Exhibit 2.8
1999
POWERGEN UK plc
and
EDISON FIRST POWER LIMITED
==============================================
AGREEMENT
for the sale, purchase and leasing of certain
assets at Fiddler's Ferry Power Station,
Warrington, Cheshire
==============================================
TABLE OF CONTENTS
Clause Page
1. DEFINITIONS............................................................... 2
2. AGREEMENT AND DEPOSIT.....................................................17
3. CONDITIONS PRECEDENT......................................................18
4. PRE-COMPLETION UNDERTAKINGS...............................................25
5. COMPLETION................................................................30
6. TITLE AND SUPPLEMENTARY PROVISIONS........................................32
7. INTELLECTUAL PROPERTY RIGHTS..............................................33
Assignment of Exclusive IPR...............................................33
Licence of Retained IPR...................................................33
Process Control Contracts.................................................34
8. CONTRACTS.................................................................36
9. PREPAYMENTS AND APPORTIONMENTS............................................39
10. POST-COMPLETION UNDERTAKINGS..............................................40
11. ENVIRONMENTAL INDEMNITY...................................................41
12. EMPLOYEES AND PENSIONS....................................................43
13. BUYER REPRESENTATIONS AND WARRANTIES......................................47
14. POWERGEN WARRANTIES.......................................................48
15. MAJOR PLANT ITEM BREAKDOWN................................................52
16. EXCLUSION OF LIABILITY AND ENVIRONMENT REPORT.............................56
17. ENTIRE AGREEMENT..........................................................59
18. ANNOUNCEMENTS.............................................................59
19. COSTS.....................................................................60
20. INVALIDITY................................................................60
21. ACCESS TO INFORMATION................................................... 60
22. NOTICES................................................................. 63
23. ASSIGNMENT.............................................................. 65
24. VARIATION............................................................... 66
25. WAIVER.................................................................. 67
26. FURTHER ASSURANCE....................................................... 67
27. DISPUTE RESOLUTION...................................................... 67
28. TAX..................................................................... 68
29. SET-OFF................................................................. 70
30. GOVERNING LAW........................................................... 71
31. COUNTERPARTS............................................................ 71
SCHEDULE 1..................................................................... 72
PREMIUM................................................................. 72
SCHEDULE 1A.................................................................... 82
PREMIUM................................................................. 82
SCHEDULE 2..................................................................... 92
THE WARRANTIES.......................................................... 92
SCHEDULE 3..................................................................... 103
THE POWER STATION....................................................... 103
Part 1 GENERAL......................................................... 103
Land Registry........................................................... 113
Pillar of Support....................................................... 113
Part 2.................................................................. 113
DOCUMENTS OF TITLE...................................................... 113
Part 3 FORM OF THE LEASEHOLD ASSIGNMENT................................ 122
SCHEDULE 4..................................................................... 125
PROPERTY AGREEMENTS..................................................... 125
Part 1 GENERAL.......................................................... 125
Part 2 PROPERTY AGREEMENTS.............................................. 126
SCHEDULE 5..................................................................... 128
OPERATING PERMITS, ETC...................................................128
Part 1 GENERAL..........................................................128
Part 2 OPERATING PERMITS................................................129
SCHEDULE 6......................................................................130
MATERIAL CONTRACTS.......................................................130
SCHEDULE 7......................................................................133
FUEL.....................................................................133
Part 1 OIL STOCKS.......................................................133
Part 2...................................................................134
COAL STOCKS..............................................................134
SCHEDULE 8......................................................................137
PENSIONS.................................................................137
Part 1...................................................................137
APPENDIX TO SCHEDULE 8..........................................................154
THE ACTUARY'S LETTER.....................................................154
SCHEDULE 8......................................................................155
PENSIONS.................................................................155
Part 2...................................................................155
SCHEDULE 9......................................................................160
EXCLUDED ASSETS..........................................................160
SCHEDULE 10.....................................................................161
MAJOR PLANT ITEMS CALCULATIONS...........................................161
SCHEDULE 11.....................................................................162
INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS
ASSETS AND SERVICES......................................................162
SCHEDULE 12.....................................................................172
DESCRIPTION OF MAJOR PLANT ITEMS.........................................172
SCHEDULE 13.....................................................................174
"on an after tax basis"..................................................174
SCHEDULE 14.....................................................................177
CLAUSE 3.1.2 TERMS.......................................................177
THIS DEED is made on 1999
Between:
(1) POWERGEN UK plc (registered in England and Wales with number 2366970)
whose registered office is at 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(PowerGen); and
(2) EDISON FIRST POWER LIMITED (registered in Guernsey with number 35167)
whose registered office is at 0 Xx Xxxxxxxx Xxxxxx, Xx Xxxxx Port,
Guernsey, Channel Islands, GY1 4HP (the Buyer).
Whereas:
(A) Pursuant to the Undertaking, PowerGen has agreed, inter alia, to dispose
of coal-fired generating plant with an installed capacity of 4GW by 30
April 1999 or such later date as the Secretary of State may in writing
specify (subsequently specified as 30 June 1999).
(B) In partial satisfaction of the Undertaking:
(i) PowerGen has agreed to grant, and the Buyer has agreed to accept, the
Lease on the terms set out in this Agreement and the Lease;
(ii) PowerGen has agreed to sell, and the Buyer has agreed to purchase, the
Power Station Assets on the terms set out in this Agreement and the
Transaction Documents; and
(iii) PowerGen has agreed to enter into certain other arrangements with the
Buyer on the terms set out in this Agreement and the Transaction
Documents.
(C) The Buyer has agreed to pay the Premium and all other amounts due and
payable at Completion pursuant to this Agreement and certain of the
Transaction Documents.
(D) Pursuant to the Guarantee, the Guarantor has agreed to guarantee the
performance of certain of the Buyer's obligations hereunder and pursuant
to certain of the Transaction Documents.
Now it is agreed as follows:
Definitions
1.1 In this Agreement, including the Recitals, unless the context otherwise
requires:
Actual IPC Authorisation means, with respect to the operations carried on at the
Power Station, the IPC Authorisation first issued following signing of this
Agreement (whether by way of new issue or a variation to any IPC Authorisation
held by PowerGen at the date hereof) and which contains the Actual Sulphur
Dioxide `B' Limits, disregarding any subsequent adjustment to such sulphur
dioxide emission limits contained therein;
Actual Sulphur Dioxide `B' Limits means, subject to the provisions of Schedule
1, the sulphur dioxide emission limits (expressed in kilotonnes) which are
specified as `B' limits in the Actual IPC Authorisation and which reflect the
revised proposals of the Environment Agency outlined in its consultation paper
entitled "Controlling Pollution from Existing Coal- and Oil-Fired Power
Stations" dated 23 March 1999 as adjusted by the results of the public
consultation procedure following publication of such paper, disregarding for
these purposes any proportion thereof which results from any commitment by any
member of the Buyer's Group to the Environment Agency to install flue gas
desulphurisation plant at the Power Station or at any other power station
operated by any member of the Buyer's Group;
Ancillary Agreements means the Coal Supply Contract, the Decommissioning Deed,
the Technical Support Agreement, the Transitional Services Agreement, the
Liverpool Bulk Terminal Agreement, and the Contract for Differences;
Applicable Laws means all laws, statutes, orders, decrees, licences, permits,
agreements and registrations of any Competent Authority having jurisdiction over
the matter in question;
Assumed IPC Authorisation means, with respect to the operations carried on at
the Power Station, the varied IPC Authorisation held by PowerGen at the date
hereof which contains the Assumed Sulphur Dioxide `B' Limits;
Assumed Sulphur Dioxide `B' Limits means the sulphur dioxide emission limits
which are so described in Part 1 of Schedule 1;
Business Day means a day (excluding Saturdays, Sundays and public holidays) upon
which banks are open for business in England;
Business Software Licence means a licence of each item of the computer software
identified in Part 4(b) of Schedule 11, and Business Software Licences shall
mean any of them;
Buyer's Group means the Buyer, any holding company of the Buyer and any
subsidiary of the Buyer or any such holding company from time to time;
CEGB means the Central Electricity Generating Board, being the statutory
predecessor in title to PowerGen in relation to, inter alia, the Power Station
(other than the Leasehold Property);
Clawback Letter means the clawback letter in the agreed form to be entered into
between PowerGen and the Guarantor on Completion;
Client Account means the account of PowerGen's Solicitors number 09715150 with
National Westminster Bank plc (sort code 60-00-01) or such other account as may
be stipulated by the parties in accordance with the second sentence of clause
2.2;
Coal Supply Contract means the agreement signed on the date hereof between
PowerGen and the Buyer pursuant to which coal will be supplied by PowerGen to
the Buyer;
Coal Stocks means the stocks of coal at the Power Station at Completion
determined in accordance with Part 2 of Schedule 7;
Competent Authority means any legislative, judicial, regulatory or
administrative body or agency (or any subdivision of any of them) of the United
Kingdom, the United States or of the European Union, any relevant stock exchange
on which the shares or other securities of any member of PowerGen's Group or any
member of the Buyer's Group are from time to time listed, or any supranational
body which has rulemaking power or whose directives, decisions, instructions,
rulings, laws or regulations are directly enforceable against PowerGen or the
Buyer;
Completion means completion of the grant of the Lease and the sale and purchase
of the Power Station Assets and the other transactions
contemplated by this Agreement and the other Transaction Documents which are by
their terms intended to take place on the Completion Date;
Completion Date means the date, determined in accordance with clause 5.1, upon
which the events detailed in clauses 5.2 and 5.3 are to take place;
Confidentiality Undertaking means the confidentiality undertaking between
PowerGen and Edison Mission Energy Limited dated 7 December 1998;
Consents means all or any necessary approvals, authorisations or consents from
any third party to the transfer, assignment or novation of agreements, consents,
permits or other documents referred to in Schedules 3, 4, 5 and 6 and the
Process Control Contracts in favour of the Buyer;
Contract for Differences means the hedging instrument in the agreed form
consisting of a master agreement and a supplemental agreement relating to the
electricity pool price to be entered into, subject to all required consents from
any Competent Authority to the terms thereof having been obtained, between
PowerGen and the Buyer on Completion;
Contracts means all or any of the contracts, understandings, arrangements,
commitments and engagements exclusively relating to the Power Station, the
Leasehold Property or to the operation of the Power Station and the business of
generation of electricity carried out at the Power Station or which are
incidental to such business, in each case, as are current at Completion (which,
for the avoidance of doubt, includes all contracts, understandings,
arrangements, commitments and engagements where at Completion all services have
been performed or goods delivered but in respect of which PowerGen may have
continuing rights including, without limitation, any rights relating to any
defects liability period) and to which PowerGen is, or is deemed to be, a party
or the benefit of which is held in trust for, or has been assigned to it,
including, for the avoidance of doubt, the Material Contracts, but excluding (a)
any Process Control Contract, (b) the Property Agreements, (c) any deed or
document of title or other contract, undertaking, arrangement, commitment and
engagement directly relating to the title to the Power Station, the Leasehold
Property, and/or any land adjoining or near to the Power Station and/or any land
over or in which PowerGen has any right or interest
immediately prior to the date of this Agreement, (d) the Operating Permits, (e)
any agreements relating to the supply and delivery of fuel to the Power Station,
(f) any arrangements made between members of PowerGen's Group in relation to the
Power Station, (g) the Business Software Licences, (h) any contract,
understanding, arrangement, commitment or engagement between PowerGen and any
Employee or former employee of PowerGen or CEGB evidencing or otherwise in
respect of terms of employment, (i) the Pensions Contracts and (j) the
agreements and/or licences relating to the computer software identified in Parts
1, 2 and 7 of Schedule 11, the maintenance and support services relating to
computer (including software) and/or communications technology, frequencies and
telecommunications services and assets identified in Part 3 of Schedule 11;
Decommissioning Deed means the deed in the agreed form to be made between
PowerGen and the Buyer regarding, inter alia, certain rights and obligations of
the parties in relation to land, buildings and other structures adjoining the
Power Station;
Deposit means the sum of ten million pounds sterling ((pound
sterling)10,000,000) payable by the Buyer pursuant to clause 2.2;
DGEGS means the Director General of Electricity and Gas Supply;
Disclosure Letter means the letter of even date together with the attachments
thereto addressed by PowerGen to the Buyer disclosing exceptions to the
Warranties;
Employees means those PowerGen employees employed at the Power Station on the
Completion Date and whose names are set out in the list in the agreed form (as
the same may be amended by PowerGen on the Completion Date) excluding any
PowerGen employee who is temporarily seconded to work at the Power Station;
Employment Regulations shall have the meaning ascribed to such term in clause
12.1;
Environment means all or any, or any combination, of the following media: the
air (including without limitation the air within natural or man-made structures
above or below ground), water (including underground water) and land and any
living organisms or systems supported by those media;
Environmental Authority means any central or local government department or
statutory or European Union agency, body, authority or organisation which has
regulatory or enforcement powers in relation to the Environment or under
Environmental Laws;
Environmental Laws means any and all of the following each as is in force from
time to time before or after Completion:
(i) laws, by-laws, codes, common law or other laws or legislation made by a
Competent Authority in each case which are applicable to the Power Station
(or any operator thereof), the Leasehold Property and any land over, under
or through which any right is exercised in connection with the Power
Station or the Leasehold Property or rights exercisable in relation thereto
or any Power Station Assets and all rules, regulations, ordinances, orders,
notices, directives, practices guidance notes (which is deemed to include
the Department of the Environment Consultation Draft Statutory Guidance on
Contaminated Land dated September 1996 as amended by the Department of the
Environment, Transport and the Regions' Discussion Draft dated October
1998), circulars and codes promulgated pursuant to the same (to the extent
legally effective); and
(ii) any authoritative judicial or legally effective administrative
interpretation of each of the foregoing;
which have as a purpose or effect the protection of, and/or prevention of harm
or damage to the Environment and/or the provision of remedies and/or
compensation for harm or damage to the Environment or which relate to emissions,
discharges, releases or escapes of Hazardous Materials into the Environment or
to the presence, production, processing, distribution, management, use, control,
treatment, storage, burial, disposal, transport or handling of Hazardous
Materials;
Environmental Liability means insofar as it relates to the Power Station, any
