the avoidance of doubt, nothing in this
Clause 132 shall supersede, amend or replace the
provisions of Part 3 of the Memorandum of Understanding
on Testing.
8.5 Enduring testing: The liability of any Party in respect
of claims for such losses provided for in Clause 132.2
arising from any systems testing carried out pursuant to
this Agreement shall not exceed one hundred thousand
pounds ((Pound)100,000) per Relevant Year. For the purposes of
this Clause 132.5 only, physical damage pursuant to
Clause 132.2 shall be deemed to include any interruption
or failure in the core functionality of software relevant
to a settlement system and any virus or the like which
gives rise to errors or omissions in data held by any
Party in relation to this Agreement.
8.6 Death and personal injury: Nothing in this Agreement
shall exclude or limit the liability of the Party Liable
for death or personal injury resulting from the
negligence of the Party Liable or any of its officers,
employees or agents and the Party Liable shall indemnify
and keep indemnified each other Party, its officers,
employees or agents from and against all such and any
loss or liability which any such other Party may suffer
or incur by reason of any claim on account of death or
personal injury resulting from the negligence of the
Party Liable or any of its officers, employees or agents.
8.7 Exclusion of certain types of loss: Subject to Clause
132.4 and save where any provision of this Agreement
provides for an indemnity, no Party or any of its
officers, employees or agents shall in any circumstances
whatsoever be liable to any other Party for:-
8.7.1 any loss of profit, loss of revenue, loss of
use, loss of contract or loss of goodwill; or
8.7.2 any indirect or consequential loss; or
8.7.3 loss resulting from the liability of any other
Party to any other person howsoever and
whensoever arising save as provided in Clauses
132.2.2 and 132.4.
8.8 Scottish Settlements contract indemnity: Each Party
other than Scottish Settlements shall (but only in
respect of its Agreed Share) jointly indemnify and keep
indemnified Scottish Settlements, its officers, employees
and agents against all losses arising directly or
indirectly out of a third party claim made against
Scottish Settlements, its officers, employees or agents
under or pursuant to any agreement which Scottish
Settlements has entered into pursuant to this Agreement
and/or the establishment of the arrangements referred to
in Condition 24 of Part V of the Scottish Hydro-Electric
Licence and the ScottishPower Licence (including, without
limitation, the Master Registration Agreement and the
Data Transfer Services Agreement) other than any losses
arising from the wilful default or bad faith of, or
breach of duty or trust by Scottish Settlements its
officers, employees or agents.
8.9 Scottish Settlements staff indemnity: Each officer,
employee and agent of Scottish Settlements shall be
indemnified and kept indemnified jointly and severally by
all the other Parties and, as between the other Parties
rateably in the proportion which their respective Agreed
Share bears one to the other, from and against any and
all costs (including legal costs), charges, expenses,
damages or other liabilities properly incurred or
suffered by him in relation to his office or the due
exercise by him of his powers, duties and
responsibilities (but only to the extent such costs,
charges, expenses, damages or other liabilities are
incurred pursuant to this Agreement or Condition 24 of
Part V of the Scottish Hydro-Electric Licence and the
ScottishPower Licence) and all claims, demands or
proceedings arising out of or in connection with the same
except such costs, charges, expenses, damages or other
liabilities which are suffered or incurred or occasioned
by the wilful default or bad faith of, or breach of duty
or trust by, such officer employee or agent of Scottish
Settlements. For the avoidance of doubt nothing in this
Clause shall be deemed to allow recovery of personal
charges, costs or expenses incurred pursuant to his
appointment as an officer, employee or agent of Scottish
Settlements.
8.10 Profile Data indemnity: Any Party ("Relevant Party")
(other than Scottish Settlements) with access to Profile
Data or whose Agent has such access and who fails to
possess or use such Profile Data in accordance with the
Profile Services Agreement and/or the Profile
Administrator Contract shall fully indemnify and keep
indemnified Scottish Settlements against any claims made
by EASL against Scottish Settlements in respect of such
failure by the Relevant Party or its Agent. In the event
that Scottish Settlements cannot recover any sums due in
terms of this Clause 130.10 from the Relevant Party then
each Party (other than Scottish Settlements and the
Relevant Party) shall (but only in respect of its Agreed
Share increased pro rata so that the total of all Agreed
Shares (excluding the Relevant Party's) equals 100% of
the amount claimed) indemnify and keep indemnified
Scottish Settlements jointly against any claims made by
EASL against Scottish Settlements in respect of such
failure to possess or use any Profile Data in accordance
with the Profile Services Agreement or Profile
Administrator Contract. Further each Party to whom such
access to Profile Data is provided will, prior to being
given access, grant such undertaking and/or indemnity as
EASL may require pursuant to the agreements referred to
in this Clause 132.10. For the avoidance of doubt
nothing in this Clause 132.10 shall prejudice any Party's
right to recover from the Relevant Party.
8.11 Implementation of Panel decisions: Each Party other than
Scottish Settlements shall (but only in respect of its
Agreed Share) jointly indemnify and keep indemnified
Scottish Settlements, its officers, employees and agents
against all losses arising directly or indirectly out of
a third party claim made against Scottish Settlements,
its officers, employees or agents under or pursuant to
the implementation of any Panel decision (other than
arising from the wilful default or bad faith of, or
breach of duty or trust by Scottish Settlements, its
officers, employees or agents).
8.12 Accreditation Authority indemnity: The Parties other
than Scottish Settlements shall (but only in respect of
their Agreed Share) jointly indemnify and keep
indemnified the members of the Accreditation Authority,
and any agents appointed by the Accreditation Authority
from and against any and all costs (including legal
costs), charges, expenses, damages or other liabilities
properly incurred or suffered by it or them as a result
of any third party claim in relation to the proper
performance of its duties under this Agreement (other
than arising from the wilful default or bad faith of, or
breach of duty or trust by the Accreditation Authority or
its said agents). The total aggregate liability of the
Accreditation Authority is set out in Part IX (Governance
of this Agreement).
8.13 Panel Member indemnity: Each Panel Member shall be
indemnified and kept indemnified jointly and severally by
every other Party (other than Scottish Settlements)
rateably in the proportion which their respective Agreed
Share bears one to the other from and against any and all
costs (including legal costs), charges, expenses, damages
or other liabilities properly incurred or suffered by him
in relation to the relevant Panel or his office as Panel
Member or the due exercise by him of his powers, duties and
responsibilities as a Panel Member and all claims, demands
or proceeding arising out of or in connection with the same
except any such costs and expenses which have been
recovered in accordance with Part IX and any other such
costs, charges, expenses, damages or other liabilities
which are suffered or incurred or occasioned by the wilful
default or bad faith of, or breach of duty or trust by,
such Panel Member. The SEF Member or (as the case may be)
SEF Members whom he represents as aforesaid shall, upon
request, provide the relevant Panel Member with a written
indemnity to that effect. For the avoidance of doubt
nothing in this Clause shall be deemed to allow recovery of
personal charges and expenses incurred pursuant to his
appointment as a Panel Member which would not otherwise be
recoverable under Part IX.
8.14 Scottish Settlements decisions: Each Party other than
Scottish Settlements shall (but only in respect of its
Agreed Share) jointly indemnify and keep indemnified
Scottish Settlements, its officers, employees and agents
against all losses arising directly or indirectly out of
a third party claim in relation to decisions taken by
Scottish Settlements, its officers, employees or agents
including decisions:-
8.14.1 to determine parameters; or
8.14.2 to clarify the obligations of any Party; or
8.14.3 pursuant to Schedule 8;
in each case when such decision was required of Scottish
Settlements pursuant to this Agreement (other than
arising from the wilful default or bad faith of, or
breach of duty or trust by Scottish Settlements, its
officers, employees or agents).
8.15 Indemnity for Unrecovered Sums: Each Party other than
Scottish Settlements shall (but only in respect of its
Agreed Share) jointly indemnify and keep indemnified
Scottish Settlements in respect of any sum Scottish
Settlements was entitled to recover under this Clause 132
("Unrecovered Sum") but Scottish Settlements has after
using its reasonable endeavours been unable to recover.
For the purpose of this Clause 132.15 the Agreed Share
will be calculated over the Relevant Year in which
Scottish Settlements becomes aware that it has been
unable to recover any Unrecovered Sum unless otherwise
determined by the FAP at the instance of any Party. The
Agreed Share of each other Party shall be increased pro
rata so that the total of all Agreed Shares (excluding
the Agreed Share of the Party by which the Unrecovered
Sum is owed) equals 100% of the Unrecovered Sum. This
Clause is without prejudice to each Party's right of
recovery against the Party by which the Unrecovered Sum
is owed. Scottish Settlements may only claim payment
under this indemnity under the provision in Clause
132.20.
8.16 Parties indemnity: In the event that any Party (other
than Scottish Settlements) suffers any loss or losses
arising out of any circumstance which Scottish
Settlements would have been properly indemnified for
under Clauses 132.8, 132.9, 132.11 and 132.14 such Party
will be indemnified as if its name was substituted for
Scottish Settlements as the Party being indemnified in
Clauses 132.8, 132.9, 132.11 and 132.14, except that such
Party will be liable for its own Agreed Share.
8.17 Survival: Each of Clauses 132.1 to 132.16 shall:-
8.17.1 be construed as a separate and severable
contract term, and if one or more of such
Clauses is held to be invalid, unlawful or
otherwise unenforceable the other or others of
such Clauses shall remain in full force and
effect and shall continue to bind the Parties;
and
8.17.2 survive termination of this Agreement.
8.18 Saving: For the avoidance of doubt, nothing in this
Clause 132 shall prevent or restrict any Party enforcing
any obligation (including suing for a debt) owed to it
under or pursuant to this Agreement.
8.19 Full negotiation: Each Party acknowledges and agrees
that the foregoing provisions of this Clause 132 have
been the subject of discussion and negotiation and are
fair and reasonable having regard to the circumstances as
at the date of this Agreement.
8.20 Agreed Shares: Agreed Share for each Party shall be
calculated as follows:-
8.20.1 in respect of all Generator Parties, 30% of the
total amount of all liability which shall be
divided pro rata among them on the basis of the
proportion that a Generator Party's Generator
Volume bears to the Generator Traded Volume; and
8.20.2 in respect of all Suppliers, 70% of the total
amount of all liability which shall be divided
pro rata among them on the basis of the
proportion that a Supplier's Supplier Volume
bears to the Total Supplier Traded Volume,
in each case where Generator Volume, Supplier Volume Generator
Traded Volume and Supplier Traded Volume are calculated
over the Relevant Year in which the liability is
incurred, (without prejudice to Clause 132.15) unless
otherwise determined by the FAP at the instance of any
Party.
8.21 Payment: Notwithstanding Scottish Settlements right to
recover under this Clause 132 by any other means (except
in relation to Clause 132.15) and subject to Clauses
132.8, 132.9 and 132.12 any payment due to Scottish
Settlements under the indemnities set out in Clauses
132.8 to 132.11 may be recovered by Scottish Settlements
pursuant to Part VIII.
9. Assignation
9.1 Assignation: A Party or Non Trading Generator shall not
assign and/or transfer and shall not purport to assign
and/or transfer any of its rights and/or obligations
under this Agreement.
10. Waivers; remedies not cumulative
10.1 Waivers: No delay by or omission of any Party or Non
Trading Generator in exercising any right, power,
privilege or remedy under this Agreement shall operate to
impair such right, power, privilege or remedy or be
construed as a waiver thereof. Any single or partial
exercise of any such right, power, privilege or remedy
shall not preclude any other or further exercise thereof
or the exercise of any other right, power, privilege or
remedy.
10.2 Remedies not cumulative: The rights and remedies
provided by this Agreement to each Party and Non Trading
Generator 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 (other than any such rights or remedies
provided under section 58 of the Act or any directions
(if any) issued thereunder), including without limitation
any rights any Party or Non Trading Generators may
possess in delict which shall include actions brought in
negligence and/or nuisance. Accordingly each Party and
Non Trading Generator hereby waives to the fullest extent
possible all such rights and remedies provided by common
law or statute whatsoever and whensoever arising, and
releases a Party or Non Trading Generator which is liable
to another (or others), its officers, employees and
agents to the same extent from all duties, liabilities,
responsibilities or obligations provided by common law or
statute in respect of the matters dealt with in this
Agreement and undertakes not to enforce any of the same
except as expressly provided herein.
10.3 Director's and Secretary of State's rights: For the
avoidance of doubt each Party and Non Trading Generator
acknowledges and agrees that nothing in this Agreement
shall exclude or restrict or otherwise prejudice or
affect any of the rights, powers, privileges, remedies,
duties and obligations of the Director or Secretary of
State under the Act or any Licence or otherwise
howsoever.
11. Severance of terms
11.1 Severance of terms: If for any reason whatever any
provision of this Agreement is or becomes invalid,
illegal or unenforceable, or is declared by any court of
competent jurisdiction or any other Competent Authority
to be invalid, illegal or unenforceable or if such
Competent Authority:-
11.1.1 refuses, or formally indicates an intention to
refuse, authorisation of, or exemption to, any
of the provisions of or arrangements contained
in this Agreement (in the case of a refusal
either by way of outright refusal or by way of
requiring the amendment or deletion of any
provision of this Agreement and/or the inclusion
of any provision in this Agreement and/or the
giving of undertakings or the acceptance of
conditions as to future conduct before such
authorisation or exemption can be granted); or
11.1.2 formally indicates that to continue to operate
any provision of this Agreement may expose any
Party to sanctions under any law, order,
enactment or regulation, or requests any Party
to give undertakings or to accept conditions as
to future conduct in order that such Party may
not be subject to such sanctions,
and, in all cases, whether initially or at the end of any
earlier period or periods of exemption then, in any such
case, Scottish Settlements will refer the matter to the
Modification Panel under Part IX with a view to agreeing
one or more provisions which may be substituted for such
invalid, unenforceable or illegal provision which
substitute provision(s) is/ (are) satisfactory to the
Competent Authority and produce(s) as nearly as is
practicable in all the circumstances the appropriate
balance of the commercial interests of the Parties.
12. Entire Agreement
12.1 Entire Agreement: This Agreement contains or expressly
refers to the entire agreement among each Party and Non
Trading Generator with respect to the subject matter
hereof and expressly excludes any warranty, condition or
other undertaking (except in so far as the same arises
from fraudulent misrepresentation) implied at law or by
custom and supersedes all previous agreements and
understandings among each Party and Non Trading Generator
with respect thereto and each Party and Non Trading
Generator acknowledges and confirms that it does not
enter into this Agreement in reliance on any
representation, warranty or other undertaking not fully
reflected in the terms of this Agreement.
13. Language and currency
13.1 Notices: Each notice, instrument, certificate or other
document to be given by one Party or Non Trading
Generator to another under this agreement shall be in the
English language.
13.2 Euro: If at any time a single or unified European
currency is introduced (whether known as the "euro" or
otherwise), as contemplated in the Treaty of Rome of 25
March 1957 as amended by the Single European Act 1986 and
the Treaty on European Union which was signed at
Maastricht on 1 February 1992 and as a result sterling is
replaced by a single or unified European currency, then
the amounts of sterling referred to in this Agreement
shall, if replaced by the single or unified currency, be
deemed converted into amounts of the single or unified
currency at the rate prescribed by an implementing
regulation or directive. The Parties shall make such
adjustments to this Agreement as are necessary to
implement the provisions of this Clause and to ensure
that each Party is in the same financial position as if
such currency had not been replaced.
14. Restrictive Trade Practices Act 1976 and the European
Commission
14.1 Restrictive Trade Practices Act 1976: Any restriction
contained in this Agreement or in any arrangement of
which this Agreement forms part (together, the
"Arrangement") by virtue of which the Arrangement is
subject to the Restrictive Trade Practices Act 1976 (the
"RTPA") shall be of no effect until the day following the
day on which particulars of the Arrangement have been
delivered to the Office of Fair Trading as required
thereunder. In the event of the repeal, in whole or in
part, of the RTPA Scottish Settlements shall as soon as
reasonably practicable thereafter take such steps as may
be reasonably required (including the preparation and
notification of particulars of the Arrangement) for the
purpose of obtaining such guidance and/or decision and/or
exemption and/or other form of assurance or comfort as is
available and/or required in respect of the Arrangement
by virtue of the legislation effecting such repeal. Each
Party shall co-operate fully in preparing such
particulars and in making any necessary submission(s) to
the Office of Fair Trading and/or the Secretary of State
as soon as reasonably practicable after the date of this
Agreement and, without prejudice to the generality,
hereby agree that Scottish Settlements shall have full
power and authority on their behalf to prepare such
particulars and/or make such submission(s) for the
purpose of obtaining such clearance and/or exemption
and/or such other form of assurance or comfort as it
shall, in its sole discretion, consider appropriate.
14.2 The European Commission: The Parties shall co-operate
fully in preparing particulars of this Agreement and
notifying such particulars as soon as reasonably
practicable after the date of this Agreement to the
European Commission pursuant to Regulation 17/62/EEC and,
without prejudice to the generality, each Party hereby
agrees that Scottish Settlements shall have full power
and authority on their behalf to prepare such particulars
and/or make such notification for the purpose of
obtaining such clearance and/or make such other form of
assurance or comfort as it shall, in its sole discretion,
consider appropriate.
15. Variation of this Agreement
15.1 Modification Procedure: Subject to Clause 72.2 this
Agreement shall be varied in terms of the Modification
Process as set out in Part IX.
16. Governing law
16.1 Governing law: This Agreement is governed by and shall
be construed in all respects in accordance with the law
of Scotland and, without prejudice to the provisions of
Clause 131 (Disputes), each Party and Non Trading
Generator hereby prorogates the exclusive jurisdiction of
the Scottish Courts.
IN WITNESS whereof this Agreement typewritten on this and the
preceding 211 pages together with the 20 Schedules hereto has
been duly executed as follows:
Signed for and on behalf of Scottish Electricity Settlements
Limited:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of Scottish Power plc:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of Scottish Hydro-Electric plc:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of British Gas Trading Limited:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of Manweb plc:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of Northern Electric plc:
Authorised Signatory ________________________________
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of Norweb plc:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of PowerGen plc:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of Seeboard plc:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
Signed for and on behalf of Yorkshire Electricity Group plc:
Authorised Signatory
_________________________________
_
Witness_______________________
Name__________________________
_
Name_________________________
Title_________________________
___
Address_______________________
Date__________________________
__
213
213
274
Settlement Agreement for Scotland 14 August 1998
Exhibit 10.2 - Agreements for (POUND)550 million
Credit Facility, each dated July 22, 1998, for
Yorkshire Power Group Limited,
among
Yorkshire Power Group Limited
and the banks' names therein.
THIS AGREEMENT is dated 22nd July, 1998 between:-
(1) YORKSHIRE POWER GROUP LIMITED ("YPG");
(2) YORKSHIRE HOLDINGS PLC ("YH");
(3) YORKSHIRE ELECTRICITY GROUP PLC ("YEG");
(4) CITIBANK, N.A. and DEUTSCHE BANK AG LONDON (in this
capacity the
"Arrangers");
(5) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as banks
(the "Banks"); and
(6) CITIBANK INTERNATIONAL plc as agent (in this capacity the
"Agent").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 Definitions
In this Agreement:-
"Act"
means the Electricity Act 1989 and, unless the context otherwise
requires,
all subordinate
legislation and any successive legislation thereto.
"Adjusted Share Capital and Reserves"
means the aggregate of:
(a) the amount paid up or credited as paid up on the issued
share capital of
YPG; and
(b) the amounts standing to the credit of the consolidated
capital and
revenue reserves of
the Group,
adjusted, to the extent that the following items have not already
been added,
deducted or
excluded in arriving at the figures referred to in paragraph (a)
or (b) above:
(i) by adding Subordinated Debt and the Preferred Securities;
(ii) by deducting the amounts standing to the debit of the
consolidated
reserves of the
Group;
(iii) by deducting any amounts attributable to interests of
non-Group members
in Group
subsidiaries;
(iv) by deducting any reserves set aside for deferred
taxation;
(v) by deducting the amount by which the net book value of
any fixed asset has
been
written up after the date of this Agreement (or, in the case of a
person
becoming a
member of the Group after that date, the date on which it becomes
a member of the
Group) by way of revaluation or on its transfer from one member
of the Group to
another (but no such deduction shall be made in respect of any
amount if supported by,
and not exceeding the amount shown by, an independent written
valuation),
but so that no amount to be added, deducted or excluded as a
result of any of the above shall be
added, deducted or excluded more than once in the same
calculation.
"Affiliate"
means a Subsidiary or a holding company (as defined in Section
736 of the Companies Act
1985) of a Bank or any other Subsidiary of that holding company.
"Applicable Rate"
means the rate quoted by the Agent to a Borrower to be that at
which money can be deposited
in the London interbank market on the earliest available day,
provided that the applicable rate
shall not be less than LIBID nor more than LIBOR.
"Balance Sheet"
means, at any time, the then most recent audited consolidated
annual or unaudited consolidated
half yearly balance sheet of the Group delivered to the Agent by
YPG under Clause 16.2
(Financial information).
"Borrower"
means YPG, YH or YEG.
"Borrowings"
means indebtedness in respect of:
(a) moneys borrowed or raised including (except for the
purposes of Clause 17.5 (Cross
default)) the recourse element of any asset securitisation or
other factoring but
excluding any amounts owing for assets purchased or services
obtained on trade credit
terms in the ordinary course of business;
(b) amounts raised by means of acceptances under any
acceptance credit facility or
otherwise (not being acceptances in relation to the purchase of
assets or services in the
ordinary course of business);
(c) the deferred purchase price of assets or services the
payment of which is deferred for a
period in excess of ninety days (other than assets or services
obtained on trade credit
terms normal in the business concerned);
(d) the principal amount and any premium payable by the
relevant company from time to
time owing in respect of any loan notes, debentures, bonds or
other similar
instruments;
(e) the capital value of any financial lease, hire purchase
arrangements or any arrangement
treated as a financial lease required to be capitalised and
treated as a borrowing in the
consolidated balance sheet of the Group;
(f) for the purposes of Clause 17.5 (Cross default) (only)
net indebtedness under any
currency or interest cap, swap or collar; and
(g) any guarantee or assurance against financial loss or
indemnity in respect of the
borrowings of any other person not being a member of the Group of
a type referred to
in paragraphs (a) to (f) (inclusive) above (but excluding any
such guarantee or
assurance in respect of the performance of any contract or
service not involving
financial loss or indemnity in respect of borrowings),
but shall exclude:
(A) liabilities in respect of the Pooling and Settlement
Agreement or other arrangements
which replace the Pooling and Settlement Agreement in accordance
with Clause 17.12
(Pooling and Settlement Agreement);
(B) Project Finance Borrowings; and
(C) for the avoidance of doubt, the Preferred Securities.
"Business Day"
means a day (other than a Saturday or a Sunday) on which banks
are open for business in
London.
"Capitalisation"
means, at any time, the aggregate of Adjusted Share Capital and
Reserves and Debt.
"Commitment"
means each of the Facility A Commitment, the Facility B
Commitment and the Facility C
Commitment of a Bank.
"Commitment Period"
means the Facility A Commitment Period, the Facility B Commitment
Period or the Facility C
Commitment Period.
"Debt"
means Borrowings (excluding Subordinated Debt) less Investments.
"Default"
means an Event of Default or an event which, with the giving of
notice or lapse of time
provided for in Clause 17 (Default) (or any combination of the
foregoing), would constitute an
Event of Default.
"Director General"
means the person from time to time appointed by the Secretary of
State to hold office as
Director General of Electricity Supply for the purposes of the
Act or any office which replaces
the function of the Director General of Electricity Supply.
"Drawdown Date"
means the date of the advance of a Loan.
"EBITDA"
means, in respect of any Relevant Period, the total operating
profit for continuing operations,
acquisitions (as a component of continuing operations) and
discontinued operations of the
Group before taking into account:
(a) Interest Payable and Interest Receivable and dividends in
respect of Preferred
Securities;
(b) all amounts provided for depreciation and amortisation
(including, without limitation,
amortisation of any goodwill);
(c) all exceptional and extraordinary items; and
(d) all taxes,
in each case for that Relevant Period but after:
(A) deducting any gain over book value arising in favour of
the Group on the sale, lease or
other disposal of any asset (other than on the sale of trading
stock) during the Relevant
Period and any gain arising on revaluation of any asset during
that Relevant Period, in
each case to the extent that it would otherwise be taken into
account, whether as an
exceptional item or otherwise; and
(B) excluding the earnings or profit before interest, tax
depreciation and amortisation (as
determined in accordance with the preceding paragraphs of this
definition) and
excluding all exceptional and extraordinary items of any company
referred to in
paragraph (a) of the definition of Project Finance Borrowings,
(all calculated on a consolidated basis disregarding any portion
of any item taken into account
in that calculation which is attributable to any minority
interests in Subsidiaries).
"Environmental Law"
means any applicable law (including, without limitation, common
law), regulation, directing
code of practice, circular, guidance notice or the like
concerning pollution or the protection of
human health, the environment, the conditions of the work place
or the manufacture,
processing, generation, transportation, storage, treatment or
disposal of dangerous substances,
pollutants, contaminants, chemicals or toxic or hazardous
substances or waste.
"Environmental Licence"
means any authorisation required by any Environmental Law.
"Existing Facilities"
means:
(a) the bilateral credit facility made available to YPG under
the agreement dated 31st July,
1997 and made between YPG and Union Bank of Switzerland; and
(b) each bilateral credit facility dated 2nd May, 1995 made
available to YEG by Midland
Bank PLC, Den Danske Bank Aktieselskab, The Sumitomo Bank,
Limited, Deutsche
Bank AG London, The Bank of Tokyo-Mitsubishi, Limited, National
Westminster
Bank Plc, Union Bank of Switzerland and Morgan Guaranty Trust
Company of New
York.
"Event of Default"
means an event specified as such in Clause 17.1 (Events of
Default).
"Facility"
means each of Facility A, Facility B and Facility C.
"Facility A"
means the sterling credit facility designated under Clause
2.1(a)(i) (Facilities), the terms of
which are set out in this Agreement being a revolving credit
facility up to the Facility A Term
Date which then converts on that date into a term loan facility.
"Facility A Commitment"
means:
(a) in relation to a Bank which is a Bank on the date of this
Agreement, the amount in
Sterling set opposite its name under the heading "Facility A" in
Schedule 1 and the
amount of any other Bank's Facility A Commitment acquired by it
under Clause 25
(Changes to the Parties); and
(b) in relation to a Bank which becomes a Bank after the date
of this Agreement, the
amount of any other Bank's Facility A Commitment acquired by it
under Clause 25
(Changes to the Parties),
to the extent not cancelled, transferred or reduced under this
Agreement.
"Facility A Commitment Period"
means the period from the date of this Agreement to the Facility
A Term Date (both dates
inclusive).
"Facility A Loan"
means a Loan drawn down or to be drawn down under Facility A.
"Facility A Repayment Date"
means the second anniversary of the date of this Agreement.
"Facility A Term Date"
means the date falling 364 days after the date of this Agreement.
"Facility B"
means the sterling term loan facility designated under Clause
2.1(a)(ii) (Facilities), the terms of
which are set out in this Agreement.
"Facility B Commitment"
means :
(a) in relation to a Bank which is a Bank on the date of this
Agreement, the amount in
Sterling set opposite its name under the heading "Facility B" in
Schedule 1 and the
amount of any other Bank's Facility B Commitment acquired by it
under Clause 25
(Changes to the Parties); and
(b) in relation to a Bank which becomes a Bank after the date
of this Agreement, the
amount of any other Bank's Facility B Commitment acquired by it
under Clause 25
(Changes to the Parties),
to the extent not cancelled, transferred or reduced under this
Agreement.
"Facility B Commitment Period"
means the period from the date of this Agreement to the Term Date
(both dates inclusive).
"Facility B Loan"
means a Loan drawn down or to be drawn down under Facility B.
"Facility C"
means the sterling revolving credit facility designated under
Clause 2.1(a)(iii) (Facilities), the
terms of which are set out in this Agreement.
"Facility C Commitment"
means:
(a) in relation to a Bank which is a Bank on the date of this
Agreement, the amount in
Sterling set opposite its name under the heading "Facility C" in
Schedule 1 and the
amount of any other Bank's Facility C Commitment acquired by it
under Clause 25
(Changes to the Parties); and
(b) in relation to a Bank which becomes a Bank after the date
of this Agreement, the
amount of any other Bank's Facility C Commitment acquired by it
under Clause 25
(Changes to the Parties),
to the extent not cancelled, transferred or reduced under this
Agreement.
"Facility C Commitment Period"
means the period from the date of this Agreement to the Repayment
Date (both dates inclusive).
"Facility C Loan"
means a Loan drawn down or to be drawn down under Facility C.
"Facility Office"
means the office(s) in the United Kingdom notified by a Bank to
the Agent:
(a) on or before the date it becomes a Bank; or
(b) by not less than five Business Days' notice,
as the office through which it will perform all or any of its
obligations under this Agreement.
"Fee Letter"
means a letter between the Arrangers and the Borrowers or a
letter between the Agent and the
Borrowers, in each case dated 10th June, 1998, setting out,
amongst other things, the amount
of the fees referred to in Clause 19 (Fees).
"Finance Document"
means this Agreement, any Fee Letter, any Novation Agreement, any
Novation Certificate or
any other document designated as such by the Agent and YPG.
"Finance Party"
means an Arranger, a Bank or the Agent.
"Group"
means YPG and its Subsidiaries.
"Information Memorandum"
means the Information Memorandum dated June, 1998 and prepared in
connection with this
Agreement.
"Interest Payable"
means, in respect of any Relevant Period, all interest payable
and similar charges as shown in
(or in the notes to) the financial statements of the Group
(calculated on a consolidated basis)
for the Relevant Period but excluding interest payable on Project
Finance Borrowings by
companies referred to in paragraph (a) of that definition.
"Interest Period"
means each period determined in accordance with Clause 8
(Interest Periods).
"Interest Receivable"
means, in respect of any Relevant Period, all interest receivable
and similar income as shown in
(or in the notes to) the financial statements of the Group
(calculated on a consolidated basis)
for that Relevant Period but excluding interest receivable by a
company of the type referred to
in paragraph (a) of the definition of Project Finance Borrowings.
"Investments"
means, as at any date, the aggregate (calculated on a
consolidated basis) of:
(a) cash in hand in a jurisdiction where such amounts are
freely transferable out of that
jurisdiction and convertible into currencies dealt in on the
London foreign exchange
market;
(b) money at call in a jurisdiction, and freely convertible
into currencies, referred to in (a)
above;
(c) deposits and certificates of deposit the term of which
has twelve months or less
remaining to maturity in a jurisdiction, and freely convertible
into currencies, referred
to in (a) above;
(d) United Kingdom gilts;
(e) deposits made with the Commissioners of Inland Revenue in
respect of which
certificates of tax deposit have been issued by Her Majesty's
Treasury;
(f) sterling bills of exchange eligible for rediscount at the
Bank of England;
(g) bonds rated AA- (or the equivalent) or above by Standard
& Poor's Ratings Group,
The Fitch IBCA Group or Duff & Phelps Credit Rating Co. or
Moody's Investors
Service, Limited; and
(h) any other negotiable money market instrument issued by an
issuer in a jurisdiction, and
convertible into currencies, referred to in (a) above with a
maximum maturity of twelve
months or less, excluding commercial paper (unless it is rated at
least A1 (or the
equivalent) by Standard & Poor's Ratings Group or The Fitch IBCA
Group or Duff &
Phelps Credit Rating Co. or P1 by Moody's Investors Service,
Limited),
provided that, when the aggregate amount of Investments required
to be taken into account for
the purposes of this definition on any particular day is being
ascertained, any such Investments
denominated or repayable or in respect of which monies are
payable in a currency other than
sterling shall be taken into account at their sterling equivalent
at the rate of exchange prevailing
on that day in London using the Agent's spot rate as of 11.00
a.m. on such date for the
purchase of such currency with sterling.