Power Station Assets and the Fixed Plant and Equipment, any liability, breach or
non-compliance:
(i) under or with Environmental Laws in relation to ownership or occupation of
the Power Station, any Power Station Assets and the Fixed Plant and
Equipment or to the acts or omissions of PowerGen its employees,
contractors, agents, sub-tenants,
predecessors, licensees or third parties howsoever arising in either case
arising prior to Completion (including, without limitation, any obligation
under Environmental Laws to undertake, pay or contribute to the cost of
Remedial Works); or
(ii) under or with any legally binding undertaking, deed or contract entered
into by or binding on PowerGen or its predecessors on or before Completion,
to the extent that any liability of PowerGen arising thereunder or in connection
therewith results from, relates to or addresses damage or harm to the
Environment, or any adverse effect on the Environment, or the presence of
Hazardous Materials in the Environment prior to Completion;
Environmental Losses means all damages, liabilities, costs and reasonable
expenses (including reasonable professional and/or consultants' fees and any
reasonable expenses) and any moneys paid or to be paid pursuant to any
Settlement (the Losses) suffered by PowerGen, in respect of any Environmental
Liability or in order to reduce, avert or mitigate any Environmental Liability
including any reasonable Losses (whether actual or contingent) incurred in
carrying out Remedial Works, any Losses resulting from Remedial Works being
carried out, and any Losses incurred in otherwise complying with Environmental
Law;
Environmental Proceedings means any criminal, civil, judicial, regulatory or
administrative proceeding, suit or claim of any Environmental Authority or third
party or any statutory or legislative written notice, order, instruction or
requirement issued by an Environmental Authority forming part of an
administrative or judicial action or regulatory procedure which alleges or
determines a breach of or liability under any Environmental Laws, assesses any
civil, regulatory or criminal penalty, prohibits or imposes restrictions upon
PowerGen and/or the Buyer or which requires action to be taken, operations to be
modified or Remedial Works to be undertaken;
Excluded Assets means those assets owned or used by PowerGen or any third party
which are located at the Power Station or currently used in connection with the
business conducted at the Power Station or ancillary thereto and which shall not
form part of the divestment of the Power Station pursuant to this Agreement,
brief details of which are set out in Schedule 9;
Exclusive IPR means all or any intellectual property rights owned at Completion
by PowerGen and used exclusively in the operation of, and generation of
electricity at, the Power Station by PowerGen at Completion, including the
intellectual property rights subsisting in or relating to the computer software
identified in Part 8 of Schedule 11 but excluding the Retained IPR and the Trade
Marks;
Existing Lease means the lease of the Leasehold Property dated 25 September 1996
and made between The Queen's Most Excellent Majesty (1) and PowerGen (2);
Ferrybridge Agreement means the sale and lease agreement relating to the power
station known as Xxxxxxxxxxx "X", Xxxx Xxxxxxxxx between PowerGen and the Buyer
of even date herewith;
Fixed Plant and Equipment means all fixed plant, equipment and machinery owned
by PowerGen and affixed to the land comprised within the Power Station and used
for, in connection with or ancillary to the generation of electricity or for the
electrical and mechanical connection of such plant, equipment and machinery to
any electricity transmission or distribution system, other than the Excluded
Assets;
General Conditions means the Standard Conditions of Sale (3rd Edition);
Good Industry Practice means the exercise of that degree of skill, diligence,
prudence and foresight which would reasonably and ordinarily be expected from a
skilled and experienced operator engaged in the same type of undertaking under
the same or similar circumstances;
Guarantee means the guarantee dated the date hereof between PowerGen and the
Guarantor;
Guarantor means Edison Mission Energy registered in the State of California
whose principal place of business is at 00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxxxx 00000, XXX;
GW means a gigawatt of electricity;
Hazardous Materials means any material (whether in solid, liquid or gaseous
form) which alone or in combination with one or more others is any one of the
following: Waste, hazardous, volatile, toxic, radioactive, ionising, radiating,
carcinogenic, corrosive, explosive, capable of
polluting the Environment, capable of causing harm to human health or any living
organism or its ecosystem or capable of causing a nuisance;
holding company and subsidiary shall have the meanings attributed to them in
sections 736 and 736A of the Companies Xxx 0000;
Information means:
(i) all information and know-how of PowerGen located at the Power Station at
Completion to the extent that it is used in or relates to the operation of
the Power Station at Completion; and
(ii) all such information and know-how of PowerGen which is located elsewhere
and which is material for the operation of the Power Station following
Completion, excluding any information or know-how which relates to the
provision of centrally provided services (including, without limitation,
pool pricing and bidding services, insurance services, technical and
engineering services provided by Power Technology to the extent that these
do not relate exclusively to the Power Station and central financial, tax
and accounting services),
in each case (whether or not confidential and in whatever form held).
Information and know-how shall include without limitation, all formulas,
designs, specifications, drawings, data, manuals and instructions and all
technical and other expertise of PowerGen to the extent that it relates to the
Power Station Assets, the Fixed Plant and Equipment and the operation of the
Power Station, but excluding, for the avoidance of doubt, any information
relating to any of the Excluded Assets set out in paragraph 3 of Schedule 9;
Insurance Policy means the all risks and mechanical and electrical breakdown
insurance including, in each case, consequential loss insurance (as covered by
PowerGen's Property policy, as evidenced by the insurance certificate referred
to in the Disclosure Letter) arranged by J&H Xxxxx & XxXxxxxx for PowerGen;
intellectual property rights or IPR means patents, trade marks, service marks,
trade names, design rights, copyrights (including rights in computer software)
database rights, rights in know-how, and other intellectual property rights, in
each case whether registered or unregistered and including applications for the
grant of any such rights
and all rights or forms of protection having equivalent or similar effect
anywhere in the world;
IPC Authorisation means the integrated pollution control authorisation issued by
the Environment Agency pursuant to Section 6 of the Environmental Protection Act
1990 and any variation thereof;
Lease means the lease of the property identified therein in the agreed form and
to be made between PowerGen and the Buyer at Completion;
Leasehold Assignment means the assignment to be made between PowerGen and the
Buyer in relation to the Leasehold Property in the form set out in Part 3 of
Schedule 3;
Leasehold Property means the property demised by the Existing Lease which is
more particularly described in the Leasehold Assignment;
List means the list in the agreed form of documents to be entered into by the
parties on the date hereof;
Liverpool Bulk Terminal Agreement means the agreement dated the date hereof
between PowerGen and the Buyer relating to the provision of services at the
Liverpool Dock Terminal;
Major Plant Item means each of the generator transformers, the alternator
rotors, the alternator stators, the cooling towers and the main chimneys at the
Power Station as the same are more particularly described in Schedule 12;
Material Contracts means such of the Contracts as are listed in Schedule 6;
NGC means The National Grid Company plc;
Oil Stocks means the stocks of distillate and reclaimed fuel oil contained in
tanks or other storage arrangements at the Power Station at Completion
determined in accordance with Part 1 of Schedule 7;
Operating Permits means all those permits, consents, licences, certificates and
other authorisations and approvals listed or otherwise referred to in Schedule
5;
p/GJ means Xxxxx per gigajoule (net calorific value);
Pensions Contracts means any contracts, undertakings, arrangements, commitments
and engagements between PowerGen and the trustees of the Pension Scheme or
between PowerGen and any Employees in relation to occupational pensions;
Pension Scheme means the PowerGen Group of the Electricity Supply Pension Scheme
established by a Resolution of the Electricity Council passed on 20 January 1983
and governed by clauses and rules which came into operation on 1 April 1983 and
which have been amended from time to time;
Plant and Equipment means all unfixed plant, machinery, motor vehicles,
furniture, tools, equipment and Spare Parts owned by PowerGen and either
situated at the Power Station or, if not so situated, exclusively used in the
business conducted at the Power Station, other than the Excluded Assets and the
Stocks;
Pooling and Settlement Agreement means the agreement of that name dated 30 March
1990, as subsequently amended;
Pounds, Xxxxx, p and (pound sterling) means the lawful currency of the United
Kingdom;
PowerGen Account means the account of PowerGen number 00000000 with Barclays
Bank plc (sort code 20-00-00);
PowerGen's Group means PowerGen, any holding company from time to time of
PowerGen and any subsidiary from time to time of PowerGen or any such holding
company;
PowerGen's Solicitors means Freshfields of 00 Xxxxx Xxxxxx, Xxxxxx XX0X 0XX;
Power Station means (i) all that property to be comprised in and demised by the
Lease and (ii) the Leasehold Property, which are together known as Fiddler's
Ferry Power Station, Warrington, Cheshire, including, without limitation, the
Fixed Plant and Equipment and references herein to the operation, maintenance,
preservation, protection or repair of the Power Station shall include, for these
purposes only, the Power Station Assets;
Power Station Assets means the Exclusive IPR, the Operating Permits, the Plant
and Equipment, the Stocks, the Coal Stocks, the Oil Stocks, the Information, the
Property Agreements, the Leasehold Property, the
Contracts, the Process Control Contracts to which clauses 7.6 and 7.7 refer, and
all the other undertaking and assets of PowerGen ordinarily located at the Power
Station and/or used in the operation of, and generation of electricity at, the
Power Station and/or the Leasehold Property by PowerGen at Completion (other
than the Fixed Plant and Equipment and the reversions (whether mediate or
immediate) expectant on the determination of the Lease and the rights granted
thereunder and the Excluded Assets) and Power Station Asset shall be construed
accordingly;
Power Technology means PowerGen's Power Xxxxxxxxxx Xxxxxx, Xxxxxxxxx-xx-Xxxx,
Xxxxxxxxxx, XX00 0XX;
Premium means the capital amount payable by the Buyer to PowerGen, in
consideration of the grant of the Lease, as the same is more particularly set
out in Part 1 of Schedule 1 or, if applicable, Schedule 1A in circumstances
where the Actual IPC Authorisation is issued (whether by way of new issue or a
variation to the Assumed IPC Authorisation) prior to Completion or as the same
is more particularly set out in Part 2 of Schedule 1 or, if applicable, Schedule
1A in circumstances where the Actual IPC Authorisation is issued after
Completion, in each case, as the same may be adjusted pursuant to this
Agreement;
Process Control Contract means any licence of computer software used by PowerGen
exclusively in the generation of electricity at the Power Station or for the
purpose of monitoring or controlling the process thereof, granted to PowerGen,
or any agreement for the procurement of such software by PowerGen (and to which
PowerGen is a party), including each licence and agreement relating to the
software identified in Part 4(a) of Schedule 11;
Property Agreements means the contracts, licences and agreements, details of
which are set out in Schedule 4;
Remedial Works means the carrying out of works preventing, removing, remedying,
cleaning up, abating, containing or ameliorating the presence or effect of any
Hazardous Materials as required under Environmental Laws or the Operating
Permits or as is reasonably necessary to avert, reduce or mitigate Environmental
Losses;
Replies to Preliminary Enquiries means the replies to preliminary enquiries
annexed to the Disclosure Letter;
Retained IPR means intellectual property rights owned by PowerGen or any
relevant member of PowerGen's Group, excluding the Exclusive IPR and the Trade
Marks, used in the operation of, and generation of electricity at, the Power
Station as carried on by PowerGen at the Power Station and including but not
limited to intellectual property rights subsisting in or relating to the
Technical Reports and the intellectual property rights subsisting in or relating
to the databases and computer software (and any associated documentation)
identified in Parts 5, 6 and 7 of Schedule 11;
Retained IP Agreements means any licences of or contracts relating to any
intellectual property rights, the benefit of which is used in the operation of,
and generation of electricity at, the Power Station as carried on by PowerGen at
the Power Station excluding Process Control Contracts, but including the
licences and/or agreements relating to the items identified in Parts 1, 2, 3 and
7 of Schedule 11;
Sale of Goods Act means the Sale of Goods Xxx 0000 (as amended by the Sale and
Supply of Goods Act 1994);
Scheduled Maintenance Plan means the document entitled 1999 Station Budget and
Scheduled Maintenance Plan, in the agreed form, identifying overhauls and other
maintenance work proposed to be commenced at the Power Station during the course
of 1999 together with an outline of the anticipated capital and special revenue
requirements in respect of such work;
Secretary of State means the Secretary of State for Trade and Industry;
Settlement means an agreement concluded between, as appropriate, PowerGen and/or
the Buyer and the claimant or potential claimant in any actual or potential
Environmental Proceedings on the basis of which such Environmental Proceedings
do not arise or are discontinued or withdrawn;
Spare Parts means the stocks of spare parts allocated to the Power Station which
are treated as fixed assets under PowerGen's accounting policies and which will
be held at the Power Station at Completion;
Station Manager means the person for the time being holding such position at the
Power Station;
Stocks means the stocks of spare parts and consumables (other than, for the
avoidance of doubt, the Spare Parts, the Oil Stocks and the Coal Stocks) which
will be held at the Power Station at Completion and which are not treated as
fixed assets under PowerGen's accounting policies;
Tax Information means information relating to the Power Station which has been
handed over to the Buyer or any member of the Buyer's Group by PowerGen on
Completion and which is within the knowledge, power, possession or control of,
or of any employee of, any member of the Buyer's Group so far as it (i) relates
to any transaction, period or time up to Completion and (ii) is relevant to any
Tax liability or other Tax affairs of PowerGen;
Taxation or Tax includes all forms of taxation and statutory, governmental,
supra-governmental, state, principal, local governmental or municipal
impositions, duties, contributions and levies, tariffs and rates (including
without limitation all employment taxes and national insurance contributions),
in each case whether of the United Kingdom or elsewhere, wherever imposed and
all penalties, charges, costs and interest relating thereto and any deductions
or withholdings of any sort;
Taxes Act means the Income and Corporation Taxes Xxx 0000;
Technical Reports means all of the written reports prepared by Power Technology
in relation to the Power Station;
Technical Support Agreement means the agreement in the agreed form for technical
assistance and support to be entered into between PowerGen and the Buyer on
Completion;
Termination Date means 31 August 1999;
Trade Marks means any trade marks, service marks or trade names, internet domain
names, in each case, whether registered or unregistered and including any
applications for the grant of any such rights and all rights or forms of
protection having equivalent or similar effect anywhere in the world owned or
used by PowerGen or any member of PowerGen's Group;
Transaction Documents means this Agreement, the Lease, the Clawback Letter, the
Leasehold Assignment, the assignments of the benefit, or the novations, of the
Contracts, the assignments of the benefit of the
Property Agreements and the Operating Permits, the Decommissioning Deed, the
Guarantee, the Consents, the Ancillary Agreements, the Disclosure Letter and any
other agreement set out in the List or such other agreement or arrangement to be
entered into under, or contemplated by, this Agreement, each as amended, varied,
supplemented or modified from time to time;
Transitional Services Agreement means the agreement in the agreed form for the
provision by PowerGen of certain transitional services to be entered into by
PowerGen and the Buyer on Completion;
Undertaking means certain undertakings dated 25 November 1998 given to the
Secretary of State by PowerGen pursuant to Section 75G(1) of the Fair Trading
Xxx 0000;
Uninsured Event means, with respect to the Power Station, any event the risk in
respect of which is expressly excluded by the Insurance Policy at the date on
which such event occurs or which would have been covered by the Insurance Policy
but for any avoidance of liability by the insurer as a result of any act or
omission of PowerGen;
Value Added Tax or VAT means value added tax pursuant to the VATA 1994 and/or
such other tax supplementing or replacing the same;
VATA 1994 means the Value Added Tax Xxx 0000;
Warranty Engineer means the independent engineer appointed to determine the
matters arising between the parties in relation to the provisions of clause 15;
Warranties means the warranties set out in Schedule 2 given by PowerGen and
Warranty shall be construed accordingly; and
Waste means any unwanted or surplus substance irrespective of whether it is
capable of being recycled or recovered or has any value.