"LIBID"
means, in relation to an amount received by the Agent referred to
in Clause 22.2(b) (Other
indemnities), the arithmetic mean (rounded to four decimal
places) of the rates, as supplied to
the Agent at its request, quoted by the Reference Banks to
leading banks in the London
interbank market at or about 11.00 a.m. on the relevant day for
the taking of deposits in
sterling and in an amount approximately equal to the amount so
received from a Borrower for
the period from and including the date that payment is received
by the Agent to but excluding
the last day of the Interest Period of the relevant Loan or
amount.
"LIBOR"
means, in relation to an Interest Period:
(a) the rate appearing on the Telerate Screen page 3750 or
any equivalent successor to
such page or other page as appropriate on the Telerate Service or
(failing which) such
other service as may, from time to time, display the British
Bankers' Association
Interest Settlement Rates for deposits in sterling (as agreed
between the relevant
Borrower and the Agent (acting reasonably)) (the "Telerate
Screen"); or
(b) (if no such offered rate for quotations appears on the
Telerate Screen) the arithmetic
mean (rounded to four decimal places) of the relevant offered
rates which appear on
the relevant page of the Reuters Screen; or
(c) (in the absence of manifest error, if no such offered
rate for quotations appears on the
Telerate Screen or the Reuters Screen) the arithmetic mean
(rounded to four decimal
places) of the rates, as supplied to the Agent at its request,
quoted by the Reference
Banks to leading banks in the London interbank market,
(in each case) at 11.00 a.m. on the first day of that Interest
Period, as being the interest rate(s)
quoted in the London interbank market for the offering of
deposits in sterling for a period equal
to that Interest Period.
"Licence"
means the public electricity supply licence granted by the
Secretary of State to YEG under
Section 6(I)(c) of the Act as modified or supplemented from time
to time and, if any such
licence is split by or with the consent of the Director General
into more than one new licence,
each such new licence.
"Licence Holder"
means at any time a member of the Group which then holds a
Licence.
"Loan"
means, the principal amount of each borrowing by a Borrower under
this Agreement or the
principal amount outstanding of that borrowing.
"Majority Banks"
means, at any time, Banks:-
(a) whose participations in the Loans then outstanding
aggregate more than 662/3 per cent.
of all the Loans then outstanding; or
(b) if there are no Loans then outstanding, whose Commitments
then aggregate more than
662/3 per cent. of the Total Commitments; or
(c) if there are no Loans then outstanding and the Total
Commitments have been reduced
to nil, whose Commitments aggregated more than 662/3 per cent. of
the Total
Commitments immediately before the reduction.
"Mandatory Cost"
means the cost imputed to the Banks of compliance with the
Mandatory Liquid Assets
requirements of the Bank of England and the requirements of the
Financial Services Authority
expressed as a rate per annum and determined in accordance with
Schedule 3.
"Margin"
means:-
(a) in respect of Facility A:
(i) for the period from the date of this Agreement to (and
including) the Facility A
Term Date, 0.275 per cent. per annum; and
(ii) thereafter, 0.32 per cent. per annum; and
(b) in respect of Facility B and Facility C:
(i) if Debt is less that 65 per cent. of Capitalisation, 0.3
per cent. per annum; and
(ii) otherwise, 0.325 per cent. per annum,
such changes in the Margin to be effected in accordance with
Clause 9.4 (Margin adjustment).
"Material Adverse Effect"
means a material adverse effect on:
(a) the ability of YPG to comply, from time to time, with its
obligations under
Clause 16.17 (Financial covenants);
(b) the ability of any Borrower to meet its payment
obligations under the Finance
Documents; or
(c) in respect of Clauses 15.5 (Non-conflict), 15.10
(Litigation), 15.11 (Licence), 16.15
(Licence), 16.18 (Licence undertakings), 17.11 (Licence), 17.12
(Pooling and
Settlement Agreement) and 17.13 (Compliance with the Act) only,
the ability of any
Borrower to meet any of its other material obligations under the
Finance Documents.
"Net Interest Payable"
means, in respect of any Relevant Period, Interest Payable plus
any dividends payable on the
Preferred Securities less Interest Receivable for that Relevant
Period.
"Novation Agreement"
means an agreement substantially in the form of Part II of
Schedule 5.
"Novation Certificate"
means a certificate substantially in the form of Part I of
Schedule 5.
"Original Group Accounts"
means the audited consolidated accounts of the Group for the year
ended 31st March, 1998.
"Party"
means a party to this Agreement.
"Permitted Borrower"
means:
(a) in relation to Facility A or Facility B, YPG; and
(b) in relation to Facility C, any Borrower.
"Permitted Security Interest"
means any Security Interest:
(a) arising pursuant to an order of attachment or injunction
restraining disposal of assets
or similar legal process which is contested by YPG or any of its
Subsidiaries in good
faith or created in favour of a plaintiff or defendant in any
action of the court or
tribunal before whom such action is brought as security for costs
or expenses where
YPG or one of its Subsidiaries is prosecuting or defending such
action in the bona fide
interests of the Group;
(b) arising by operation of law or contained in a contract
for the sale of goods or supply of
services entered into in the ordinary course of business of the
company creating the
same or which is a pledge over or assignment of documents of
title, insurance policies
and sale contracts in relation to commercial goods created or
made in the ordinary
course of business to secure the purchase price of goods or
indebtedness to finance
such purchase price;
(c) over or affecting (1) any asset acquired by a member of
the Group after the date hereof
and subject to which such asset is acquired or (2) any asset of
any company which
becomes a member of the Group after the date hereof, where such
Security Interest is
created prior to the date on which such company becomes a member
of the Group,
provided that in each case:
(i) the principal amount secured by such Security Interest is
not increased either
as a result of such acquisition or such company becoming a member
of the
Group or thereafter and, when aggregated with such other Security
Interests
under this paragraph (c), does not exceed (POUND)15,000,000 (or
its equivalent in any
other currency or currencies); or
(ii) that Security Interest is discharged within 180 days of
such acquisition or such
company becoming a member of the Group;
(d) which is a Security Interest (a "Substitute Security
Interest") which replaces any
Permitted Security Interest and which secures an amount not
exceeding the principal
amount secured by such Permitted Security in such circumstances
when such
Permitted Security Interest will be released as a consequence of
such Substitute
Security Interest being granted;
(e) arising in connection with any cash management or netting
arrangements made
between any banks or financial institutions and any member or
members of the Group;
(f) created prior to the date of this Agreement (including,
without limitation, any existing
Security Interest in favour of the European Investment Bank)
provided the principal
amount secured by such Security Interest shall not be increased
after the date of this
Agreement;
(g) arising out of title retention provisions in a supplier's
standard conditions of supply of
goods acquired by any member of the Group in the ordinary course
of business;
(h) over assets and/or (where such assets comprise
substantially the whole of the assets of
the owner thereof) shares or the like in the owner of such assets
securing borrowings
incurred to finance the cost of developing (or acquiring and
developing) such assets
(and/or securing any indebtedness in respect of hedging actual or
projected exposure in
respect of these borrowings) where such borrowings are Project
Finance Borrowings;
(i) created under or pursuant to, or in accordance or
connection with, the terms of any
pooling and settlement agreement (including, without limitation,
the Pooling and
Settlement Agreement) or pooling and settling arrangements of the
electricity supply
industry or any transactions or arrangements entered into in
connection with the
management of risks relating thereto;
(j) securing indebtedness not otherwise permitted to be
secured by Security Interests
provided that the aggregate principal amount of the indebtedness
so secured under this
paragraph (j) shall not at any time exceed (POUND)10,000,000 or
(if higher) 2 per cent. of
Adjusted Share Capital and Reserves; or
(k) to the creation or subsistence of which the Majority
Banks at any time consent in
writing.
"Pooling and Settlement Agreement"
means an agreement dated 30th March 1990 (as amended and restated
at 22nd April, 1994),
made by YEG with The National Grid Company plc and others setting
out the rules and
procedures for the operation of an electricity trading pool and
of a settlement system and, while
the same has effect, the Initial Settlement Agreement dated 30th
March 1990.
"Preferred Securities"
means US$275,000,000 8.08% Trust Securities due June 2038.
"Principal Subsidiary"
means YH, YEG or a Subsidiary of YPG (not being a Subsidiary
falling within category (a) of
the definition of Project Finance Borrowings or any other
Subsidiary of YPG whose only
Borrowings are Project Finance Borrowings):
(a) whose (i) net assets or (ii) turnover represent 10 per
cent. or more of the net assets of
the Group or consolidated turnover of the Group respectively, in
each case as
calculated by reference to the then latest audited financial
statements of such
Subsidiary (consolidated in the case of a company which itself
has Subsidiaries and
which, in the normal course, prepares consolidated accounts) and
the then latest
audited consolidated financial statements of the Group; or
(b) to which is transferred all or substantially all of the
business, undertaking and assets of
a Subsidiary of YPG which immediately prior to such transfer is a
Principal
Subsidiary, whereupon the transferor Subsidiary shall immediately
become a Principal
Subsidiary and the transferee Subsidiary shall cease to be a
Principal Subsidiary under
the provisions of this sub-paragraph (b) (but without prejudice
to the provisions of
sub-paragraph (a) above), upon publication of its next audited
financial statements; or
(c) which is a Licence Holder.
"Project Finance Borrowings"
means any Borrowings to finance the ownership, acquisition,
construction, development and/or
operation of an asset:
(a) made by a single purpose company (whether or not a member
of the Group) whose
principal assets and business are constituted by the ownership,
acquisition,
construction, development and/or operation of an asset and whose
liabilities in respect
of the relevant financing are not directly or indirectly the
subject of a guarantee,
indemnity or any other form of assurance, undertaking or support
from any member of
the Group except as expressly referred to in paragraph (b)(iii)
below; or
(b) in respect of which the person or persons to whom such
Borrowings are or may be
owed by the relevant borrower (whether or not a member of the
Group) has or have no
recourse whatsoever to any member of the Group for the repayment
of or payment of
any sum relating to such Borrowings other than:
(i) recourse to the relevant borrower for amounts limited to
the aggregate cash
flow or net cash flow (other than historic cash flow or historic
net cash flow)
from such asset; and/or
(ii) recourse to such borrower for the purpose only of
enabling amounts to be
claimed in respect of those Borrowings in an enforcement of any
Security
Interest given by such borrower over such asset or the income,
cash flow or
other proceeds arising therefrom (or given by any shareholder or
the like in the
borrower over its shares or the like in the capital of the
relevant borrower) to
secure those Borrowings or any recourse referred to in (iii)
below, provided
that (A) the extent of such recourse to such borrower is limited
solely to the
amount of any recoveries made on any such enforcement, and (B)
such person
or persons are not entitled, by virtue of any right or claim
arising out of or in
connection with such Borrowings, to commence proceedings for the
winding
up or dissolution of the borrower or to appoint or procure the
appointment of
any receiver, trustee or similar person or officer in respect of
the borrower or
any of its assets (save for the assets the subject of such
Security Interest);
and/or
(iii) recourse to such borrower generally, or directly or
indirectly to a member of
the Group under any form of assurance, undertaking or support,
which
recourse is limited to a claim for damages (other than liquidated
damages and
damages required to be calculated in a specified way) for breach
of an
obligation (not being a payment obligation or any obligation to
procure
payment by another or an obligation to comply or to procure
compliance by
another with any financial ratios or other tests of financial
condition) by the
person against whom such recourse is available; or
(c) which the Agent (acting on the instructions of the
Majority Banks) shall have agreed
(acting reasonably) in writing to treat as a Project Finance
Borrowing for the purposes
of this Agreement.
"Qualifying Bank"
means a bank which:
(a) is a bank within the meaning of Section 840A of the
Income and Corporation Taxes
Act 1988;
(b) will be beneficially entitled to any interest to be paid
to it (as a Bank) under this
Agreement; and
(c) is within the charge to United Kingdom corporation tax as
respects such interest.
"Reference Banks"
means, subject to Clause 25.4 (Reference Banks), the Agent,
Deutsche Bank AG London and
National Westminster Bank Plc.
"Relevant Period"
means each period of 12 months ending on the date of the audited
consolidated accounts for
each of YPG's financial years and on the date of YPG's unaudited
consolidated accounts for the
first half of each of YPG's financial years.
"Repayment Date"
means the fifth anniversary of the date of this Agreement.
"Request"
means a request made by a Borrower for a Loan, substantially in
the form of Schedule 4.
"Rollover Loan"
means one or more Facility A Loans or Facility C Loans:
(a) whose proposed Drawdown Date is the same as the last day
of the Interest Period of
one or more existing Facility A Loans or Facility C Loans
borrowed under the same
Facility; and
(b) whose aggregate principal amount does not exceed the
aggregate outstanding principal
amount of all existing Facility A Loans or Facility C Loans under
the relevant Facility
whose Interest Period ends on that Drawdown Date.
"Secretary of State"
means the person from time to time holding office as the
Secretary of State for Trade and
Industry or any successor office thereto;
"Security Interest"
means any mortgage, pledge, lien (other than a lien arising by
operation of law), charge or
other security interest.
"Subordinated Debt"
means, at any time, the outstanding amount (including capitalised
interest) of Borrowings
which is:
(a) owing by YPG to any of its shareholders; and
(b) fully subordinated to the indebtedness of the Borrowers
under this Agreement by a
subordination agreement in an agreed form.
"Subsidiary"
means:-
(a) a subsidiary within the meaning of Section 736 of the
Companies Act 1985 as
amended by Section 144 of the Companies Act 1989; and
(b) unless the context otherwise requires, a subsidiary
undertaking within the meaning of
Section 21 of the Companies Act 1989.
"Syndication Period"
means the period from the date of this Agreement to the earlier
of:
(a) the date on which the Arrangers confirm to YPG that
syndication of the Facilities is
complete; and
(b) 30th September, 1998,
or, if New Banks (as defined in Clause 25.2 (Transfers by Banks))
have agreed to commit to
join the Facilities under the syndication by the Arrangers but
the relevant Novation Agreement
or Novation Certificate has not been effected by the end of the
Syndication Period, such longer
period as YPG shall agree with the Arrangers.
"Term Date"
means the date falling ten Business Days after the date of this
Agreement.
"Total Commitments"
means the aggregate for the time being of the Commitments, being
(POUND)330,000,000 at the date of
this Agreement.
"YEG Facility"
means the agreement dated on or about the date of this Agreement
and made between YEG, the
Arrangers, the Banks and the Agent.
1.2 Construction
(a) In this Agreement, unless the contrary intention appears,
a reference to:-
(i) an "agreed form" means, in the case of a document, the
form of that document agreed
between YPG and the Agent as evidenced by the initialling of that
document (or other
written confirmation of the same) by YPG and the Agent or their
respective legal
advisers;
"assets" includes present and future properties, revenues and
rights of every
description;
an "authorisation" includes an authorisation, consent, approval,
resolution, licence,
exemption, filing and registration;
a "month" is a reference to a period starting on one day in a
calendar month and
ending on the numerically corresponding day in the next calendar
month, except that, if
there is no numerically corresponding day in the month in which
that period ends, that
period shall end on the last day in that calendar month;
a "regulation" includes any regulation, rule, official directive,
request or guideline
(whether or not having the force of law but, if not having the
force of law, being of a
type with which a relevant person is accustomed to comply) of any
governmental body,
agency, department or regulatory, self-regulatory or other
authority or organisation;
"(POUND)" and "sterling" means the lawful currency for the time
being of the United
Kingdom; and
"tax" includes any present or future tax, levy, impost, duty,
charge, fee deduction or
withholding of any nature and whatever called by whomsoever and
wherever imposed,
levied, collected, withheld or assessed;
(ii) a provision of law is a reference to that provision as
amended or re-enacted;
(iii) a Clause or a Schedule is a reference to a clause of or a
schedule to this Agreement;
(iv) a person includes its successors and assigns;
(v) a Finance Document or another document is a reference to
that Finance Document or
other document as amended, novated or supplemented; and
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any
other Finance Document or in any
notice given under or in connection with any Finance Document has
the same meaning in that
Finance Document or notice as in this Agreement.
(c) The index to and the headings in this Agreement are for
convenience only and are to be ignored
in construing this Agreement.
1.3 Financial definitions
In this Agreement, Adjusted Share Capital and Reserves as at the
end of a Relevant Period, and
EBITDA, Interest Payable and Interest Receivable for any Relevant
Period shall be determined
or calculated by reference to the financial statements of YPG or
any other relevant entity for
that Relevant Period delivered to the Agent under Clause 16.2
(Financial information).
2. THE FACILITIES
2.1 Facilities
(a) Subject to the terms of this Agreement, the Banks agree:
(i) to make Facility A Loans (being revolving Loans up to the
Facility A Term Date and
thereafter being term Loans) available to YPG during the Facility
A Commitment
Period up to an aggregate principal amount not exceeding at any
time the aggregate of
the Facility A Commitments; and
(ii) to make Facility B Loans (being term Loans) available to
YPG during the Facility B
Commitment Period up to an aggregate principal amount not
exceeding at any time the
aggregate of the Facility B Commitments; and
(iii) to make Facility C Loans (being revolving Loans)
available to the Borrowers during
the Facility C Commitment Period up to an aggregate principal
amount not exceeding
at any time the aggregate of the Facility C Commitments.
(b) No Bank is obliged to lend more than the sum of its
Commitments or, in respect of any
Facility, its Commitment in respect of that Facility.
2.2 Nature of a Finance Party's rights and obligations
(a) The obligations of a Finance Party under the Finance
Documents are several. Failure of a
Finance Party to carry out those obligations does not relieve any
other Party of its obligations
under the Finance Documents. No Finance Party is responsible for
the obligations of any other
Finance Party under the Finance Documents.
(b) The rights of a Finance Party under the Finance Documents
are divided rights. A Finance
Party may, except as otherwise stated in the Finance Documents,
separately enforce those
rights.
2.3 Change of currency
(a) If more than one currency or currency unit denomination
are at the same time recognised by
the central bank of any country as the lawful currency of that
country, then:-
(i) any reference in the Finance Documents to, and any
obligations arising under the
Finance Documents in, the currency of that country shall be
translated into, or paid in,
the currency or currency unit of that country designated by the
Agent; and
(ii) any translation from one currency or currency unit to
another shall be at the official
rate of exchange or conversion rate recognised by the central
bank for the conversion
of that currency or currency unit into the other, rounded up or
down by the Agent
acting reasonably.
(b) If a change in any currency of a country occurs, this
Agreement will be amended to the extent
the Agent specifies to be necessary to reflect the change in
currency and to put the Banks and
the Borrowers in the same position, so far as possible, that they
would have been in if no
change in currency had occurred.
3. PURPOSE
(a) YPG shall apply each Loan made to it under Facility A or
Facility B towards its general
corporate purposes and those of its Subsidiaries including
(without limitation) prepayment of
the Existing Facilities. Each Borrower shall apply each loan
made to it under Facility C
towards its general corporate purposes and those of its
Subsidiaries.
(b) Without affecting the obligations of any Borrower in any
way, no Finance Party is bound to
monitor or verify the application of any Loan.
4. CONDITIONS PRECEDENT
4.1 Documentary conditions precedent
(a) A Borrower may not deliver a Request until the Agent has
notified that Borrower and the
Banks that it has received all the documents set out in Schedule
2 in respect of that Borrower in
the agreed form or, if not in the agreed form, in form and
substance satisfactory to the Agent;
and
(b) For the avoidance of doubt, a Borrower shall not be
prevented by paragraph (a) above from
delivering a Request solely because any other Borrower has not
satisfied the conditions
precedent relating to that Borrower in accordance with paragraph
(a) above.
4.2 Conditions precedent to first Loan
The obligation of each Bank to make the first Loan to any
Borrower is subject to the further
condition precedent that the Agent has received evidence
satisfactory to it that, on that first
Drawdown Date, the Existing Facilities have been (or will be
immediately following the making
of the first Loan) prepaid and cancelled in full.
4.3 Further conditions precedent
The obligation of each Bank to make any Loan is subject to the
further conditions precedent
that on both the date of the Request and the Drawdown Date:-
(a) the representations and warranties in Clause 15
(Representations and warranties) to be
repeated on those dates are correct in all material respects and
will be correct in all
material respects immediately after the Loan is made; and
(b) (i) (in the case of a Loan other than a Rollover
Loan) no Default;
(ii) in the case of a Rollover Loan, no Event of Default
is outstanding or would result from the making of the Loan.
5. DRAWDOWN
5.1 Commitment Period
(a) A Borrower may borrow a Loan under a Facility during the
relevant Commitment Period if the
Agent receives, not later than 10.00 a.m. on the Business Day
before the proposed Drawdown
Date a duly completed Request. Each Request is irrevocable.
(b) The undrawn amount (if any) of the Facility A Commitment
shall automatically be cancelled at
close of business on the Facility A Term Date. The undrawn
amount (if any) of the Facility B
Commitment shall automatically be cancelled in full on the Term
Date. The Facility C
Commitment shall automatically be cancelled in full on the
Repayment Date.
5.2 Completion of Requests
A Request will not be regarded as having been duly completed
unless:-
(a) the Drawdown Date is a Business Day (which, in the case
of Facility A, must fall on or
before the Facility A Term Date and, in the case of Facility B,
must fall on or before
the Term Date);
(b) the Facility under which the Loan is to be made is
specified;
(c) the proposed Borrower is a Permitted Borrower in relation
to the selected Facility;
(d) the principal amount of the Loan is a minimum of
(POUND)20,000,000 (in the case of
Facility A or Facility B) or (POUND)5,000,000 (in the case
of Facility C) and (in each case) is
an integral multiple of (POUND)5,000,000 or the balance of the
relevant undrawn
Commitment;
(e) the first Interest Period selected complies with Clause 8
(Interest Periods); and
(f) the payment instructions comply with Clause 10
(Payments).
Each Request must specify one Loan only, but a Borrower may,
subject to the other terms of
this Agreement, deliver more than one Request on any one day.
Unless otherwise agreed by the
Agent, the number of Loans outstanding, together with the number
of sterling-denominated
loans outstanding under the YEG Facility, shall not at any time
exceed ten.
5.3 Advance of Loan
(a) The Agent shall promptly notify each Bank of the details
of a requested Loan and the amount
of its participation in that Loan.
(b) Subject to the terms of this Agreement, each Bank shall
make its participation in a Loan
available to the Agent for each Borrower on the relevant Drawdown
Date.
(c) The amount of each Bank's participation in a Loan under a
Facility will be the proportion of
the Loan which its Commitment in relation to the relevant
Facility bears to the Total
Commitments in relation to that Facility on the proposed Drawdown
Date.
6. REPAYMENT
6.1 Facility A and term-out
The Borrower shall repay each Facility A Loan in full:-
(a) if the first Interest Period for that Facility A Loan
would end before the Facility A
Term Date, on the last day of the Interest Period for that
Facility A Loan; or
(b) otherwise, on the Facility A Repayment Date.
6.2 Facility B
YPG shall repay each Facility B Loan in full on the Repayment
Date.
6.3 Facility C
Each Facility C Loan shall be repaid in full by the Borrower to
whom it was made on the last
day of the Interest Period for that Facility C Loan.
6.4 Re-borrowing
(a) Amounts repaid under Facility A may be re-borrowed, in
accordance with the terms of this
Agreement, prior to the Facility A Term Date.
(b) Amounts repaid under Facility C may be re-borrowed, in
accordance with the terms of this
Agreement, prior to the Repayment Date.
(c) Subject to paragraphs (a) and (b) above, no amount repaid
under this Agreement may be re-
borrowed.
7. PREPAYMENT AND CANCELLATION
7.1 Voluntary prepayment
(a) Any Borrower may at any time, by giving not less than
five Business Days' prior notice (or
such shorter period as the Majority Banks may agree) to the
Agent, prepay any Loan made to it
multiple of (POUND)5,000,000).
(b) Any prepayment of a Loan under this Clause 7.1 shall be
applied pro rata against the
participations of each Bank participating in that Loan.
7.2 Voluntary cancellation
(a) The Borrowers (acting together) may, by giving not less
than five Business Days' prior notice
(or such lesser period as the Majority Banks may agree) to the
Agent, cancel the undrawn
amount of the Total Commitments in relation to one or more
Facilities in whole or in part (but,
if in part, in a minimum amount of (POUND)10,000,000 and an
integral multiple of (POUND)5,000,000).
(b) Any cancellation in part shall be applied pro rata
against the relevant Commitment of each
Bank.
7.3 Additional right of prepayment and cancellation
(a) If:-
(i) any Borrower is required to pay to a Finance Party any
additional amounts under
Clause 11 (Taxes); or
(ii) any Borrower is required to pay to a Finance Party any
amount under Clause 13
(Increased costs)
then, without prejudice to the obligations of the Borrowers under
those Clauses, the affected
Borrower or Borrowers may, whilst the relevant circumstances
continue, serve a notice of
prepayment and cancellation on that Bank through the Agent. In
that event:-
(i) each of the Commitments of that Bank shall be cancelled;
and
(ii) on the date falling five Business Days after the date of
service of the notice, each
Borrower shall prepay that Bank's participation in all the Loans
made to it.
(b) If interest on a Loan is being calculated in accordance
with Clause 12.2 (Alternative basis),
then, without prejudice to the obligations of the Borrowers under
that Clause, the affected
Borrower or Borrowers may, whilst the relevant circumstances
continue, serve a notice of
prepayment and cancellation on each Bank through the Agent. On
the date falling
five Business Days after the date of service of the notice, the
Borrower or Borrowers giving
such notice shall prepay all the Loans made to it (or them).
7.4 Miscellaneous provisions
(a) Any notice of prepayment and/or cancellation under this
Agreement is irrevocable.
(b) All prepayments under this Agreement shall be made
together with accrued interest on the
amount prepaid and, subject to Clause 22.2 (Other indemnities),
without premium or penalty.
(c) No prepayment or cancellation is permitted except in
accordance with the express terms of this
Agreement.
(d) No amount of a Commitment cancelled under this Agreement
may subsequently be reinstated.
No amount prepaid under Facility A on or after the Facility A
Term Date or under Facility B at
any time may subsequently be re-borrowed. Subject to the terms
of this Agreement, amounts
prepaid under Facility A before the Facility A Term Date may be
reborrowed and amounts
prepaid under Facility C at any time may be reborrowed.
8. INTEREST PERIODS
8.1 General
(a) Each Facility A Loan shall have one Interest Period only
unless that Interest Period would end
after the Facility A Term Date, in which case it shall have
successive Interest Periods.
(b) Each Facility B Loan shall have successive Interest
Periods.
(c) Each Facility C Loan shall have one Interest Period only.
(d) (i) Any Interest Period for a Facility A Loan which
would otherwise end during the week
preceding, or extend beyond, the Facility A Repayment Date shall
be of such duration
that it shall end on the Facility A Repayment Date.
(ii) Any Interest Period for a Facility B Loan or a Facility C
Loan which would otherwise
end during the week preceding, or extend beyond, the Repayment
Date shall be of such
duration that it shall end on the Repayment Date.
8.2 Selection
(a) A Borrower may select an Interest Period for a Loan in
either the relevant Request or, if (in the
case of a Facility A Loan after the Facility A Term Date or a
Facility B Loan) the Loan has
been borrowed, a notice received by the Agent not later than
11.00 a.m. on the Business Day
before the commencement of that Interest Period. Each Interest
Period for a Loan will
commence on its Drawdown Date or (in the case of a Facility A
Loan after the Facility A Term
Date or a Facility B Loan which (in either case) has already been
borrowed) the expiry of its
preceding Interest Period.
(b) Subject to the following provisions of this Clause 8,
each Interest Period will be either an
approved duration or an optional duration as so selected under
paragraph (a) above.
In this Clause 8:-
"approved duration" means one, two, three or six months; and
"optional duration" means any other period agreed by the Banks.
(c) If a Borrower fails to select an Interest Period for an
outstanding Facility A Loan after the
Facility A Term Date or a Facility B Loan in accordance with
paragraph (a) above, that
Interest Period will, subject to the other provisions of this
Clause 8, be three months.
(d) No Interest Period for a Facility A Loan may extend
beyond the Facility A Repayment Date.
No Interest Period for a Facility B Loan or a Facility C Loan may
extend beyond the
Repayment Date.
(e) The Borrowers may not select an Interest Period in excess
of one month during the Syndication
Period.
8.3 Selection of an optional duration
(a) If a Borrower selects an Interest Period of an optional
duration, it may also select an Interest
Period of an approved duration to apply if the selection of an
optional duration becomes
ineffective in accordance with paragraph (b) below.
(b) If:-
(i) a Borrower requests an Interest Period of an optional
duration; and
(ii) the Agent notifies that Borrower not later than 10.30
a.m. on the first Business Day of
that Interest Period that matching deposits are not available to
the Reference Banks in
the London interbank market to fund the Loan for that Interest
Period,
the Interest Period for that Loan shall be the alternative period
so specified or, in the absence of
any alternative selection, one month.
8.4 Non-Business Days
If an Interest Period would otherwise end on a day which is
not a Business Day, that Interest
Period shall instead end on the next Business Day in that
calendar month (if there is one) or the
preceding Business Day (if there is not).
8.5 Consolidation and splitting
(a) Notwithstanding Clause 8.2 (Selection), if YPG so
requests at any time after the Facility A
Term Date, the Facility A Loans outstanding after the Facility A
Term Date shall be
consolidated and/or split in accordance within the directions of
YPG.
(b) Notwithstanding Clause 8.2 (Selection), the first
Interest Period for each Facility B Loan shall
end on the same day as the current Interest Period for any other
Facility B Loan. On the last
day of those Interest Periods, those Loans shall be consolidated
and treated as one Loan.
(c) YPG may, subject to Clause 2.1(b) (Facilities) , in any
notice selecting an Interest Period for
an outstanding Facility B Loan under Clause 8.2 (Selection),
direct that the Facility B Loan in
question shall, at the beginning of that Interest Period be
divided into (and thereafter be treated
for all purposes under this Agreement as) two Facility B Loans in
such amount each being a
minimum of (POUND)25,000,000 and an integral multiple of
(POUND)5,000,000 as YPG shall specify and on
the first day of the Interest Period to which that notice relates
those Facility B Loans shall be so
divided.
8.6 Other adjustments
The Agent and any Borrower may enter into such other arrangements
as they may agree for the
adjustment of Interest Periods and the consolidation and/or
splitting of Facility A Loans (after
the Facility A Term Date and the Facility B Loans. Any such
arrangements shall be notified to
the relevant Banks by the Agent and shall be binding on them.
8.7 Notification
The Agent shall notify each relevant Party of the duration of
each Interest Period promptly
after ascertaining its duration.
9. INTEREST
9.1 Interest rate
The rate of interest on each Loan for each of its Interest
Periods is the rate per annum
determined by the Agent to be the aggregate of the applicable:-
(a) Margin;
(b) LIBOR; and
(c) Mandatory Cost.
9.2 Due dates
Except as otherwise provided in this Agreement, accrued interest
on each Loan is payable by
the relevant Borrower on the last day of each Interest Period for
that Loan and also, if the
Interest Period is longer than 6 months, on the date falling 6
months after the first day of that
Interest Period.
9.3 Default interest
(a) If a Borrower fails to pay any amount payable by it under
this Agreement, it shall forthwith on
demand by the Agent pay interest on the overdue amount from the
due date up to the date of
actual payment, as well after as before judgment, at a rate (the
"default rate") determined by
the Agent to be 1 per cent. per annum above the rate which would
have been payable if the
overdue amount had, during the period of non-payment, constituted
a Loan for such successive
Interest Periods of such duration as the Agent may determine
(each a "Designated Interest
Period").
(b) The default rate will be determined by the Agent on each
Business Day or the first day of, or
two Business Days before the first day of, the relevant
Designated Interest Period, as
appropriate.
(c) If the default rate is to be calculated by reference to
LIBOR and no rates are being quoted on
the Telerate Screen or the Reuters Screen and the Agent
determines that deposits of the overdue
amount are not at the relevant time being made available by the
Reference Banks to leading
banks in the London interbank market, the default rate will be
determined by reference to the
cost of funds to the Agent from whatever sources it may select.
(d) Default interest will be compounded at the end of each
Designated Interest Period.