1.2 In this Agreement, unless the context otherwise requires:
(a) any reference to persons shall include individuals, bodies corporate
(wherever incorporated), unincorporated associations and partnerships;
(b) the headings are inserted for convenience only and shall not affect the
construction of this Agreement;
(c) any reference to an enactment or statutory provision is a reference to it
as it may have been, or may from time to time be, amended, modified,
consolidated or re-enacted and includes all instruments or orders made
under such enactment or statutory provision;
(d) any reference to clauses and Schedules are to the clauses of, and to the
schedules to, this Agreement. The Schedules comprise schedules to this
Agreement and form part of this Agreement;
(e) the provisions of the Transaction Documents are incorporated into this
Agreement to the extent required for any agreement relating to an interest
in land (as defined in section 2(6) of the Law of Property (Miscellaneous
Provisions) Act 1989) contained in this Agreement to be a valid agreement
in accordance with section 2(1) of that Act;
(f) the singular includes the plural and vice versa and a reference to one
gender includes the other;
(g) any reference to a document in the agreed form is to the form of the
relevant document agreed between the parties thereto and, for the purpose
of identification, initialled by each of them or on their behalf (in each
case with such amendments as may be reasonably agreed by or on behalf of
PowerGen and the Buyer at the request of the other);
(h) save in relation to the Replies to Preliminary Enquiries, where any of the
Warranties is qualified by reference to PowerGen's awareness or knowledge,
that Warranty shall be deemed to include a statement that PowerGen has made
all reasonable inquiry of each of PowerGen's Company Secretary and General
Counsel, the Station Manager and such other persons employed by PowerGen of
whom it would be reasonable to suppose, having regard to the relevant
matter, would have the relevant information concerning the subject matter
of the Warranty but shall include no other express or implied statement,
representation or warranty as to the state of PowerGen's knowledge,
awareness or inquiry;
(i) references to PowerGen when relating to any date prior to 9 December 1998
are references to the company registered under number 2366970 then known as
PowerGen plc;
(j) where any indemnity or payment covenant contained in this Agreement is
expressed to be on an after tax basis, then the provisions of Schedule 13
shall apply;
(k) any amount which is due hereunder from PowerGen to the Buyer in respect of
any warranty, indemnity or otherwise shall be paid to the Buyer as a
repayment of the relevant amount of the Premium; and
(l) any express reference to the "consent of the Buyer" being required shall be
deemed to include a statement that such consent may not be unreasonably
withheld or delayed and that (i) such consent shall be deemed to have been
given by the Buyer if the Buyer fails to notify PowerGen in writing that
its consent is withheld within eight (8) Business Days of it having been
notified in writing that its consent is being sought (or such lesser period
(which shall be notified by PowerGen to the Buyer at the time the Buyer's
consent is sought) as may be necessary in order to comply with the
directions of any Competent Authority or with any Applicable Law and (ii)
no such consent shall be required in circumstances where an emergency
situation at the Power Station requires the relevant action to be taken
immediately.
Agreement and deposit
2.1 PowerGen agrees:
(a) with full title guarantee to sell and transfer, and the Buyer agrees to
purchase, the Power Station Assets (or, where applicable, PowerGen's
proprietary interest therein) to the extent capable of ownership and
transfer (other than the Property Agreements, the Fixed Plant and Equipment
and the Leasehold Property) free from all liens, charges and encumbrances
(whether monetary or not) (other than any which may have been created or
evidenced by the terms of any such Power Station Assets);
(b) to grant the Lease, and the Buyer agrees to take, the Lease; and
(c) to assign, and the Buyer agrees to take the assignments of, the Property
Agreements and the Leasehold Property;
in each case, as at and with effect from Completion and upon the terms and
subject to the conditions of this Agreement and the other applicable Transaction
Documents.
2.2 The Deposit shall be paid by the Buyer on or before the date of this
Agreement by way of telegraphic transfer for the credit of the Client Account to
be held by PowerGen's Solicitors as stakeholder, pending Completion or earlier
termination of this Agreement pursuant to clause 3.3. The Deposit shall be held
in an account of a type which, at the date of making the Deposit, provides the
best rate of interest reasonably available from National Westminster Bank plc in
the circumstances taking into account the provisions of this Agreement pending
Completion or earlier termination of this Agreement in accordance with its terms
and as shall have been agreed between PowerGen and the Buyer or, in the absence
of agreement, as may be reasonably stipulated by PowerGen's Solicitors. An
amount representing interest accruing on the Deposit (net of any applicable
taxes and break funding costs) shall be paid to the Buyer on Completion or
earlier termination of this Agreement unless such termination shall have
occurred pursuant to clause 3.4.
2.3 In consideration of the receipt by PowerGen of the Premium (or, in the case
of the application of Part 2 of Schedule 1 or Schedule 1A (if applicable), the
First Instalment (as defined therein)) and any other amounts due and payable
hereunder at Completion pursuant to clause 28.5 or otherwise, PowerGen
undertakes to the Buyer to cause the events set out in clause 5.2 to take place.
In consideration of the foregoing obligations of PowerGen referred to above, the
Buyer shall cause the events set out in clause 5.3 to take place.
Conditions Precedent
3.1.1 The obligations of PowerGen under clause 5.2 shall be conditional upon
the following conditions precedent having been fulfilled (or, where relevant,
waived by PowerGen):
(a) the Buyer and the Guarantor each having taken all necessary corporate
action and obtained all approvals and consents of any Competent Authority
or as may otherwise be required by law or by its constituent documents to
permit it to enter into and perform its obligations under the Transaction
Documents (other than, where applicable, the Contract for Differences);
(b) the DGEGS giving his formal consent in accordance with Paragraph 4 of
Schedule 3 (Compulsory Acquisition of Land) to the Electricity Xxx 0000 to
the disposal of the Power Station (other than the Leasehold Property) by
way of the Lease;
(c) PowerGen having received a legal opinion from the Guarantor's General
Counsel, in form and substance reasonably satisfactory to PowerGen, in
relation to the validity and enforceability of the Guarantor's obligations
pursuant to certain of the Transaction Documents;
(d) PowerGen having received a legal opinion from the Buyer's Guernsey legal
counsel, Ozannes, in form and substance reasonably satisfactory to
PowerGen, in relation to the validity and enforceability of the Buyer's
obligations under those of the Transaction Documents which are effective as
of the Completion Date;
(e) PowerGen having received the requisite approval of the Secretary of State
in accordance with the Undertaking for the divestment of the Power Station
to the Buyer on terms (including terms as to the allocation of emission
limits and fuel purchase obligations) which are reasonably satisfactory to
PowerGen;
(f) PowerGen having received confirmation from the Secretary of State that he
does not intend to refer to the Competition Commission the acquisition by
the Buyer of the power generation business carried on at the Power Station
or any matters arising therefrom; and
(g) PowerGen having received all amounts which are due and payable at
Completion pursuant to any of the Transaction Documents except this
Agreement.
3.1.2 The obligations of the Buyer under clause 5.3 shall be conditional upon
the following conditions precedent having been fulfilled (or waived by the
Buyer):
(a) PowerGen having taken all necessary corporate action and obtained all
approvals and consents of any Competent Authority or as may otherwise be
required by law or by PowerGen's constituent documents to permit it to
enter into and perform its obligations under the Transaction Documents
(other than, where applicable, the Contract for Differences);
(b) PowerGen having performed, in all material respects, its pre-Completion
undertakings contained in clause 4.1(a), (b), (c), (d), (e), (g), (k) and
(l);
(c) no Uninsured Event having occurred after the execution of this Agreement
which would materially and adversely affect the ability of the Buyer to
operate the Power Station at Completion in the manner operated by PowerGen
at the date of this Agreement;
(d) a copy of the Assumed IPC Authorisation or, if then available, the Actual
IPC Authorisation having been provided by PowerGen to the Buyer;
(e) the Buyer not being entitled to terminate this Agreement pursuant to clause
14.5.2;
(f) the Buyer having acceded to the Pooling and Settlement Agreement;
(g) the Buyer having received copies (executed by the relevant counterparties)
of the following documents which shall be in the agreed form in all
material respects:
(i) a deed of novation between the Buyer, PowerGen and NGC in respect
of the following documents:
(aa) Supplemental Agreement Type 1 dated 21 July 1998 between
PowerGen and NGC for the Power Station (A/PG/90/211EN);
(bb) Supplemental Ancillary Services Agreement for the Power
Station (as subsequently amended from time to time) dated 14
March 1997 between PowerGen and NGC;
(cc) Supplementary Reactive Market Ancillary Services Agreement
relating to the Power Station dated 26 March 1999 between
PowerGen and NGC; and
(dd) Interface Agreement relating to the Power Station dated 31
March 1990 between PowerGen and NGC;
(ii) a deed of accession between the Buyer and NGC to the Master
Connection and Use of System Agreement dated 30 March 1990 made
between the parties named therein and NGC (as subsequently
amended from time to time);
(iii) a master ancillary services agreement between the Buyer and NGC;
(h) a licence under the Electricity Xxx 0000 having been granted to the Buyer
to generate electricity in England and Wales on terms reasonably
satisfactory to the Buyer. Without limiting the generality of the
foregoing, the terms set forth in Part 1 of Schedule 14 are deemed to be
reasonably satisfactory to the Buyer for this purpose;
(i) the DGEGS indicating to First Hydro Company that he does not intend to seek
any modifications to that company's generating licence other than the
addition of any terms which are the same or reasonably similar to those
that would fall within the terms set forth in Part 1 of Schedule 14;
(j) approval having been granted by the Secretary of State under the Fair
Trading Act 1973 on terms reasonably satisfactory to the Buyer of the
acquisition by the Buyer of the power generation business carried on at the
Power Station. Without limiting the generality of the foregoing, the terms
set forth in Part 2 of Schedule 14 are deemed to be reasonably satisfactory
to the Buyer for this purpose;
(k) approval having been granted by the Secretary of State, in accordance with
the Undertaking, for divestment of the Power Station:
(i) to the Buyer; and
(ii) on terms (including terms as to the allocation of emission limits
and fuel purchase obligations) which are reasonably satisfactory
to the Buyer.
Without limiting the generality of the foregoing, the terms set forth in
Part 3 of Schedule 14 are deemed to be reasonably satisfactory to the Buyer
for this purpose;
(l) the Buyer having obtained a direction or directions from the DGEGS (or
confirmation in reasonably satisfactory form to the Buyer that such
direction or directions will be obtained) giving the Buyer all necessary
derogations from the requirements of the Grid Code in a form reasonably
acceptable to the Buyer (it being acknowledged that the draft reactive
power derogations submitted by the Buyer to the DGEGS by a letter dated on
or around 29 April 1999 are in reasonably acceptable form; it being further
acknowledged that if the actual derogations are given on
an "indefinite" rather than a "lifetime" basis, such derogations will be
in a reasonably acceptable form to the Buyer) to enable the Buyer to
operate the Power Station in a manner consistent with the manner in
which PowerGen has operated the Power Station in the twelve months prior
to the date of this Agreement.
3.2(a) Each of PowerGen and the Buyer undertakes to use all reasonable
endeavours (including, in the case of the Buyer and where applicable, the
payment of monies or the provision of collateral, in each case, to the extent
reasonable in the circumstances, provided however that in no circumstances shall
this obligation require the Buyer to create any form of fixed or floating charge
or any other form of security over its assets) to ensure that the conditions
precedent referred to in clauses 3.1.1 and 3.1.2 as are within its control (or
within the control of any member of PowerGen's Group or the Buyer's Group, as
the case may be) are fulfilled as soon as reasonably practicable and in any
event by the Termination Date and each party undertakes immediately upon
satisfaction of a condition precedent by it or within its control to notify the
others of such fact. Without prejudice to the foregoing, PowerGen and the Buyer
shall promptly co-operate with and provide all information and assistance
reasonably required by each other with the object of satisfying the conditions
precedent set out in clauses 3.1.1 and 3.1.2. For the avoidance of doubt and
for the purposes of interpreting clauses 3.4 and 3.5, an allegation by either
party that another party has failed to co-operate in the manner set out in the
preceding sentence of this clause shall not be used by the party alleging such
failure as a reason not to perform its Completion obligations under this
Agreement.
(b) Either party shall be entitled in its absolute discretion, by written
notice to the other, to waive (either in whole or in part) its right to
require the satisfaction of those conditions precedent in clauses 3.1.1 and
3.1.2 which are capable of being waived by it.
3.3 Provided that there is not outstanding or unresolved any Dispute pursuant
to this Agreement on the relevant date and unless otherwise agreed by the
parties, if any of the conditions precedent has not been fulfilled (or waived)
by the Termination Date and neither PowerGen nor the Buyer has terminated this
Agreement pursuant to clauses 3.4 or 3.5, as the case may be, within one (1)
Business Day of the Termination Date (or such later date as the Buyer may
agree), PowerGen shall cause PowerGen's Solicitors to return the Deposit to the
Buyer together with an amount representing all accrued interest thereon (net of
any applicable Taxes and break funding costs) and the obligations of the
parties under this Agreement with respect to the divestment of the Power Station
and the Power Station Assets shall terminate and, save in relation to the return
of the Deposit and an amount representing the accrued interest thereon (net of
any applicable Taxes and break funding costs) as aforesaid, neither party shall
have any claim of any nature whatsoever against the other party under this
Agreement for any failure to perform such obligations.
3.4 Subject to clause 3.6, if by the Termination Date the Buyer has failed:
(a) to use all reasonable endeavours to ensure the fulfilment of those
conditions precedent within its control which are required by PowerGen
(other than where the same have been waived by PowerGen); or
(b) to perform its obligations under clause 5.3 in circumstances where all the
conditions precedent have been satisfied,
the Buyer shall be in default of its obligations under this Agreement. Such
default shall constitute a repudiation by the Buyer of its obligations hereunder
which shall, without prejudice to any of PowerGen's other rights or remedies
against the Buyer for breach of this Agreement or any claim that PowerGen may
have against the Guarantor pursuant to the Guarantee, entitle PowerGen to
terminate this Agreement forthwith, whereupon the Deposit and an amount
representing the interest accrued thereon (net of any applicable Taxes and break
funding costs) shall be forfeited by the Buyer and shall be payable to PowerGen
(and the Buyer consents to such payment by PowerGen's Solicitors in such
circumstances). The failure by the Guarantor to make any payment to PowerGen
pursuant to clause 2.4(a) of the Guarantee shall also entitle PowerGen to treat
such non-payment as a repudiation of, and terminate, this Agreement.
3.5 Subject to clause 3.6, if by the Termination Date PowerGen has failed:
(a) to use all reasonable endeavours to ensure the fulfilment of the conditions
precedent within its control which are required by the Buyer (other than
where the same have been waived by the Buyer); or
(b) to perform its obligations under clause 5.2 in circumstances where all the
conditions precedent have been satisfied,
and, provided that the provisions of clause 3.4 shall not then apply, the Buyer
may, without prejudice to the Buyer's rights or remedies against PowerGen for
breach of this Agreement, terminate this Agreement whereupon PowerGen shall
immediately cause PowerGen's Solicitors to return the Deposit to the Buyer
together with any amount representing all accrued interest thereon (net of any
applicable Taxes and break funding costs).
3.6 Notwithstanding the foregoing provisions of this clause 3, PowerGen may
terminate this Agreement prior to Completion and prior to the Termination Date
if (i) required to do so by the Secretary of State in order to satisfy its
obligations owed to him pursuant to the Undertaking or (ii) provided that the
Ferrybridge Agreement is not then terminated, the Secretary of State approves
the Buyer, in accordance with the Undertaking, as a person to whom either the
Power Station or the power station known as Ferrybridge "C" which is the subject
of the Ferrybridge Agreement (but not both) may be disposed of. In such
circumstances, PowerGen shall immediately cause the Deposit to be returned to
the Buyer together with an amount representing accrued interest thereon (net of
any applicable Taxes and break funding costs) but shall, except in respect of
any breach of this clause 3.6, have no further liability to the Buyer pursuant
to this Agreement as a consequence of such termination.
3.7 Except as expressly otherwise provided in this Agreement, the parties shall
not be liable to one another by way of indemnity or by reason of any breach of
this Agreement or of statutory duty or by reason of tort (including but not
limited to negligence) for any loss of profit, loss of use or any other indirect
or consequential costs suffered by the relevant party, provided always that in
the event of PowerGen terminating this Agreement in accordance with its terms,
the foregoing shall not apply with respect to the Buyer compensating PowerGen
(subject to PowerGen having complied with its duty to mitigate its losses) for
the difference between (i) the sale proceeds it actually receives (and is
entitled to retain) on a disposal of the Power Station to a third party
purchaser on terms (except as to the consideration payable by such purchaser)
which are not materially less favourable to the purchaser as those under this
Agreement and the other Transaction Documents, together with any payments
actually made by the Buyer and/or the Guarantor pursuant to this Agreement and
the Guarantee and any costs and expenses incurred by PowerGen in connection with
such a disposal, and (ii) the payments required to be made by the Buyer pursuant
to this Agreement.
Pre-Completion Undertakings
4.1 Save as otherwise expressly provided in the Transaction Documents and
pending Completion (except in relation to sub-paragraph (d) below, so far as is
necessary to provide the Buyer with cover for Consequential Losses (in
accordance with the Insurance Policy) following Completion relating to events
prior to Completion), PowerGen shall:
(a) carry on the operation of the Power Station in accordance with Good
Industry Practice, the Scheduled Maintenance Plan and the provisions of the
Contracts, the Operating Permits and all Applicable Laws;
(b) utilise both the Spare Parts and the Stocks only for the purposes of the
Power Station and in accordance with Good Industry Practice and shall order
replacement Spare Parts and Stocks in the normal course of business;
(c) without restricting PowerGen's right to operate the Power Station under any
operating regime which complies with Good Industry Practice having regard
to the age and condition of the Power Station and without being required to
exceed the specifications set out in the Scheduled Maintenance Plan (as the
same may be amended from time to time), take all reasonable steps to
preserve and protect the Power Station;
(d) maintain the Insurance Policy on the same terms, and at the same levels, as
those set out in the insurance certificate referred to in the Disclosure
Letter (unless such cover is no longer available or only available at a
materially greater cost, unless requested by the Buyer in which case the
Buyer shall pay any additional premium, and for this purpose PowerGen will
provide the Buyer on a timely basis with details of such matters) in
respect of the assets the subject of this Agreement and, immediately
following the execution of this Agreement and at the Buyer's cost (if any),
PowerGen shall provide to the Buyer written confirmation that the following
endorsements, effective as from the time of execution of this Agreement,
have been included on the Insurance Policy:
(i) the addition of the Buyer as having an additional insured
interest in the Insurance Policy with respect to any claims
arising in connection therewith in respect of the Power Station
or, to the extent applicable, the Leasehold Property or the Power
Station Assets immediately following the execution of this
Agreement;
(ii) the Buyer shall receive 30 days prior notice of any cancellation
of the Insurance Policy except in the event of non-payment of
premium when 10 days prior notice shall be given;
(iii) the insurance covered by the Insurance Policy shall be primary
with respect to the interest of the Buyer and any other
insurances maintained by the Buyer is excess and not contributory
with such insurance; and
(iv) the insurers shall waive all rights of subrogation against the
additional insured in respect of the Insurance Policy;
(e) apply any proceeds of the Insurance Policy received by PowerGen in so far
as they relate to the repair and/or restoration of any loss or damage to
the Power Station caused during the period between the date of this
Agreement and Completion;
(f) other than in the ordinary and usual course of the business of the Power
Station, not enter into or amend, renew or extend any contracts or other
arrangements in any way relating to the Power Station or the operation
thereof having a value of (pound sterling)50,000 or more if the same are to
be transferred to the Buyer on Completion without the Buyer's prior written
approval. For the avoidance of doubt, contracts for expenditure identified
in the Scheduled Maintenance Plan shall be regarded as being in the
ordinary and usual course of the business of the Power Stations;
(g) not (without the Buyer's prior written consent) enter into or amend, renew
or extend any contracts or other arrangements in any way relating to the
Power Station or the operation thereof having a value of (pound
sterling)250,000 or more individually or having, when aggregated with all
other contracts or arrangements (of any value) of such nature, an aggregate
value of (pound sterling)1,000,000 or more if the same are to be
transferred to the Buyer on Completion;
(h) not (without the Buyer's prior written consent) make any amendment to the
terms and conditions of employment (including without limitation,
remuneration, pension entitlements and other benefits) of any senior
employee (being any employee employed at the Power Station and earning on a
full time basis in excess of (pound sterling)40,000) (other than minor
increases in the ordinary course of business which PowerGen shall notify to
the Buyer as soon as reasonably practicable thereafter) or dismiss any
senior employee (other than for a reason set out in sections 98(1) or (2)
of the Employment Rights Xxx 0000 provided that the dismissal does not fall
within Regulation 8(1) of the Employment Regulations) or engage or appoint
any additional senior employee;
(i) subject to the terms of clause 21 and the rights of any third parties,
allow the Buyer's representatives, agents and advisers upon reasonable
notice and during normal business hours, reasonable access to the Power
Station and to the Information, subject always to the Buyer's
representatives, agents and advisers observing Good Industry Practice and
complying with the reasonable instructions of the Station Manager and all
Applicable Laws (including, without limitation, health and safety
requirements) and not interfering with the operation of the Power Station;
(j) continue to implement its proposed programme of work (as disclosed in the
Disclosure Letter) relating to millennium compliance issues arising in
connection with the Power Station, in accordance with the timetable
currently proposed therein, and otherwise in accordance with the Buyer's
reasonable requests, subject to the following:
(i) PowerGen shall be reimbursed (on an after tax basis) its
reasonable costs incurred in complying with each request;
(ii) PowerGen shall not be required to shutdown the Power Station, any
Plant and Equipment, or otherwise cease any operation carried on
at the Power Station, except as would (if at all), apart from the
request, be shutdown in accordance with the Scheduled Maintenance
Plan; and
(iii) no act or omission of PowerGen in complying with the request,
nor the consequence thereof or any state of affairs
resulting therefrom, shall constitute a breach of the Warranties
in Schedule 2 or any of them;
(k) not create or permit to arise (other than solely by operation of law and in
the ordinary course of business the amounts of which are not material) any
liens, charges or encumbrances on or over the Power Station, any of the
Power Station Assets or the Property Agreements;
(l) not take or refrain from taking any action which would materially and
adversely affect the ability of the Buyer to operate the Power Station at
Completion in the same manner as operated by PowerGen at the date hereof,
including with respect to any of the following:
(i) the disposal of any of the IPR to be assigned under clause 7.1 or
(so far as it relates to the operation of and generation of
electricity at the Power Station as carried on by PowerGen at the
date of this Agreement) any of the Retained IPR;
(ii) the termination of any Process Control Contract which is current
at the date of this Agreement or (so far as it relates to the
operation of and generation of electricity at the Power Station
as carried on by PowerGen) any Business Software Licence or
Retained IP Agreement which is current at the date of this
Agreement (but excluding such licences and/or agreements relating
to the items in Part 3 of Schedule 11) without the prior consent
of the Buyer; and
(m) in relation to any proposed variation or new issue of the Actual IPC
Authorisation or the Assumed IPC Authorisation, as the case may be:
(i) consult as fully as is reasonably practicable with the Buyer;
(ii) give the Buyer reasonable notice of any meetings with the
Environment Agency;
(iii) if agreed by the Environment Agency, permit the Buyer to attend
any such meetings with the Environment Agency and to contribute
to the same; and
(iv) have proper regard to any comments or representations made by the
Buyer in relation to any such proposed variation or new issue.
4.2 Where PowerGen fails to perform, in any material respect, any of its pre-
Completion undertakings contained in clauses 4.1(f), (h), (i), (j) and (m), and
the liability (if any) of PowerGen to the Buyer in respect of such a breach of
undertaking shall, to the extent it is quantifiable and exceeds, in the
aggregate, a value of (pound sterling)50,000 (the Undertaking Liability), then
the Buyer's sole remedy in respect of the occurrence of an Undertaking Liability
shall be a reduction in the Premium paid by the Buyer at Completion by the
amount representing the Undertaking Liability subject always to a maximum
downwards adjustment to the Premium of (pound sterling)95,550,000. The
occurrence of an Undertaking Liability or the amount thereof shall be agreed
between the parties, in default of which agreement the matter shall be
determined in accordance with clause 27. In cases where the Buyer claims that an
Undertaking Liability has occurred but PowerGen disputes such claim or the
occurrence of an Undertaking Liability is accepted but the amount thereof is
disputed by the parties, Completion shall take place in accordance with the
provisions of this Agreement, provided that such element of the Premium as
represents the Buyer's estimate of the amount of the disputed Undertaking
Liability or, where applicable, the higher of each of the parties' valuations of
the disputed amount (the Disputed Amount) shall be paid into the Client Account
by the Buyer on the Completion Date and on terms that PowerGen's Solicitors hold
the Disputed Amount on trust on behalf of the parties until directed to pay the
same or a relevant portion thereof together with an amount representing interest
accrued thereon (net of any applicable Taxes and break funding costs) to the
parties or one of them in accordance with the decision of an arbitration
tribunal upon resolution of the dispute. The Disputed Amount shall be held in an
account of a type which, at the date of its payment into the Client Account,
provides the best rate of interest reasonably available from National
Westminster Bank plc in the circumstances, as shall have been agreed between
PowerGen and the Buyer or, in the absence of agreement, as may be reasonably
stipulated by PowerGen's Solicitors.
4.3 If any Competent Authority whose approval of the terms of the Contract for
Differences is required, as a condition for giving such approval, requires
either party to make a formal application, analysis, justification or other
similar submission to the Competent Authority,
each affected party undertakes to provide such reports and submissions in a
complete and timely manner and the other party agrees to co-operate and assist
the affected party in so doing in order to obtain the required approval from the
Competent Authority of the terms of the Contract for Differences.