9.4 Margin adjustment
The Margin shall be determined by reference to the most recently
delivered certificate under
Clause 16.2(c) (Financial information). If that certificate
shows that a change in the applicable
Margin is required, that change shall take effect within three
Business Days of the delivery of
that certificate to the Agent for all Loans which are outstanding
or which are to be made. That
Margin shall apply until the next change in the Margin following
delivery of a certificate under
Clause 16.2(c) (Financial information) which shows that a further
change in the Margin is
required.
9.5 Notification
The Agent shall promptly notify each relevant Party of each
determination of each rate of
interest under this Agreement.
10. PAYMENTS
10.1 Place
All payments under the Finance Documents by a Borrower or a Bank
shall be made to the
Agent to its account at such office or bank in the U.K. as it may
notify to that Borrower or
Bank for this purpose.
10.2 Funds
Payments under the Finance Documents to the Agent shall be made
for value on the due date at
such times and in such funds as the Agent may specify as being
customary at the time for the
settlement of transactions in sterling.
10.3 Distribution
(a) Each payment received by the Agent under the Finance
Documents for another Party shall,
subject to paragraphs (b) and (c) below, be made available by the
Agent to that Party by
payment (on the date and in the currency and funds of receipt) to
its account with such bank in
the principal financial centre of the country of the relevant
currency as it may notify to the
Agent for this purpose by not less than five Business Days' prior
notice.
(b) The Agent may apply any amount received by it for a
Borrower in or towards payment (on the
date and in the currency and funds of receipt) of any amount due
from a Borrower under this
Agreement or in or towards the purchase of any amount of any
currency to be so applied.
(c) Where a sum is to be paid under this Agreement to the
Agent under the Finance Documents for
another Party, the Agent is not obliged to pay that sum to that
Party until it has established that
it has actually received that sum. The Agent may, however,
assume that the sum has been paid
to it in accordance with this Agreement and, in reliance on that
assumption, make available to
that Party a corresponding amount. If the sum has not been made
available but the Agent has
paid a corresponding amount to another Party, that Party shall
refund the corresponding
amount within three Business Days of demand, together with
interest on that amount from the
date of payment to the date of receipt, calculated at a rate
determined by the Agent to reflect its
cost of funds.
10.4 Currency
(a) Amounts payable in respect of costs, expenses and taxes
and the like are payable in the
currency in which they are incurred.
(b) Any other amount payable under the Finance Documents is,
except as otherwise provided in the
Finance Documents, payable in sterling.
10.5 Set-off and counterclaim
All payments made by a Borrower under the Finance Documents shall
be made without set-off
or counterclaim.
10.6 Non-Business Days
(a) If a payment under the Finance Documents is due on a day
which is not a Business Day, the
due date for that payment shall instead be the next Business Day
in the same calendar month (if
there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any
principal under this Agreement
interest is payable on that principal at the rate payable on the
original due date.
10.7 Partial payments
(a) If the Agent receives a payment insufficient to discharge
all the amounts then due and payable
by the Borrowers under this Agreement, the Agent shall apply that
payment towards the
obligations of the Obligors under this Agreement in the following
order:-
(i) first, in or towards payment pro rata of any unpaid fees,
costs and expenses of the
Agent under this Agreement;
(ii) secondly, in or towards payment pro rata of any accrued
interest due but unpaid under
this Agreement;
(iii) thirdly, in or towards payment pro rata of any principal
due but unpaid under this
Agreement; and
(iv) fourthly, in or towards payment pro rata of any other sum
due but unpaid under the
Finance Documents.
(b) The Agent shall, if so directed by all the Banks, vary
the order set out in sub-paragraphs (a)(ii)
to (iv) above.
(c) Paragraphs (a) and (b) above will override any
appropriation made by a Borrower.
11. TAXES
11.1 Gross-up
Subject to Clause 11.4 (Exceptions from gross-up), each payment
to be made by a Borrower
under this Agreement shall be made free and clear of and without
deduction or withholding
(whether for or on account of tax or otherwise) unless the
relevant Borrower is required by law
to make such a payment subject to such deduction or withholding
in respect of any taxes
imposed by laws of the United Kingdom or any federation or
association of sovereign states of
which the United Kingdom is a member ("Relevant Taxes"). If any
Relevant Tax or amounts
in respect of Relevant Tax must be deducted, or any other
deductions must be made, from any
amounts payable or paid by a Borrower, or paid or payable by the
Agent to a Bank, under the
Finance Documents, that Borrower shall (subject as provided in
this Clause) increase the sum
payable to the extent necessary to ensure that, after the making
of such deduction or
withholding, the relevant Bank receives and retains (free from
any liability in respect of any
such deduction or withholding) a net sum equal to the sum which
it would have received and so
retained had no such deduction or withholding been made or
required to be made.
11.2 Tax receipts
Within 30 days after paying any sum from which it is required by
law to make any deduction
or withholding, the relevant Borrower shall deliver to the Agent
for the relevant Bank evidence
satisfactory to that Bank of that deduction, withholding or
payment and (where remittance is
required) of the remittance thereof to the relevant taxing or
other authority (a receipt by the
relevant taxing or other authority being deemed to be such
evidence).
11.3 Tax credits
If a Borrower makes a payment under Clause 11.1 (Gross-up) for
the account of a Bank and
that Bank determines that it has received or been granted a
credit against or relief or remission
for, or repayment of, any tax paid or payable by it in respect of
or calculated with reference to
the deduction or withholding under Clause 11.1 (Gross-up) that
Bank shall, to the extent that it
can do so without prejudice to the retention of the amount of
such credit, relief, remission or
repayment, pay to that Borrower such amount as that Bank
determines is attributable to such
deduction or withholding under Clause 11.1 (Gross-up) and which
will leave that Bank (after
such payment) in no better or worse position than it would have
been in if that Borrower had
not been required to make such deduction or withholding under
Clause 11.1 (Gross-up).
Nothing in this Clause 11.3 shall interfere with the right of a
Bank to arrange its tax affairs in
whatever manner it thinks fit nor oblige a Bank to disclose any
information relating to its tax
affairs or any computations in respect thereof.
11.4 Exceptions from gross-up
(a) If:
(i) a Bank is not or ceases to be a Qualifying Bank; and
(ii) as a result a Borrower is required to deduct or withhold
United Kingdom income tax in
respect of payments of interest to be made by that Borrower to
that Bank under this
Agreement,
then that Borrower shall not be liable to pay under Clause 11.1
(Gross-up) in respect of any
such payment of interest any amount in excess of the amount it
would have been obliged to pay
if that Bank were a Qualifying Bank provided that this Clause
11.4 shall not apply if, after the
date of this Agreement any change occurs in, or in the official
interpretation or application of,
any relevant law or the practice of the United Kingdom Inland
Revenue and as a result thereof
that Bank is not or ceases to be a Qualifying Bank.
(b) The obligation of a Borrower to pay an additional amount
under Clause 11.1 (Gross-up) shall
not apply to the extent that the tax deducted is tax on the
overall net income of a Bank save to
the extent that such tax is in respect of the relevant payment
from which the deduction must be
made.
11.5 Notification
If at any time after the date of this Agreement a Bank is aware
that it is not or will cease to be a
Qualifying Bank (for whatever reason), it shall promptly notify
the Borrowers through the
Agent.
12. MARKET DISRUPTION
12.1 Absence of quotations
If LIBOR is to be determined by reference to the Reference Banks
but a Reference Bank does
not supply an offered rate by 11.30 a.m. on the Drawdown Date,
the applicable LIBOR shall,
subject to Clause 12.2 (Market disruption), be determined on the
basis of the quotations of the
remaining Reference Banks.
12.2 Market disruption
If:
(a) LIBOR is to be determined by reference to the Reference
Banks but no, or only one,
Reference Bank supplies a rate by 11.30 a.m. on the Drawdown Date
or the Agent
otherwise determines that, by reason of circumstances affecting
the London Interbank
Market generally and not specific to the Bank or Banks concerned,
adequate and fair
means do not exist for ascertaining LIBOR; or
(b) the Agent receives notification from Banks whose
participations in a Loan exceed
50 per cent. of that Loan that, by reason of circumstances
affecting the London
Interbank Market generally and not specific to the Bank or Banks
concerned:-
(i) matching deposits will not be available to them in the
London interbank market
in the ordinary course of business to fund their participations
in that Loan for
the relevant Interest Period; or
(ii) the cost to them of matching deposits in the London
interbank market would be
in excess of LIBOR for the relevant Interest Period,
the Agent shall promptly notify each Borrower and the relevant
Banks of the fact and
that this Clause 12 is in operation.
12.3 Alternative basis
(a) If a notification under Clause 12.2 (Market disruption)
applies to a Loan which has not been
made:
(i) that Loan shall still be made;
(ii) the first Interest Period of that Loan shall be one
month; and
(iii) interest in respect of that Loan shall be calculated in
accordance with paragraph (b)
below.
(b) If a notification under Clause 12.2 (Market disruption)
applies to a Loan which is made under
paragraph (a) above or which is outstanding then, notwithstanding
any other provision of this
Agreement:
(i) within five Business Days of receipt of the notification,
the Borrower to which that was
made and the Agent shall enter into negotiations for a period of
not more than 30 days
with a view to agreeing an alternative basis for determining the
rate of interest and/or
funding applicable to that Loan and/or any other Loans;
(ii) if no alternative basis is agreed, the Agent shall
certify on or before the last day of the
Interest Period to which the notification relates an alternative
basis for maintaining that
Loan, which shall be binding on the relevant Borrower; and
(iii) any such alternative basis may include an alternative
method of fixing the interest rate,
alternative Interest Periods or alternative currencies but it
must reflect the cost to the
Banks of funding the Loan from whatever sources they may select
plus the Margin
plus any Mandatory Cost.
(c) The Agent shall consult with the relevant Borrower or
Borrowers at least once every 14 days
after the occurrence and during the continuance of the
circumstances specified in the foregoing
provisions of this Clause 12 with a view to reverting to the
normal provisions for the
determination of the rates of interest applicable to any Loan.
13. INCREASED COSTS
13.1 Increased costs
(a) Subject to Clause 13.2 (Exceptions), the Borrowers shall
within five Business Days of a
demand by a Bank pay to that Bank the amount of any increased
cost incurred by it or its
holding company as a result of any change in or change in the
interpretation or application of
any law or regulation (including any law or regulation relating
to taxation, or reserve asset,
special deposit, cash ratio, liquidity or capital adequacy
requirements or any other form of
banking or monetary control). Any such demand shall set out in
reasonable detail the
calculation and the cause of the amounts claimed and contain
confirmation that the affected
Bank is taking the same approach in relation to the majority of
its other facilities of a similar
nature.
(b) In this Agreement "increased cost" means:
(i) an additional cost incurred by a Bank or its holding
company as a result of that Bank
having entered into, or performing, maintaining or funding its
obligations under, this
Agreement; or
(ii) that portion of an additional cost incurred by a Bank or
its holding company in that
Bank making, funding or maintaining all or any advances comprised
in a class of
advances formed by or including the Loans made or to be made
under this Agreement
as is attributable to it or its holding company in that Bank
making, funding or
maintaining the Loans; or
(iii) a reduction in any amount payable to a Bank or its
holding company or the effective
return to a Bank or its holding company under this Agreement or
on its capital; or
(iv) the amount of any payment made by a Bank or its holding
company, or the amount of
any interest or other return foregone by a Bank or its holding
company, calculated by
reference to any amount received or receivable by a Bank under
this Agreement.
13.2 Exceptions
Clause 13.1 (Increased costs) does not apply to any increased
cost:-
(a) compensated for by the payment of the Mandatory Cost;
(b) compensated for by the operation of Clause 11 (Taxes) or
which would have been
compensated under that Clause but for the operation of Clause
11.4 (Exceptions from
gross-up);
(c) attributable to any change in the rate of tax on the
overall net income of a Bank;
(d) occurring as a result of any negligence or default of a
Bank, including, without
limitation, a breach by a Bank of any fiscal, monetary or capital
adequacy limit
imposed on it by any law or regulation; or
(e) occurring as a result of a transfer or novation of a
Bank's rights or obligations under
this Agreement; or
(f) any increased cost attributable to any implementation of
the proposals contained in any
of:-
(i) the statement of the Basle Committee on Banking
Regulations and Supervisory
Practices dated July 1988 and entitled "International Convergence
of Capital
Measurement and Capital Standards"; or
(ii) the EC Solvency Ratio Directive, EC Own Funds Directive,
or EC Capital
Adequacy Directive or any law, regulation, rule, official
directive, request or
guideline (whether or not having the force of law) of any
governmental body,
central bank, agency, department, regulatory, self-regulatory or
other authority
in any jurisdiction, implementing, applying or supplementing any
of them with
which a Bank complies or is required to comply,
in each case as published before the date of this Agreement
unless it results from any
change in, or change in the interpretation of or application of,
that statement, Directive,
law, regulation, rule, official directive, request or guideline
after the date of this
Agreement.
14. ILLEGALITY AND MITIGATION
14.1 Illegality
If it is or becomes unlawful in any jurisdiction for a Bank to
give effect to any of its obligations
as contemplated by this Agreement or to fund or maintain its
participation in any Loan, then:-
(a) that Bank may notify each Borrower through the Agent
accordingly; and
(b) (i) each Borrower shall forthwith prepay the
participations of that Bank in all or
part of the Loans made to it to the extent necessary to avoid the
relevant
illegality, together with accrued interest on that portion of
those Loans; and
(ii) the undrawn Commitments of that Bank shall be reduced to
such amount as
would be lawful or (if no such amount would be lawful) to zero,
in each case, on or before the last day before the relevant
unlawfulness takes effect.
14.2 Mitigation
If circumstances arise which would, or would on the giving of
notice, result in:-
(a) any additional amounts becoming payable under Clause 11
(Taxes); or
(b) any amount becoming payable under Clause 13 (Increased
costs); or
(c) any prepayment, early payment or cancellation under
Clause 14.1 (Illegality),
then, without limiting the obligations of the Borrowers under
this Agreement and without
prejudice to the terms of Clauses 11 (Taxes), 13 (Increased
costs) and 14.1 (Illegality), the
affected Finance Party may, in consultation with the relevant
Borrower or Borrowers, take
such steps as may reasonably be open to it to mitigate or remove
such circumstance, including
(without limitation) the transfer of its rights and obligations
under this Agreement to another
branch or another bank or financial institution acceptable to the
Borrowers, unless to do so
would (in the sole opinion of the affected Finance Party) be
prejudicial to it.
15. REPRESENTATIONS AND WARRANTIES
15.1 Representations and warranties
Each Borrower makes the representations and warranties set out in
this Clause 15
(Representations and warranties) to each Finance Party.
15.2 Status
(a) It is a limited liability company, duly incorporated and
validly existing under the laws of
England;
(b) each member of the Group has the power to own its assets
and carry on its business as it is
being conducted;
(c) (i) YH is the direct, wholly owned, Subsidiary of
YPG; and
(ii) YEG is the direct, wholly owned, Subsidiary of YH; and
(d) Each Licence Holder has been duly licensed and authorised
by the Secretary of State under
Section 6(I)(c) of the Act for the generation, distribution
and/or supply of electricity and the
Licence is in full force and effect.
15.3 Powers and authority
It has the power to enter into and perform, and has taken all
necessary action to authorise the
entry into, performance and delivery of, the Finance Documents to
which it is or will be a party
and the transactions contemplated by those Finance Documents.
15.4 Legal validity
Except as stated in any qualifications as to matters of law in
any legal opinion referred to in
Schedule 2, each Finance Document to which it is or will be a
party constitutes, or when
executed in accordance with its terms will constitute, its legal,
valid and binding obligation.
15.5 Non-conflict
(a) The entry into and performance by it of, and the
transactions contemplated by, the Finance
Documents do not and will not conflict with the Licence in any
material respect.
(b) The entry into and performance by it of, and the
transactions contemplated by, the Finance
Documents do not and will not:-
(i) conflict with any law or regulation or authorisation or
judicial or official order in any
material respect; or
(ii) conflict with the constitutional documents of any member
of the Group; or
(iii) conflict with the Licence or any document which is
binding upon any member of the
Group or any asset of any member of the Group to an extent or in
a manner which
would have a Material Adverse Effect.
15.6 No default
No Event of Default or Default is outstanding which has not been
remedied or waived or would
result from the making of any Loan.
15.7 Authorisations
All authorisations which are necessary for the entry into,
performance and validity of, and the
transactions contemplated by, the Finance Documents have been
obtained or effected (as
appropriate) and are in full force and effect.
15.8 Accounts
On and from the date that audited consolidated accounts of
the Group are first delivered to the
Agent under Clause 16.2 (Financial information), the audited
consolidated accounts of the
Group most recently delivered to the Agent:-
(a) have been prepared in accordance with accounting
principles and practices generally
accepted in the United Kingdom; and
(b) (in conjunction with the notes thereto) give a true and
fair view of the consolidated
financial condition of the Group as at the date to which they
were drawn up.
15.9 Material adverse change
Since the date as at which the most recent audited
consolidated financial statements of YPG
were stated to be prepared, there has been no material adverse
change in the financial condition
of Group taken as a whole.
15.10 Litigation
Save as disclosed in writing to the Agent prior to the date of
this Agreement no litigation or
arbitration is current or, to its knowledge, pending or has been
threatened in writing, which are
likely to be determined adversely to it and, if so determined,
might reasonably be likely to have
a Material Adverse Effect.
15.11 Licence
(a) The Licence is in full force and effect and there exist
no material breaches of the terms of the
Licence.
(b) There are no circumstances in existence which would be
likely to lead the Director General or
the Secretary of State to seek to revoke the Licence except in
each case where the relevant
event or circumstances would not have a Material Adverse Effect.
(c) YEG has not breached:
(i) any requirement of the Act or any regulations made
thereunder; or
(ii) any other statutory requirement or any final order or
confirmed provisional order in
each case made under the Act; or
(iii) any undertaking given by it to the Director General or
the Secretary of State in relation
to the conduct of its business as a generator of electricity or
as a public electricity
supplier (as the case may be),
the consequence of which is reasonably likely to have a Material
Adverse Effect.
(d) Neither the Director General nor the Secretary of State
has given notice to revoke a Licence.
(e) Save as described in writing to the Agent no amendment of
any of the terms of a Licence has
been made or proposed which is reasonably likely to have a
Material Adverse Effect.
15.12 Information
To the best of the knowledge of the Borrowers after due enquiry:
(a) the factual information contained in Sections 4, 5 and 6
of the Information
Memorandum (other than the information referred to in paragraph
(b) below) was true
in all material respects as at its date;
(b) the factual information contained in the Information
Memorandum which has been
taken from the SEC filing dated 3rd June, 1998 was true in all
material respects as at
the date of that SEC filing;
(c) all estimates and projections contained in the
Information Memorandum were prepared
by the Borrowers based upon assumptions that the Borrowers
considered to be
reasonable as at the date of their preparation and on the basis
of information available
to the Borrowers provided by third parties the Borrowers
believed, in each case, to be
reliable, except that no representation is made that these
estimates or projections will
be achieved;
(d) the Information Memorandum did not omit as at its date
any information which renders
the information contained in it untrue or misleading in any
material respect; and
(e) as at the date of the Credit Agreement, nothing has
occurred since the date of the
Information Memorandum which renders the factual information
contained in
Sections 4, 5 and 6 of the Information Memorandum untrue or
misleading in any
material respect.
15.13 Times for making representations and warranties
The representations and warranties set out in this Clause 15
(Representations and warranties):-
(a) are made on the date of this Agreement; and
(b) (other than the representations in Clauses 15.2(d)
(Status), 15.5(a) (Non-conflict), 15.9
(Material adverse change), 15.10 (Litigation), 15.11(c) to (e)
(Licence) and 15.12
(Information)) are deemed to be repeated by each Borrower on the
date of each
Request made by it and the first day of each Interest Period of a
Loan made to it with
reference to the facts and circumstances then existing but as if
the words in
Clause 15.6 (No default) "or Default" had been deleted.
16. UNDERTAKINGS
16.1 Duration
The undertakings in this Clause 16 (Undertakings) remain in force
from the date of this
Agreement for so long as any amount is or may be outstanding
under this Agreement or any
Commitment is in force.
16.2 Financial information
YPG shall supply to the Agent (with sufficient copies for all the
Banks):-
(a) as soon as the same are available (and in any event
within 180 days of the end of each
of its financial years), the audited consolidated accounts of the
Group for that financial
year;
(b) as soon as the same are available (and in any event
within 90 days of the end of the
first half-year of each of its financial years), the unaudited
consolidated accounts of the
Group for that half-year; and
(c) together with the accounts specified in paragraphs (a)
and (b) above, a certificate
signed by two of its directors on its behalf setting out in
reasonable detail computations
establishing compliance with Clause 16.17 (Financial covenants);
and
(d) as soon as the same are available (and in any case within
60 days of the end of each
relevant financial quarter of each of its financial years), the
unaudited quarterly
accounts required to be registered with the U.S. Securities and
Exchange Commission,
and all such accounts supplied under paragraphs (a) or (b) above
shall be prepared in
accordance with accounting principles generally accepted in the
United Kingdom.
16.3 Information - Miscellaneous
Each Borrower shall supply to the Agent (with sufficient copies
for all the Banks, if the Agent
so requests):-
(a) all documents despatched by it to its creditors generally
or (if it is not a close company
within the meaning of Section 414 of the Income and Corporation
Taxes Act, 1988) to
its shareholders generally (or any class of its shareholders
generally) at the same time
as they are despatched;
(b) promptly upon becoming aware of them, details of any
litigation, arbitration or
administrative proceedings which are current, threatened in
writing or pending, and
which if they had been current or threatened in writing on the
date of this Agreement
would have resulted in the representation in Clause 15.10
(Litigation) being incorrect
in any material respect; and
(c) promptly upon becoming aware that any modifications to
the Licence are being
proposed by the Director General or the Secretary of State,
reasonable details thereof,
to be updated from time to time to reflect any changes, provided
that such details shall
be required to be reported to the Agent hereunder, only to the
extent that if such
proposed modifications were to be made to the Licence, compliance
with such
modification or undertaking would have a Material Adverse Effect.
16.4 Notification of Default
Each Borrower shall notify the Agent of any Default or Event of
Default affecting it (and the
steps, if any, being taken to remedy it) promptly upon its
occurrence.
16.5 Compliance certificates
Each Borrower shall supply to the Agent:-
(a) together with the accounts specified in Clause 16.2(a)
(Financial information); and
(b) promptly if the Agent so requests (but no more often than
twice in a calendar year
(excluding the certificate under paragraph (a) above)),
a certificate signed by two of its directors on its behalf
certifying that no Default is outstanding
or, if a Default is outstanding, specifying the Default and the
steps, if any, being taken to
remedy it.
16.6 Authorisations
Each Borrower shall:-
(a) use all reasonable endeavours to obtain, maintain and
comply in all material respects
with the terms of; and
(b) (if requested) supply certified copies to the Agent of,
any authorisation required under any law or regulation to enable
it to perform its obligations
under, or for the validity or admissibility in evidence of, any
Finance Document.
16.7 Pari passu ranking
Each Borrower shall procure that its obligations under the
Finance Documents do and will rank
at least pari passu with all its other present and future
unsecured obligations, except for taxes,
national insurance contributions, local or water authority rates
and employee remuneration and
benefits which are mandatorily preferred by law applying to
companies generally or by the Act.
16.8 Negative pledge
(a) No Borrower shall, and YPG shall procure that no
Subsidiary will, create or permit to subsist
any Security Interest on any of its assets.
(b) (i) YPG shall not create or permit to subsist any
Security Interest on any of its shares in
or loans to YH; and
(ii) YH shall not create or permit to subsist any Security
Interest in any of its shares in or
loans to YEG.
(c) Paragraph (a) does not apply to Permitted Security
Interests or to Security Interests arising
under the Act.
16.9 Transactions similar to security
Neither YPG nor YH shall:-
(a) sell, transfer or otherwise dispose of any of its assets
on terms whereby it is or may be
leased to or re-acquired or acquired by a member of the Group or
any of its related
entities; or
(b) (except as permitted under Clause 16.10 (Disposals))
sell, transfer or otherwise
dispose of any of its receivables on recourse terms, except for
the discounting of bills
or notes in the ordinary course of trading,
in circumstances where the transaction is entered into primarily
as a method of raising finance
or of financing the acquisition of an asset.
16.10 Disposals
(a) YPG will not sell, transfer or otherwise dispose of or
cease to exercise direct control over any
of its shares in YH.
(b) YH will not sell, transfer or otherwise dispose of or
cease to exercise direct control over any of
its shares in YEG.
(c) Neither YPG nor YH will dispose of all or any material
part of its other assets.
(d) YEG shall not, and shall procure that no other Subsidiary
of YEG shall, either in a single
transaction or in a series of transactions, whether related or
not and whether voluntarily or
involuntarily, sell, transfer, grant or lease or otherwise
dispose of all or any substantial part of
the assets of YEG and its Subsidiaries.
Paragraphs (c) and (d) above do not apply to:
(i) sales, conveyances, transfers or other disposals in the
ordinary course of business on
arm's length terms or otherwise at market value; or
(ii) sales, conveyances, transfers or other disposals the
aggregate book value of which is at
the time of the final such disposal in any financial year 7.5 per
cent. or less of Adjusted
Share Capital and Reserves (less the Preferred Securities); or
(iii) disposals to another member of the Group provided that
such disposals shall only be
made to:
(A) another Borrower;
(B) a wholly owned Subsidiary of a Borrower;
(C) another person who immediately after such disposal
becomes a wholly owned
subsidiary of a Borrower; or
(D) another member of the Group if the interest of YEG in
that transferee is no
less than its interest in the transferor; or
(iv) disposals of assets in exchange for other assets similar
as to type and value or where
all or a substantial part of the net proceeds of such disposal
are used within 60 days of
the disposal (or such longer period as the Majority Banks may
agree) in the acquisition
of such assets; or
(v) disposals of cash raised or borrowed or temporary
investments representing surplus
funds; or
(vi) the expenditure of cash in the ordinary course of
business including, without limitation,
for the repayment of any debt or the acquisition of any asset; or
(vii) the payment of any dividend or distribution whatsoever
and whether extraordinary or
special in nature or otherwise, in each case, in cash or in
specie; or
(viii) disposals on normal commercial terms of old and/or
obsolete plant or equipment; or
(ix) any distribution of the surplus assets of a Subsidiary
(not being a Principal Subsidiary)
in a liquidation or winding up not involving insolvency; or
(x) disposals (with or without recourse) of receivables at
arm's length and on normal
commercial terms (or by way of securitisation or monetisation)
provided that:
(A) the majority of the proceeds from that disposal are used
to repay the Facilities
in the following order:
first, Facility A;
second, any other Loan owing by YPG;
third, any other Facility designated by YPG; and
(B) that disposal would not of itself be reasonably likely to
result in a breach of
YPG's obligations under Clause 16.17 (Financial covenants) either
at the time
of the disposal or following the disposal; or
(xi) the sale at arm's length of any of the shares in Ionica
PLC owned by YEG; or
(xii) the sale at arm's length or otherwise at market value of
the power generation assets
owned by members of the Group; or
(xiii) with the prior written consent of the Majority Banks.
16.11 Change of business
Unless the Agent (acting on the instructions of the Majority
Banks) otherwise agrees or the
change arises by operation of law, YPG shall not permit the Group
as a whole to make any
substantial change in the nature of its business as a distributor
and/or supplier of electricity
within its authorised area which, when taken together, would
account for more than 10 per
cent. of the consolidated gross assets and/or turnover of the
Group.
16.12 Restriction on Borrowings
(a) No member of the Group will incur or have outstanding any
Borrowings other than:
(i) under the Finance Documents;
(ii) for the purpose of refinancing the Facilities in full on
the date on which such
Borrowings are first utilised;
(iii) for the purpose of refinancing part of the Facility so
long as all utilisations of such
Borrowings shall be applied first to repay outstanding Facility A
Loans (and if any
portion of the Borrowings referred to above remains unused after
the Facility A Loans
have been repaid or prepaid in full, an amount of the Facility B
Commitments equal to
the amount of that portion shall be cancelled);
(iv) Borrowings owing by one member of the Group to another
member of the Group;
(v) Subordinated Debt;
(vi) in the case of YPG and its Subsidiaries, Borrowings
secured under paragraph (c) of the
definition of Permitted Security Interests up to the amount set
out in sub-
paragraph (c)(i) of that definition unless that Security Interest
is to be discharged under
sub-paragraph (c)(ii) of that definition;
(vii) in the case of YPG and its Subsidiaries, Borrowings under
any recourse disposal of
receivables where that disposal is permitted under Clause
16.10(d)(x) (Disposals);
(viii) Project Finance Borrowings;
(ix) in the case of YPG and its Subsidiaries (other than YEG
and its Subsidiaries) any
Borrowings existing at the date of this Agreement or any
refinancing of those
Borrowings, provided that the principal amount of those
Borrowings is not increased;
(x) with the prior written consent of the Majority Banks; or
(xi) any other Borrowings of YEG or any of its Subsidiaries in
an amount which, after
deducting Investments of YEG or any of its Subsidiaries do not
exceed in aggregate
(POUND)700,000,000 (including under the Finance Documents and the
YEG Facility).
(b) YH shall not guarantee any Borrowings of Yorkshire Power
Finance Limited.
16.13 Environmental Matters
The Borrowers will ensure that each member of the Group will:
(a) obtain all necessary Environmental Licences and comply in
all material respects with
(i) the terms and conditions of all Environmental Licences
applicable to it and (ii) all
other applicable Environmental Laws in each case where failure to
do so would have a
Material Adverse Effect;
(b) promptly upon receipt of the same, notify the Agent of
any claim, notice or other
communication served on it in respect of any alleged breach of or
corrective or
remedial obligation or liability under any Environmental Law
which would or would be
likely to or (in the case of an alleged breach), if
substantiated, would have a Material
Adverse Effect.
16.14 Company distributions etc.
Subject to:
(a) compliance with all applicable laws, directives and
consents (including, without
limitation, the Act and the conditions of the Licence) by YEG or,
as the case may be,
the relevant Subsidiary; and
(b) retention of cash by YEG or, as the case may be, the
relevant Subsidiary to meet its
projected cash requirements,
YEG shall not enter into any agreement prohibiting it from, and
YPG will use all reasonable
endeavours to procure that each other member of the Group does
distribute, lend or otherwise
transfer so as to be received directly or indirectly by any
Borrower, such cash from time to time
as may be required from time to time to meet and provide for any
Borrower's payment
obligations under the Finance Documents, save to the extent to
which funds for that purpose
are provided from another source.
16.15 Licence
(a) To the extent that there would otherwise be a Material
Adverse Effect, YEG shall, and shall
ensure that each Licence Holder shall, comply with all terms and
conditions of the Licence and
with the requirements of all laws, rules, regulations, orders and
other requirements for the time
being of the Secretary of State and the Director General
applicable to each Licence Holder with
which it is obliged to comply; and
(b) YEG will promptly notify the Agent of any amendments to
the Licence occurring after the date
of this Agreement (other than those of a minor and/or technical
nature).
16.16 Change of basis
If, at any time, YPG changes or proposes to change in any
material respect the basis upon
which the Group's audited annual consolidated accounts are
prepared (whether or not by reason
of a change in accounting standards or otherwise), then:-
(a) YPG shall promptly notify the Agent of the change or
proposed change;
(b) subject to paragraph (c) below, YPG shall calculate the
financial covenants under
Clause 16.17 (Financial covenants) on the basis of the accounting
standards used for
the Original Group Accounts and shall provide appropriate
calculations with the
certificates delivered under Clause 16.2(c) (Financial
information) to show the
reconciliations and adjustments that have been made as a result
of the change in
accounting standards; and
(c) if YPG so requests at any time:
(i) YPG and the Agent shall enter into discussions for a
period of not more than
45 days with a view to agreeing the amendments which would be
required to
be made to Clause 16.17 (Financial Covenants) to procure that, so
far as
possible, the Borrowers and the Banks are in no worse position
than they
would have been in if the change in accounting standards had not
occurred;
(ii) any agreement between YPG and the Agent under sub-
paragraph (i) above
shall be, with the prior consent of the Majority Banks, binding
on all the
Parties; and
(iii) if no agreement is reached under sub-paragraph (i) above,
then YPG's auditors
shall certify the amendments which would be required to be made
to this
Agreement to place YPG, the Borrowers and the Banks in the same
position
they would have been in if the change had not taken place; a
certificate of the
auditors in accordance with the above will, in the absence of
manifest error, be
binding on all the Parties.
16.17 Financial covenants
YPG shall procure that:
(a) the ratio of Debt of the Group to Capitalisation does not
at any time exceed 75 per
cent.; and
(b) EBITDA for any Relevant Period shall not be less than
2.00 times Net Interest Payable
for that Relevant Period.
16.18 Licence undertakings
YEG shall promptly supply to the Agent:
(a) copies of all notices or orders served on it by the
Director General or the Secretary of
State in exercise of the powers conferred on him by the Act to
the extent the same
might reasonably be expected to have a Material Adverse Effect;
(b) details of any references relating to it to the
Monopolies and Mergers Commission
after the date of this Agreement; and
(c) details of the exercise by the Secretary of State or the
Director General of the powers
conferred on them by the Fair Trading Act 1973, the Competition
Act 1980 and/or
Section 12 of the Act relating to it or any business carried on
by it and regulated
thereby.
17. DEFAULT
17.1 Events of Default
Each of the events set out in Clauses 17.2 (Non-payment) to 17.16
(Expropriation) (inclusive)
is an Event of Default (whether or not caused by any reason
whatsoever outside the control of
any Borrower or any other person).
17.2 Non-payment
A Borrower does not pay any amount payable by it under the
Finance Documents on the due
date at the place at and in the currency in which it is expressed
to be payable and, but only if
such failure is due solely to administrative error or technical
difficulties, such non payment is
not remedied within 3 Business Days.
17.3 Breach of other obligations
(a) YPG does not comply with the provisions of Clause 16.17
(Financial covenants).
(b) A Borrower does not comply with any provision of the
Finance Documents (other than those
referred to in paragraph (a) above or Clause 17.2 (Non-payment))
and such default, if capable
of remedy, is not remedied within 25 days after the earlier of
the date upon which that
Borrower became aware of the same and the date on which that
Borrower receives notice from
the Agent requiring remedy.
17.4 Misrepresentation
A representation, warranty or statement made or repeated in or in
connection with any Finance
Document or in any document delivered by or on behalf of a
Borrower under or in connection
with any Finance Document is incorrect in any respect when made
or deemed to be made or
repeated.
17.5 Cross-default
(a) Any Borrowings of a member of the Group are not paid when
due; or
(b) an event of default howsoever described occurs under any
document relating to Borrowings of
a member of the Group and any financier to which those Borrowings
are owed takes any step
to improve its commercial position, whether by charging a fee not
provided for in the original
document evidencing those Borrowings, or seeking more onerous
provisions in that document;
or
(c) any Borrowings of a member of the Group become
prematurely due and payable or are placed
on demand as a result of an event of default under the document
relating to those Borrowings,
and the aggregate principal amount of Borrowings or amounts
referred to in paragraphs (a) to
(c) (inclusive) above exceeds (POUND)15,000,000 or its equivalent
in any other currency.
17.6 Administration
(a) A Borrower or any Principal Subsidiary passes an
effective resolution to present an application
for an administration order; or
(b) an application for an administration order in relation to
a Borrower or a Principal Subsidiary is
presented to the court unless the application is being contested
in good faith on reasonable
grounds by appropriate proceedings; or
(c) an administration order is made in relation to a Borrower
or any Principal Subsidiary.
17.7 Insolvency
A Borrower or any Principal Subsidiary has any voluntary
arrangement proposed in relation to
it under Section 1 of the Insolvency Act 1986, or enters into any
other composition, scheme of
arrangement, compromise or arrangement involving such company and
its respective creditors
generally (other than for the purposes of reconstruction or
amalgamation or other similar
arrangement).
17.8 Insolvency proceedings
(a) A Borrower or any Principal Subsidiary passes an
effective resolution for its winding up other
than a resolution previously approved in writing by the Agent; or
(b) a petition for the winding up of a Borrower or any
Principal Subsidiary is presented to the
court and either:
(i) such company does not apply to the court within 30 days
after the presentation of such
petition requesting the court to refuse such petition; or
(ii) it does so apply but such petition is not refused by such
court within 60 days after such
application for the refusal of such petition or any such company
becomes subject to a
winding up order,
provided that nothing in this Clause 17.8 shall apply to a
solvent reconstruction, amalgamation
or reorganisation of a Principal Subsidiary.
17.9 Appointment of receivers and managers
Any liquidator, trustee in bankruptcy, compulsory manager,
receiver, administrative receiver,
administrator or the like is appointed in respect of a Borrower
or any Principal Subsidiary or
any material part of its assets or undertaking or the directors
of a Borrower or a Principal
Subsidiary request the appointment of a liquidator, trustee in
bankruptcy, compulsory manager,
receiver, administrative receiver, administrator or the like
(other than an appointment to which
the Agent has approved pursuant to Clause 17.8 (Insolvency
proceedings)).
17.10 Unlawfulness
It is or becomes unlawful for a Borrower to perform any of its
obligations under the Finance
Documents.
17.11 Licence
(a) Any modification (other than a modification which is of a
minor or technical nature) is made to
the terms and conditions of the Licence and such modification
would be expected to have a
Material Adverse Effect; or
(b) the Licence (excluding any second tier supply licence) is
surrendered by the Licence Holder or
is revoked by the Secretary of State or a notice from the
Secretary of State is given to that
effect in accordance with its terms or it otherwise ceases to be
in full force and effect and, in
each case, the Licence is not replaced on substantially similar
terms except where such
surrender, cessation or revocation has been agreed between the
Company and the Secretary of
State and consented to by the Majority Banks and provided that
the giving of notice pursuant to
paragraph 3 of Part 1 of the Licence shall not be deemed to
constitute the revocation of the
Licence.
17.12 Pooling and Settlement Agreement
Any notice requiring YEG to cease to be a party to the Pooling
and Settlement Agreement is
given to YEG under clause 66.1.3 or 66.2.2 of the Pooling and
Settlement Agreement, or YEG
otherwise ceases to be a party to that agreement and the same has
a Material Adverse Effect,
unless YEG or any of its Subsidiaries enters into arrangements
which replace the Pooling and
Settlement Agreement for electricity trading and settlement
within the electricity industry and
those replacement arrangements do not have a Material Adverse
Effect.
17.13 Compliance with the Act
YEG fails to comply with a final order (within the meaning
of Section 25 of the Act) or with a
provisional order (within the meaning of that section) which has
been confirmed under that
section (and not since been revoked) or any provisions of the Act
detailing the rights, powers,
authorities, obligations and duties of the Secretary of State or
the Director General or the
manner in or time at which they are to be exercised, are repealed
or amended in a manner
which has (or is likely to have) a Material Adverse Effect.
17.14 Ownership of YPG
More than 50 per cent. of the ordinary voting shares in the
capital of YPG cease to be owned,
directly or indirectly, by American Electric Power Company Inc.
or New Century Energies,
Inc. (or their respective wholly owned Subsidiaries) taken
together.
17.15 Ownership of YH and YEG
(a) YH is not or ceases to be a direct or indirect wholly
owned Subsidiary of YPG.
(b) YEG is not or ceases to be a direct or indirect wholly
owned Subsidiary of YH.
17.16 Expropriation
All or a substantial part of the assets of a Borrower shall be
seized, renationalised or
expropriated by any governmental authority.
17.17 Acceleration
On and at any time after the occurrence of an Event of Default
while the same is continuing,
unremedied or unwaived the Agent may (and, shall if so directed
by the Majority Banks), by
notice to each of the Borrowers:
(a) cancel the Total Commitments; and/or
(b) demand that all or part of the Loans, together with
accrued interest and all other
amounts accrued under this Agreement be immediately due and
payable, whereupon
they shall become immediately due and payable; and/or
(c) demand that all or part of the Loans be payable on
demand, whereupon they shall
immediately become payable on demand by the Agent acting on the
instructions of the
Majority Banks.
18. THE AGENT AND THE ARRANGERS
18.1 Appointment and duties of the Agent
(a) Each Finance Party (other than the Agent) irrevocably
appoints the Agent to act as its agent
under and in connection with the Finance Documents.
(b) Each Party appointing the Agent irrevocably authorizes
the Agent on its behalf to:
(i) perform the duties and to exercise the rights, powers and
discretions that are
specifically delegated to it under or in connection with the
Finance Documents,
together with any other incidental rights, powers and
discretions; and
(ii) execute each Finance Document expressed to be executed by
the Agent on that Party's
behalf.
(c) The Agent shall have only those duties which are
expressly specified in the Finance
Documents. Those duties are solely of a mechanical and
administrative nature.
18.2 Role of the Arrangers
Except as otherwise provided in the Finance Documents, the
Arrangers have no obligations of
any kind to any other Finance Party under or in connection with
any Finance Document.
18.3 Relationship
The relationship between the Agent and the other Finance Parties
is that of agent and principal
only. Nothing in this Agreement constitutes the Agent as trustee
or fiduciary for any other
Party or any other person and the Agent need not hold in trust
any moneys paid to it for a Party
or be liable to account for interest on those moneys.
18.4 Majority Banks' instructions
(a) The Agent will be fully protected if it acts in
accordance with the instructions of the Majority
Banks in connection with the exercise of any right, power or
discretion or any matter not
expressly provided for in the Finance Documents. Any such
instructions given by the Majority
Banks will be binding on all the Banks. In the absence of such
instructions the Agent may act
as it considers to be in the best interests of all the Banks.
(b) The Agent is not authorized to act on behalf of a Bank
(without first obtaining that Bank's
consent) in any legal or arbitration proceedings relating to any
Finance Document.
18.5 Delegation
The Agent may act under the Finance Documents through its
personnel and agents.
18.6 Responsibility for documentation
Neither the Agent nor the Arrangers are responsible to any other
Finance Party for:-
(a) the execution, genuineness, validity, enforceability or
sufficiency of any Finance
Document or any other document;
(b) the collectability of amounts payable under any Finance
Document; or
(c) the accuracy of any statements (whether written or oral)
made in or in connection with
any Finance Document (including the Information Memorandum).
18.7 Default
(a) The Agent is not obliged to monitor or enquire as to
whether or not a Default has occurred.
The Agent will not be deemed to have knowledge of the occurrence
of a Default. However, if
the Agent receives notice from a Party referring to this
Agreement, describing the Default and
stating that the event is a Default, it shall promptly notify the
Banks.
(b) The Agent may require the receipt of security
satisfactory to it whether by way of payment in
advance or otherwise, against any liability or loss which it will
or may incur in taking any
proceedings or action arising out of or in connection with any
Finance Document before it
commences these proceedings or takes that action.
18.8 Exoneration
(a) Without limiting paragraph (b) below, the Agent will not
be liable to any other Finance Party
for any action taken or not taken by it under or in connection
with any Finance Document,
unless directly caused by its gross negligence or wilful
misconduct.
(b) No Party may take any proceedings against any officer,
employee or agent of the Agent in
respect of any claim it might have against the Agent or in
respect of any act or omission of any
kind (including gross negligence or wilful misconduct) by that
officer, employee or agent in
relation to any Finance Document.
18.9 Reliance
The Agent may:-
(a) rely on any notice or document believed by it to be
genuine and correct and to have
been signed by, or with the authority of, the proper person;
(b) rely on any statement made by a director or employee of
any person regarding any
matters which may reasonably be assumed to be within his
knowledge or within his
power to verify; and
(c) engage, pay for and rely on legal or other professional
advisers selected by it (including
those in the Agent's employment and those representing a Party
other than the Agent).
18.10 Credit approval and appraisal
Without affecting the responsibility of any Borrower for
information supplied by it or on its
behalf in connection with any Finance Document, each Bank
confirms that it:-
(a) has made its own independent investigation and assessment
of the financial condition
and affairs of each Borrower and its related entities in
connection with its participation
in this Agreement and has not relied exclusively on any
information provided to it by
the Agent or the Arrangers in connection with any Finance
Document; and
(b) will continue to make its own independent appraisal of
the creditworthiness of each
Borrower and its related entities while any amount is or may be
outstanding under the
Finance Documents or any Commitment is in force.
18.11 Information
(a) The Agent shall promptly forward to the person concerned
the original or a copy of any
document which is delivered to the Agent by a Party for that
person.
(b) The Agent shall promptly supply a Bank with a copy of
each document received by the Agent
under Clause 4 (Conditions precedent) upon the request and at the
expense of that Bank.
(c) Except where this Agreement specifically provides
otherwise, the Agent is not obliged to
review or check the accuracy or completeness of any document it
forwards to another Party.
(d) Except as provided above, the Agent has no duty:-
(i) either initially or on a continuing basis to provide any
Bank with any credit or other
information concerning the financial condition or affairs of any
Borrower or any
related entity of any Borrower whether coming into its possession
before, on or after
the date of this Agreement; or
(ii) unless specifically requested to do so by a Bank in
accordance with a Finance
Document, to request any certificates or other documents from any
Borrower.
18.12 The Agent and the Arrangers individually
(a) If it is also a Bank, each of the Agent and each Arranger
has the same rights and powers under
this Agreement as any other Bank and may exercise those rights
and powers as though it were
not the Agent or an Arranger.
(b) Each of the Agent and each Arranger may:-
(i) carry on any business with a Borrower or its related
entities;
(ii) act as agent or trustee for, or in relation to any
financing involving, a Borrower or its
related entities; and
(iii) retain any profits or remuneration in connection with its
activities under this
Agreement or in relation to any of the foregoing.
(c) In acting as the Agent, the agency division of the Agent
will be treated as a separate entity from
its other divisions and departments. Any information acquired by
the Agent which, in its
opinion, is acquired by it otherwise than in its capacity as the
Agent may be treated as
confidential by the Agent and will not be deemed to be
information possessed by the Agent in
its capacity as such.
(d) Each Borrower irrevocably authorizes the Agent to
disclose to the other Finance Parties any
information which is received by it in its capacity as the Agent.
(e) The Agent may deduct from any amount received by it for
the Banks pro rata any unpaid fees,
costs and expenses of the Agent incurred by it in connection with
the Finance Documents.
18.13 Indemnities
(a) Without limiting the liability of any Borrower under the
Finance Documents, each Bank shall
forthwith on demand indemnify the Agent for that Bank's
proportion of any liability or loss
incurred by the Agent in any way relating to or arising out of
its acting as the Agent, except to
the extent that the liability or loss arises directly from the
Agent's gross negligence or wilful
misconduct.
(b) A Bank's proportion of the liability or loss set out in
paragraph (a) above is the proportion
which its participation in the Loans (if any) bear to all the
Loans outstanding on the date of the
demand. However, if there are no Loans outstanding on the date
of demand, then the
proportion will be the proportion which its Commitment bears to
the Total Commitments at the
date of demand or, if the Total Commitments have been cancelled,
bore to the Total
Commitments immediately before being cancelled.
18.14 Compliance
(a) The Agent may refrain from doing anything which might, in
its opinion, constitute a breach of
any law or regulation or be otherwise actionable at the suit of
any person, and may do anything
which, in its opinion, is necessary or desirable to comply with
any law or regulation of any
jurisdiction.
(b) Without limiting paragraph (a) above, the Agent need not
disclose any information relating to
any Borrower or any of its related entities if the disclosure
might, in the opinion of the Agent,
constitute a breach of any law or regulation or any duty of
secrecy or confidentiality or be
otherwise actionable at the suit of any person.
18.15 Resignation of Agent
(a) Notwithstanding its irrevocable appointment, the Agent
may resign by giving notice to the
Banks and the Borrowers, in which case the Agent may forthwith
appoint one of its Affiliates
as successor Agent or, failing that, the Majority Banks may
(after consultation with YPG)
appoint a successor Agent.
(b) If the appointment of a successor Agent is to be made by
the Majority Banks but they have not,
within 30 days after notice of resignation, appointed a successor
Agent which accepts the
appointment, the retiring Agent may (after consultation with YPG)
appoint a successor Agent.
(c) The resignation of the Agent and the appointment of any
successor Agent will both become
effective only upon the successor Agent notifying all the Parties
that it accepts the appointment.
On giving the notification, the successor Agent will succeed to
the position of the Agent and the
term "Agent" will mean the successor Agent.
(d) The retiring Agent shall, at its own cost, make available
to the successor Agent such documents
and records and provide such assistance as the successor Agent
may reasonably request for the
purposes of performing its functions as the Agent under this
Agreement.
(e) Upon its resignation becoming effective, this Clause 18
shall continue to benefit the retiring
Agent in respect of any action taken or not taken by it under or
in connection with the Finance
Documents while it was the Agent, and, subject to paragraph (d)
above, it shall have no further
obligation under any Finance Document.
(f) The Majority Banks may, by notice to the Agent, require
it to resign in accordance with
paragraph (a) above. In this event, the Agent shall resign in
accordance with paragraph (a)
above but it shall not be entitled to appoint one of its
Affiliates as successor Agent.
18.16 Banks
(a) The Agent may treat each Bank as a Bank, entitled to
payments under this Agreement and as
acting through its Facility Office(s) until it has received not
less than five Business Days notice
from a Bank to the contrary.
(b) Each Bank, on the date on which it becomes a party to
this Agreement, represents to the Agent
and the Borrowers that it is:
(i) either:
(A) not resident in the United Kingdom for United Kingdom tax
purposes; or
(B) a "bank" as defined in section 840A of the Income and
Corporation Taxes Act
1988 and resident in the United Kingdom; and
(ii) beneficially entitled to the principal and interest
payable by the Agent to it under this
Agreement,
and shall forthwith notify the Agent and YPG if either
representation ceases to be correct.
19. FEES
19.1 Arrangement fee
YPG shall, on the earlier of the date falling three Business Days
from the date of this
Agreement and the first Drawdown Date, pay to the Arrangers an
arrangement fee in the
amount agreed in the relevant Fee Letter. This fee shall be
distributed by the Arrangers among
the Banks in accordance with the arrangements agreed by the
Arrangers with the Banks prior to
the date of this Agreement.
19.2 Agent's fee
YPG shall pay to the Agent for its own account an agency fee in
the amount and on the dates
agreed in the relevant Fee Letter. The agency fee is payable for
so long as any amount is or
may be outstanding under this Agreement or any Commitment is in
force.
19.3 Commitment fee
(a) YPG shall pay to the Agent for each Bank a commitment fee
in the amount of:-
(i) 0.075 per cent. per annum on the undrawn, uncancelled
amount of that Bank's Facility
A Commitment during the Facility A Commitment Period; plus
(ii) 0.13 per cent. per annum (or, if Debt is less than 65 per
cent. of Capitalisation, 0.12
per cent. per annum) on the undrawn, uncancelled amount of that
Banks Facility C
Commitment during the Facility C Commitment Period.
(b) Accrued commitment fee is payable quarterly in arrear.
Accrued commitment fee shall also
payable to the Agent for the relevant Bank on the cancelled
amount of its Commitment at the
time any cancellation comes into effect.
(c) Any change in the commitment fee shall take effect at the
same time as any change in the
Margin under Clause 9.4 (Margin adjustment).
19.4 VAT
Any fee referred to in this Clause 19 is exclusive of any value
added tax or any other tax which
might be chargeable in connection with that fee. If any value
added tax or other tax is so
chargeable, it shall be paid by a Borrower at the same time as it
pays the relevant fee.
20. EXPENSES
20.1 Initial and special costs
YPG shall, within 10 days of a claim being made , pay the Agent
and the Arrangers the amount
of all reasonable costs and expenses (including, for paragraph
(a) below only, legal fees only
up to a maximum of as set out in the relevant Fee Letter)
properly incurred by any of them in
connection with:
(a) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in
this Agreement;
(ii) any other Finance Document (other than a Novation
Certificate) executed after
the date of this Agreement; and
(b) any amendment, waiver, consent or suspension of rights
(or any proposal for any of the
foregoing) requested by or on behalf of the Borrower or, in the
case of Clause 2.3
(Change of currency), the Agent, and relating to a Finance
Document or a document
referred to in any Finance Document.
20.2 Enforcement Costs
The Borrowers shall, within 10 days of demand, pay to each
Finance Party the amount of all
costs and expenses (including legal fees) incurred by it in
connection with the enforcement of,
or in preservation of any rights under, any Finance Document.
21. STAMP DUTIES
The Borrowers shall within 10 Business Days of a demand pay to a
Finance Party the amount
of any liability it incurs in respect of any United Kingdom
stamp, registration and similar tax
which is or becomes payable in connection with the entry into,
performance or enforcement of
any Finance Document.
22. INDEMNITIES
22.1 Currency indemnity
(a) If a Finance Party receives an amount in respect of a
Borrower's liability under the Finance
Documents or if that liability is converted into a claim, proof,
judgment or order in a currency
other than the currency (the "contractual currency") in which the
amount is expressed to be
payable under the relevant Finance Document:
(i) that Borrower shall indemnify that Finance Party as an
independent obligation against
any loss or liability arising out of or as a result of the
conversion;
(ii) if the amount received by that Finance Party, when
converted into the contractual
currency at a market rate in the usual course of its business is
less than the amount
owed in the contractual currency, that Borrower shall forthwith
on demand pay to that
Finance Party an amount in the contractual currency equal to the
deficit; and
(iii) that Borrower shall pay to that Finance Party forthwith
on demand any exchange costs
and taxes payable in connection with any such conversion.
(b) Each Borrower waives any right it may have in any
jurisdiction to pay any amount under the
Finance Documents in a currency other than that in which it is
expressed to be payable.
22.2 Other indemnities
(a) A Borrower shall, within 10 Business Days of a demand pay
to a Finance Party the amount of
any loss or liability which that Finance Party incurs as a
consequence of:
(i) the occurrence of any Event of Default;
(ii) the operation of Clause 17.17 (Acceleration); or
(iii) (other than by reason of negligence or default by a
Finance Party) a Loan not being
made after that Borrower has delivered a Request or a Loan (or
part of a Loan) not
being prepaid in accordance with a notice of prepayment.
That Borrower's liability in each case includes any loss or
expense on account of funds
borrowed, contracted for or utilised to fund any amount payable
under any Finance Document,
any amount repaid or prepaid or any Loan but excludes any loss of
margin.
(b) If any Finance Party receives or recovers any payment of
principal of a Loan or of an overdue
amount other than on the last day of the Interest Period relative
to that Loan or amount so
received or recovered, that Finance Party shall calculate the
difference between:
(i) the additional interest (excluding the Margin and
Mandatory Costs) which would have
been payable on the principal so received or recovered had it
been received or
recovered on the last day of the relevant Interest Period; and
(ii) the amount of interest which would have been payable to
that Finance Party on the last
day of that Interest Period in respect of the principal so
received or recovered if the
principal so received or recovered had been placed on deposit by
that Finance Party
earning interest at the Applicable Rate from (and including) the
Business Day of
receipt of that amount up to (but excluding) the last day of
applicable Interest Period.
If (i) is greater than (ii) then the Borrower to whom the
relevant Loan was made shall, within
five Business Days of a demand from the relevant Finance Party,
pay to that Finance Party an
amount equal to the difference.
23. EVIDENCE AND CALCULATIONS
23.1 Accounts
Accounts maintained by a Finance Party in connection with this
Agreement are prima facie
evidence of the matters to which they relate.
23.2 Certificates and determinations
Any certification or determination by a Finance Party of a rate
or amount under this Agreement
is prima facie evidence of the matters to which it relates.
23.3 Calculations
Interest (including any applicable Mandatory Cost), default
interest payable pursuant to Clause
9.3 (Default interest) and the fee payable under Clause 19.3
(Commitment fee) accrue from
day to day and are calculated on the basis of the actual number
of days elapsed and a year of
365 days.
24. AMENDMENTS AND WAIVERS
24.1 Procedure
(a) Subject to Clause 25.2 (Exceptions), any term of the
Finance Documents may be amended or
waived with the agreement of each of the Borrowers and the
Majority Banks. The Agent may
effect, on behalf of any Finance Party, an amendment or waiver
permitted under this Clause.
(b) The Agent shall promptly notify the other Parties of any
amendment or waiver effected under
paragraph (a) above, and any such amendment or waiver shall be
binding on all the Parties.
24.2 Exceptions
(a) An amendment or waiver which relates to:-
(i) the definition of "Majority Banks" in Clause 1.1
(Definitions);
(ii) an extension of the date for, or a decrease in an amount
or a change in the currency of,
any payment to that Bank under the Finance Documents (including
the Margin and any
fee payable under Clause 20.3 (Commitment Fee));
(iii) an increase in that Bank's Commitment;
(iv) a term of a Finance Document which expressly requires the
consent of that Bank; or
(v) Clause 2.2 (Nature of a Finance Party's rights and
obligations), Clause 25.1 (Transfers
by the Borrower), Clause 28 (Pro rata sharing) or this Clause 24,
is not binding unless all the Banks agree to it.
(b) An amendment or waiver which relates to the rights and/or
obligations of the Agent may not be
effected without the agreement of the Agent.
24.3 Waivers and remedies cumulative
The rights of each Finance Party under the Finance Documents:-
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the
general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a
waiver of that right.
25. CHANGES TO THE PARTIES
25.1 Transfers by Borrowers
No Borrower may assign, transfer, novate or dispose of any of, or
any interest in, its rights
and/or obligations under the Finance Documents.
25.2 Transfers by Banks
(a) A Bank (the "Existing Bank") may, subject to paragraph
(b) below, at any time assign,
transfer or novate any of its Commitment and/or any of its rights
and/or obligations under this
Agreement to another bank or financial institution (the "New
Bank").
(b) (i) After the Syndication Period, a transfer of a
Commitment must be in a minimum
amount of at least (POUND)5,000,000;
(ii) no transfer of a Commitment shall take place unless the
Existing Bank simultaneously
transfers to the New Bank the same proportion of each other
Commitment and of its
commitment under the YEG Facility; and
(iii) the prior consent of YPG is required for any such
assignment, transfer or novation,
unless the New Bank is another Bank or an Affiliate of a Bank,
provided that no
consent of YPG is required during the Syndication Period if YPG
has been consulted
by the Arrangers on the approach to that New Bank.
(c) A transfer of obligations will be effective only if
either:-
(i) the obligations are novated in accordance with Clause
25.3 (Procedure for novations);
or
(ii) the New Bank confirms to the Agent and the Borrowers that
it undertakes to be bound
by the terms of this Agreement as a Bank in form and substance
satisfactory to the
Agent. On the transfer becoming effective in this manner the
Existing Bank shall be
relieved of its obligations under this Agreement to the extent
that they are transferred
to the New Bank.
(d) No Bank shall sub-participate any of its obligations
under this Agreement without the prior
written consent of YPG.
(e) On each occasion an Existing Bank assigns, transfers or
novates any of its Commitment and/or
any of its rights and/or obligations under this Agreement (other
than under the Novation
Agreement), the New Bank shall, on the date the assignment,
transfer and/or novation takes
effect, pay to the Agent for its own account a fee of (POUND)750.
(f) An Existing Bank is not responsible to a New Bank for:-
(i) the execution, genuineness, validity, enforceability or
sufficiency of any Finance
Document or any other document;
(ii) the collectability of amounts payable under any Finance
Document; or
(iii) the accuracy of any statements (whether written or oral)
made in or in connection with
any Finance Document.
(g) Each New Bank confirms to the Existing Bank and the other
Finance Parties that it:-
(i) has made its own independent investigation and assessment
of the financial condition
and affairs of each Borrower and its related entities in
connection with its participation
in this Agreement and has not relied exclusively on any
information provided to it by
the Existing Bank in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of
the creditworthiness of each
Borrower and its related entities while any amount is or may be
outstanding under the
Finance Documents or any Commitment is in force.
(h) Nothing in any Finance Document obliges an Existing Bank
to:-
(i) accept a re-transfer from a New Bank of any of the rights
and/or obligations assigned,
transferred or novated under this Clause; or
(ii) support any losses incurred by the New Bank by reason of
the non-performance by any
Borrower of its obligations under the Finance Documents or
otherwise.
(i) Any reference in this Agreement to a Bank includes a New
Bank, but excludes a Bank if no
amount is or may be owed to or by that Bank under this Agreement
and its Commitment has
been cancelled or reduced to nil.
25.3 Procedure for novations
(a) A novation is effected if:-
(i) the Existing Bank and the New Bank deliver to the
Facility Agent a duly completed
Novation Certificate and the Agent executes it; or
(ii) a Novation Agreement is executed by all the parties to
it.
(b) Each Party (other than the Existing Bank and the New
Bank) irrevocably authorizes the Agent
to execute any duly completed Novation Certificate on its behalf.
(c) To the extent that they are expressed to be the subject
of the novation in the Novation
Certificate or Novation Agreement
(i) the Existing Bank and the other Parties (the "existing
Parties") will be released from
their obligations to each other (the "discharged obligations");
(ii) the New Bank and the existing Parties will assume
obligations towards each other
which differ from the discharged obligations only insofar as they
are owed to or
assumed by the New Bank instead of the Existing Bank;
(iii) the rights of the Existing Bank against the existing
Parties and vice versa (the
"discharged rights") will be cancelled; and
(iv) the New Bank and the existing Parties will acquire rights
against each other which
differ from the discharged rights only insofar as they are
exercisable by or against the
New Bank instead of the Existing Bank,
all on the date of execution of the Novation Certificate or
Novation Agreement by the Agent or,
if later, the date specified in the Novation Certificate or
Novation Agreement.
25.4 Reference Banks
If a Reference Bank (or, if a Reference Bank is not a Bank, the
Bank of which it is an Affiliate)
ceases to be a Bank, the Agent shall (in consultation with the
Borrowers) appoint another Bank
or an Affiliate of a Bank to replace that Reference Bank.
25.5 Register
The Agent shall keep a register of all the Parties and shall
supply any other Party (at that
Party's expense) with a copy of the register on request.
26. DISCLOSURE OF INFORMATION
Any information supplied to a Finance Party pursuant to or in
connection with this Agreement
shall be held in confidence and shall not be disclosed by it to
any person (other than an Affiliate
of that Finance Party) without the prior written consent of the
Borrowers except:
(a) to that Finance Party's legal or other professional
advisers to the extent required for the
purposes of protecting its rights hereunder or by law or
regulation or pursuant to
applicable reporting requirements or any order of any court or to
bank supervisory
authorities or examining authorities unless it is or becomes a
matter of public
knowledge otherwise than as a result of a breach by it of its
obligations hereunder; or
(b) by the Arrangers to a financial institution during the
Syndication Period in connection
with the syndication of the Facilities, provided that YPG has
been consulted by the
Arrangers on the approach to that financial institution.
27. SET-OFF
A Finance Party may set off any matured obligation owed by
a Borrower under this Agreement
(to the extent beneficially owned by that Finance Party) against
any credit balance owed by that
Finance Party to a Borrower, regardless of the place of payment,
booking branch or currency
of either obligation. If the obligations are in different
currencies, a Finance Party may convert
either obligation at a market rate of exchange in its usual
course of business for the purpose of
the set-off.
28. PRO RATA SHARING
28.1 Redistribution
If any amount owing by a Borrower under the Finance Documents to
a Finance Party (the
"recovering Finance Party") is discharged by payment, set-off or
any other manner other than
through the Agent in accordance with Clause 10 (Payments) (a
"recovery"), then:-
(a) the recovering Finance Party shall, within three Business
Days, notify details of the
recovery to the Agent;
(b) the Agent shall determine whether the recovery is in
excess of the amount which the
recovering Finance Party would have received had the recovery
been received by the
Agent and distributed in accordance with Clause 10 (Payments);
(c) subject to Clause 28.3 (Exception), the recovering
Finance Party shall, within three
Business Days of demand by the Agent, pay to the Agent an amount
(the
"redistribution") equal to the excess;
(d) the Agent shall treat the redistribution as if it were a
payment by the Borrower
concerned under Clause 10 (Payments) and shall pay the
redistribution to the Finance
Parties (other than the recovering Finance Party) in accordance
with Clause 10.7
(Partial Payments); and
(e) after payment of the full redistribution, the recovering
Finance Party will be
subrogated to the portion of the claims paid under paragraph (d)
above, and that
Borrower will owe the recovering Finance Party a debt which is
equal to the
redistribution, immediately payable and of the type originally
discharged.