Completion
5.1 The transactions contemplated by this Agreement (other than the provisions
of Part 2 of Schedule 1 or Schedule 1A (if applicable) where such provisions
apply, in which case the Second Instalment (as therein defined) together with
any other amounts due thereunder shall be payable in accordance with the terms
thereof) shall be completed at the offices of PowerGen's Solicitors within five
(5) Business Days of the fulfilment or, where relevant, waiver of such of the
conditions precedent set out in clauses 3.1.1 and 3.1.2 or, in circumstances
where the conditions precedent in clause 3.1.2(h), (i), (j) and (k) of the
Ferrybridge Agreement are at that time no longer capable of being fulfilled,
within ten (10) Business Days thereafter (or on such other date and at such
other place as the parties may agree) when the events detailed in the remainder
of this clause 5 shall take place.
5.2 On the Completion Date, PowerGen shall, subject to, and in each case in
accordance with, the relevant provisions of this Agreement:
(a) grant the Lease to the Buyer;
(b) deliver to the Buyer those of the Power Station Assets which are capable of
transfer by delivery;
(c) deliver to the Buyer, in a manner complying with Schedule 7, the Coal
Stocks and the Oil Stocks;
(d) deliver to the Buyer the Information;
(e) enter into the Leasehold Assignment;
(f) deliver to the Buyer assignments or novations of the Contracts and the
Operating Permits for which Consents are necessary and have been obtained,
together with copies of such Consents;
(g) enter into the assignment(s) of the Property Agreements for which Consents
are not necessary or are necessary and have been obtained;
(h) enter into the Decommissioning Deed;
(i) if applicable, enter into the Contract for Differences;
(j) enter into the Technical Support Agreement;
(k) enter into the Clawback Letter;
(l) enter into the Transitional Services Agreement; and
(m) other than in respect of amounts which have been borne by PowerGen and, as
at the Completion Date, remain unpaid and outstanding under the Insurance
Policy in relation to the Power Station, if applicable, deliver to the
Buyer an assignment of PowerGen's right to receive any proceeds of
insurance from the Insurance Policy in connection with any claims made
pursuant to clause 4(e).
5.3.1 Immediately upon PowerGen fulfilling its obligations under clause 5.2
(and subject only thereto), and irrespective of whether the Buyer has at that
time fulfilled its obligations under clause 5.3.2, on the Completion Date the
Buyer shall cause:
(a) in case of the application of Part 1 of Schedule 1 or Schedule 1A (if
applicable), the Premium (as defined therein); or
(b) in case of the application of Part 2 of Schedule 1 or Schedule 1A (if
applicable), the First Instalment (as defined therein),
together with all other amounts due and payable on Completion pursuant to clause
28.5 of this Agreement to be paid by an electronic funds transfer to the
PowerGen Account.
5.3.2 Without prejudice to the Buyer's obligations under clause 5.3.1 (and in
addition thereto), on the Completion Date, the Buyer shall subject to, and in
each case in accordance with, the relevant provisions of this Agreement:
(a) enter into the Lease;
(b) accept delivery of those of the Power Station Assets which are capable of
transfer by delivery;
(c) accept delivery of the Coal Stocks and the Oil Stocks;
(d) enter into the Leasehold Assignment;
(e) enter into the assignment(s) of the Property Agreements for which Consents
are not necessary or are necessary and have been obtained;
(f) enter into the Decommissioning Deed;
(g) enter into the assignments and/or novations of the Contracts and, so far as
applicable, the Operating Permits for which Consents are necessary and have
been obtained;
(h) if applicable, enter into the Contract for Differences;
(i) enter into the Technical Support Agreement;
(j) enter into the Transitional Services Agreement;
(k) execute the deed of adherence to the Pension Scheme as referred to in
paragraph 4.8 of Part 1 of Schedule 8; and
(l) procure that the Guarantor enters into the Clawback Letter.
TITLE AND SUPPLEMENTARY PROVISIONS
6.1 The provisions of Schedule 3 shall apply in respect of the Lease and the
Leasehold Property.
6.2 The provisions of Schedule 4 shall apply in relation to the Property
Agreements.
6.3 The provisions of Schedule 5 shall apply in relation to the Operating
Permits.
6.4 The provisions of Schedule 7 shall apply in relation to the Oil Stocks and
Coal Stocks.
6.5 PowerGen shall with all due diligence execute such other documents and take
such other steps as may reasonably be required by the Buyer to give effect to
this Agreement with any costs arising therefrom being borne by the parties
equally.
6.6 Risk in respect of the Power Station, the Leasehold Property, the Power
Station Assets (excluding the Oil Stocks and the Coal Stocks) shall pass on the
execution of this Agreement by the parties. Risk in respect of the Oil Stocks
and the Coal Stocks shall pass on Completion.
6.7 Title to all Power Station Assets which are to be transferred by delivery
shall pass on delivery and such delivery shall be deemed to take place at the
Power Station on Completion.
INTELLECTUAL PROPERTY RIGHTS
Assignment of Exclusive IPR
7.1 The Exclusive IPR is hereby assigned to the Buyer with effect from the
Completion Date.
7.2 PowerGen shall execute, at the Buyer's cost, such other documents and take
such other steps as may reasonably be required by the Buyer to vest the title to
the Exclusive IPR in the Buyer.
Licence of Retained IPR
7.3 PowerGen hereby grants the Buyer, with effect from the Completion Date, the
following royalty free, (subject to clause 7.4) perpetual, non-exclusive and
(subject to clause 7.5) non-transferable licences:
(a) to use, or to have used on its behalf, the Retained IPR to which this
clause 7.3 refers identified in Part 5 of Schedule 11; and
(b) to use, develop, modify and otherwise alter, or to have done any of those
acts on its behalf, the Retained IPR to which this clause 7.3 refers
identified in Part 6 of Schedule 11,
in each case exclusively in connection with the operation of and generation of
electricity at the Power Station as carried on by PowerGen. This clause 7.3
only refers to Retained IPR which, at Completion, is owned by PowerGen or any
member of PowerGen's Group and is used in the operation of, and generation of
electricity at, the Power Station as carried on by PowerGen at Completion.
7.4 Each licence granted under clause 7.3 shall continue in force only for so
long as the Buyer (or any of the Buyer's successors or assignees pursuant to
clause 7.5) is doing, or having done on its behalf, any of such licensed acts
exclusively in connection with the operation of, and generation of electricity
at, the Power Station as carried on by PowerGen.
7.5 Subject to clause 23, the Buyer shall not be entitled to assign, sub-
license or transfer any of its rights, obligations, title or interest in any of
the licences granted in clause 7.3 without the prior written consent of PowerGen
(such consent not to be unreasonably withheld), except to the extent that such
assignment, sub-licence or transfer is in favour of another member of the
Buyer's Group (and such assignment, sub-licence or transfer shall be permitted
accordingly).
Process Control Contracts
7.6 To the extent that the benefit (subject to the burden) of any Process
Control Contract to which this clause 7.6 refers can be assigned by PowerGen to
the Buyer without any Consent, this Agreement shall (subject to Completion
taking place) constitute an assignment of the benefit (subject to the burden) of
each such Process Control Contract (a Relevant PC Contract) with effect from
Completion:
(a) the Buyer shall with effect from Completion perform all the obligations of
PowerGen under each Relevant PC Contract in accordance with its terms
except insofar as such obligations should have been performed before that
date;
(b) the Buyer undertakes fully and effectively to indemnify and keep
indemnified (on an after tax basis) PowerGen against all liabilities,
losses, actions, proceedings, costs, claims, demands and expenses (Losses)
brought or made against PowerGen by reason of a breach by the Buyer of
clause 7.6(a).
7.7 Insofar as the Power Station Assets comprise the benefit (subject to the
burden) of Process Control Contracts to which this clause 7.7 refers which
cannot effectively be assigned or transferred by PowerGen to the Buyer except by
agreements of novation or without obtaining a Consent:
(a) subject to clause 7.7(c) unless or until any such Process Control Contract
is so novated or assigned or any necessary Consent is obtained, PowerGen
shall receive and hold the benefit of the relevant Process Control Contract
as agent for the Buyer and shall accordingly pay to the Buyer promptly upon
receipt any sums received by it under any such Process Control Contract;
(b) subject to clause 7.7(c), the Buyer shall (at the Buyer's cost) perform
such Process Control Contract (provided the terms thereof have been
disclosed to the Buyer) in accordance with its terms as sub-contractor to
PowerGen provided that
sub-contracting is permitted under the terms of the Process Control
Contract in question, and where sub-contracting is not so permitted the
Buyer shall perform such Process Control Contract in accordance with its
terms as agent for PowerGen and shall, in either case, indemnify (on an
after tax basis) PowerGen against all Losses incurred by PowerGen arising
in connection with any such Process Control Contract in respect of the
period after the Completion Date;
(c) nothing in this Agreement shall be construed as an attempt to sell,
transfer, assign or sub-license or hold as agent, any such Process Control
Contract or the benefit thereof which by its terms is not transferable,
assignable or sub-licensable or may not be held as agent without Consent
unless the Consent shall have been given, and PowerGen shall use its
reasonable endeavours at PowerGen's cost to procure such Consent. In such
event or if any necessary Consent is not obtained within 60 Business Days
after Completion or is refused and the procedure set out in this clause 7.7
does not enable the full benefit (subject to the burden) of any such
Process Control Contract to be enjoyed by the Buyer after Completion, the
parties shall use all reasonable endeavours to achieve an alternative
solution pursuant to which the Buyer shall both receive the full benefits
of that Process Control Contract and assume the associated obligations.
7.7A Clauses 7.6 and 7.7 refer only to Process Control Contracts which are
current at Completion and which relate to computer software which is used at
Completion in the manner required by the definition thereof.
Retained IP Agreements
7.8 Where the Buyer requires to use the benefit of any Retained IP Agreement
identified in Part 1 of Schedule 11 which is current at Completion in order to
carry out the operation of and generation of electricity at the Power Station
and the Leasehold Property as carried on by PowerGen at the Power Station, then
PowerGen shall use its reasonable endeavours during the period of 3 months
following the Completion Date to obtain the consent of such third party (a
Relevant Consent) as may be necessary to authorise those acts during such period
(each being a Relevant Act), in each case in accordance with the relevant
Retained IP Agreement (the Relevant Agreement):
(a) where any Relevant Consent is obtained:
(i) the Buyer shall ensure that all Relevant Acts shall be in
accordance with the Relevant Agreement; and
(ii) PowerGen or the relevant member of PowerGen's Group shall incur no
liability to the Buyer in respect of the provision or use, or the
purported provision or use, of the benefit of the Relevant IP
Agreement;
(b) the Buyer shall indemnify and keep indemnified (on an after tax basis)
PowerGen in respect of all Losses incurred by PowerGen as a result of a
breach by the Buyer of clause 7.8(a)(i).
7.9 The Buyer shall provide such assistance and information as PowerGen may
reasonably require in the performance of clause 7.8, and the Buyer shall enter
into such reasonable undertakings in respect of obligations for which the Buyer
will become subject in connection with the Relevant Consent.
Business Software Licences
7.10 Where the Buyer requires to use the benefit of any Business Software
Licence which is current at Completion in order to carry out the operation of
and generation of electricity at the Power Station as carried on by PowerGen,
then PowerGen shall use its reasonable endeavours during the period of 3 months
following the Completion Date to obtain the consent of any relevant third party
to the assignment of such of the benefit thereof (subject to the burden) as is
used by PowerGen at Completion in the operation of, and generation of
electricity at, the Power Station.
7.11 All the assignments made by PowerGen, licences granted by PowerGen, and
other obligations of PowerGen, under this clause 7 are subject to the conditions
precedent in clauses 3.1.1 and 3.1.2 being fulfilled or waived in accordance
with the provisions of this Agreement.
CONTRACTS
8.1 Subject to Completion taking place and with effect from Completion, the
Buyer undertakes to PowerGen to assume the obligations and, in return, shall
become entitled to the benefits of PowerGen under the Contracts and the Buyer
undertakes to carry out, perform and complete all the obligations and
liabilities created by or arising under the Contracts (except for any
obligations or liabilities attributable to the non-performance or wrongful
performance on the
part of PowerGen or its employees, agents or sub-contractors (each a Breach))
and shall indemnify PowerGen and keep it fully indemnified (on an after tax
basis) against all liabilities, losses, actions, proceedings, costs, claims,
demands and expenses brought or made against or incurred by PowerGen in respect
of the non-performance or wrongful performance by the Buyer or its employees,
agents or sub-contractors of the Contracts after Completion.
8.2 To the extent that the benefit of any Contract may be assigned by PowerGen
to the Buyer without any third party consent, this Agreement shall constitute an
assignment of the relevant Contract with effect from Completion and PowerGen
shall indemnify the Buyer and keep it fully indemnified (on an after tax basis)
against all liabilities, losses, actions, proceedings, costs, claims, demands
and expenses brought or made against or incurred by the Buyer in respect of any
Breach.
8.3 In so far as any of the Material Contracts are not assignable to the Buyer
without any Consent, this Agreement shall not constitute an assignment or
attempted assignment if such assignment or attempted assignment would constitute
a breach of such Material Contract. In the event that a Consent is required:
(a) PowerGen, at the Buyer's request and at PowerGen's cost, shall use all
reasonable endeavours with the co-operation of the Buyer to procure such
Consent and shall not assign any such Material Contract until such Consent
is obtained;
(b) unless and until any such Consent is obtained and the relevant Material
Contract is so novated or assigned, PowerGen shall be deemed to hold the
benefit of such Material Contract as trustee for the Buyer and PowerGen
shall not, unless required by the Buyer, agree to amend or terminate any
such Material Contract and the Buyer shall (if such sub-contracting is
permissible and lawful under the relevant Material Contract) as PowerGen's
sub-contractor or agent perform all the obligations of PowerGen under such
Material Contract and shall indemnify PowerGen fully (on an after tax
basis) in respect of all liability in connection with the relevant Material
Contract (except to the extent such liability arises as a result of a
Breach); and
(c) unless and until such Consent is obtained and the relevant Material
Contract novated or assigned accordingly, PowerGen
will give all such reasonable assistance to the Buyer, and at the Buyer's
cost, as the Buyer may reasonably require to enable the Buyer to enforce
PowerGen's rights under such Material Contract.