28.2 Reversal of redistribution
If under Clause 28.1 (Redistribution):-
(a) a recovering Finance Party must subsequently return a
recovery, or an amount
measured by reference to a recovery, to a Borrower; and
(b) the recovering Finance Party has paid a redistribution in
relation to that recovery,
each Finance Party shall, within three Business Days of demand by
the recovering Finance
Party through the Agent, reimburse the recovering Finance Party
all or the appropriate portion
of the redistribution paid to that Finance Party together with
interest on the amount to be
returned to the recovering Finance Party for the period whilst it
held the re-distribution.
Thereupon the subrogation in Clause 28.1(e) (Redistribution) will
operate in reverse to the
extent of the reimbursement.
28.3 Exceptions
(a) A recovering Finance Party need not pay a redistribution
to the extent that it would not, after
the payment, have a valid claim against the Borrower concerned in
the amount of the
redistribution pursuant to Clause 28.1(e) (Redistribution).
(b) A recovering Finance Party is not obliged to share with
any other Finance Party any amount
which the recovering Finance Party has received or recovered as a
result of taking legal
proceedings, if the other Finance Party had an opportunity to
participate in those legal
proceedings but did not do so or did not take separate legal
proceedings.
29. SEVERABILITY
If a provision of any Finance Document is or becomes illegal,
invalid or unenforceable in any
jurisdiction, that shall not affect:
(a) the validity or enforceability in that jurisdiction of
any other provision of the Finance
Documents; or
(b) the validity or enforceability in other jurisdictions of
that or any other provision of the
Finance Documents.
30. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and
this has the same effect
as if the signatures on the counterparts were on a single copy of
this Agreement.
31. NOTICES
31.1 Giving of notices
All notices or other communications under or in connection with
this Agreement shall be given
in writing or by telex or facsimile. Any such notice will be
deemed to be given as follows:
(a) if in writing, when delivered;
(b) if by telex, when despatched, but only if, at the time of
transmission, the correct
answerback appears at the start and at the end of the sender's
copy of the notice; and
(c) if by facsimile, when received,
provided that any notice or communication to be made hereunder
shall only be effective when
received and then only if the same is expressly marked for the
attention of the department or
office identified in Clause 31.2 (Addresses for notices) below.
However, a notice given in accordance with the above but received
on a non-working day or
after business hours in the place of receipt will only be deemed
to be given on the next working
day in that place.
31.2 Addresses for notices
(a) The address, telex number and facsimile number of each
Party (other than the Borrowers and
the Agent) for all notices under or in connection with the
Finance Documents are:-
(i) those notified by that Party for this purpose to the
Agent on or before it becomes a
Party; or
(ii) any other notified by that Party for this purpose to the
Agent by not less than five
Business Days notice.
(b) The address, telex number and facsimile number of YPG, YH
and YEG are:
Yorkshire Power Group Limited
Wetherby Road
Scarcroft
Leeds LS14 3HS
Telex: 55128
Facsimile: 0113 289 5682
Telephone: 0113 289 5602
Attention: Nick Dahlgreen
or such other as YPG, YH or YEG (as appropriate) may notify to
the other Parties by not less
than five Business Days notice.
(c) The address, telex number and facsimile number of the
Agent are:
336 Strand
London
WC2R 7HB
Telex: 299831 CIBLA
Facsimile: 0171 500 4482/3
Telephone: [0171 500 4247
Attention: Loans Agency
or such other as the Agent may notify to the other Parties by not
less than five Business Days'
notice.
(d) All notices to or from a Borrower shall be sent through
the Agent.
(e) The Agent shall, promptly upon request from any Party,
give to that Party the address, telex
number or facsimile number of any other party applicable at the
time for the purposes of this
Clause.
32. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
SCHEDULE 1
BANKS AND COMMITMENTS
Commitments
Banks
Facility A
Facility B
Facility C
(POUND)
(POUND)
(POUND)
Citibank, N.A.
15,423,197.50
13,366,771.17
5,141,065.82
Deutsche Bank AG London
15,423,197.49
13,366,771.17
5,141,065.83
The Bank of Tokyo-Mitsubishi, Ltd.
12,931,034.48
11,206,896.55
4,310,344.83
Bayerische Landesbank Girozentrale
12,931,034.48
11,206,896.55
4,310,344.83
Den Danske Bank Aktieselskab
12,931,034.48
11,206,896.55
4,310,344.83
Dresdner Bank AG London Branch
12,931,034.48
11,206,896.55
4,310,344.83
Midland Bank plc
12,931,034.48
11,206,896.55
4,310,344.83
National Westminster Bank Plc
12,931,034.48
11,206,896.55
4,310,344.83
The Toronto-Dominion Bank
12,931,034.48
11,206,896.55
4,310,344.83
The Bank of New York
9,545,454.55
8,272,727.27
3,181,818.18
Barclays Bank PLC
9,545,454.55
8,272,727.27
3,181,818.18
NationsBank, N.A.
9,545,454.55
8,272,727.27
3,181,818.18
Total Commitments
(POUND)150,000,000
(POUND)130,000,000
(POUND)50,000,000
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
1. A copy of the memorandum and articles of association and
certificate of incorporation of each
Borrower, such memorandum in the case of YH to have been amended
to give YH the express
power to borrow.
2. A copy of a resolution of the board of directors of each
Borrower:
(i) approving the terms of, and the transactions contemplated
by, this Agreement and
resolving that it execute this Agreement;
(ii) authorising a specified person or persons to execute this
Agreement on its behalf; and
(iii) authorising a specified person or persons, on its behalf,
to sign and/or despatch all
documents and notices to be signed and/or despatched by it under
or in connection with
this Agreement.
3. A specimen of the signature of each person authorised by
the resolution referred to in
paragraph 2 above.
4. A certificate of a director of each Borrower confirming
that the borrowing by it of the
maximum amount entitled to be borrowed by it under this Agreement
would not cause any
borrowing limit binding on it to be exceeded.
5. A certificate of an Authorised Signatory of each Borrower
certifying that each copy document
supplied by that Borrower or on its behalf specified in this
Schedule 2 is correct, complete and
in full force and effect as at a date no earlier than the date of
this Agreement.
6. A legal opinion of Clifford Chance, legal advisers to
the Arrangers.
SCHEDULE 3
CALCULATION OF THE MANDATORY COST
(a) The Mandatory Cost for a Loan for each of its Interest
Periods is the rate determined by the
Agent to be equal to the arithmetic mean (rounded upward, if
necessary, to four decimal
places) of the respective rates notified by each of the Reference
Banks to the Agent and
calculated in accordance with the following formulae:
in relation to a Loan denominated in sterling:
BY + S(Y-Z) + F x 0.01 % per annum = Mandatory Cost
100-(B + S)
in relation to any other Loan:
F x 0.01 % per annum = Mandatory Cost
300
where on the day of application of the formula:
B is the percentage of the Reference Bank's eligible
liabilities (in excess of any stated
minimum) which the Bank of England requires the Reference Bank to
hold on a non-
interest-bearing deposit account in accordance with its cash
ratio requirements;
Y is the rate at which sterling deposits are offered by the
Reference Bank to leading
banks in the London interbank market at or about 11.00 a.m. on
that day for the
relevant period;
S is the percentage of the Reference Bank's eligible
liabilities which the Bank of England
requires the Reference Bank to place as a special deposit;
Z is the interest rate per annum allowed by the Bank of
England on special deposits; and
F is the charge payable by the Reference Bank to the
Financial Services Authority under
paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations
(or any succeeding
provisions to those paragraphs) (but where for this purpose, any
minimum amount for
the charge will be deemed to be zero) expressed in pounds per
(POUND)1 million of the fee
base of the Reference Bank.
(b) For the purposes of this Schedule 3:
(i) "eligible liabilities" and "special deposits" have the
meanings given to them at the time
of application of the formula by the Bank of England; and
(ii) "fee base" has the meaning given to it in the Fees
Regulations;
(iii) "Fees Regulations" means:-
(1) prior to 31st March, 1999, the Banking Supervision (Fees)
Regulations 1998;
and
(2) on and after 31st March, 1999, any regulations governing
the payment of fees
for banking supervision.
(ii) "relevant period" in relation to each Interest Period,
means:
(A) if it is three months or less, that Interest Period; or
(B) if it is more than three months, each successive period
of three months and any
necessary shorter period comprised in that Interest Period.
(c) In the application of the formula, B, Y, S and Z are
included in the formula as figures and not
as percentages, e.g. if B = 0.5% and Y = 15%, BY is calculated as
0.5 x 15.
(d) If a Reference Bank does not supply a rate to the Agent,
the applicable Mandatory Cost will be
determined on the basis of the rate(s) supplied by the remaining
Reference Banks.
(e) (i) The formula is applied on the first day of each
relevant period comprised in the
relevant Interest Period.
(ii) Each rate calculated in accordance with the formula is,
if necessary, rounded upward
to four decimal places.
(f) If the Agent determines that a change in circumstances
has rendered, or will render, the formula
inappropriate, the Agent (after consultation with the Banks)
shall notify the Company of the
manner in which the Mandatory Cost will subsequently be
calculated which shall (so far as
practicable) leave the Banks and the Borrower in no better or
worse position that they would
have been in if the relevant change in circumstances had not
occurred. The manner of
calculation so notified by the Agent shall, in the absence of
manifest error, be binding on all the
Parties.
SCHEDULE 4
FORM OF REQUEST
To: [ ]
From[ ]
Date: [ ]
YORKSHIRE POWER GROUP LIMITED AND OTHERS - (POUND)330,000,000
Credit Agreement dated [
], 1998
1. We wish to borrow a Loan as follows:
(a) Drawdown Date: [
]
(b) Facility: [A/B/C]*
(c) Amount: (POUND)[
]
(d) First Interest Period: [
]/
alternative Interest Period: [
]**
(e) Payment Instructions: [
].
2. We confirm that each condition specified in Clause 4.3
(Further conditions precedent) is
satisfied on the date of this Request.
By:
[ ]
Authorised Signatory
SCHEDULE 5
PART I
FORM OF NOVATION CERTIFICATE
To: CITIBANK INTERNATIONAL plc as Agent
From: [THE EXISTING BANK] and [THE NEW BANK] Date: [ ]
YORKSHIRE POWER GROUP LIMITED and others
(POUND)330,000,000 Credit Agreement dated [
], 1998
We refer to Clause 25.3 (Procedure for novations).
1. We [ ] (the
"Existing Bank") and [ ]
(the
"New Bank") agree to the Existing Bank and the New Bank novating
all the Existing Bank's
Commitment (or part) rights and obligations referred to in the
Schedule in accordance with
Clause 25.3 (Procedure for novations).
2. The specified date for the purposes of Clause 25.3(c)
(Procedure for novations) is [date of
novation].
3. The Facility Office and address for notices of the New
Bank for the purposes of Clause 31.2
(Addresses for notices) are set out in the Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
Commitment/rights and obligations to be novated
[Insert relevant details]
[New Bank]
[Facility Office] [Address for notices]
[Existing Bank] [New Bank] CITIBANK INTERNATIONAL plc
By: By: By:
Date: Date: Date:
PART II
FORM OF NOVATION AGREEMENT
NOVATION AGREEMENT
DATED [ ]
relating to a (POUND)330,000,000 Revolving Credit and Term Loan
Facility
for
YORKSHIRE POWER GROUP LIMITED
YORKSHIRE HOLDINGS PLC
and
YORKSHIRE ELECTRICITY GROUP PLC
arranged by
CITIBANK, N.A.
and
DEUTSCHE BANK AG LONDON
ALLEN & OVERY
London
THIS AGREEMENT is dated [ ] between:
(1) YORKSHIRE POWER GROUP LIMITED, YORKSHIRE HOLDINGS PLC and
YORKSHIRE ELECTRICITY GROUP PLC (each a "Company");
(2) CITIBANK, N.A. and DEUTSCHE BANK AG LONDON (in this
capacity the "Arrangers");
(3) CITIBANK, N.A. and DEUTSCHE BANK AG LONDON as the Banks
party to the Credit
Agreement (as defined below) as at the date of this Agreement
(the "Existing Banks");
(4) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as the
banks who wish to accede to
the Credit Agreement as Banks (the "New Banks"); and
(5) CITIBANK INTERNATIONAL plc as agent (in this capacity the
"Agent").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement, unless the contrary intention appears or the
context otherwise requires:
"Credit Agreement"
means the Credit Agreement dated [ ], 1998 between the
Companies, the Arrangers, the
Existing Banks and the Agent.
"Effective Date"
means [ ].
1.2 Incorporation of Credit Agreement definitions
Terms defined in the Credit Agreement shall, unless the contrary
intention appears or the
context otherwise requires, have the same meaning in this
Agreement.
1.3 Incorporation
Clauses 1.2 (Construction), 29 (Severability) and 30
(Counterparts) of the Credit Agreement
shall apply to this Agreement, mutatis mutandis.
2. CONSENT, CONFIRMATION AND DESIGNATION
2.1 Consent and confirmation
Each Company, each Arranger, each Existing Bank and the Agent
each consent to the New
Banks becoming Banks and confirm that, except as expressly
provided by the terms of this
Agreement, each of the Finance Documents shall continue in full
force and effect.
2.2 Designation
The Agent and the Companies hereby designate this Agreement a
Finance Document.
3. NOVATION
3.1 Novation of Commitments and related rights and
obligations
On the Effective Date (regardless of whether a Default is then
continuing):
(a) each New Bank will become a Bank under the Credit
Agreement with Commitments
set out opposite its name in Schedule 2;
(b) each Commitment of each Existing Bank shall be and be
deemed to be reduced down to
the relevant level set out opposite its name in Schedule 2; and
(c) each New Bank will automatically obtain and assume, and
undertakes to perform, all
of the rights and obligations of a Bank under and in respect of
each of the Finance
Documents in respect of the rights and obligations transferred to
it under paragraphs
(a) and (b) above.
3.2 Amounts due on or before the Effective Date
(a) All amounts (if any) payable to an Existing Bank by the
Borrowers on or before the Effective
Date (including, without limitation, all interest and fees
payable on the Effective Date) in
respect of any period ending prior to the Effective Date shall be
for the account of the Existing
Bank, and none of the New Banks shall have any interest in, or
any rights in respect of, any
such amount.
(b) If any Loan falls to be made on the Effective Date:
(i) the Agent will promptly notify each of the New Banks of
that fact (and of the amount
of its participation in that Loan in accordance with paragraph
(ii) below); and
(ii) each Existing Bank and each New Bank shall participate in
that Loan (subject to the
terms of the Credit Agreement) as if the novation of Commitments
under Clause 3.1
(Novation of Commitments and related rights and obligations) of
this Agreement had
taken effect prior to opening of business on the Business Day
before the Effective
Date,
and the Companies acknowledge that each Existing Bank will not be
obliged to participate in
any such Loan to any greater extent.
3.3 Administrative details
Each New Bank has delivered to the Agent its initial details for
the purposes of Clause 31
(Notices) of the Credit Agreement.
4. NATURE OF THIS AGREEMENT
For the avoidance of doubt, the parties to this Agreement agree
that the transfer of rights and
obligations contemplated by this Agreement shall take effect (in
accordance with its terms) as a
novation so that:
(a) Schedule 2 is substituted for Schedule 1 to the Credit
Agreement on the Effective Date;
and
(b) this Agreement being a Novation Agreement, Clause 25.3(c)
(Procedure for novations)
of the Credit Agreement shall apply to the rights and obligations
transferred, assumed
and released under Clause 3.1 (Novation of Commitments and
related rights and
obligations) of this Agreement and to the associated rights and
obligations under the
Finance Documents.
5. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
SCHEDULE 1
THE NEW BANKS
SCHEDULE 2
BANKS AND COMMITMENTS
Commitments
Banks
Facility A
Facility B
Facility C
(POUND)
(POUND)
(POUND)
Total Commitments
(POUND)150,000,000
(POUND)130,000,000
(POUND)50,000,000
SIGNATORIES
The Borrowers
YORKSHIRE POWER GROUP LIMITED
By: A. PENA R. KELLY
YORKSHIRE HOLDINGS PLC
By: A. PENA R. KELLY
YORKSHIRE ELECTRICITY GROUP PLC
By A. PENA R. KELLY
The Arrangers
CITIBANK, N.A.
By: NIELS C. KIRK
DEUTSCHE BANK AG LONDON
By: SEAN MALONE
The Banks
CITIBANK, N.A.
By: NIELS C. KIRK
DEUTSCHE BANK AG LONDON
By: SEAN MALONE
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: SEAN MALONE (POWER OF ATTORNEY)
BAYERISCHE LANDESBANK GIROZENTRALE
By: MICHAEL EVANS
DEN DANSKE BANK AKTIESELSKAB
By: SEAN MALONE (POWER OF ATTORNEY)
DRESDNER BANK AG LONDON BRANCH
By: C.D.A. MORGAN MICHAEL LEE
MIDLAND BANK PLC
By: ALAN O. THOMAS
NATIONAL WESTMINSTER BANK PLC
By: JOHN KASPEREK
THE TORONTO-DOMINION BANK
By: GRAEME FRANCIS
THE BANK OF NEW YORK
By: PHILIP G. WALKER
BARCLAYS BANK PLC
By: SEAN MALONE (POWER OF ATTORNEY)
NATIONSBANK, N.A.
By: SEAN MALONE (POWER OF ATTORNEY)
The Agent
CITIBANK INTERNATIONAL plc
By: PETER F. BROWN
B1:136040.7
CONFORMED COPY
AGREEMENT
DATED 22nd July, 1998
(POUND)330,000,000
REVOLVING CREDIT AND TERM LOAN FACILITY
FOR
YORKSHIRE POWER GROUP LIMITED
YORKSHIRE HOLDINGS PLC
and
YORKSHIRE ELECTRICITY GROUP PLC
ARRANGED BY
CITIBANK, N.A.
and
DEUTSCHE BANK AG LONDON
ALLEN & OVERY
London
for the Borrowers
CLIFFORD CHANCE
London
for the Finance Parties
INDEX
Clause Page
1. Interpretation 1
2. The Facilities 18
3. Purpose 19
4. Conditions Precedent 19
5. Drawdown 20
6. Repayment 21
7. Prepayment and Cancellation 21
8. Interest Periods 23
9. Interest 25
10. Payments 26
11. Taxes 28
12. Market Disruption 29
13. Increased Costs 30
14. Illegality and Mitigation 32
15. Representations and Warranties 32
16. Undertakings 36
17. Default 43
18. The Agent and the Arranger 46
19. Fees 51
20. Expenses 51
21. Stamp Duties 52
22. Indemnities 52
23. Evidence and Calculations 53
24. Amendments and Waivers 54
25. Changes to the Parties 55
26. Disclosure of Information 57
27. Set-Off 57
28. Pro Rata Sharing 58
29. Severability 59
30. Counterparts 59
31. Notices 59
32. Governing Law 60
Schedules
1. Banks and Commitments 61
2. Conditions Precedent Documents 62
3. Calculation of the Mandatory Cost 63
4. Form of Request 65
5. Part I - Form of Novation Certificate 66
Part II - Form of Novation Agreement 67
Signatories 73
THIS AGREEMENT is dated 22nd July, 1998 between:-
(1) YORKSHIRE ELECTRICITY GROUP PLC (the "Borrower");
(2) CITIBANK, N.A. and DEUTSCHE BANK AG LONDON (in this
capacity the "Arrangers");
(3) THE FINANCIAL INSTITUTIONS listed in Schedule 1 as banks;
(4) CITIBANK INTERNATIONAL PLC as facility agent (in this
capacity the "Facility Agent").
(5) CITIBANK, N.A. NEW YORK as swingline agent (in this
capacity the "Swingline Agent")
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 Definitions
In this Agreement:-
"Act"
means the Electricity Act 1989 and, unless the context otherwise
requires, all subordinate
legislation and any successive legislation thereto.
"Adjusted Share Capital and Reserves"
means the aggregate of:
(a) the amount paid up or credited as paid up on the issued
share capital of YPG; and
(b) the amounts standing to the credit of the consolidated
capital and revenue reserves of
YPG and its Subsidiaries (the "YPG Group"),
adjusted, to the extent that the following items have not already
been added, deducted or
excluded in arriving at the figures referred to in paragraph (a)
or (b) above:
(i) by adding Subordinated Debt and the Preferred Securities;
(ii) by deducting the amounts standing to the debit of the
consolidated reserves of the
YPG Group;
(iii) by deducting any amounts attributable to interests of
non-YPG Group members in
YPG Group subsidiaries;
(iv) by deducting any reserves set aside for deferred
taxation;
(v) by deducting the amount by which the net book value of
any fixed asset has been
written up after the date of this Agreement (or, in the case of a
person becoming a
member of the YPG Group after that date, the date on which it
becomes a member of
the YPG Group) by way of revaluation or on its transfer from one
member of the
YPG Group to another (but no such deduction shall be made in
respect of any amount
if supported by, and not exceeding the amount shown by, an
independent written
valuation),
but so that no amount to be added, deducted or excluded as a
result of any of the above shall be
added, deducted or excluded more than once in the same
calculation.
"Affiliate"
means a Subsidiary or a holding company (as defined in Section
736 of the Companies Act
1985) of a Bank or any other Subsidiary of that holding company.
"Affiliated Bank"
means a Bank which is an Affiliate of another Bank.
"Agent"
means the Facility Agent or the Swingline Agent.
"Applicable Rate"
means the rate quoted by the Facility Agent to the Borrower to be
that at which money can be
deposited in the London interbank market on the earliest
available day, provided that the
applicable rate shall not be less than LIBID nor more than LIBOR.
"Balance Sheet"
means, at any time, the then most recent audited consolidated
annual or unaudited consolidated
half yearly balance sheet of the Group delivered to the Facility
Agent by the Borrower under
Clause 17.2 (Financial information).
"Bank"
means a Revolving Credit Bank or a Swingline Bank.
"Borrowings"
means indebtedness in respect of:
(a) moneys borrowed or raised including (except for the
purposes of Clause 18.5 (Cross
default)) the recourse element of any asset securitisation or
other factoring but
excluding any amounts owing for assets purchased or services
obtained on trade credit
terms in the ordinary course of business;
(b) amounts raised by means of acceptances under any
acceptance credit facility or
otherwise (not being acceptances in relation to the purchase of
assets or services in the
ordinary course of business);
(c) the deferred purchase price of assets or services the
payment of which is deferred for a
period in excess of ninety days (other than assets or services
obtained on trade credit
terms normal in the business concerned);
(d) the principal amount and any premium payable by the
relevant company from time to
time owing in respect of any loan notes, debentures, bonds or
other similar
instruments;
(e) the capital value of any financial lease, hire purchase
arrangements or any arrangement
treated as a financial lease required to be capitalised and
treated as a borrowing in the
consolidated balance sheet of the Group;
(f) for the purposes of Clause 18.5 (Cross default) (only)
net indebtedness under any
currency or interest cap, swap or collar; and
(g) any guarantee or assurance against financial loss or
indemnity in respect of the
borrowings of any other person not being a member of the Group of
a type referred to
in paragraphs (a) to (f) (inclusive) above (but excluding any
such guarantee or
assurance in respect of the performance of any contract or
service not involving
financial loss or indemnity in respect of borrowings),
but shall exclude:
(A) liabilities in respect of the Pooling and Settlement
Agreement or other arrangements
which replace the Pooling and Settlement Agreement in accordance
with Clause 18.12
(Pooling and Settlement Agreement);
(B) Project Finance Borrowings; and
(C) for the avoidance of doubt, the Preferred Securities.
"Business Day"
means a day (other than a Saturday or a Sunday) on which banks
are open for business in
London and (in relation to a transaction involving the Swingline
Facility) New York.
"Commitment"
means a Revolving Credit Commitment or a Swingline Commitment.
"Commitment Period"
means the period from the date of this Agreement to the Repayment
Date (both dates inclusive).
"Default"
means an Event of Default or an event which, with the giving of
notice or lapse of time
provided for in Clause 18 (Default) (or any combination of the
foregoing), would constitute an
Event of Default.
"Director General"
means the person from time to time appointed by the Secretary of
State to hold office as
Director General of Electricity Supply for the purposes of the
Electricity Act 1989 or any
office which replaces the function of the Director General of
Electricity Supply.
"Double Taxation Treaty"
means any convention between the government of the United Kingdom
and any other
government for the avoidance of double taxation and the
prevention of fiscal evasion with
respect to taxes on income and capital gains.
"Drawdown Date"
means the date of the advance of a Loan.
"EBITDA"
means, in respect of any Relevant Period, the total operating
profit for continuing operations,
acquisitions (as a component of continuing operations) and
discontinued operations of the
Group before taking into account:
(a) Interest Payable and Interest Receivable;
(b) all amounts provided for depreciation and amortisation
(including, without limitation,
amortisation of any goodwill);
(c) all exceptional and extraordinary items; and
(d) all taxes,
in each case for that Relevant Period but after:
(A) deducting any gain over book value arising in favour of
the Group on the sale, lease or
other disposal of any asset (other than on the sale of trading
stock) during the Relevant
Period and any gain arising on revaluation of any asset during
that Relevant Period, in
each case to the extent that it would otherwise be taken into
account, whether as an
exceptional item or otherwise; and
(B) excluding the earnings or profit before interest, tax
depreciation and amortisation (as
determined in accordance with the preceding paragraphs of this
definition) and
excluding all exceptional and extraordinary items of any company
referred to in
paragraph (a) of the definition of Project Finance Borrowings,
(all calculated on a consolidated basis disregarding any portion
of any item taken into account
in that calculation which is attributable to any minority
interests in Subsidiaries).
"Environmental Law"
means any applicable law (including, without limitation, common
law), regulation, directing
code of practice, circular, guidance notice or the like
concerning pollution or the protection of
human health, the environment, the conditions of the work place
or the manufacture,
processing, generation, transportation, storage, treatment or
disposal of dangerous substances,
pollutants, contaminants, chemicals or toxic or hazardous
substances or waste.
"Environmental Licence"
means any authorisation required by any Environmental Law.
"Event of Default"
means an event specified as such in Clause 18.1 (Events of
Default).
"Existing Facilities"
means:
(a) the bilateral credit facility made available to YPG under
the agreement dated 31st July,
1997 and made between YPG and Union Bank of Switzerland; and
(b) each bilateral credit facility dated 2nd May, 1995 made
available to the Borrower by
Midland Bank PLC, Den Danske Bank Aktieselskab, The Sumitomo
Bank, Limited,
Deutsche Bank AG London, The Bank of Tokyo-Mitsubishi, Limited,
National
Westminster Bank Plc, Union Bank of Scotland and Morgan Guaranty
Trust Company
of New York.
"Facility"
means each of the Revolving Credit Facility and the Swingline
Facility.
"Facility Agent's Spot Rate of Exchange"
means the Facility Agent's spot rate of exchange for the purchase
of Dollars in the London
foreign exchange market with sterling at or about 11.00 a.m. on a
particular day for delivery
two days hence.
"Facility Office"
means the office(s) notified by a Bank to the Facility Agent:
(a) on or before the date it becomes a Bank; or
(b) by not less than five Business Days' notice,
as the office through which it will perform all or any of its
obligations under this Agreement.
"Federal Funds Rate"
means, on any day, the rate per annum determined by the Swingline
Agent to be the Federal
Funds Rate (as published by the Federal Reserve Bank of New York)
at or about 1.00 p.m.
(New York City time) on that day.
"Finance Document"
means this Agreement, any Novation Agreement, any Novation
Certificate or any other
document designated as such by the Facility Agent and the
Borrower.
"Finance Party"
means an Arranger, a Bank or an Agent.
"Group"
means the Borrower and its Subsidiaries.
"Information Memorandum"
means the Information Memorandum dated June, 1998 and prepared in
connection with this
Agreement.
"Interest Payable"
means, in respect of any Relevant Period, all interest payable
and similar charges as shown in
(or in the notes to) the financial statements of the Group
(calculated on a consolidated basis)
for the Relevant Period but excluding interest payable on Project
Finance Borrowings by
companies referred to in paragraph (a) of that definition.
"Interest Period"
means each period determined in accordance with Clause 9
(Interest Periods).
"Interest Receivable"
means, in respect of any Relevant Period, all interest receivable
and similar income as shown in
(or in the notes to) the financial statements of the Group
(calculated on a consolidated basis)
for that Relevant Period but excluding interest receivable by a
company of the type referred to
in paragraph (a) of the definition of Project Finance Borrowings.
"Investments"
means, as at any date, the aggregate (calculated on a
consolidated basis) of:
(a) cash in hand in a jurisdiction where such amounts are
freely transferable out of that
jurisdiction and convertible into currencies dealt in on the
London foreign exchange
market;
(b) money at call in a jurisdiction, and freely convertible
into currencies, referred to in (a)
above;
(c) deposits and certificates of deposit the term of which
has twelve months or less
remaining to maturity in a jurisdiction, and freely convertible
into currencies, referred
to in (a) above;
(d) United Kingdom gilts;
(e) deposits made with the Commissioners of Inland Revenue in
respect of which
certificates of tax deposit have been issued by Her Majesty's
Treasury;
(f) sterling bills of exchange eligible for rediscount at the
Bank of England;
(g) bonds rated AA- (or the equivalent) or above by Standard
& Poor's Ratings Group,
The Fitch IBCA Group or Duff & Phelps Credit Rating Co. or
Moody's Investors
Service, Limited; and
(h) any other negotiable money market instrument issued by an
issuer in a jurisdiction, and
convertible into currencies, referred to in (a) above with a
maximum maturity of twelve
months or less, excluding commercial paper (unless it is rated at
least A1 (or the
equivalent) by Standard & Poor's Ratings Group or The Fitch IBCA
Group or Duff &
Phelps Credit Rating Co. or P1 by Moody's Investors Service,
Limited),
provided that, when the aggregate amount of Investments required
to be taken into account for
the purposes of this definition on any particular day is being
ascertained, any such Investments
denominated or repayable or in respect of which monies are
payable in a currency other than
sterling shall be taken into account at their sterling equivalent
at the rate of exchange prevailing
on that day in London using the Facility Agent's Spot Rate of
Exchange.
"LIBID"
means, in relation to an amount received by the Facility Agent
referred to in Clause 23.2(b)
(Other indemnities), the arithmetic mean (rounded to four decimal
places) of the rates, as
supplied to the Facility Agent at its request, quoted by the
Reference Banks to leading banks in
the London interbank market at or about 11.00 a.m. on the
relevant day for the taking of
deposits in sterling and in an amount approximately equal to the
amount so received from the
Borrower for the period from and including the date that payment
is received by the Facility
Agent to but excluding the last day of the Interest Period of the
relevant Loan or amount.
"LIBOR"
means, in relation to an Interest Period:
(a) the rate appearing on the Telerate Screen page 3750 or
any equivalent successor to
such page or other page as appropriate on the Telerate Service or
(failing which) such
other service as may, from time to time, display the British
Bankers' Association
Interest Settlement Rates for deposits in sterling (as agreed
between the Borrower and
the Facility Agent (acting reasonably)) (the "Telerate Screen");
or
(b) (if no such offered rate for quotations appears on the
Telerate Screen) the arithmetic
mean (rounded to four decimal places) of the relevant offered
rates which appear on
the relevant page of the Reuters Screen; or
(c) (in the absence of manifest error, if no such offered
rate for quotations appears on the
Telerate Screen or the Reuters Screen) the arithmetic mean
(rounded to four decimal
places) of the rates, as supplied to the Facility Agent at its
request, quoted by the
Reference Banks to leading banks in the London interbank market,
(in each case) at 11.00 a.m. on the first day of that Interest
Period, as being the interest rate(s)
quoted in the London interbank market for the offering of
deposits in sterling for a period equal
to that Interest Period.
"Licence"
means the public electricity supply licence granted by the
Secretary of State to the Borrower
under Section 6(I)(c) of the Electricity Act 1989 as modified or
supplemented from time to time
and, if any such licence is split by or with the consent of the
Director General into more than
one new licence, each such new licence.
"Licence Holder"
means at any time a member of the Group which then holds a
Licence.
"Loan"
means a Revolving Loan or a Swingline Loan.