If such Consent is refused or otherwise not obtained on terms reasonably
satisfactory to the Buyer within 60 Business Days of the Completion Date, the
Buyer shall be entitled to require PowerGen to terminate the relevant Material
Contract, provided that the Buyer shall indemnify PowerGen (on an after tax
basis) for any costs incurred by PowerGen in connection with any such
termination.
8.4 If any Material Contract to which clause 8.3(b) applies does not permit
sub-contracting or agency, the parties shall, at their own respective costs,
make such other arrangements between themselves as may be permissible to
implement as far as possible the effective transfer of the benefit of such
Material Contract to the Buyer.
8.5 In so far as any of the Contracts which are not Material Contracts are not
assignable to the Buyer without a Consent, this Agreement shall not constitute
an assignment or attempted assignment if such assignment or attempted assignment
would constitute a breach of any such Contract. In the event that a Consent is
required:
(a) unless and until any such Consent is obtained and the relevant Contract is
so novated or assigned, PowerGen shall be deemed to hold the benefit of
such Contract as trustee for the Buyer and PowerGen shall not, unless
required by the Buyer, agree to amend or terminate any such Contract and
the Buyer shall (if such sub-contracting is permissible and lawful under
the relevant Contract) as PowerGen's sub-contractor or agent perform all
the obligations of PowerGen under such Contract and shall indemnify
PowerGen fully (on an after tax basis) in respect of all liability in
connection with the relevant Contract (except to the extent such liability
arises as a result of a Breach); and
(b) unless and until such Consent is obtained and the relevant Contract novated
or assigned accordingly, PowerGen shall give all such reasonable assistance
to the Buyer, and at the Buyer's cost, as the Buyer may reasonably require
to enable the Buyer to enforce PowerGen's rights under such Contract.
PREPAYMENTS AND APPORTIONMENTS
9.1 Where anything (including any service) is to be provided by the Buyer under
any of the Contracts, the Property Agreements or the Operating Permits after
Completion, but any payment (whether by way of deposit, prepayment or otherwise
but, for these purposes, excluding any part representing properly chargeable
VAT) in respect of the price or cost of it has been received by PowerGen before
Completion or is due to be paid to PowerGen after Completion, on Completion the
Buyer shall deduct and be entitled to retain a sum equal to the amount of that
payment (to the extent that it is attributable to anything to be so provided by
the Buyer) from the Premium to be paid by the Buyer.
9.2 Where anything (including any service) is to be provided to the Buyer under
any of the Contracts, the Property Agreements or the Operating Permits after
Completion, but any payment (by way of deposit, prepayment or otherwise and, for
these purposes, excluding any part of such payment that represents recoverable
VAT) has been paid by PowerGen in respect of the price or cost of it before
Completion, or is due to be paid by PowerGen in respect of it after Completion,
on Completion the Buyer shall increase the Premium payable to PowerGen by a sum
equal to the amount of such payment (to the extent that it is attributable to
anything to be so provided to the Buyer). To the extent that any items of work
set out in the Scheduled Maintenance Plan to be undertaken during 1999 have not
been commenced (or else have been commenced but, as at Completion, the payment
for such work remains outstanding) (the Unperformed Work) then, on Completion
the Buyer shall:
(a) deduct from the Premium a sum equal to the total amount (including
irrecoverable VAT) attributable to the Unperformed Work (which shall be
calculated on the basis of the capital and special revenue amounts
attributable to such items in the Scheduled Maintenance Plan); and
(b) for the avoidance of doubt, assume in accordance with and subject to the
terms of this Agreement all of PowerGen's liability with regard to the
payment (including VAT properly payable thereon) of any third party
contractors in respect of any such Unperformed Work.
9.3 Subject to clauses 9.1 and 9.2, upon Completion, or as soon as practicable
thereafter, all necessary apportionments shall be made by
PowerGen on such basis as PowerGen shall, with the Buyer's consent, reasonably
stipulate in respect of accrued charges and payments in advance payable or
receivable in respect of the Power Station, the Leasehold Property and the Power
Station Assets as at Completion, together with the amount of any reimbursement
of business expenses and overtime payments relating to the period prior to
Completion made to Employees by the Buyer after Completion, and the resulting
balance shall be paid over to the relevant party promptly after such
apportionment has been made. For the avoidance of doubt:
(a) the apportioned amount of any payment due but not paid as at the Completion
Date shall be paid when received by the relevant party;
(b) apportionments in accordance with this clause 9.3 shall include an
apportionment in respect of any business rates payable by PowerGen in
relation to the Power Station and/or the Leasehold Property for the rating
year 1999/2000 which shall be in addition to any business or other rates or
outgoings levied on the Buyer as a result of its occupation, or right of
occupation, of the Power Station and/or the Leasehold Property from the
Completion Date.
9.4 Without prejudice to the generality of clause 28.1, all payments made
whether by PowerGen or the Buyer in respect of apportionments at Completion are
exclusive of Value Added Tax and if any such payments shall constitute
consideration or adjustments to consideration for an actual or deemed supply for
Value Added Tax purposes which is taxable at a rate other than zero the person
making the payment shall also either (i) (against delivery of a valid tax
invoice in respect thereof by the recipient) pay an amount equal to the Value
Added Tax chargeable thereon (whether as required by statute or as a result of
the exercise by PowerGen or the Buyer or a statutory right to waive an exemption
or make an election or otherwise), or (ii) comply with the provisions of clause
28.1(b) treating a downwards adjustment of consideration as a reimbursement for
those purposes.
POST-COMPLETION UNDERTAKINGS
10. Following Completion the Buyer undertakes to PowerGen:
(a) to cease, by the tenth Business Day following Completion, in any manner
whatsoever to use or display, the Trade Marks or any
confusingly similar xxxx, design name or logo, provided that nothing in
this clause prevents the Buyer from using the Trade Marks or any
confusingly similar name, xxxx, design or logo in a way which would not
constitute an infringement of PowerGen's intellectual property rights
subsisting in the Trade Marks;
(b) in accordance with the Environmental Protection Act 1990 (including the
time periods stipulated therein), to notify the Environment Agency of the
transfer of the Assumed IPC Authorisation or, if then available, the Actual
IPC Authorisation.
ENVIRONMENTAL INDEMNITY
11.1 Except in respect of Claims indemnified under clause 12.10, the Buyer
shall indemnify, defend and hold PowerGen harmless, on an after tax basis, from
and against:
(a) all Environmental Losses incurred, suffered or sustained by PowerGen
after Completion; and
(b) the reasonable costs of procuring compliance by the Buyer with this
indemnity.
11.2 Except to the extent that any Environmental Liability gives a party
hereto a right of recovery under the indemnity set out in clause 11.1 above, any
party to this Agreement which suffers or incurs Environmental Liability or
Environmental Losses shall bear the same in their entirety without recourse to,
or any right of action or recovery or other remedy against, any other party
hereto.
11.3 The provisions of clause 11.4 shall apply in relation to any matter which
may give rise to a claim under clause 11.1.
11.4.1 If PowerGen becomes aware of a matter that may give rise to a claim
under clause 11.1 notice of that fact shall be given as soon as reasonably
practicable to the Buyer and in any event within eight (8) Business Days of
PowerGen receiving written notice of the matter provided that failure to comply
with this time period shall not render invalid any claim by PowerGen under
clause 11.1;
11.4.2 Subject to clause 11.4.3 below, where the Buyer is likely to have a
claim against a third party in relation to a matter which has given or is likely
to give rise to a claim under clause 11.1 PowerGen shall afford the Buyer such
reasonable assistance as may be reasonably necessary in
relation to such claim, including access to and copies of any documents or other
information in the possession of PowerGen to the extent that such information is
relevant to the matter the subject of the claim under clause 11.1 (subject to
PowerGen being indemnified (on an after tax basis) against all reasonable costs,
expenses and liabilities incurred as a result of so doing). Nothing in this
clause or clause 11.4.3 shall require (i) any waiver of any legal privilege; or
(ii) breach of any duty of confidentiality (except where PowerGen has failed to
use its reasonable endeavours to obtain a release from such duty of
confidentiality). Notwithstanding (ii) above, PowerGen will use its reasonable
endeavours to obtain a release from any such confidentiality obligation;
11.4.3 Where PowerGen is likely to have a claim against a third party in
relation to a matter which has given or may give rise to a claim under clause
11.1, PowerGen shall use reasonable endeavours (subject to being indemnified (on
an after tax basis) against all reasonable costs, expenses and liabilities as a
result of doing so) to recover any amounts due from any such third party. If
the Buyer pays an amount in discharge of any claim under clause 11.1 and
PowerGen subsequently recovers from a third party a sum in respect of the
subject matter of the claim, PowerGen shall pay to the Buyer an amount equal to
(i) the sum recovered from the third party less any reasonable costs and
expenses incurred in relation to such recovery and any tax payable or (ii) if
the amount recovered from the third party is more than the amount paid under
clause 11.1, the amount previously paid by the Buyer to PowerGen in respect of
such claim. In respect of any claim PowerGen may have against a third party, if
the Buyer so requests, to the extent reasonably practicable, PowerGen shall
assign or transfer the benefit of its cause of action to the Buyer and afford
the Buyer such reasonable assistance as may be reasonably necessary in relation
to such claim, including access to and copies of any documents or other
information in the possession of PowerGen (subject to PowerGen being indemnified
(on an after tax basis) against all reasonable costs, expenses and liabilities
incurred as a result of so doing);
11.4.4 If a claim under clause 11.1 is a result of or in connection with any
Environmental Proceedings to which PowerGen is a party or is likely to become a
party or where PowerGen is the subject of those Environmental Proceedings,
PowerGen shall reasonably promptly notify the Buyer in writing of such
Environmental Proceedings and the following provisions shall then apply:
(a) subject as set out in clause 11.4.4(b) below, PowerGen shall be entitled to
avoid, dispute, deny, defend, resist, appeal, compromise or contest such
Environmental Proceedings (including, without limitation, making
counterclaims or other claims against third parties in its own name) and to
have the conduct of any related proceedings, negotiation or appeals but no
admission of liability shall be made by or on behalf of PowerGen, and the
Environmental Proceedings shall not be compromised, disposed of or settled
without the consent of the Buyer (such consent not to be unreasonably
withheld or delayed) and PowerGen shall not take any action which may
adversely affect the goodwill or good name of the Buyer without the prior
written consent of the Buyer;
(b) if so required in writing by the Buyer (and provided that it is indemnified
(on an after tax basis) by the Buyer against all reasonable costs, charges,
liabilities and expenses properly suffered or incurred in relation thereto)
PowerGen shall take all such action as the Buyer may reasonably request to
avoid, dispute, deny, defend, resist, appeal, compromise or contest such
claim or liability provided that PowerGen shall consult as fully as is
reasonably practicable with the Buyer as regards any negotiations and/or
proceedings arising out of such claim or liability;
11.4.5 Notwithstanding clause 11.4.4, if a claim under clause 11.1 is a result
of or in connection with any Environmental Proceedings to which the Buyer is or
is likely to become a party or where the Buyer is the subject of such
Environmental Proceedings, the Buyer shall have sole control over the conduct of
such Environmental Proceedings but shall notify PowerGen of the Environmental
Proceedings promptly upon becoming aware thereof.
EMPLOYEES AND PENSIONS
12.1 The parties acknowledge and agree that the transaction contemplated by
this Agreement is a "relevant transfer" within the meaning of the Transfer of
Undertakings (Protection of Employment) Regulations 1981 (the Employment
Regulations). Accordingly, the contract of employment of each Employee (other
than in respect of occupational pension scheme rights) shall have effect after
the Completion Date as if originally made between the Employee and the Buyer.
12.2 The Buyer shall indemnify PowerGen and keep PowerGen indemnified (on an
after tax basis) from and against any costs, claims, charges, expenses, demands,
liabilities or penalties which arise from the employment by the Buyer of the
Employees after the close of business on the Completion Date and are
attributable to any act, breach or default by the Buyer after the Completion
Date in relation to any of the Employees or which arises out of the employment
relationship, including but not limited to any liability arising out of the
termination or dismissal of any Employee by the Buyer after the close of
business on the Completion Date or any collective agreement, or any failure by
the Buyer to offer terms and conditions of employment and working conditions
which are no less favourable than those which apply to the Employees up to
Completion, (provided such terms and conditions have been fully and accurately
disclosed to the Buyer by PowerGen) and any failure to comply with its
obligations under regulation 10(3) of the Employment Regulations.
12.3 PowerGen shall be responsible for all wages, salaries, emoluments and
other amounts due or accruing prior to the Completion Date and Taxation payable
in respect thereof relating to the entitlement of the Employees to such amounts
(other than in relation to accrued holiday pay) and will discharge all such
obligations in respect of the Employees prior to the Completion Date (other than
business expenses and overtime payments which shall be discharged in accordance
with clause 9.3) and shall indemnify the Buyer and keep the Buyer indemnified
(on an after tax basis) against all costs, claims, charges, expenses, demands,
liabilities or penalties arising from PowerGen's failure so to discharge. The
Buyer will be responsible for all wages, salaries, emoluments, and other amounts
accruing after the Completion Date and Taxation payable in respect thereof
relating to the entitlement of the Employees to such amounts and will discharge
all such obligations in respect of the Employees and shall indemnify and keep
PowerGen indemnified (on an after tax basis) against all costs, claims, charges,
expenses, demands, liabilities or penalties arising from the Buyer's failure so
to discharge.