"Majority Banks"
means, at any time, Revolving Credit Banks:-
(a) whose participations in the Loans then outstanding
aggregate more than 662/3 per cent.
of all the Loans then outstanding; or
(b) if there are no Loans then outstanding, whose Commitments
then aggregate more than
662/3 per cent. of the Total Commitments; or
(c) if there are no Loans then outstanding and the Total
Commitments have been reduced
to nil, whose Commitments aggregated more than 662/3 per cent. of
the Total
Commitments immediately before the reduction.
"Mandatory Cost"
means the cost imputed to the Banks of compliance with the
Mandatory Liquid Assets
requirements of the Bank of England and the requirements of the
Financial Services Authority
expressed as a rate per annum and determined in accordance with
Schedule 3.
"Margin"
means 0.25 per cent. per annum.
"Material Adverse Effect"
means a material adverse effect on:
(a) the ability of YEG to comply, from time to time, with its
obligations under
Clause 17.14 (Financial covenants);
(b) the ability of any Borrower to meet its payment
obligations under the Finance
Documents; or
(c) in respect of Clauses 16.5 (Non-conflict), 16.10
(Litigation), 16.11 (Licence), 17.13
(Licence), 17.15 (Licence undertakings), 18.11 (Licence), 18.12
(Pooling and
Settlement Agreement) and 18.13 (Compliance with the Act) only,
the ability of any
Borrower to meet any of its other material obligations under the
Finance Documents.
"Net Interest Payable"
means, in respect of any Relevant Period, Interest Payable less
Interest Receivable for that
Relevant Period.
"New York Business Day"
means a day (other than a Saturday or Sunday) on which banks are
open for business in New
York.
"Novation Agreement"
means an agreement substantially in the form of Part II of
Schedule 5.
"Novation Certificate"
means a certificate substantially in the form of Part I of
Schedule 5.
"Original Group Accounts"
means the audited consolidated accounts of the Group for the year
ended 31st March, 1998.
"Original Sterling Amount"
in relation to a Loan, means:-
(a) if that Loan is denominated in sterling, the amount of
that Loan; or
(b) if that Loan is a Swingline Loan, the equivalent in
sterling of the amount of that
Swingline Loan calculated at the Facility Agent's Spot Rate of
Exchange on its
Drawdown Date.
"Party"
means a party to this Agreement.
"Permitted Security Interest"
means any Security Interest:
(a) arising pursuant to an order of attachment or injunction
restraining disposal of assets
or similar legal process which is contested by the Borrower or
any of its Subsidiaries
in good faith or created in favour of a plaintiff or defendant in
any action of the court
or tribunal before whom such action is brought as security for
costs or expenses where
the Borrower or one of its Subsidiaries is prosecuting or
defending such action in the
bona fide interests of the Group;
(b) arising by operation of law or contained in a contract
for the sale of goods or supply of
services entered into in the ordinary course of business of the
company creating the
same or which is a pledge over or assignment of documents of
title, insurance policies
and sale contracts in relation to commercial goods created or
made in the ordinary
course of business to secure the purchase price of goods or
indebtedness to finance
such purchase price;
(c) over or affecting any asset acquired by a member of the
Group after the date hereof
and subject to which such asset is acquired or (2) any asset of
any company which
becomes a member of the Group after the date hereof, where such
Security Interest is
created prior to the date on which such company becomes a member
of the Group,
provided that in each case:
(i) the principal amount secured by such Security Interest is
not increased either
as a result of such acquisition or such company becoming a member
of the
Group or thereafter and, when aggregated with such other Security
Interests
under this paragraph (c), does not exceed (POUND)15,000,000 (or
its equivalent in any
other currency or currencies); or
(ii) that Security Interest is discharged within 180 days of
such acquisition or such
company becoming a member of the Group;
(d) which is a Security Interest (a "Substitute Security
Interest") which replaces any
Permitted Security Interest and which secures an amount not
exceeding the principal
amount secured by such Permitted Security Interest in such
circumstances when such
Permitted Security Interest will be released as a consequence of
such Substitute
Security Interest being granted;
(e) arising in connection with any cash management or netting
arrangements made
between any banks or financial institutions and any member or
members of the Group;
(f) created prior to the date of this Agreement (including,
without limitation, any existing
Security Interest in favour of the European Investment Bank)
provided the principal
amount secured by such Security Interest shall not be increased
after the date of this
Agreement;
(g) arising out of title retention provisions in a supplier's
standard conditions of supply of
goods acquired by any member of the Group in the ordinary course
of business;
(h) over assets and/or (where such assets comprise
substantially the whole of the assets of
the owner thereof) shares or the like in the owner of such assets
securing borrowings
incurred to finance the cost of developing (or acquiring and
developing) such assets
(and/or securing any indebtedness in respect of hedging actual or
projected exposure in
respect of these borrowings) where such borrowings are Project
Finance Borrowings;
(i) created under or pursuant to, or in accordance or
connection with, the terms of any
pooling and settlement agreement (including, without limitation,
the Pooling and
Settlement Agreement) or pooling and settling arrangements of the
electricity supply
industry or any transactions or arrangements entered into in
connection with the
management of risks relating thereto;
(j) securing indebtedness not otherwise permitted to be
secured by Security Interests
provided that the aggregate principal amount of the indebtedness
so secured under this
paragraph (j) shall not at any time exceed (POUND)10,000,000 or
(if higher) 2 per cent. of
Adjusted Share Capital and Reserves; or
(k) to the creation or subsistence of which the Majority
Banks at any time consent in
writing.
"Pooling and Settlement Agreement"
means an agreement dated 30 March 1990 (as amended and restated
at 22 April 1994), made
by the Borrower with The National Grid Company plc and others
setting out the rules and
procedures for the operation of an electricity trading pool and
of a settlement system and, while
the same has effect, the Initial Settlement Agreement dated 30
March 1990;
"Preferred Securities"
means US$275,000,000 8.08% Trust Securities due June 2038.
"Prime Rate"
means the prime commercial lending rate in Dollars from time to
time announced by the
Swingline Agent; each change in the interest rate on a Swingline
Loan which results from a
change in the Prime Rate becomes effective on the day on which
the change in the Prime Rate
becomes effective.
"Principal Subsidiary"
means the Borrower or a Subsidiary of the Borrower (not being a
Subsidiary falling within
category (a) of the definition of Project Finance Borrowings or
any other Subsidiary of the
Borrower whose only Borrowings are Project Finance Borrowings):
(a) whose (i) net assets or (ii) turnover represent 10 per
cent. or more of the net assets of
the Group or consolidated turnover of the Group respectively, in
each case as
calculated by reference to the then latest audited financial
statements of such
Subsidiary (consolidated in the case of a company which itself
has Subsidiaries and
which, in the normal course, prepares consolidated accounts) and
the then latest
audited consolidated financial statements of the Group; or
(b) to which is transferred all or substantially all of the
business, undertaking and assets of
a Subsidiary of the Borrower which immediately prior to such
transfer is a Principal
Subsidiary, whereupon the transferor Subsidiary shall immediately
become a Principal
Subsidiary and the transferee Subsidiary shall cease to be a
Principal Subsidiary under
the provisions of this sub-paragraph (b) (but without prejudice
to the provisions of
sub-paragraph (a) above), upon publication of its next audited
financial statements; or
(c) which is a Licence Holder.
"Project Finance Borrowings"
means any Borrowings to finance the ownership, acquisition,
construction, development and/or
operation of an asset:
(a) made by a single purpose company (whether or not a member
of the Group) whose
principal assets and business are constituted by the ownership,
acquisition,
construction, development and/or operation of an asset and whose
liabilities in respect
of the relevant financing are not directly or indirectly the
subject of a guarantee,
indemnity or any other form of assurance, undertaking or support
from any member of
the Group except as expressly referred to in paragraph (b)(iii)
below; or
(b) in respect of which the person or persons to whom such
Borrowings are or may be
owed by the relevant borrower (whether or not a member of the
Group) has or have no
recourse whatsoever to any member of the Group for the repayment
of or payment of
any sum relating to such Borrowings other than:
(i) recourse to the relevant borrower for amounts limited to
the aggregate cash
flow or net cash flow (other than historic cash flow or historic
net cash flow)
from such asset; and/or
(ii) recourse to such borrower for the purpose only of
enabling amounts to be
claimed in respect of those Borrowings in an enforcement of any
Security
Interest given by such borrower over such asset or the income,
cash flow or
other proceeds arising therefrom (or given by any shareholder or
the like in the
borrower over its shares or the like in the capital of the
relevant borrower) to
secure those Borrowings or any recourse referred to in (iii)
below, provided
that (A) the extent of such recourse to such borrower is limited
solely to the
amount of any recoveries made on any such enforcement, and (B)
such person
or persons are not entitled, by virtue of any right or claim
arising out of or in
connection with such Borrowings, to commence proceedings for the
winding
up or dissolution of the borrower or to appoint or procure the
appointment of
any receiver, trustee or similar person or officer in respect of
the borrower or
any of its assets (save for the assets the subject of such
Security Interest);
and/or
(iii) recourse to such borrower generally, or directly or
indirectly to a member of
the Group under any form of assurance, undertaking or support,
which
recourse is limited to a claim for damages (other than liquidated
damages and
damages required to be calculated in a specified way) for breach
of an
obligation (not being a payment obligation or any obligation to
procure
payment by another or an obligation to comply or to procure
compliance by
another with any financial ratios or other tests of financial
condition) by the
person against whom such recourse is available; or
(c) which the Facility Agent (acting on the instructions of
the Majority Banks) shall have
agreed (acting reasonably) in writing to treat as a Project
Finance Borrowing for the
purposes of this Agreement.
"Qualifying Bank"
means:
(a) a bank which:
(i) is a bank within the meaning of Section 840A of the
Income and Corporation
Taxes Act 1988;
(ii) will be beneficially entitled to any interest to be paid
to it (as a Bank) under
this Agreement; and
(iii) is within the charge to United Kingdom corporation tax as
respects such
interest; or
(b) a Treaty Bank.
"Reference Banks"
means, subject to Clause 26.4 (Reference Banks), the Agent,
Deutsche Bank AG London and
National Westminster Bank Plc.
"Relevant Period"
means each period of 12 months ending on the date of the audited
consolidated accounts for
each of the Borrower's financial years and on the date of the
Borrower's unaudited consolidated
accounts for the first half of each of the Borrower's financial
years.
"Repayment Date"
means the fifth anniversary of the date of this Agreement.
"Request"
means a request made by the Borrower for a Loan, substantially in
the form of Schedule 4.
"Revolving Credit Bank"
means, subject to Clause 26.2 (Transfers by Banks), a bank or
financial institution listed in
Part I of Schedule 1 in its capacity as a participant in the
Revolving Credit Facility.
"Revolving Credit Commitment"
means :
(a) in relation to a Revolving Credit Bank which is a
Revolving Credit Bank on the date of
this Agreement, the amount in Sterling set opposite its name in
Part I of Schedule 1
and the amount of any other Bank's Revolving Credit Commitment
acquired by it
under Clause 26 (Changes to the Parties); and
(b) in relation to a Revolving Credit Bank which becomes a
Revolving Credit Bank after
the date of this Agreement, the amount of any other Bank's
Revolving Credit
Commitment acquired by it under Clause 26 (Changes to the
Parties),
to the extent not cancelled, transferred or reduced under this
Agreement.
"Revolving Credit Facility"
means the sterling revolving credit facility referred to in
Clause 2.1(a) (Facilities)
"Revolving Loan"
means the principal amount of each borrowing by the Borrower
under the Revolving Credit
Facility or the principal amount outstanding of that borrowing.
"Rollover Loan"
means one or more Revolving Loans:
(a) whose proposed Drawdown Date is the same as the last day
of the Interest Period of
one or more existing Revolving Loans borrowed under the same
Facility; and
(b) whose aggregate principal amount does not exceed the
aggregate outstanding principal
amount of all existing Revolving Loans under the relevant
Facility whose Interest
Period ends on that Drawdown Date.
"Secretary of State"
means the person from time to time holding office as the
Secretary of State for Trade and
Industry or any successor office thereto;
"Security Interest"
means any mortgage, pledge, lien (other than a lien arising by
operation of law), charge or
other security interest.
"Subordinated Debt"
means, if the YPG Facility has been cancelled in full, the
outstanding amount at any time
(including capitalised interest) of Borrowings which is:
(a) owing by the Borrower to any of the shareholders of YPG;
and
(b) fully subordinated to the indebtedness of the Borrower
under this Agreement by a
subordination agreement in an agreed form.
"Subsidiary"
means:-
(a) a subsidiary within the meaning of Section 736 of the
Companies Act 1985 as
amended by Section 144 of the Companies Act 1989; and
(b) unless the context otherwise requires, a subsidiary
undertaking within the meaning of
Section 21 of the Companies Act 1989.
"Swingline Bank"
means, subject to Clause 26.2 (Transfers by Banks), a bank or
financial institution listed in
Part II of Schedule 1 in its capacity as a participant in the
Swingline Facility.
"Swingline Commitment"
means:-
(a) in the case of a Swingline Bank which is a Swingline Bank
on the date of this
Agreement, the amount in sterling set opposite its name in Part
II of Schedule 1 and the
amount of any other Bank's Swingline Commitment acquired by it
under Clause 26
(Changes to the Parties); or
(b) in the case of a Swingline Bank which becomes a Swingline
Bank after the date of this
Agreement, the amount of any other Bank's Swingline Commitment
acquired by it
under Clause 26 (Changes to the Parties),
to the extent not transferred, cancelled or reduced under this
Agreement.
"Swingline Facility"
means the Dollar swingline facility referred to in Clause 2.1(b)
(Facilities).
"Swingline Loan"
means the principal amount of each borrowing by the Borrower
under the Swingline Facility or
the principal amount outstanding of that borrowing.
"Swingline Rate"
means, on any day, the higher of:
(a) the Prime Rate; and
(b) the aggregate of the Federal Funds Rate and 0.5 per cent.
per annum.
"Syndication Period"
means the period from the date of this Agreement to the earlier
of:
(a) the date on which the Arrangers confirm to YEG that
syndication of the Facility is
complete; and
(b) 30th September, 1998,
or, if New Banks (as defined in Clause 26.2 (Transfers by Banks))
have agreed to commit to
join the Facility under the syndication by the Arrangers but the
relevant Novation Agreement or
Novation Certificate has not been effected by the end of the
Syndication Period, such longer
period as YEG shall agree with the Arrangers.
"Total Revolving Credit Commitments"
means the aggregate for the time being of the Revolving Credit
Commitments, being
(POUND)220,000,000 at the date of this Agreement.
"Total Swingline Commitments"
means the aggregate for the time being of the Swingline
Commitments, being equivalent in
Dollars of (POUND)110,000,000 calculated at the Facility Agent's
Spot Rate of Exchange at the date of
this Agreement.
"Treaty Bank"
means an institution which is resident (as such term is defined
in the appropriate Double
Taxation Treaty) in a country with which the United Kingdom has
an appropriate Double
Taxation Treaty giving residents of that country exemption from
UK taxation on interest and
does not carry on business in the United Kingdom through a
permanent establishment with
which the facility provided under this Agreement is effectively
connected.
"YH"
means Yorkshire Holdings plc.
"YPG"
means Yorkshire Power Group Limited.
"YPG Facility"
means the agreement dated on or about the date of this Agreement
and made between YPG,
YH, the Borrower, the Arrangers, the Banks and the Facility
Agent.
1.2 Construction
(a) In this Agreement, unless the contrary intention appears,
a reference to:-
(i) an "agreed form" means, in the case of a document, the
form of that document agreed
between the Borrower and the Facility Agent as evidenced by the
initialling of that
document (or other written confirmation of the same) by the
Borrower and the Facility
Agent or their respective legal advisers;
"assets" includes present and future properties, revenues and
rights of every
description;
an "authorisation" includes an authorisation, consent, approval,
resolution, licence,
exemption, filing and registration;
a "month" is a reference to a period starting on one day in a
calendar month and
ending on the numerically corresponding day in the next calendar
month, except that, if
there is no numerically corresponding day in the month in which
that period ends, that
period shall end on the last day in that calendar month;
a "regulation" includes any regulation, rule, official directive,
request or guideline
(whether or not having the force of law but, if not having the
force of law, being of a
type with which a relevant person is accustomed to comply) of any
governmental body,
agency, department or regulatory, self-regulatory or other
authority or organisation;
"(POUND)" and "sterling" means the lawful currency for the time
being of the United
Kingdom; and
"tax" includes any present or future tax, levy, impost, duty,
charge, fee deduction or
withholding of any nature and whatever called by whomsoever and
wherever imposed,
levied, collected, withheld or assessed.; and
"US$" or "Dollars" means the lawful currency for the time being
of the United States
of America.
(ii) a provision of law is a reference to that provision as
amended or re-enacted;
(iii) a Clause or a Schedule is a reference to a clause of or a
schedule to this Agreement;
(iv) a person includes its successors and assigns;
(v) a Finance Document or another document is a reference to
that Finance Document or
other document as amended, novated or supplemented; and
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any
other Finance Document or in any
notice given under or in connection with any Finance Document has
the same meaning in that
Finance Document or notice as in this Agreement.
(c) The index to and the headings in this Agreement are for
convenience only and are to be ignored
in construing this Agreement.
1.3 Financial definitions
In this Agreement, EBITDA, Interest Payable and Interest
Receivable for any Relevant Period
shall be determined or calculated by reference to the financial
statements of the Borrower or,
for Adjusted Share Capital and Reserves, by reference to the
financial statements of YPG or
any other relevant entity for that Relevant Period delivered to
the Facility Agent under
Clause 17.2 (Financial information).
2. THE FACILITIES
2.1 Facilities
Subject to the terms of this Agreement:-
(a) the Revolving Credit Banks grant to the Borrower a
sterling revolving credit facility;
and
(b) the Swingline Banks grant to the Borrower a Dollar
swingline facility.
2.2 Facility limits
(a) The Swingline Facility is not independent of the
Revolving Credit Facility. The aggregate
Original Sterling Amount of all outstanding Loans (including
Swingline Loans) shall not at any
time exceed the Total Revolving Credit Commitments at that time.
(b) The aggregate Original Sterling Amount of all outstanding
Swingline Loans shall not at any
time exceed the Total Swingline Commitments at that time.
2.3 A Bank's individual limit
(a) A Bank is not obliged to participate in a Loan if it
would cause its applicable Outstandings to
exceed its Overall Commitment.
(b) For the purpose of this Clause 2.3:-
(i) the "applicable Outstandings" of a Bank on any Drawdown
Date means the aggregate
Original Sterling Amount of the participations of that Bank and
its Affiliated Bank(s)
in all outstanding Loans which would be outstanding on that
Drawdown Date, if:-
(1) all outstanding Loans having Maturity Dates which fall on
or before that
Drawdown Date are repaid; and
(2) all Loans to be made on or before that Drawdown Date and
in respect of
which a Request has been received by an Agent are made;
and
(ii) the "Overall Commitment" of a Bank means, in the case of
a Revolving Credit Bank,
its Revolving Credit Commitment or, in the case of a Swingline
Bank which is not a
Revolving Credit Bank, the Revolving Credit Commitment of its
Affiliated Bank which
is a Revolving Credit Bank.
(c) If the operation of Clause 5.3 (Advance of Revolving
Loans) or 6.3 (Advance of Swingline
Loans) would cause the applicable Outstandings of a Bank (the
"affected Bank") to exceed its
Overall Commitment, then:-
(i) the affected Bank will participate in the relevant Loan
only to the extent that its
applicable Outstandings will not exceed its Overall Commitment;
(ii) each other Bank's participation in the Loan under the
relevant Clause will be re-
calculated in accordance with that Clause, but for the purpose of
the recalculation the
affected Bank's Commitment will be deducted from the Total
Revolving Credit
Commitments or the Total Swingline Commitments (as appropriate)
and the amount of
the affected Bank's participation in that Loan (if any) will be
deducted from the
requested amount of the Loan; and
(iii) the calculation in sub-paragraph (ii) above will be
applied to each Bank in turn until
the amount of its participation in the Loan under that Clause is
determined.
2.4 Nature of a Finance Party's rights and obligations
(a) The obligations of a Finance Party under the Finance
Documents are several. Failure of a
Finance Party to carry out those obligations does not relieve any
other Party of its obligations
under the Finance Documents. No Finance Party is responsible for
the obligations of any other
Finance Party under the Finance Documents.
(b) The rights of a Finance Party under the Finance Documents
are divided rights. A Finance
Party may, except as otherwise stated in the Finance Documents,
separately enforce those
rights.
2.5 Change of currency
(a) If more than one currency or currency unit denomination
are at the same time recognised by
the central bank of any country as the lawful currency of that
country, then:-
(i) any reference in the Finance Documents to, and any
obligations arising under the
Finance Documents in, the currency of that country shall be
translated into, or paid in,
the currency or currency unit of that country designated by the
Facility Agent; and
(ii) any translation from one currency or currency unit to
another shall be at the official
rate of exchange or conversion rate recognised by the central
bank for the conversion
of that currency or currency unit into the other, rounded up or
down by the Facility
Agent acting reasonably.
(b) If a change in any currency of a country occurs, this
Agreement will be amended to the extent
the Facility Agent specifies to be necessary to reflect the
change in currency and to put the
Banks and the Borrower in the same position, so far as possible,
that they would have been in if
no change in currency had occurred.
3. PURPOSE
(a) The Borrower shall apply each Loan made to it under the
Revolving Credit Facility towards its
general corporate purposes and those of its Subsidiaries.
(b) The proceeds of a Swingline Loan may not be applied
towards repayment of an outstanding
Swingline Loan.
(c) Without affecting the obligations of any Borrower in any
way, no Finance Party is bound to
monitor or verify the application of any Loan.
4. CONDITIONS PRECEDENT
4.1 Documentary conditions precedent
The Borrower may not deliver the first Request until the
Facility Agent has notified the
Borrower and the Banks that it has received all the documents set
out in Schedule 2 in the
agreed form or, if not in the agreed form, in form and substance
satisfactory to the Facility
Agent; and
4.2 Conditions precedent to first Loan
The obligation of each Bank to make the first Loan to the
Borrower is subject to the further
condition precedent that the Agent has received evidence
satisfactory to it that, on that first
Drawdown Date, the Existing Facilities have been (or will be
immediately following the making
of the first Loan) prepaid and cancelled in full.
4.3 Further conditions precedent
The obligation of each Bank to make any Loan is subject to the
further conditions precedent
that:
(a) on both the date of the Request and the Drawdown Date:-
(i) the representations and warranties in Clause 16
(Representations and
warranties) to be repeated on those dates are correct in all
material respects
and will be correct in all material respects immediately after
the Loan is made;
and
(ii) (A) (in the case of a Loan other than a Rollover
Loan) no Default
(B) in the case of a Rollover Loan, no Event of Default
is outstanding or would result from the making of the Loan.
(b) the loan would not cause Clause 2.2 (Facility limits) to
be contravened).
5. REVOLVING LOANS
5.1 Commitment Period
The Borrower may borrow a Revolving Loan during the
Commitment Period if the Facility
Agent receives, not later than 10.00 a.m. on the Business Day
before the proposed Drawdown
Date a duly completed Request. Each Request is irrevocable.
5.2 Completion of Requests
A Request for a Revolving Loan will not be regarded as having
been duly completed unless:-
(a) it specifies that it is a utilisation of the Revolving
Credit Facility;
(b) the Drawdown Date is a Business Day falling before the
Repayment Date;
(c) the principal amount of the Loan is a minimum of
(POUND)5,000,000 and is an integral
multiple of (POUND)5,000,000 or the balance of the undrawn Total
Revolving Credit
Commitments;
(e) the Interest Period selected complies with Clause 9
(Interest Periods); and
(f) the payment instructions comply with Clause 11
(Payments).
Each Request must specify one Loan only, but the Borrower may,
subject to the other terms of
this Agreement, deliver more than one Request on any one day.
Unless otherwise agreed by the
Facility Agent, the number of Revolving Loans outstanding,
together with the number of loans
outstanding under the YPG Facility, shall not at any time exceed
ten.
5.3 Advance of Revolving Loans
(a) The Facility Agent shall promptly notify each Revolving
Credit Bank of the details of a
requested Revolving Loan and the amount of its participation in
that Revolving Loan.
(b) Subject to the terms of this Agreement, each Revolving
Credit Bank shall make its participation
in a Revolving Loan available to the Facility Agent for the
Borrower on the relevant
Drawdown Date.
(c) The amount of each Bank's participation in a Revolving
Loan will be the proportion of the
Revolving Loan which its Revolving Credit Commitment bears to the
Total Revolving Credit
Commitments on the proposed Drawdown Date, adjusted, if necessary
to reflect the operation
of Clause 2.3 (A Bank's individual limit).
6. SWINGLINE LOANS
6.1 Commitment Period
The Borrower may borrow a Swingline Loan during the Commitment
Period if the Swingline
Agent receives, not later than 10.00 a.m. (New York City time) on
the proposed Drawdown
Date, a duly completed Request. Each Request must be copied to
the Facility Agent and is
irrevocable.
6.2 Completion of Requests
A Request for a Swingline Loan will not be regarded as having
been duly completed unless:-
(a) it specifies that it is a utilisation of the Swingline
Facility;
(b) the Drawdown Date is a New York Business Day falling
before the Repayment Date;
(c) the amount of the Loan is:-
(i) the equivalent in Sterling of a minimum of US$5,000,000
and an integral
multiple of US$1,000,000; or
(ii) the balance of the undrawn Total Swingline Commitments;
or
(iii) such other amount as the Swingline Agent and the Borrower
may agree;
(d) the amount selected under paragraph (c) does not cause
Clause 2.2 (Facility limits) to
be contravened and no more than three Swingline Loans will be
outstanding at any one
time as a result of the making of that Swingline Loan;
(e) the Interest Period selected complies with Clause 9
(Interest Periods); and
(f) the payment instructions comply with Clause 11
(Payments).
6.3 Advance of Swingline Loans
(a) The Swingline Agent shall, not later than 12.00 (noon)
(New York City time) on the proposed
Drawdown Date, notify each Swingline Bank of the details of the
requested Swingline Loan
and the amount of its participation in the Swingline Loan.
(b) Subject to the terms of this Agreement, each Swingline
Bank shall make its participation in the
Swingline Loan available to the Swingline Agent for the Borrower
on the relevant Drawdown
Date.
(c) The amount of each Swingline Bank's participation in the
Swingline Loan will be the
proportion of the Swingline Loan which its Swingline Commitment
bears to the Total
Swingline Commitments on the date of receipt of the relevant
Request, adjusted, if necessary,
to reflect the operation of Clause 2.3 (A Bank's individual
limit).
(d) A Swingline Loan cannot be used to repay another
Swingline Loan.
7. REPAYMENT
7.1 Repayment
The Borrower shall repay each Loan in full on the last day of the
Interest Period for that Loan:
(a) in the case of a Revolving Loan, to the Facility Agent;
or
(b) in the case of a Swingline Loan, to the Swingline Agent.
7.2 Re-borrowing
Subject to the other terms of this Agreement amounts repaid
under this Agreement may be re-
borrowed.
8. PREPAYMENT AND CANCELLATION
8.1 Automatic cancellation
The Commitments of each Bank shall be automatically cancelled at
the close of business on the
Repayment Date.
8.2 Voluntary prepayment
(a) The Borrower may at any time, by giving not less than
five Business Days' prior notice (or
such shorter period as the Majority Banks may agree) to the
Facility Agent, prepay a
Revolving Loan in whole or in part (but, if in part, in a minimum
amount of (POUND)10,000,000 and
an integral multiple of (POUND)5,000,000).
(b) The Borrower may at any time prepay a Swingline Loan in
whole or in part (but, if in part, in a
minimum amount of US$10,000,000 and an integral multiple of
US$5,000,000).
(c) Any prepayment of a Loan under this Clause 8.2 shall be
applied pro rata against the
participations of each Bank participating in that Loan.
8.3 Voluntary cancellation
(a) The Borrower may, by giving not less than five Business
Days' prior notice (or such lesser
period as the Majority Banks may agree) to the Facility Agent,
cancel the undrawn amount of
the Total Revolving Credit Commitments in whole or in part (but,
if in part, in a minimum
amount of (POUND)10,000,000 and an integral multiple of
(POUND)5,000,000).
(b) The Borrower may, by giving not less than five Business
Days' prior notice to the Swingline
Agent, cancel the unutilised portion of the Total Swingline
Commitments in whole or in part
(but, if in part, in a minimum amount of (POUND)10,000,000 and an
integral multiple of (POUND)5,000,000).
(c) Any cancellation in part shall be applied pro rata
against the relevant Commitment of each
Bank.
(d) The Borrower may not cancel the Total Revolving Credit
Commitments if it would result in the
Total Swingline Commitments exceeding the Total Revolving Credit
Commitments.
8.4 Additional right of prepayment and cancellation
(a) If:-
(i) any Borrower is required to pay to a Finance Party any
additional amounts under
Clause 12 (Taxes); or
(ii) any Borrower is required to pay to a Finance Party any
amount under Clause 14
(Increased costs)
then, without prejudice to the obligations of the Borrower under
those Clauses, the Borrower
may, whilst the relevant circumstances continue, serve a notice
of prepayment and cancellation
on that Bank through the Facility Agent. In that event:-
(i) each of the Commitments of that Bank and its Affiliated
Bank (if any) shall be
cancelled; and
(ii) on the date falling five Business Days after the date of
service of the notice, the
Borrower shall prepay the participation of that Bank and its
Affiliated Bank (if any) in
all the Loans made to it.
(b) If interest on a Loan is being calculated in accordance
with Clause 13.3 (Alternative basis),
then, without prejudice to the obligations of the Borrower under
that Clause, the Borrower
may, whilst the relevant circumstances continue, serve a notice
of prepayment and cancellation
on each Bank through the Facility Agent. On the date falling
five Business Days after the date
of service of the notice, the Borrower giving such notice shall
prepay all the Loans made to it.
8.5 Miscellaneous provisions
(a) Any notice of prepayment and/or cancellation under this
Agreement is irrevocable.
(b) All prepayments under this Agreement shall be made
together with accrued interest on the
amount prepaid and, subject to Clause 23.2 (Other indemnities),
without premium or penalty.
(c) No prepayment or cancellation is permitted except in
accordance with the express terms of this
Agreement.
(d) No amount of a Commitment cancelled under this Agreement
may subsequently be reinstated.
9. INTEREST PERIODS
9.1 General
Each Loan shall have one Interest Period only.
9.2 Selection
(a) The Borrower may select an Interest Period for a Loan in
the relevant Request. Each Interest
Period for a Loan will commence on its Drawdown Date.
(b) Subject to the following provisions of this Clause 9:
(i) each Interest Period for a Revolving Loan will be either
an approved duration or an
optional duration as so selected under paragraph (a) above; and
(ii) each Interest Period for a Swingline Loan will be a
period not exceeding seven New
York Business Days.
(c) No Interest Period for a Loan may extend beyond the
Repayment Date.
(d) In this Clause 8:-
"approved duration" means one, two, three or six months; and
"optional duration" means any other period agreed by the Banks.
(e) The Borrower may not select an Interest Period in excess
of one month during the Syndication
Period.
9.3 Selection of an optional duration
(a) If the Borrower selects an Interest Period for a
Revolving Loan of an optional duration, it may
also select an Interest Period of an approved duration to apply
if the selection of an optional
duration becomes ineffective in accordance with paragraph (b)
below.
(b) If:-
(i) the Borrower requests an Interest Period for a Revolving
Loan of an optional duration;
and
(ii) the Facility Agent notifies the Borrower not later than
10.30 a.m. on the first Business
Day of that Interest Period that matching deposits are not
available to the Reference
Banks in the London interbank market to fund the Revolving Loan
for that Interest
Period,
the Interest Period for that Revolving Loan shall be the
alternative period so specified or, in the
absence of any alternative selection, one month.
9.4 Non-Business Days
If an Interest Period for a Revolving Loan would otherwise
end on a day which is not a
Business Day, that Interest Period shall instead end on the next
Business Day in that calendar
month (if there is one) or the preceding Business Day (if there
is not).