12.4 PowerGen shall indemnify the Buyer and keep the Buyer indemnified (on an
after tax basis) against any costs, claims, charges, demands, penalties,
liabilities and expenses which are attributable to any act, breach or default by
PowerGen prior to the close of business on the Completion Date (whether arising
under common law, statute, custom or otherwise) to or in relation to any of the
Employees, its
employees or former employees or which arises out of the employment relationship
(including but not limited to any liability arising out of the termination or
dismissal of any Employee, employee or former employee or any collective
agreement or liability to any employee representative or in respect of any claim
for personal injury to the extent that the personal injury relates to the period
prior to Completion) and which the Buyer may incur or suffer as a result of the
Buyer succeeding to PowerGen pursuant to the Employment Regulations in relation
to the contracts of employment of the Employees, employees or former employees
or any of them or any collective agreement.
12.5 Except with the Buyer's consent, PowerGen shall not take any steps to
terminate the contracts of employment of any Employees (other than for a reason
set out in Section 98(1) or (2) of the Employment Rights Xxx 0000, provided that
the dismissal does not fall within Regulation 8(1) of the Employment
Regulations) or any collective agreement concerning any Employee.
12.6 PowerGen shall deliver to each Employee a letter from PowerGen and the
Buyer in an agreed form concerning the transfer of their employment to the
Buyer.
12.7 If any contract of employment or collective agreement not disclosed to the
Buyer shall have effect as if originally made between the Buyer and any employee
(as that term is defined in the Employment Regulations) (Undisclosed Employee)
or a trade union or other body that represents employees as a result of the
Employment Regulations or this Agreement (without prejudice to any other rights
or remedies which may be available to the Buyer):
(i) the Buyer may, upon becoming aware of the application of the Employment
Regulations or this Agreement to any such contract of employment or
collective agreement, terminate such contract or agreement immediately; and
(ii) provided the Buyer terminates the contract or agreement within 14 days of
becoming so aware, PowerGen shall indemnify the Buyer and keep the Buyer
indemnified (on an after tax basis) against all costs, claims, expenses,
demands, liabilities or penalties relating to or arising out of such
termination and reimburse the Buyer for all costs and expenses incurred in
employing such Undisclosed Employee in respect of his employment on or
after the Completion Date; and
(iii) PowerGen shall indemnify the Buyer and keep the Buyer indemnified (on an
after tax basis) in respect of any Undisclosed Employee on the same terms
mutatis mutandis as PowerGen has indemnified the Buyer in respect of an
Employee pursuant to the terms of clauses 12.3 to 12.5 whether or not
their employment is terminated within the 14 day period referred to above.
12.8 If for any reason the contracts of employment of any of the Employees are
not automatically transferred to the Buyer pursuant to the Employment
Regulations, the Buyer shall (provided such terms and conditions have been fully
and accurately disclosed by PowerGen to the Buyer) offer to employ such persons
on terms and conditions (including continuity of service for contractual
purposes) no less favourable to the Employees than the terms on which they would
have been employed had their contracts of employment been so transferred and
PowerGen shall (at its own cost) then terminate the contracts of employment of
the Employees who accept such offer.
12.9 PowerGen shall duly fulfil any obligation imposed by the Trade Union and
Labour Relations (Consolidation) Xxx 0000 to consult with any relevant
recognised trade union and to notify the Department of Employment of the
proposed or potential dismissal of the Employees.
12.10 PowerGen shall indemnify the Buyer and keep the Buyer indemnified (on an
after tax basis) against any costs, claims, charges, expenses, demands,
liabilities or penalties (Claims) in respect of any Industrial Disease (which
for the purposes of this clause 12.10 shall mean any of pneumoconiosis
(including but not limited to asbestosis), mesothelioma, hand-arm vibration
syndrome (HAVS) (including but not limited to, vibratory white finger), deafness
(including any form of hearing impairment) and any other disease, damage or
condition, including any injury or trauma attributable to a single event or
incident, suffered or contracted by:
(a) an Employee, employee or former employee whilst acting in the course of
his employment with PowerGen: or
(b) any other person (whether or not they were employed by PowerGen) whilst
acting in the course of their employment with any other employer whose
liability in respect of any such Industrial Disease passed to or was
assumed by PowerGen whether by law or agreement,
provided that this indemnity shall only extend to Claims which arise prior to
the Completion Date or which arise after the Completion Date to the extent that
the Claim arises from circumstances occurring prior to the Completion Date (it
being agreed that, in appropriate cases, liability in relation to such a Claim
will be apportioned between PowerGen and the Buyer to the extent that the Buyer
has contributed to that liability in the period after the Completion Date).
12.11 If any person becomes an employee of PowerGen after the date of this
Agreement but before Completion and is engaged, for the purposes of his
employment, at the Power Station, PowerGen shall notify the Buyer of their
engagement and such person shall be deemed for the purposes of this Agreement to
be an Employee provided that PowerGen shall not engage more than 5 employees who
earn less than (Pounds)40,000 per annum without the prior written consent of the
Buyer.
12.12 The Buyer acknowledges that fourteen (14) of the Employees have entered
agreements in relation to the termination of their employment with PowerGen
prior to the Completion Date, the terms of which have been disclosed to the
Buyer (Severance Forward Agreements). The Buyer agrees that any liability under
the Severance Forward Agreements which arises after the Completion Date will be
its liability. Further, the Buyer agrees to indemnify (on an after tax basis)
PowerGen from any costs, claims, charges, expenses, demands, liabilities or
penalties it incurs in connection with any Severance Forward Agreement, provided
that each Severance Forward Agreement has been fully and accurately disclosed to
the Buyer.
12.13 The provisions of Schedule 8 of this Agreement shall apply in respect of
pensions applicable to the Employees.
BUYER REPRESENTATIONS AND WARRANTIES
13.1 The Buyer represents and warrants that:
(a) it is duly incorporated and validly existing under the laws of the
jurisdiction of its incorporation;
(b) the documents which contain or establish its constitution include
provisions which give power, and all necessary corporate authority has
been obtained and action taken, for it to sign and deliver, and perform
the obligations contemplated in, this Agreement which constitutes valid
and binding obligations of it enforceable in accordance with the terms
hereof except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganisation, moratorium or other similar laws affecting creditors'
rights generally including those based on equitable principles;
(c) neither the signing and delivery of this Agreement nor the performance of
any of its obligations hereunder does or will contravene or constitute a
default under, or cause to be exceeded, any limitation on it or the powers
of its directors imposed by or contained in:
(i) any law by which it or any of its assets is bound or affected;
(ii) any document which contains or establishes its constitution; or
(iii) any agreement to which it is a party.
13.2 The warranties set out in clause 13.1 shall be deemed to be repeated
immediately before Completion with reference to the facts and circumstances then
existing and if before Completion any matter arises which the Buyer is aware
renders any such warranty untrue, unfulfilled or misleading or incorrect in any
material respect at Completion, the Buyer shall immediately notify PowerGen and
provide such details as PowerGen may reasonably require.
POWERGEN WARRANTIES
14.1 PowerGen warrants to the Buyer in the terms of the Warranties.
14.2 Each of the Warranties shall be construed as a separate and independent
Warranty.
14.3 Save in relation to the Replies to Preliminary Enquiries, the Warranties
shall be deemed to be repeated immediately before Completion with reference to
the facts and circumstances then existing and if before Completion any matter
arises which PowerGen is aware renders any such Warranty untrue, unfulfilled or
misleading or incorrect in any material respect at Completion, PowerGen shall
immediately notify the Buyer and provide such details as the Buyer may
reasonably require.
14.4 In the absence of any fraud or dishonesty on the part of PowerGen or its
agents or advisers, the Buyer shall not be entitled to
claim that any fact causes any of the Warranties to be breached or renders any
of them misleading to the extent that:
(a) it has been fully and accurately disclosed to the Buyer in the Disclosure
Letter; or
(b) without prejudice to the provisions of clause 14.5 in respect of any
matter arising after the date hereof, it has been disclosed to the Buyer
in writing prior to Completion.
14.5.1 Save as provided in clause 14.5.2, the sole remedy of the Buyer for any
breach of any of the Warranties shall be a reimbursement of part of the Premium
and the Buyer shall not be entitled to terminate this Agreement.
14.5.2 The Buyer shall be entitled to terminate this Agreement prior to
Completion if:
(a) as at the date of this Agreement, any of the Warranties are incorrect or
untrue in any material respect; or
(b) after the date hereof but prior to Completion, any matter has arisen
which results in any of the Warranties becoming incorrect or untrue if
the same were repeated at Completion or which would have so resulted but
for clause 14.4(b),
in each case, such as to cause a quantifiable monetary liability (if any) of
PowerGen in respect of such breach of warranty (the Warranty Liability) which,
in the aggregate, exceeds (pound sterling)95,550,000. If the Buyer elects not to
terminate this Agreement pursuant to this clause in the event of the application
of the foregoing, it shall agree with PowerGen an appropriate adjustment to the
Premium prior to Completion taking place.
14.5.3 Prior to the Completion Date and in such circumstances where a Warranty
Liability has arisen but the provisions of clause 14.5.2 do not apply:
(a) if a Warranty Liability does not exceed (pound sterling)250,000 (which
amount may be made up of one or more warranty breaches provided that each
such breach exceeds (pound sterling)50,000) or (save, in each case, to
the extent such amounts are not actually recovered) is recoverable under
the Insurance Policy or pursuant to the Environmental
Consultant's Agreement, the Buyer shall not be entitled to claim any
reduction or adjustment to the Premium;
(b) if the aggregate amount of all Warranty Liabilities exceeds (pound
sterling)250,000 but is less than (pound sterling)95,550,000, the Premium
paid by the Buyer at Completion shall be reduced by the amount representing
such Warranty Liabilities.
14.5.4 The occurrence of a Warranty Liability or the amount thereof shall be
agreed between the parties, in default of which agreement the matter shall be
determined in accordance with clause 27. In cases where the Buyer claims that a
Warranty Liability has occurred but PowerGen disputes such claim or the
occurrence of a Warranty Liability is accepted but the amount thereof is
disputed by the parties, Completion shall take place in accordance with the
provisions of this Agreement, provided that such element of the Premium as
represents the Buyer's estimate of the amount of the disputed Warranty Liability
or, where applicable, the higher of each of the parties' valuations of the
disputed amount (the Disputed Amount) shall be paid into the Client Account by
the Buyer on the Completion Date and on terms that PowerGen's Solicitors hold
the Disputed Amount on trust on behalf of the parties until directed to pay the
same or a relevant portion thereof together with an amount representing interest
accrued thereon (net of any applicable taxes or break funding costs) to the
parties or one of them in accordance with the decision of an arbitration
tribunal upon resolution of the Dispute. The Disputed Amount shall be held in
an account of a type which, at the date of its payment into the Client Account,
provides the best rate of interest reasonably available from National
Westminster Bank plc in the circumstances, as shall have been agreed between
PowerGen and the Buyer or, in the absence of agreement, as may be reasonably
stipulated by PowerGen's Solicitors. The foregoing shall not apply where the
Disputed Amount exceeds the value of (pound sterling)95,550,000, in which
circumstances, without prejudice to clause 14.5.2, Completion shall be delayed
until such time as the Dispute is resolved by the arbitration tribunal and, for
these purposes, the Termination Date or the Completion Date, as the case may be
shall not be deemed to occur until five (5) Business Days after such Dispute is
resolved. The parties agree that the Dispute shall be settled as expeditiously
as possible and, to this end, the parties shall, so far as possible, require the
arbitrators (if so appointed) to use their best endeavours to render their
decision as soon as possible and in any event within six (6) months of their
appointment.
Following resolution of the Dispute, on Completion, the Buyer shall be entitled
to deduct from the Premium payable on the delayed Completion Date an amount
equal to:
(i) the expected earnings of the Buyer from the operation of the Power
Station from the Termination Date until the delayed Completion
Date (Delay Period), before interest, tax, depreciation and
amortisation (EBITDA) less applicable tax on such EBITDA
calculated by reference to, and on the basis of the assumptions
contained in, the audited economic model of the intended financial
performance of the Power Station prepared by or for the benefit of
the Buyer's lenders who are financing the acquisition of the Power
Station (financial model) as such EBITDA is adjusted by reference
to the actual market circumstances on an after tax basis
applicable during the Delay Period; less
(ii) an amount equal to the interest which PowerGen would have earned
on an after tax basis during the Delay Period on the unadjusted
amount of the Premium (ignoring for these purposes any Disputed
Amount) which would have been payable if Completion had not been
so delayed, calculated at the rate specified in paragraph 3 of
Part 3 of Schedule 1 and accruing on a daily basis.
If PowerGen does not agree the amount to be deducted by the Buyer from the
Premium, it may refer the Dispute to arbitration, whereupon the Buyer shall
deliver a copy of the financial model to the arbitrators who shall determine the
amount to be deducted from the Premium, but so that under no circumstances shall
PowerGen have access to the information contained in the financial model.
14.6 PowerGen shall not, save as otherwise provided in this clause 14.6, be
liable for any claim for breach of Warranty unless it receives from the Buyer
written notice containing reasonable details of the claim (including the Buyer's
estimate of the amount of such claim) on or before the date falling eighteen
months after the Completion Date. The foregoing provisions of this clause 14.6
shall apply in a modified manner to any Warranty relating to Taxation matters so
that the latest time for the notice referred to shall be on or before the sixth
anniversary of the Completion Date.
14.7 PowerGen shall only be liable for any claim for breach of Warranty if its
liability in respect thereof exceeds (pound sterling)50,000. For the avoidance
of doubt, claims of less than (pound sterling)50,000 in respect of different
matters shall not be treated as a single claim exceeding (pound sterling)50,000.
14.8 PowerGen shall not be liable in respect of any claim under any of the
Warranties unless and until its liability for all such claims exceeds in
aggregate (pound sterling)250,000 (in which event PowerGen shall be liable only
for the excess over (pound sterling)250,000).