9.5 Notification
The Facility Agent shall notify each relevant Party of the
duration of each Interest Period
promptly after ascertaining its duration.
10. INTEREST
10.1 Interest rate
(a) The rate of interest on each Revolving Loan for each its
Interest Period is the rate per annum
determined by the Facility Agent to be the aggregate of the
applicable:-
(i) Margin;
(ii) LIBOR; and
(iii) Mandatory Cost.
(b) The rate of interest on each Swingline Loan for its
Interest Period is the rate per annum
determined by the Swingline Agent to be the Swingline Rate for
each day during the Interest
Period.
10.2 Due dates
Except as otherwise provided in this Agreement, accrued interest
on each Loan is payable by
the Borrower on the last day of each Interest Period for that
Loan and also, if the Interest
Period is longer than six months and the Loan is a Revolving
Loan, on the date falling six
months after the first day of that Interest Period.
10.3 Default interest
(a) If the Borrower fails to pay any amount payable by it
under this Agreement, it shall forthwith
on demand by the Facility Agent pay interest on the overdue
amount from the due date up to
the date of actual payment, as well after as before judgment, at
a rate (the "default rate")
determined by the Facility Agent to be 1 per cent. per annum
above the higher of:
(i) the rate on the overdue amount under Clause 10.1
(Interest rate) immediately before
the due date (if of principal); and
(ii) (1) if the overdue amount relates to a Swingline
Loan, the Swingline Rate; or
(2) in all other cases, the rate which would have been
payable if the overdue
amount had, during the period of non-payment, constituted a
Revolving Loan
in the currency of the overdue amount for such successive
Interest Periods of
such duration as the Facility Agent may determine (each a
"Designated
Interest Period").
(b) The default rate will be determined:
(i) if calculated by reference to the Swingline Rate, on each
day; or
(ii) if calculated by reference to LIBOR, on each Business Day
or the first day of, or two
Business Days before the first day of, the relevant Designated
Interest Period, as
appropriate.
(c) If the default rate is to be calculated by reference to
LIBOR and not rates are being quoted on
the Telerate Screen or the Reuters Screen and the Facility Agent
determines that deposits in
sterling are not at the relevant time being made available by the
Reference Banks to leading
banks in the London interbank market, the default rate will be
determined by reference to the
cost of funds to the Facility Agent from whatever sources it may
select.
(d) Default interest will be compounded daily (if calculated
by reference to the Swingline Rate) or
at the end of each Designated Interest Period (if calculated by
reference to LIBOR).
10.4 Notification
The relevant Agent shall promptly notify each relevant Party of
each determination of each rate
of interest under this Agreement.
11. PAYMENTS
11.1 Place
All payments by the Borrower or a Bank under the Finance
Documents shall be made to the
Agent or (if the payment relates to the Swingline Facility) the
Swingline Agent to its account at
such office or bank in the United Kingdom (or, in the case of the
Swingline Agent, the United
States of America) as it may notify to the other Parties for this
purpose.
11.2 Funds
Payments under the Finance Documents to the Agent shall be made
for value on the due date at
such times and in such funds as the Facility Agent may specify as
being customary at the time
for the settlement of transactions in the relevant currency in
the place for payment.
11.3 Distribution
(a) Each payment received by an Agent under the Finance
Documents for another Party shall,
subject to paragraphs (b) and (c) below, be made available by
that Agent to that Party by
payment (on the date and in the currency and funds of receipt) to
its account with such bank in
the principal financial centre of the United Kingdom (or, in the
case of payments relating to the
Swingline , the United States of America) as it may notify to
that Agent for this purpose by not
less than five Business Days' prior notice.
(b) Each Agent may apply any amount received by it for the
Borrower in or towards payment (on
the date and in the currency and funds of receipt) of any amount
due from the Borrower under
this Agreement or in or towards the purchase of any amount of any
currency to be so applied.
(c) Where a sum is to be paid under this Agreement to an
Agent under the Finance Documents for
another Party, that Agent is not obliged to pay that sum to that
Party until it has established
that it has actually received that sum. Each Agent may, however,
assume that the sum has
been paid to it in accordance with this Agreement and, in
reliance on that assumption, make
available to that Party a corresponding amount. If the sum has
not been made available but an
Agent has paid a corresponding amount to another Party, that
Party shall refund the
corresponding amount within three Business Days of demand,
together with interest on that
amount from the date of payment to the date of receipt,
calculated at a rate determined by that
Agent to reflect its cost of funds.
11.4 Currency
(a) A repayment or prepayment of a Loan or any part of a Loan
is payable in the currency in
which the Loan is denominated on its due date.
(b) Interest is payable in the currency in which the relevant
amount in respect of which it is
payable is denominated.
(c) Amounts payable in respect of costs, expenses and taxes
and the like are payable in the
currency in which they are incurred.
(d) Any other amount payable under the Finance Documents is,
except as otherwise provided in the
Finance Documents, payable in sterling.
11.5 Set-off and counterclaim
All payments made by the Borrower under the Finance Documents
shall be made without set-
off or counterclaim.
11.6 Non-Business Days
(a) If a payment under the Finance Documents is due on a day
which is not a Business Day, the
due date for that payment shall instead be the next Business Day
in the same calendar month (if
there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any
principal under this Agreement
interest is payable on that principal at the rate payable on the
original due date.
11.7 Partial payments
(a) If the Facility Agent receives a payment insufficient to
discharge all the amounts then due and
payable by the Borrower under this Agreement, the Facility Agent
shall apply that payment
towards the obligations of the Borrower under this Agreement in
the following order:-
(i) first, in or towards payment pro rata of any unpaid fees,
costs and expenses of the
Agents under this Agreement;
(ii) secondly, in or towards payment pro rata of any accrued
interest due but unpaid under
this Agreement;
(iii) thirdly, in or towards payment pro rata of any principal
due but unpaid under this
Agreement; and
(iv) fourthly, in or towards payment pro rata of any other sum
due but unpaid under the
Finance Documents.
(b) If the Swingline Agent receives a payment insufficient to
discharge all the amounts then due
and payable by the Borrower to the Swingline Banks under this
Agreement, the Swingline
Agent shall apply that payment towards the obligations of the
Borrower under the Finance
Documents in respect of the Swingline Facility in the following
order:-
(i) first, in or towards payment pro rata of any unpaid fees,
costs and expenses of the
Swingline Agent under the Finance Documents;
(ii) secondly, in or towards payment pro rata of any accrued
interest on a Swingline Loan
due but unpaid under this Agreement; and
(iii) thirdly, in or towards payment pro rata of the principal
of any Swingline Loan due but
unpaid under this Agreement.
(c) The relevant Facility Agent shall, if so directed by all
the Banks in the case of paragraph (a)
above or all the Swingline Banks in the case of paragraph (b)
above, vary the order set out in
sub-paragraphs (a)(ii) to (iv) above or b(ii) and (iii) above as
appropriate.
(d) Paragraphs (a), (b) and (c) above will override any
appropriation made by the Borrower.
12. TAXES
12.1 Gross-up
Subject to Clause 12.4 (Exceptions from gross-up), each payment
to be made by the Borrower
under this Agreement shall be made free and clear of and without
deduction or withholding
(whether for or on account of tax or otherwise) unless the
Borrower is required by law to make
such a payment subject to such deduction or withholding in
respect of any taxes imposed by
laws of the United Kingdom or any federation or association of
sovereign states of which the
United Kingdom is a member ("Relevant Taxes"). If any Relevant
Tax or amounts in respect
of Relevant Tax must be deducted, or any other deductions must be
made, from any amounts
payable or paid by the Borrower, or paid or payable by an Agent
to a Bank, under the Finance
Documents, the Borrower shall (subject as provided in this
Clause) increase the sum payable
to the extent necessary to ensure that, after the making of such
deduction or withholding, the
relevant Bank receives and retains (free from any liability in
respect of any such deduction or
withholding) a net sum equal to the sum which it would have
received and so retained had no
such deduction or withholding been made or required to be made.
12.2 Tax receipts
Within 30 days after paying any sum from which it is required by
law to make any deduction
or withholding, the Borrower shall deliver to the relevant Agent
for the relevant Bank evidence
satisfactory to that Bank of that deduction, withholding or
payment and (where remittance is
required) of the remittance thereof to the relevant taxing or
other authority (a receipt by the
relevant taxing or other authority being deemed to be such
evidence).
12.3 Tax credits
If the Borrower makes a payment under Clause 12.1 (Gross-up) for
the account of a Bank and
that Bank determines that it has received or been granted a
credit against or relief or remission
for, or repayment of, any tax paid or payable by it in respect of
or calculated with reference to
the deduction or withholding under Clause 12.1 (Gross-up) that
Bank shall, to the extent that it
can do so without prejudice to the retention of the amount of
such credit, relief, remission or
repayment, pay to the Borrower such amount as that Bank
determines is attributable to such
deduction or withholding under Clause 12.1 (Gross-up) and which
will leave that Bank (after
such payment) in no better or worse position than it would have
been in if the Borrower had not
been required to make such deduction or withholding under Clause
12.1 (Gross-up). Nothing
in this Clause 12.3 shall interfere with the right of a Bank to
arrange its tax affairs in whatever
manner it thinks fit nor oblige a Bank to disclose any
information relating to its tax affairs or
any computations in respect thereof.
12.4 Exceptions from gross-up
(a) If:
(i) a Revolving Bank is not or ceases to be a Qualifying
Bank; and
(ii) as a result the Borrower is required to deduct or
withhold United Kingdom income tax
in respect of payments of interest to be made by the Borrower to
that Revolving Bank
under this Agreement,
then the Borrower shall not be liable to pay under Clause 12.1
(Gross-up) in respect of any
such payment of interest any amount in excess of the amount it
would have been obliged to pay
if that Revolving Bank were a Qualifying Bank provided that this
Clause 12.4 shall not apply
if, after the date of this Agreement any change occurs in, or in
the official interpretation or
application of, any relevant law or the practice of the United
Kingdom Inland Revenue and as a
result thereof that Bank is not or ceases to be a Qualifying
Bank.
(b) The obligation of the Borrower to pay an additional
amount under Clause 12.1 (Gross-up) shall
not apply to the extent that the tax deducted is tax on the
overall net income of a Bank save to
the extent that such tax is in respect of the relevant payment
from which the deduction must be
made.
(c) A Borrower is not obliged to pay any additional amounts
under Clause 12.1 (Gross-up) in
respect of any deduction which, if the relevant Finance Party had
completed a declaration,
claim, exemption or other form which it is able to complete,
would not have been required.
12.5 Notification
If at any time after the date of this Agreement a Revolving Bank
is aware that it is not or will
cease to be a Qualifying Bank (for whatever reason), it shall
promptly notify the Borrower
through the Facility Agent.
13. MARKET DISRUPTION
13.1 Absence of quotations
If LIBOR is to be determined by reference to the Reference Banks
but a Reference Bank does
not supply an offered rate by 11.30 a.m. on the Drawdown Date,
the applicable LIBOR shall,
subject to Clause 13.2 (Market disruption), be determined on the
basis of the quotations of the
remaining Reference Banks.
13.2 Market disruption
If:
(a) LIBOR is to be determined by reference to the Reference
Banks but no, or only one,
Reference Bank supplies a rate by 11.30 a.m. on the Drawdown Date
or the Facility
Agent otherwise determines that, by reason of circumstances
affecting the London
Interbank Market generally and not specific to the Revolving
Credit Bank or Revolving
Credit Banks concerned, adequate and fair means do not exist for
ascertaining LIBOR;
or
(b) the Facility Agent receives notification from Revolving
Credit Banks whose
participations in a Revolving Loan exceed 50 per cent. of that
Loan that, by reason of
circumstances affecting the London Interbank Market generally and
not specific to the
Revolving Credit Bank or Revolving Credit Banks concerned:-
(i) matching deposits will not be available to them in the
London interbank market
in the ordinary course of business to fund their participations
in that Loan for
the relevant Interest Period; or
(ii) the cost to them of matching deposits in the London
interbank market would be
in excess of LIBOR for the relevant Interest Period,
the Facility Agent shall promptly notify the Borrower and the
Revolving Credit Banks
of the fact and that this Clause 13 is in operation.
13.3 Alternative basis
(a) If a notification under Clause 13.2 (Market disruption)
applies to a Loan which has not been
made:
(i) that Loan shall still be made;
(ii) the first Interest Period of that Loan shall be one
month; and
(iii) interest in respect of that Loan shall be calculated in
accordance with paragraph (b)
below.
(b) If a notification under Clause 13.2 (Market disruption)
applies to a Loan which is made under
paragraph (a) above or which is outstanding then, notwithstanding
any other provision of this
Agreement:
(i) within five Business Days of receipt of the notification,
the Borrower and the Facility
Agent shall enter into negotiations for a period of not more than
30 days with a view to
agreeing an alternative basis for determining the rate of
interest and/or funding
applicable to that Loan and/or any other Loans;
(ii) if no alternative basis is agreed, the Facility Agent
shall certify on or before the last
day of the Interest Period to which the notification relates an
alternative basis for
maintaining that Loan, which shall be binding on the Borrower;
and
(iii) any such alternative basis may include an alternative
method of fixing the interest rate,
alternative Interest Periods or alternative currencies but it
must reflect the cost to the
Revolving Credit Banks of funding the Loan from whatever sources
they may select
plus the Margin plus any Mandatory Cost.
(c) The Facility Agent shall consult with the Borrower at
least once every 14 days after the
occurrence and during the continuance of the circumstances
specified in the foregoing
provisions of this Clause 13 with a view to reverting to the
normal provisions for the
determination of the rates of interest applicable to any Loan.
14. INCREASED COSTS
14.1 Increased costs
(a) Subject to Clause 14.2 (Exceptions), the Borrower shall
within five Business Days of a demand
by a Bank pay to that Bank the amount of any increased cost
incurred by it or its holding
company as a result of any change in or change in the
interpretation or application of any law
or regulation (including any law or regulation relating to
taxation, or reserve asset, special
deposit, cash ratio, liquidity or capital adequacy requirements
or any other form of banking or
monetary control). Any such demand shall set out in reasonable
detail the calculation and the
cause of the amounts claimed and contain confirmation that the
affected Bank is taking the
same approach in relation to the majority of its other facilities
of a similar nature.
(b) In this Agreement "increased cost" means:
(i) an additional cost incurred by a Bank or its holding
company as a result of that Bank
having entered into, or performing, maintaining or funding its
obligations under, this
Agreement; or
(ii) that portion of an additional cost incurred by a Bank or
its holding company in that
Bank making, funding or maintaining all or any advances comprised
in a class of
advances formed by or including the Loans made or to be made
under this Agreement
as is attributable to it or its holding company in that Bank
making, funding or
maintaining the Loans; or
(iii) a reduction in any amount payable to a Bank or its
holding company or the effective
return to a Bank or its holding company under this Agreement or
on its capital; or
(iv) the amount of any payment made by a Bank or its holding
company, or the amount of
any interest or other return foregone by a Bank or its holding
company, calculated by
reference to any amount received or receivable by a Bank under
this Agreement.
14.2 Exceptions
Clause 14.1 (Increased costs) does not apply to any increased
cost:-
(a) compensated for by the payment of the Mandatory Cost;
(b) compensated for by the operation of Clause 12 (Taxes) or
which would have been
compensated under that Clause but for the operation of Clause
12.4 (Exceptions from
gross-up);
(c) attributable to any change in the rate of tax on the
overall net income of a Bank;
(d) occurring as a result of any negligence or default of a
Bank, including, without
limitation, a breach by a Bank of any fiscal, monetary or capital
adequacy limit
imposed on it by any law or regulation; or
(e) occurring as a result of a transfer or novation of a
Bank's rights or obligations under
this Agreement; or
(f) any increased cost attributable to any implementation of
the proposals contained in any
of:-
(i) the statement of the Basle Committee on Banking
Regulations and Supervisory
Practices dated July 1988 and entitled "International Convergence
of Capital
Measurement and Capital Standards"; or
(ii) the EC Solvency Ratio Directive, EC Own Funds Directive,
or EC Capital
Adequacy Directive or any law, regulation, rule, official
directive, request or
guideline (whether or not having the force of law) of any
governmental body,
central bank, agency, department, regulatory, self-regulatory or
other authority
in any jurisdiction, implementing, applying or supplementing any
of them with
which a Bank complies or is required to comply,
in each case as published before the date of this Agreement
unless it results from any
change in, or change in the interpretation of or application of,
that statement, Directive,
law, regulation, rule, official directive, request or guideline
after the date of this
Agreement.
15. ILLEGALITY AND MITIGATION
15.1 Illegality
If it is or becomes unlawful in any jurisdiction for a Bank to
give effect to any of its obligations
as contemplated by this Agreement or to fund or maintain its
participation in any Loan, then:-
(a) that Bank may notify the Borrower through the Facility
Agent accordingly; and
(b) (i) the Borrower shall forthwith prepay the
participations of that Bank in all or
part of the Loans made to it to the extent necessary to avoid the
relevant
illegality, together with accrued interest on that portion of
those Loans; and
(ii) the undrawn Commitments of that Bank shall be reduced to
such amount as
would be lawful or (if no such amount would be lawful) to zero,
in each case, on or before the last day before the relevant
unlawfulness takes effect.
15.2 Mitigation
If circumstances arise which would, or would on the giving of
notice, result in:-
(a) any additional amounts becoming payable under Clause 12
(Taxes); or
(b) any amount becoming payable under Clause 14 (Increased
costs); or
(c) any prepayment, early payment or cancellation under
Clause 15.1 (Illegality),
then, without limiting the obligations of the Borrower under this
Agreement and without
prejudice to the terms of Clauses 12 (Taxes), 14 (Increased
costs) and 15.1 (Illegality), the
affected Finance Party may, in consultation with the Borrower,
take such steps as may
reasonably be open to it to mitigate or remove such circumstance,
including (without limitation)
the transfer of its rights and obligations under this Agreement
to another branch or another
bank or financial institution acceptable to the Borrower, unless
to do so would (in the sole
opinion of the affected Finance Party) be prejudicial to it.
16. REPRESENTATIONS AND WARRANTIES
16.1 Representations and warranties
The Borrower makes the representations and warranties set out in
this Clause 16
(Representations and warranties) to each Finance Party.
16.2 Status
(a) It is a limited liability company, duly incorporated and
validly existing under the laws of
England;
(b) each member of the Group has the power to own its assets
and carry on its business as it is
being conducted;
(c) Each Licence Holder has been duly licensed and authorised
by the Secretary of State under
Section 6(I)(c) of the Act for the generation, distribution
and/or supply of electricity and the
Licence is in full force and effect.
16.3 Powers and authority
It has the power to enter into and perform, and has taken all
necessary action to authorise the
entry into, performance and delivery of, the Finance Documents to
which it is or will be a party
and the transactions contemplated by those Finance Documents.
16.4 Legal validity
Except as stated in any qualifications as to matters of law in
any legal opinion referred to in
Schedule 2, each Finance Document to which it is or will be a
party constitutes, or when
executed in accordance with its terms will constitute, its legal,
valid and binding obligation.
16.5 Non-conflict
(a) The entry into and performance by it of, and the
transactions contemplated by, the Finance
Documents do not and will not conflict with the Licence in any
material respect.
(b) The entry into and performance by it of, and the
transactions contemplated by, the Finance
Documents do not and will not:-
(i) conflict with any law or regulation or authorisation or
judicial or official order in any
material respect; or
(ii) conflict with the constitutional documents of any member
of the Group; or
(iii) conflict with the Licence or any document which is
binding upon any member of the
Group or any asset of any member of the Group to an extent or in
a manner which
would have a Material Adverse Effect.
16.6 No default
No Event of Default or Default is outstanding which has not been
remedied or waived or would
result from the making of any Loan.
16.7 Authorisations
All authorisations which are necessary for the entry into,
performance and validity of, and the
transactions contemplated by, the Finance Documents have been
obtained or effected (as
appropriate) and are in full force and effect.
16.8 Accounts
On and from the date that audited consolidated accounts of
the Group are first delivered to the
Facility Agent under Clause 17.2 (Financial information), the
audited consolidated accounts of
the Group most recently delivered to the Facility Agent:-
(i) have been prepared in accordance with accounting
principles and practices generally
accepted in the United Kingdom; and
(ii) (in conjunction with the notes thereto) give a true and
fair view of the consolidated
financial condition of the Group as at the date to which they
were drawn up.
16.9 Material adverse change
Since the date as at which the most recent audited
consolidated financial statements of YPG
were stated to be prepared, there has been no material adverse
change in the financial condition
of Group taken as a whole.
16.10 Litigation
Save as disclosed in writing to the Facility Agent prior to the
date of this Agreement no
litigation or arbitration is current or, to its knowledge,
pending or has been threatened in
writing, which are likely to be determined adversely to it and,
if so determined, might
reasonably be likely to have a Material Adverse Effect.
16.11 Licence
(a) The Licence is in full force and effect and there exist
no material breaches of the terms of the
Licence.
(b) There are no circumstances in existence which would be
likely to lead the Director General or
the Secretary of State to seek to revoke the Licence except in
each case where the relevant
event or circumstances would not have a Material Adverse Effect.
(c) YEG has not breached:
(i) any requirement of the Act or any regulations made
thereunder; or
(ii) any other statutory requirement or any final order or
confirmed provisional order in
each case made under the Act; or
(iii) any undertaking given by it to the Director General or
the Secretary of State in relation
to the conduct of its business as a generator of electricity or
as a public electricity
supplier (as the case may be),
the consequence of which is reasonably likely to have a Material
Adverse effect.
(d) Neither the Director General nor the Secretary of State
has given notice to revoke a Licence.
(e) Save as described in writing to the Agent no amendment of
any of the terms of a Licence has
been made or proposed which is reasonably likely to have a
Material Adverse Effect.
16.12 Information
To the best of the knowledge of the Borrower after due enquiry:
(a) the factual information contained in Sections 4, 5 and 6
of the Information
Memorandum (other than the information referred to in paragraph
(b) below) was true
in all material respects as at its date;
(b) the factual information contained in the Information
Memorandum which has been
taken from the SEC filing dated 3rd June, 1998 was true in all
material respects as at
the date of that SEC filing;
(c) all estimates and projections contained in the
Information Memorandum were prepared
by the Borrower based upon assumptions that the Borrower
considered to be
reasonable as at the date of their preparation and on the basis
of information available
to the Borrower provided by third parties the Borrower believed,
in each case, to be
reliable, except that no representation is made that these
estimates or projections will
be achieved;
(d) the Information Memorandum did not omit as at its date
any information which renders
the information contained in it untrue or misleading in any
material respect; and
(e) as at the date of the Credit Agreement, nothing has
occurred since the date of the
Information Memorandum which renders the factual information
contained in Sections
4, 5 and 6 of the Information Memorandum untrue or misleading in
any material
respect.
16.13 Times for making representations and warranties
The representations and warranties set out in this Clause 16
(Representations and warranties):-
(a) are made on the date of this Agreement; and
(b) (other than the representations in Clauses 16.2(c)
(Status), 16.5(a) (Non-conflict),16.9
(Material adverse change), 16.10 (Litigation), 16.11(c) to (e)
(Licence) and 16.12
(Information)) are deemed to be repeated by the Borrower on the
date of each Request
made by it and the first day of each Interest Period of a Loan
made to it with reference
to the facts and circumstances then existing but as if the words
in Clause 16.6 (No
default) "or Default" had been deleted.
17. UNDERTAKINGS
17.1 Duration
The undertakings in this Clause 17 (Undertakings) remain in force
from the date of this
Agreement for so long as any amount is or may be outstanding
under this Agreement or any
Commitment is in force.
17.2 Financial information
The Borrower shall supply to the Facility Agent (with sufficient
copies for all the Banks):-
(a) as soon as the same are available (and in any event
within 180 days of the end of each
of its financial years), the audited consolidated accounts of the
Group and for YPG for
that financial year;
(b) as soon as the same are available (and in any event
within 90 days of the end of the
first half-year of each of its financial years), the unaudited
consolidated accounts of the
Group and for YPG for that half-year; and
(c) together with the accounts specified in paragraphs (a)
and (b) above, a certificate
signed by two of its directors on its behalf setting out in
reasonable detail computations
establishing compliance with Clause 17.14 (Financial covenants);
and
(d) as soon as the same are available (and in any case within
60 days of the end of each
relevant financial quarter of each of its financial years), the
unaudited quarterly
accounts required to be registered by YPG with the U.S.
Securities and Exchange
Commission,
and all such accounts supplied under paragraphs (a) or (b) above
shall be prepared in
accordance with accounting principles generally accepted in the
United Kingdom.
17.3 Information - Miscellaneous
The Borrower shall supply to the Facility Agent (with sufficient
copies for all the Banks, if the
Facility Agent so requests):-
(a) all documents despatched by it to its creditors generally
or (if it is not a close company
within the meaning of Section 414 of the Income and Corporation
Taxes Act, 1988) to
its shareholders generally (or any class of its shareholders
generally) at the same time
as they are despatched;
(b) promptly upon becoming aware of them, details of any
litigation, arbitration or
administrative proceedings which are current, threatened in
writing or pending, and
which if they had been current or threatened in writing on the
date of this Agreement
would have resulted in the representation in Clause 16.10
(Litigation) being incorrect
in any material respect; and
(c) promptly upon becoming aware that any modifications to
the Licence are being
proposed by the Director General or the Secretary of State,
reasonable details thereof,
to be updated from time to time to reflect any changes, provided
that such details shall
be required to be reported to the Agent hereunder, only to the
extent that if such
proposed modifications were to be made to the Licence, compliance
with such
modification or undertaking would have a Material Adverse Effect.
17.4 Notification of Default
The Borrower shall notify the Facility Agent of any Default or
Event of Default affecting it
(and the steps, if any, being taken to remedy it) promptly upon
its occurrence.
17.5 Compliance certificates
The Borrower shall supply to the Facility Agent:-
(a) together with the accounts specified in Clause 17.2(a)
(Financial information); and
(b) promptly if the Facility Agent so requests (but no more
often than twice in a calendar
year (excluding the certificate under paragraph (a) above)),
a certificate signed by two of its directors on its behalf
certifying that no Default is outstanding
or, if a Default is outstanding, specifying the Default and the
steps, if any, being taken to
remedy it.
17.6 Authorisations
The Borrower shall:-
(a) use all reasonable endeavours to obtain, maintain and
comply in all material respects
with the terms of; and
(b) (if requested) supply certified copies to the Facility
Agent of,
any authorisation required under any law or regulation to enable
it to perform its obligations
under, or for the validity or admissibility in evidence of, any
Finance Document.
17.7 Pari passu ranking
The Borrower shall procure that its obligations under the Finance
Documents do and will rank
at least pari passu with all its other present and future
unsecured obligations, except for taxes,
national insurance contributions, local or water authority rates
and employee remuneration and
benefits which are mandatorily preferred by law applying to
companies generally or by the Act.
17.8 Negative pledge
(a) The Borrower shall not and shall procure that no
Subsidiary will, create or permit to subsist
any Security Interest on any of its assets.
(b) Paragraph (a) does not apply to Permitted Security
Interests or to Security Interests arising
under the Act.
17.9 Disposals
The Borrower shall not, and shall procure that no other
Subsidiary of the Borrower shall, either
in a single transaction or in a series of transactions, whether
related or not and whether
voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of all or any
substantial part of the assets of the Group.
The paragraph above does not apply to:
(a) sales, conveyances, transfers or other disposals in the
ordinary course of business on
arm's length terms or otherwise at market value; or
(b) sales, conveyances, transfers or other disposals the
aggregate book value of which is at
the time of the final such disposal in any financial year 7.5% or
less of Adjusted Share
Capital and Reserves (less the Preferred Securities); or
(c) disposals to another member of the Group provided that
such disposals shall only be
made to:
(A) a wholly owned Subsidiary of the Borrower;
(B) another person who immediately after such disposal
becomes a wholly owned
subsidiary of the Borrower; or
(C) another member of the Group if the interest of the
Borrower in that transferee
is no less than its interest in the transferor; or
(d) disposals of assets in exchange for other assets similar
as to type and value or where
all or a substantial part of the net proceeds of such disposal
are used within 60 days of
the disposal (or such longer period as the Majority Banks may
agree) in the acquisition
of such assets; or
(e) disposals of cash raised or borrowed or temporary
investments representing surplus
funds; or
(f) the expenditure of cash in the ordinary course of
business including, without limitation,
for the repayment of any debt or the acquisition of any asset; or
(g) the payment of any dividend or distribution whatsoever
and whether extraordinary or
special in nature or otherwise, in each case, in cash or in
specie; or
(h) disposals on normal commercial terms of old and/or
obsolete plant or equipment; or
(i) any distribution of the surplus assets of a Subsidiary
(not being a Principal Subsidiary)
in a liquidation or winding up not involving insolvency; or
(j) disposals (with or without recourse) of receivables at
arm's length and on normal
commercial terms (or by way of securitisation or monetisation)
provided that:
(A) the majority of the proceeds from that disposal are used
to repay the YPG
Facility and this Agreement in the following order:
first, Facility A;
second, any other loan owing by YPG under the YPG Facility;
third, any other amount under the YPG Facility or this Agreement
designated
by YEG; and
(B) that disposal would not of itself be reasonably likely to
result in a breach of the
Borrower's obligations under Clause 17.14 (Financial covenants)
either at the
time of the disposal or following the disposal; or
(k) the sale at arm's length or otherwise at market value of
the any of the shares in
Ionica PLC owned by the Borrower; or
(l) the sale at arm's length of power generation assets owned
by members of the Group; or
(m) with the prior written consent of the Majority Banks.
17.10 Change of business
Unless the Facility Agent (acting on the instructions of the
Majority Banks) otherwise agrees or
the change arises by operation of law, the Borrower shall not
permit the Group as a whole to
make any substantial change in the nature of its business as a
distributor and/or supplier of
electricity within its authorised area which, when taken
together, would account for more than
10 per cent. of the consolidated gross assets and/or turnover of
the Group.
17.11 Restriction on Borrowings
No member of the Group will incur or have outstanding any
Borrowings other than:
(a) under the Finance Documents;
(b) for the purpose of refinancing the Facility in full on
the date on which such Borrowings
are first utilised;
(c) for the purpose of refinancing part of the Facility;
(d) Borrowings owing by one member of the Group to another
member of the Group;
(e) Subordinated Debt;
(f) Borrowings secured under paragraph (c) of the definition
of Permitted Security
Interests up to the amount set out in sub-paragraph (c)(i) of
that definition unless that
Security Interest is to be discharged under sub-paragraph (c)(ii)
of that definition;
(g) Borrowings under any recourse disposal of receivables
where that disposal is permitted
under Clause 17.9(j) (Disposals);
(h) Project Finance Borrowings; or
(i) with the prior written consent of the Majority Banks;
(j) any other Borrowings of the Borrower or any of its
Subsidiaries in an amount which,
after deducting Investments of the Borrower or any of its
Subsidiaries do not exceed in
aggregate (POUND)700,000,000 (including under the Finance
Documents and the YPG
Facility).
17.12 Environmental Matters
The Borrower will, and will ensure that each member of the Group
will:
(a) obtain all necessary Environmental Licences and comply in
all material respects with
(i) the terms and conditions of all Environmental Licences
applicable to it and (ii) all
other applicable Environmental Laws in each case where failure to
do so would have a
Material Adverse Effect;
(b) promptly upon receipt of the same, notify the Facility
Agent of any claim, notice or
other communication served on it in respect of any alleged breach
of or corrective or
remedial obligation or liability under any Environmental Law
which would or would be
likely to or (in the case of an alleged breach), if
substantiated, would have a Material
Adverse Effect.
17.13 Licence
(a) To the extent that there would otherwise be a Material
Adverse Effect, the Borrower shall, and
shall ensure that each Licence Holder shall, comply with all
terms and conditions of the
Licence and with the requirements of all laws, rules,
regulations, orders and other requirements
for the time being of the Secretary of State and the Director
General applicable to Licence
Holder with which it is obliged to comply; and
(b) The Borrower will promptly notify the Facility Agent of
any amendments to the Licence
occurring after the date of this Agreement (other than those of a
minor and/or technical nature).
17.14 Financial covenants
The Borrower shall procure that EBITDA for any Relevant Period
shall not be less than 2.5
times Net Interest Payable for that Relevant Period.
17.15 Licence undertakings
The Borrower shall promptly supply to the Agent:
(a) copies of all notices or orders served on it by the
Director General or the Secretary of
State in exercise of the powers conferred on him by the Act to
the extent the same
might reasonably be expected to have a Material Adverse Effect;
(b) details of any references relating to it to the
Monopolies and Mergers Commission
after the date of this Agreement; and
(c) details of the exercise by the Secretary of State or the
Director General of the powers
conferred on them by the Fair Trading Act 1973, the Competition
Act 1980 and/or
Section 12 of the Act relating to it or any business carried on
by it and regulated
thereby,
17.16 Change of basis
If, at any time, the Borrower changes or proposes to change in
any material respect the basis
upon which the Group's audited annual consolidated accounts are
prepared (whether or not by
reason of a change in accounting standards or otherwise), then:-
(a) the Borrower shall promptly notify the Facility Agent of
the change or proposed
change;
(b) subject to paragraph (c) below, the Borrower shall
calculate the financial covenants
under Clause 17.14 (Financial covenants) on the basis of the
accounting standards
used for the Original Group Accounts and shall provide
appropriate calculations with
the certificates delivered under Clause 17.2(c) (Financial
information) to show the
reconciliations and adjustments that have been made as a result
of the change in
accounting standards; and
(c) if the Borrower so requests at any time:-
(i) the Borrower and the Facility Agent shall enter
into discussions for a period of
not more than 45 days with a view to agreeing the amendments
which would
be required to be made to Clause 17.14 (Financial Covenants) to
procure that,
as far as possible, the Borrower and the Banks are in no worse
position than
they would have been in if the change in accounting standards had
not
occurred,
(ii) any agreement between the Borrower and the Facility Agent
under sub-
paragraph (i) above shall be, with the prior consent of the
Majority Banks,
binding on all the Parties; and
(iii) if no agreement is reached under sub-paragraph (i) above,
then the Borrower's
auditors shall certify the amendments which would be required to
be made to
this Agreement to place the Borrower, the Borrower and the Banks
in the same
position they would have been in if the change had not taken
place; a
certificate of the auditors in accordance with the above will, in
the absence of
manifest error, be binding on all the Parties.
18. DEFAULT
18.1 Events of Default
Each of the events set out in Clauses 18.2 (Non-payment) to 18.15
(Expropriation) (inclusive)
is an Event of Default (whether or not caused by any reason
whatsoever outside the control of
the Borrower or any other person).
18.2 Non-payment
The Borrower does not pay any amount payable by it under the
Finance Documents on the due
date at the place at and in the currency in which it is expressed
to be payable and, but only if
such failure is due solely to administrative error or technical
difficulties, such non payment is
not remedied within 3 Business Days.
18.3 Breach of other obligations
(a) The Borrower does not comply with the provisions of
Clause 17.14 (Financial covenants).
(b) The Borrower does not comply with any provision of the
Finance Documents (other than those
referred to in paragraph (a) above or Clause 18.2 (Non-payment))
and such default, if capable
of remedy, is not remedied within 25 days after the earlier of
the date upon which the Borrower
became aware of the same and the date on which the Borrower
receives notice from the Facility
Agent requiring remedy.
18.4 Misrepresentation
A representation, warranty or statement made or repeated in or in
connection with any Finance
Document or in any document delivered by or on behalf of the
Borrower under or in connection
with any Finance Document is incorrect in any respect when made
or deemed to be made or
repeated.
18.5 Cross-default
(a) Any Borrowings of a member of the Group are not paid when
due; or
(b) an event of default howsoever described occurs under any
document relating to Borrowings of
a member of the Group and any financier to which those Borrowings
are owed takes any step
to improve its commercial position, whether by charging a fee not
provided for in the original
document evidencing those Borrowings, or seeking more onerous
provisions in that document;
or
(c) any Borrowings of a member of the Group become
prematurely due and payable or are placed
on demand as a result of an event of default under the document
relating to those Borrowings,
and the aggregate principal amount of Borrowings or amounts
referred to in paragraphs (a) to
(c) (inclusive) above exceeds (POUND)15,000,000 or its equivalent
in any other currency.
18.6 Administration
(a) The Borrower or any Principal Subsidiary passes an
effective resolution to present an
application for an administration order; or
(b) an application for an administration order in relation to
the Borrower or a Principal Subsidiary
is presented to the court unless the application is being
contested in good faith on reasonable
grounds by appropriate proceedings; or
(c) an administration order is made in relation to the
Borrower or any Principal Subsidiary.
18.7 Insolvency
The Borrower or any Principal Subsidiary has any voluntary
arrangement proposed in relation
to it under Section 1 of the Insolvency Act 1986, or enters into
any other composition, scheme
of arrangement, compromise or arrangement involving such company
and its respective
creditors generally (other than for the purposes of
reconstruction or amalgamation or other
similar arrangement).
18.8 Insolvency proceedings
(a) The Borrower or any Principal Subsidiary passes an
effective resolution for its winding up
other than a resolution previously approved in writing by the
Facility Agent; or
(b) a petition for the winding up of the Borrower or any
Principal Subsidiary is presented to the
court and either:
(i) such company does not apply to the court within 30 days
after the presentation of such
petition requesting the court to refuse such petition; or
(ii) it does so apply but such petition is not refused by such
court within 60 days after such
application for the refusal of such petition or any such company
becomes subject to a
winding up order,
provided that nothing in this Clause 18.8 shall apply to a
solvent reconstruction, amalgamation
or reorganisation of a Principal Subsidiary.
18.9 Appointment of receivers and managers
Any liquidator, trustee in bankruptcy, compulsory manager,
receiver, administrative receiver,
administrator or the like is appointed in respect of the Borrower
or any Principal Subsidiary or
any material part of its assets or undertaking or the directors
of the Borrower or a Principal
Subsidiary request the appointment of a liquidator, trustee in
bankruptcy, compulsory manager,
receiver, administrative receiver, administrator or the like
(other than an appointment to which
the Facility Agent has approved pursuant to Clause 18.8
(Insolvency proceedings)).
18.10 Unlawfulness
It is or becomes unlawful for the Borrower to perform any of its
obligations under the Finance
Documents.
18.11 Licence
(a) Any modification (other than a modification which is of a
minor or technical nature) is made to
the terms and conditions of the Licence and such modification
would be expected to have a
Material Adverse Effect; or
(b) the Licence (excluding any second tier supply licence) is
surrendered by the Licence Holder or
is revoked by the Secretary of State or a notice from the
Secretary of State is given to that
effect in accordance with its terms or it otherwise ceases to be
in full force and effect and, in
each case, the Licence is not replaced on substantially similar
terms except where such
surrender, cessation or revocation has been agreed between the
Borrower and the Secretary of
State and consented to by the Majority Banks and provided that
the giving of notice pursuant to
paragraph 3 of Part 1 of the Licence shall not be deemed to
constitute the revocation of the
Licence.
18.12 Pooling and Settlement Agreement
Any notice requiring the Borrower to cease to be a party to the
Pooling and Settlement
Agreement is given to the Borrower under clause 66.1.3 or 66.2.2
of the Pooling and
Settlement Agreement, or the Borrower otherwise ceases to be a
party to that agreement and
the same has a Material Adverse Effect, unless the Borrower or
any of its Subsidiaries enters
into arrangements which replace the Pooling and Settlement
Agreement for electricity trading
and settlement within the electricity industry and those
replacement arrangements do not have a
Material Adverse Effect.
18.13 Compliance with the Act
YEG fails to comply with a final order (within the meaning
of Section 25 of the Act) or with a
provisional order (within the meaning of that section) which has
been confirmed under that
section (and not since been revoked) or any provisions of the Act
detailing the rights, powers,
authorities, obligations and duties of the Secretary of State or
the Director General or the
manner in or time at which they are to be exercised, are repealed
or amended in a manner
which has (or is likely to have) a Material Adverse Effect.
18.14 Ownership of the Borrower
The Borrower is not or ceases to be a direct or indirect
wholly owned Subsidiary of YH.
18.15 Expropriation
All or a substantial part of the assets of the Borrower shall be
seized, renationalised or
expropriated by any governmental authority.
18.16 Acceleration
On and at any time after the occurrence of an Event of Default
while the same is continuing,
unremedied or unwaived the Facility Agent may (and, shall if so
directed by the Majority
Banks), by notice to the Borrower:
(a) cancel the Total Revolving Credit Commitments and the
Total Swingline
Commitments; and/or
(b) demand that all or part of the Loans, together with
accrued interest and all other
amounts accrued under this Agreement be immediately due and
payable, whereupon
they shall become immediately due and payable; and/or
(c) demand that all or part of the Loans be payable on
demand, whereupon they shall
immediately become payable on demand by the Facility Agent acting
on the
instructions of the Majority Banks.
19. THE AGENT AND THE ARRANGERS
19.1 Appointment and duties of the Facility Agent
(a) Each Finance Party (other than the Facility Agent)
irrevocably appoints the Facility Agent to
act as its agent under and in connection with the Finance
Documents.
(b) Each Swingline Bank irrevocably appoints the Swingline
Agent to act as its agent under this
Agreement in connection with the Swingline Facility.
(c) Each Party appointing an Agent irrevocably authorizes
that Agent on its behalf to:
(i) perform the duties and to exercise the rights, powers and
discretions that are
specifically delegated to it under or in connection with the
Finance Documents,
together with any other incidental rights, powers and
discretions; and
(ii) execute each Finance Document expressed to be executed by
that Agent on that Party's
behalf.
(d) The Agents shall have only those duties which are
expressly specified in the Finance
Documents. Those duties are solely of a mechanical and
administrative nature.
19.2 Role of the Arrangers
Except as otherwise provided in the Finance Documents, the
Arrangers have no obligations of
any kind to any other Finance Party under or in connection with
any Finance Document.
19.3 Relationship
The relationship between an Agent and the other Finance Parties
is that of agent and principal
only. Nothing in this Agreement constitutes an Agent as trustee
or fiduciary for any other
Party or any other person and an Agent need not hold in trust any
moneys paid to it for a Party
or be liable to account for interest on those moneys.
19.4 Majority Banks' instructions
(a) Each Agent will be fully protected if it acts in
accordance with the instructions of the Majority
Banks in connection with the exercise of any right, power or
discretion or any matter not
expressly provided for in the Finance Documents. Any such
instructions given by the Majority
Banks will be binding on all the Banks. In the absence of such
instructions an Agent may act
as it considers to be in the best interests of all the Banks.
(b) No Agent is authorized to act on behalf of a Bank
(without first obtaining that Bank's consent)
in any legal or arbitration proceedings relating to any Finance
Document.
19.5 Delegation
Each Agent may act under the Finance Documents through its
personnel and agents.
19.6 Responsibility for documentation
No Agent or Arranger is responsible to any other Finance Party
for:-
(a) the execution, genuineness, validity, enforceability or
sufficiency of any Finance
Document or any other document;
(b) the collectability of amounts payable under any Finance
Document; or
(c) the accuracy of any statements (whether written or oral)
made in or in connection with
any Finance Document (including the Information Memorandum).
19.7 Default
(a) No Agent is obliged to monitor or enquire as to whether
or not a Default has occurred. No
Agent will not be deemed to have knowledge of the occurrence of a
Default. However, if an
Agent receives notice from a Party referring to this Agreement,
describing the Default and
stating that the event is a Default, it shall promptly notify the
Banks.
(b) An Agent may require the receipt of security satisfactory
to it whether by way of payment in
advance or otherwise, against any liability or loss which it will
or may incur in taking any
proceedings or action arising out of or in connection with any
Finance Document before it
commences these proceedings or takes that action.
19.8 Exoneration
(a) Without limiting paragraph (b) below, no Agent will be
liable to any other Finance Party for
any action taken or not taken by it under or in connection with
any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.
(b) No Party may take any proceedings against any officer,
employee or agent of an Agent in
respect of any claim it might have against an Agent or in respect
of any act or omission of any
kind (including gross negligence or wilful misconduct) by that
officer, employee or agent in
relation to any Finance Document.
19.9 Reliance
Each Agent may:-
(a) rely on any notice or document believed by it to be
genuine and correct and to have
been signed by, or with the authority of, the proper person;
(b) rely on any statement made by a director or employee of
any person regarding any
matters which may reasonably be assumed to be within his
knowledge or within his
power to verify; and
(c) engage, pay for and rely on legal or other professional
advisers selected by it (including
those in an Agent's employment and those representing a Party
other than an Agent).
19.10 Credit approval and appraisal
Without affecting the responsibility of the Borrower for
information supplied by it or on its
behalf in connection with any Finance Document, each Bank
confirms that it:-
(a) has made its own independent investigation and assessment
of the financial condition
and affairs of the Borrower and its related entities in
connection with its participation
in this Agreement and has not relied exclusively on any
information provided to it by
the Agents or the Arrangers in connection with any Finance
Document; and
(b) will continue to make its own independent appraisal of
the creditworthiness of the
Borrower and its related entities while any amount is or may be
outstanding under the
Finance Documents or any Commitment is in force.
19.11 Information
(a) Each Agent shall promptly forward to the person concerned
the original or a copy of any
document which is delivered to that Agent by a Party for that
person.
(b) The Facility Agent shall promptly supply a Bank with a
copy of each document received by it
under Clause 4 (Conditions precedent) upon the request and at the
expense of that Bank.
(c) Except where this Agreement specifically provides
otherwise, no Agent is obliged to review or
check the accuracy or completeness of any document it forwards to
another Party.
(d) Except as provided above, no Agent has a duty:-
(i) either initially or on a continuing basis to provide any
Bank with any credit or other
information concerning the financial condition or affairs of the
Borrower or any related
entity of the Borrower whether coming into its possession before,
on or after the date
of this Agreement; or
(ii) unless specifically requested to do so by a Bank in
accordance with a Finance
Document, to request any certificates or other documents from the
Borrower.
19.12 The Agents and the Arrangers individually
(a) If it is also a Bank, each of the Agents and each
Arranger has the same rights and powers under
this Agreement as any other Bank and may exercise those rights
and powers as though it were
not an Agent or an Arranger.
(b) Each Agent and each Arranger may:-
(i) carry on any business with the Borrower or its related
entities;
(ii) act as agent or trustee for, or in relation to any
financing involving, the Borrower or its
related entities; and
(iii) retain any profits or remuneration in connection with its
activities under this
Agreement or in relation to any of the foregoing.
(c) In acting as an Agent, the agency division of each Agent
will be treated as a separate entity
from its other divisions and departments. Any information
acquired by an Agent which, in its
opinion, is acquired by it otherwise than in its capacity as the
Agent may be treated as
confidential by that Agent and will not be deemed to be
information possessed by it in its
capacity as such.
(d) The Borrower irrevocably authorizes each Agent to
disclose to the other Finance Parties any
information which is received by it in its capacity as an Agent.
(e) Each Agent may deduct from any amount received by it for
the Banks pro rata any unpaid fees,
costs and expenses of that Agent incurred by it in connection
with the Finance Documents.
19.13 Indemnities
(a) Without limiting the liability of any Borrower under the
Finance Documents, each Bank shall
forthwith on demand indemnify each Agent for that Bank's
proportion of any liability or loss
incurred by that Agent in any way relating to or arising out of
its acting as that Agent, except
to the extent that the liability or loss arises directly from
that Agent's gross negligence or wilful
misconduct.
(b) A Bank's proportion of the liability or loss set out in
paragraph (a) above is the proportion
which its participation in the Revolving Loans (if any) bear to
all the Revolving Loans
outstanding on the date of the demand. However, if there are no
Revolving Loans outstanding
on the date of demand, then the proportion will be the proportion
which its Revolving Credit
Commitment bears to the Total Revolving Credit Commitments at the
date of demand or, if the
Total Revolving Credit Commitments have been cancelled, bore to
the Total Revolving Credit
Commitments immediately before being cancelled.
19.14 Compliance
(a) Each Agent may refrain from doing anything which might,
in its opinion, constitute a breach of
any law or regulation or be otherwise actionable at the suit of
any person, and may do anything
which, in its opinion, is necessary or desirable to comply with
any law or regulation of any
jurisdiction.
(b) Without limiting paragraph (a) above, no Agent need
disclose any information relating to the
Borrower or any of its related entities if the disclosure might,
in the opinion of that Agent,
constitute a breach of any law or regulation or any duty of
secrecy or confidentiality or be
otherwise actionable at the suit of any person.
19.15 Resignation of Agent
(a) Notwithstanding its irrevocable appointment, an Agent may
resign by giving notice to the
Banks and the Borrower, in which case that Agent may forthwith
appoint one of its Affiliates
as successor Agent or, failing that, the Majority Banks may
(after consultation with the
Borrower) appoint a successor Agent.
(b) If the appointment of a successor Agent is to be made by
the Majority Banks but they have not,
within 30 days after notice of resignation, appointed a successor
Agent which accepts the
appointment, the retiring Agent may (after consultation with the
Borrower) appoint a successor
Agent.
(c) The resignation of an Agent and the appointment of any
successor Agent will both become
effective only upon the successor Agent notifying all the Parties
that it accepts the appointment.
On giving the notification, the successor Agent will succeed to
the position of the relevant
Agent and the term "Agent" or "Swingline Agent", as appropriate
will mean the successor
Agent.
(d) The retiring Agent shall, at its own cost, make available
to the successor Agent such documents
and records and provide such assistance as the successor Agent
may reasonably request for the
purposes of performing its functions as an Agent under this
Agreement.
(e) Upon its resignation becoming effective, this Clause 19
shall continue to benefit the retiring
Agent in respect of any action taken or not taken by it under or
in connection with the Finance
Documents while it was an Agent, and, subject to paragraph (d)
above, it shall have no further
obligation under any Finance Document.
(f) The Majority Banks may, by notice to an Agent, require it
to resign in accordance with
paragraph (a) above. In this event, that Agent shall resign in
accordance with paragraph (a)
above but it shall not be entitled to appoint one of its
Affiliates as successor Agent.
19.16 Banks
(a) The Agents may treat each Bank as a Bank, entitled to
payments under this Agreement and as
acting through its Office(s) until it has received not less than
five Business Days notice from a
Bank to the contrary.
(b) Each Revolving Bank, on the date on which it becomes a
party to this Agreement, represents to
the Agent and the Borrower that it is:
(i) either:
(A) not resident in the United Kingdom for United Kingdom tax
purposes; or
(B) a "bank" as defined in section 840A of the Income and
Corporation Taxes Act
1988 and resident in the United Kingdom; and
(ii) beneficially entitled to the principal and interest
payable by the Agent to it under this
Agreement,
and shall forthwith notify the Agent and the Borrower if either
representation ceases to be
correct.
20. FEES
20.1 Commitment fee
(a) The Borrower shall pay to the Facility Agent for each
Revolving Credit Bank a commitment
fee in the amount of 0.1 per cent. per annum on the undrawn,
uncancelled amount of that
Bank's Revolving Credit Commitment during the Commitment Period.
(b) Accrued commitment fee is payable quarterly in arrear.
Accrued commitment fee shall also
payable to the Facility Agent for the relevant Revolving Credit
Bank on the cancelled amount
of its Revolving Credit Commitment at the time any cancellation
comes into effect.
20.2 VAT
Any fee referred to in this Clause 20 is exclusive of any value
added tax or any other tax which
might be chargeable in connection with that fee. If any value
added tax or other tax is so
chargeable, it shall be paid by the Borrower at the same time as
it pays the relevant fee.
21. EXPENSES
21.1 Initial and special costs
The Borrower shall, within 10 days of a claim being made, pay the
Agents and the Arrangers
the amount of all reasonable costs and expenses (including, for
paragraph (a) below only, legal
fees only up to a maximum of as set out in the relevant Fee
Letter) properly incurred by any of
them in connection with:
(a) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in
this Agreement;
(ii) any other Finance Document (other than a Novation
Certificate) executed after
the date of this Agreement; and
(b) any amendment, waiver, consent or suspension of rights
(or any proposal for any of the
foregoing) requested by or on behalf of the Borrower or, in the
case of Clause 2.5
(Change of currency), the Agents, and relating to a Finance
Document or a document
referred to in any Finance Document.
21.2 Enforcement Costs
The Borrower shall, within 10 days of demand, pay to each Finance
Party the amount of all
costs and expenses (including legal fees) incurred by it in
connection with the enforcement of,
or in preservation of any rights under, any Finance Document.
22. STAMP DUTIES
The Borrower shall within 10 Business Days of a demand pay to a
Finance Party the amount of
any liability it incurs in respect of any United Kingdom stamp,
registration and similar tax
which is or becomes payable in connection with the entry into,
performance or enforcement of
any Finance Document.
23. INDEMNITIES
23.1 Currency indemnity
(a) If a Finance Party receives an amount in respect of the
Borrower's liability under the Finance
Documents or if that liability is converted into a claim, proof,
judgment or order in a currency
other than the currency (the "contractual currency") in which the
amount is expressed to be
payable under the relevant Finance Document:
(i) the Borrower shall indemnify that Finance Party as an
independent obligation against
any loss or liability arising out of or as a result of the
conversion;
(ii) if the amount received by that Finance Party, when
converted into the contractual
currency at a market rate in the usual course of its business is
less than the amount
owed in the contractual currency, the Borrower shall forthwith on
demand pay to that
Finance Party an amount in the contractual currency equal to the
deficit; and
(iii) the Borrower shall pay to that Finance Party forthwith on
demand any exchange costs
and taxes payable in connection with any such conversion.
(b) The Borrower waives any right it may have in any
jurisdiction to pay any amount under the
Finance Documents in a currency other than that in which it is
expressed to be payable.
23.2 Other indemnities
(a) The Borrower shall, within 10 Business Days of a demand
pay to a Finance Party the amount
of any loss or liability which that Finance Party incurs as a
consequence of:
(i) the occurrence of any Event of Default;
(ii) the operation of Clause 18.16 (Acceleration); or
(iii) (other than by reason of negligence or default by a
Finance Party) a Loan not being
made after the Borrower has delivered a Request or a Loan (or
part of a Loan) not
being prepaid in accordance with a notice of prepayment.
The Borrower's liability in each case includes any loss or
expense on account of funds
borrowed, contracted for or utilised to fund any amount payable
under any Finance Document,
any amount repaid or prepaid or any Loan but excludes any loss of
margin.
(b) If any Finance Party receives or recovers any payment of
principal of a Loan or of an overdue
amount other than on the last day of the Interest Period relative
to that Loan or amount so
received or recovered, that Finance Party shall calculate the
difference between:
(i) the additional interest (excluding the Margin and
Mandatory Costs) which would have
been payable on the principal so received or recovered had it
been received or
recovered on the last day of the relevant Interest Period; and
(ii) the amount of interest which would have been payable to
that Finance Party on the last
day of that Interest Period in respect of the principal so
received or recovered if the
principal so received or recovered had been placed on deposit by
that Finance Party
earning interest at the Applicable Rate from (and including) the
Business Day of
receipt of that amount up to (but excluding) the last day of
applicable Interest Period.
If (i) is greater than (ii) then the Borrower shall, within five
Business Days of a demand from
the relevant Finance Party, pay to that Finance Party an amount
equal to the difference.
24. EVIDENCE AND CALCULATIONS
24.1 Accounts
Accounts maintained by a Finance Party in connection with this
Agreement are prima facie
evidence of the matters to which they relate.
24.2 Certificates and determinations
Any certification or determination by a Finance Party of a rate
or amount under this Agreement
is prima facie evidence of the matters to which it relates.
24.3 Calculations
Interest (including any applicable Mandatory Cost), default
interest payable pursuant to Clause
10.3 (Default interest) and the fee payable under Clause 20.1
(Commitment fee) accrue from
day to day and are calculated on the basis of the actual number
of days elapsed and a year of
365 days.
25. AMENDMENTS AND WAIVERS
25.1 Procedure
(a) Subject to Clause 25.2 (Exceptions), any term of the
Finance Documents may be amended or
waived with the agreement of the Borrower and the Majority Banks.
The Facility Agent may
effect, on behalf of any Finance Party, an amendment or waiver
permitted under this Clause.
(b) The Facility Agent shall promptly notify the other
Parties of any amendment or waiver effected
under paragraph (a) above, and any such amendment or waiver shall
be binding on all the
Parties.
25.2 Exceptions
(a) An amendment or waiver which relates to:-
(i) the definition of "Majority Banks" in Clause 1.1
(Definitions);
(ii) an extension of the date for, or a decrease in an amount
or a change in the currency of,
any payment to that Bank under the Finance Documents (including
the Margin and any
fee payable under Clause 20.1 (Commitment Fee));
(iii) an increase in that Bank's Commitment;
(iv) a term of a Finance Document which expressly requires the
consent of that Bank; or
(v) Clause 2.2 (Nature of a Finance Party's rights and
obligations), Clause 26.1 (Transfers
by the Borrower), Clause 29 (Pro rata sharing) or this Clause 25,
is not binding unless all the Banks agree to it.
(b) An amendment or waiver which relates to the rights and/or
obligations of an Facility Agent
may not be effected without the agreement of that Facility Agent.
25.3 Waivers and remedies cumulative
The rights of each Finance Party under the Finance Documents:-
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the
general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a
waiver of that right.
26. CHANGES TO THE PARTIES
26.1 Transfers by the Borrower
The Borrower may not assign, transfer, novate or dispose of any
of, or any interest in, its rights
and/or obligations under the Finance Documents.
26.2 Transfers by Banks
(a) A Bank (the "Existing Bank") may, subject to paragraph
(b) below, at any time assign,
transfer or novate any of its Commitments and/or any of its
rights and/or obligations under this
Agreement to another bank or financial institution (the "New
Bank").
(b) (i) After the Syndication Period, a transfer of a
Commitment must be in a minimum
amount of at least (POUND)5,000,000;
(ii) no transfer of a Commitment shall take place unless the
Existing Bank simultaneously
transfers to the New Bank the same proportion of its other
Commitment and of each of
its commitments under the YPG Facility; and
(iii) no transfer by a Bank of its Revolving Credit Commitment
may result in its Swingline
Commitment or that of its Affiliated Bank exceeding its Revolving
Credit
Commitment;
(iv) a Bank may only transfer its Swingline Commitment to a
New Bank if the New Bank
is, or will be, a Revolving Credit Bank or an Affiliate of a
Revolving Credit Bank; and
(v) the prior consent of the Borrower is required for any
such assignment, transfer or
novation, unless the New Bank is another Bank or an Affiliate of
a Bank, provided that
no consent of the Borrower is required during the Syndication
Period if the Borrower
has been consulted by the Arrangers on the approach to that New
Bank.
(c) A transfer of obligations will be effective only if
either:-
(i) the obligations are novated in accordance with Clause
26.3 (Procedure for novations);
or
(ii) the New Bank confirms to the Facility Agents and the
Borrower that it undertakes to
be bound by the terms of this Agreement as a Bank in form and
substance satisfactory
to the Facility Agents. On the transfer becoming effective in
this manner the Existing
Bank shall be relieved of its obligations under this Agreement to
the extent that they
are transferred to the New Bank.
(d) No Bank shall sub-participate any of its obligations
under this Agreement without the prior
written consent of the Borrower.
(e) On each occasion an Existing Bank assigns, transfers or
novates any of its Commitment and/or
any of its rights and/or obligations under this Agreement (other
than under the Novation
Agreement), the New Bank shall, on the date the assignment,
transfer and/or novation takes
effect, pay to the Facility Agent for its own account a fee of
(POUND)750.
(f) An Existing Bank is not responsible to a New Bank for:-
(i) the execution, genuineness, validity, enforceability or
sufficiency of any Finance
Document or any other document;
(ii) the collectability of amounts payable under any Finance
Document; or
(iii) the accuracy of any statements (whether written or oral)
made in or in connection with
any Finance Document.
(g) Each New Bank confirms to the Existing Bank and the other
Finance Parties that it:-
(i) has made its own independent investigation and assessment
of the financial condition
and affairs of the Borrower and its related entities in
connection with its participation
in this Agreement and has not relied exclusively on any
information provided to it by
the Existing Bank in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of
the creditworthiness of the
Borrower and its related entities while any amount is or may be
outstanding under the
Finance Documents or any Commitment is in force.
(h) Nothing in any Finance Document obliges an Existing Bank
to:-
(i) accept a re-transfer from a New Bank of any of the rights
and/or obligations assigned,
transferred or novated under this Clause; or
(ii) support any losses incurred by the New Bank by reason of
the non-performance by the
Borrower of its obligations under the Finance Documents or
otherwise.
(i) Any reference in this Agreement to a Bank includes a New
Bank, but excludes a Bank if no
amount is or may be owed to or by that Bank under this Agreement
and its Commitment has
been cancelled or reduced to nil.
26.3 Procedure for novations
(a) A novation is effected if:-
(i) the Existing Bank and the New Bank deliver to the
Facility Agent a duly completed
Novation Certificate and the Facility Agent executes it; or
(ii) a Novation Agreement is executed by all the parties to
it.
(b) Each Party (other than the Existing Bank and the New
Bank) irrevocably authorizes the
Facility Agent to execute any duly completed Novation Certificate
on its behalf.
(c) To the extent that they are expressed to be the subject
of the novation in the Novation
Certificate or Novation Agreement
(i) the Existing Bank and the other Parties (the "existing
Parties") will be released from
their obligations to each other (the "discharged obligations");
(ii) the New Bank and the existing Parties will assume
obligations towards each other
which differ from the discharged obligations only insofar as they
are owed to or
assumed by the New Bank instead of the Existing Bank;
(iii) the rights of the Existing Bank against the existing
Parties and vice versa (the
"discharged rights") will be cancelled; and
(iv) the New Bank and the existing Parties will acquire rights
against each other which
differ from the discharged rights only insofar as they are
exercisable by or against the
New Bank instead of the Existing Bank,
all on the date of execution of the Novation Certificate or
Novation Agreement by the Facility
Agent or, if later, the date specified in the Novation
Certificate or Novation Agreement .
26.4 Reference Banks
If a Reference Bank (or, if a Reference Bank is not a Bank, the
Bank of which it is an Affiliate)
ceases to be a Bank, the Facility Agent shall (in consultation
with the Borrower) appoint
another Bank or an Affiliate of a Bank to replace that Reference
Bank.
26.5 Register
The Facility Agent shall keep a register of all the Parties and
shall supply any other Party (at
that Party's expense) with a copy of the register on request.
27. DISCLOSURE OF INFORMATION
Any information supplied to a Finance Party pursuant to or in
connection with this Agreement
shall be held in confidence and shall not be disclosed by it to
any person other than an Affiliate
of that Finance Party without the prior written consent of the
Borrower except:
(a) to that Finance Party's legal or other professional
advisers to the extent required for the
purposes of protecting its rights hereunder or by law or
regulation or pursuant to
applicable reporting requirements or any order of any court or to
bank supervisory
authorities or examining authorities unless it is or becomes a
matter of public
knowledge otherwise than as a result of a breach by it of its
obligations hereunder; or
(b) by the Arrangers to a financial institution during the
Syndication Period in connection
with the syndication of the Facility, provided that the Borrower
has been consulted by
the Arrangers on the approach to that financial institution.
28. SET-OFF
A Finance Party may set off any matured obligation owed by
the Borrower under this
Agreement (to the extent beneficially owned by that Finance
Party) against any credit balance
owed by that Finance Party to the Borrower, regardless of the
place of payment, booking
branch or currency of either obligation. If the obligations are
in different currencies, a Finance
Party may convert either obligation at a market rate of exchange
in its usual course of business
for the purpose of the set-off.
29. PRO RATA SHARING
29.1 Redistribution
If any amount owing by the Borrower under the Finance Documents
to a Finance Party (the
"recovering Finance Party") is discharged by payment, set-off or
any other manner other than
through the Facility Agent in accordance with Clause 11
(Payments) (a "recovery"), then:-
(a) the recovering Finance Party shall, within three Business
Days, notify details of the
recovery to the Facility Agent;
(b) the Facility Agent shall determine whether the recovery
is in excess of the amount
which the recovering
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<PERIOD-START> Jul-1-1998
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0
168
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