14.9 PowerGen shall not be liable in respect of any claim for breach of
Warranty to the extent that it would cause PowerGen's total liability for all
claims for breach of Warranty to exceed (pound sterling)318,500,000 provided
that if PowerGen has sold the Power Station known as Ferrybridge `C' to the
Buyer pursuant to the Ferrybridge Agreement, the overall limit for claims for
breach of Warranty under this Agreement and claims for breach of Warranty (as
therein defined) under the Ferrybridge Agreement, if applicable, shall not
exceed (pound sterling)437,850,000.
MAJOR PLANT ITEM BREAKDOWN
15.1 For the period from Completion to 28 February 2004, PowerGen shall warrant
the availability of each of the coal-fired units at the Power Station (each a
Unit) in accordance with the provisions of this clause 15. The warranty period
shall be divided into six individual periods (each a Warranty Period). The
first Warranty Period shall commence on the Completion Date and end on 31
December 1999. The second Warranty Period shall commence on 1 January 2000 and
end on 31 December 2000. The third Warranty Period shall commence on 1 January
2001 and end on 31 December 2001. The fourth Warranty Period shall commence on
1 January 2002 and end on 31 December 2002. The fifth Warranty Period shall
commence on 1 January 2003 and end on 31 December 2003. The sixth Warranty
Period shall commence on 1 January 2004 and end on 28 February 2004.
15.2 Subject to the provisions of clause 15.7, a claim (Claim) may only be made
by the Buyer in respect of a Unit which is declared by the Buyer to be
unavailable to generate electricity for supply to the wholesale electricity
market for a minimum continuous period of no less than seven (7) days as a
direct result of either the failure of a Major Plant Item or the withdrawal from
service of a Major Plant Item prior to failure on the grounds that its continued
operation would result in
failure such as to jeopardise the safety of the Power Station (a Qualifying
Major Plant Failure).
15.3 For the purposes of this clause 15, a Warranty Incident Period shall
commence on the occurrence of a Qualifying Major Plant Failure and shall end on
the earlier of the date on which the Unit is again declared available for the
purposes of wholesale electricity supply or on the Agreed Incident End Date.
The Agreed Incident End Date shall be the date on which PowerGen (as advised by
PowerGen's Engineer) and the Buyer agree that the Major Plant Item would
normally be returned to service following a period of outage to effect the
necessary repairs to, or replacement of, the Major Plant Item, having regard to
the availability of a duly qualified contractor and the availability of the
required replacement parts or replacement items at that time and assuming that
the repairs are carried out by a duly qualified contractor exercising Good
Industry Practice. In default of agreement between the Buyer and PowerGen (as
advised by PowerGen's Engineer), either of them may request the Warranty
Engineer to determine the Agreed Incident End Date in accordance with the
procedures contained in clause 15.6.
15.4 For each Business Day between 1 October and 24 December and between 3
January and 28 February in any Warranty Period that a Unit is unavailable due to
a Qualifying Major Plant Failure during a Warranty Incident Period, PowerGen
shall pay to the Buyer an amount equal to the lower of:
(a) the sum attributable to the Warranty Period in which the Claim is made as
set out in part 1 of Schedule 10; and
(b) the relevant percentage of the LOLP payments as are attributable to the
Warranty Period in which the Claim is made as set out in Part 2 of Schedule
10 which the Buyer would have been entitled to receive in respect of the
Unit had it been available. For these purposes, LOLP shall have the same
meaning as the definition of "Loss of Load Probability" in Schedule 9 of
the Pooling and Settlement Agreement. If, during any Warranty Period, LOLP
payments cease to be applicable, PowerGen and the Buyer shall use all
reasonable endeavours to agree an appropriate alternative, failing which
agreement the sum due under this clause 15.4(b) shall be (pound
sterling)35,000 for each Business Day falling within the Warranty Incident
Period.
15.5 Any amount payable by PowerGen in respect of a Claim under this clause 15
shall be treated as a reimbursement of the Premium. The amount of any
undisputed Claims that have accrued during any Warranty Period shall fall due
for payment on the expiry date of such Warranty Period. Any disputed amounts
shall be paid on the later of the expiry date of the relevant Warranty Period or
upon resolution of the dispute by the Warranty Engineer in accordance with the
procedure outlined in clause 15.6. PowerGen shall pay interest on any amount
due but unpaid at the rate of 3 per cent. above the base rate of HSBC Bank from
the due date until the actual date of payment.
15.6 For the purposes of this clause 15, PowerGen shall, at its own expense,
appoint an independent engineer (PowerGen's Engineer) to act on PowerGen's
behalf in the verification of the validity or otherwise of any Claim.
PowerGen's Engineer shall forward to PowerGen a report based on the information
he receives from the Buyer in accordance with this clause 15.6 and setting out
his recommendations as to the validity of the Claim. Under no circumstances
shall PowerGen be under any obligation to disclose PowerGen's Engineer's report
to the Buyer. Based on the advice of PowerGen's Engineer, PowerGen may dispute
the Claim in accordance with the following provisions of this clause 15.6. If
within 25 Business Days of a Claim being made by the Buyer, PowerGen and the
Buyer are not in agreement either as to the validity of the Claim or its amount
or both, a dispute shall be deemed to have arisen and either PowerGen or the
Buyer may then serve a notice on the other requiring the dispute to be referred
for determination by the Warranty Engineer. The Warranty Engineer shall be a
person nominated by the Buyer and PowerGen or, in default of agreement within 10
Business Days of the service of the notice to refer, by the President of the
Institute of Mechanical Engineers upon the application of either PowerGen or the
Buyer. The Warranty Engineer shall have experience of coal fired electricity
generating plant of a type similar to the Power Station and shall not have been
a director, office holder or employee of either PowerGen or the Buyer for at
least five (5) years prior to his appointment nor shall he have been employed as
a consultant or adviser by either party during the 12 month period prior to his
appointment nor shall he be involved in a then current assignment on behalf of
either party at the time of his appointment. Within 5 Business Days of his
appointment the Warranty Engineer shall give directions to PowerGen and the
Buyer (with which they agree to comply) as to the procedure to be followed in
the proceedings before the Warranty Engineer. The Warranty Engineer shall act
as an expert
and not as an arbitrator. The Buyer shall give PowerGen's Engineer and the
Warranty Engineer access to the Power Station at all reasonable times to inspect
the affected Major Plant Item and the unavailable Unit and the Buyer shall
provide the Warranty Engineer and PowerGen Engineer with all such information
and samples as either of them may reasonably request to substantiate the Claim
in order for them to determine the dispute and to report to PowerGen
respectively. All information and documentation supplied to the Warranty
Engineer and PowerGen's Engineer shall be treated as confidential and shall not
be disclosed to any other person or company (including PowerGen). The decision
of the Warranty Engineer shall be given within 3 months of his appointment (or
after such longer period as the Buyer may agree) and shall be final and binding
on PowerGen and the Buyer save in the case of manifest error.
Within 10 Business Days of giving his determination the Warranty Engineer shall
give PowerGen and the Buyer written reasons for his decision. The costs of the
Warranty Engineer in connection with the dispute shall be borne by the parties
in such proportions as the Warranty Engineer may in his absolute discretion
direct.
15.7 PowerGen shall not be liable in respect of any Claim if it is established
that the Buyer had not operated or maintained:
(a) the relevant failing Major Plant Item in accordance with Good Industry
Practice; or
(b) the Power Station (excluding the relevant failing Major Plant Item) in
accordance with Good Industry Practice and such failure so to operate or
maintain the Power Station was the primary cause of the failure of the
relevant Major Plant Item.
15.8 In respect of each Warranty Period, PowerGen shall not be liable for any
Claim unless it receives from the Buyer written notice containing details of the
relevant Claim on or before the date falling 10 Business Days after the relevant
Agreed Incident End Date (and, in the event of any dispute, as the same may be
agreed between the parties or in default of such agreement determined by the
Warranty Engineer) in respect of which the Qualifying Major Plant Failure took
place, provided always that as soon as the Buyer becomes aware of any failure of
a Major Plant Item which is likely to become a Qualifying Major Plant Failure
and in any event, by no later than the first Business Day of a Warranty Incident
Period, the Buyer shall notify PowerGen of such fact
and shall, as soon as practicable following a written request from PowerGen,
provide PowerGen's Engineer with a full photographic record of any physical
damage caused to the relevant Major Plant Item together with all such access as
may be reasonably necessary for the purposes of this clause to inspect any
physical evidence of or relating to the failure of such Major Plant Item.
15.9 PowerGen shall not be liable for any Claim in circumstances where the
Buyer is or, but for a breach of warranty or other condition, ought to have been
able to make a claim under any relevant insurance policy or, where the proceeds
of such insurance policy do not compensate the Buyer to the same extent as the
provisions of this clause 15, PowerGen shall only be liable for the difference
between the amount which would be payable by PowerGen pursuant to clause 15.4
and the compensation which becomes or, but for a breach of warranty or other
condition, ought to have become due under the insurance policy.
15.10 The maximum liability of PowerGen under the warranty contained in this
clause 15 shall not exceed (pound sterling)30,000,000 in respect of the first
Warranty Period, (pound sterling)50,000,000 in respect of each of the second,
third, fourth and fifth Warranty Periods and (pound sterling)20,000,000 in
respect of the sixth Warranty Period.
15.11 Nothing in clauses 14 and 15 shall in any way restrict or limit the
general obligation at law of the Buyer to mitigate any loss or damage which it
may suffer in consequence of any breach by PowerGen of the terms of this
Agreement or any fact, matter, event or circumstance giving rise to any claim
under clause 14 or a Claim pursuant to this clause 15.
EXCLUSION OF LIABILITY AND ENVIRONMENT REPORT
16.1 The Buyer or persons on its behalf have inspected the Power Station
(PowerGen acknowledging that the Buyer's inspection of the Power Station in
relation only to Environmental Liabilities has been no more than a visual
inspection of the Power Station by appropriately qualified personnel), the Power
Station Assets and such property over which the Buyer shall have rights under
the Lease or otherwise, the Leasehold Property and the Fixed Plant and Equipment
and the title thereto and has entered into this Agreement, the Liverpool Bulk
Terminal Agreement, the Coal Supply Contract and such other of the Transaction
Documents as may be executed on the date hereof and will
enter into the other Transaction Documents at Completion solely on the basis of
its inspection, its own judgement and the terms of the Transaction Documents and
not in reliance wholly or partly upon any statement, representation or warranty
whether written, oral or implied made by or on behalf of PowerGen save for the
Replies to Preliminary Enquiries and any representation and warranty contained
in the Transaction Documents.
16.2 The Buyer further acknowledges that this Agreement is made with the
intention that any Environmental Authority serving any notice or (as the case
may be) seeking to recover its costs in respect of any Remedial Works relating
to the Power Station, the Power Station Assets and such property over which the
Buyer shall have rights under the Lease and the Leasehold Assignment shall give
effect to this Agreement pursuant to the draft statutory guidance issued under
Part IIA of the Environmental Protection Act 1990 and to any final guidance to
the like effect and pursuant to any similar guidance (whether statutory or non-
statutory) issued in relation to any other legislation under which similar
responsibilities may be imposed. It is also intended that, in the absence of
such guidance, this Agreement should be borne in mind by an Environmental
Authority under any legislation under which similar responsibilities may be
imposed, in considering how to exercise any discretion available to them or how
to make any relevant determination.
16.3 The Buyer acknowledges that it has been provided with the environmental
documents attached to the Disclosure Letter prior to the date of this Agreement
and acknowledges that such information is sufficient to make the Buyer aware of
the presence at or about the Power Station of the Hazardous Materials referred
to in that information.
16.4 The Buyer further acknowledges that PowerGen and the Buyer are `large
commercial organisations' (as such term is understood in the draft Statutory
Guidance on Contaminated Land dated October 1998).
16.5 The Buyer further acknowledges that the effect of such information in
accordance with any applicable statutory or non-statutory guidance shall be to
exclude PowerGen from liability in respect of the Power Station, the Power
Station Assets and such other property over which the Buyer shall have rights
under the Lease and the Leasehold Assignment as an appropriate person to bear
responsibility for any Remedial Works in relation to the relevant
Hazardous Materials or for the cost of such actions if carried out by an
Environmental Authority.
16.6 Without prejudice to any liability PowerGen may have under any other
provision in the Transaction Documents, the Buyer accepts responsibility for and
acknowledges that PowerGen shall have no liability of any kind to the Buyer or
any successors in title for or consequent on (i) the state and condition of the
Power Station, the Power Station Assets and the Fixed Plant and Equipment or
land adjacent thereto or (ii) their suitability for any future use including
without limitation any liability arising out of or in connection with any actual
or asserted presence of any Hazardous Material on, in or under the Power
Station, the Power Station Assets and the Fixed Plant and Equipment or (iii) any
actual or asserted escape of such Hazardous Material from the Power Station, the
Power Station Assets and the Fixed Plant and Equipment and any consequences in
respect of (i) (ii) or (iii) (including liabilities arising in any way out of
any claims by third parties any actual or proposed requirement or directions by
any regulatory body to remediate any land or waters or to pay for such
remediation costs or off-site waste disposal and all legal and consultants and
other professional fees incurred in relation to any such matter).
16.7 Prior to Completion, PowerGen shall procure the signing by XX Xxxxxx of
the XX Xxxxxx Reliance Agreement in favour of the Buyer and such other persons
nominated by the Buyer who are permitted to rely upon the Environmental
Consultant's Agreement under its terms. For the purposes of this clause 16.7:
XX Xxxxxx Reliance Agreement means an agreement in the agreed form pursuant
to which the persons identified in this clause 16.7 may rely on the Reports
(as the same are defined in paragraph 1.8 of Schedule 2) subject to the
terms of the Environmental Consultant's Agreement;
Environmental Consultant's Agreement means the agreement between PowerGen
and XX Xxxxxx under which XX Xxxxxx agreed to carry out certain
professional consultancy services in relation to the environmental
condition of the Power Station.
16.8 Nothing in this clause 16 shall exclude any liability for fraudulent
misrepresentation.
ENTIRE AGREEMENT
17.1 This Agreement, the Disclosure Letter, the Transaction Documents
(including the documents in the List) set out the entire agreement and
understanding between the parties to this Agreement and those documents in
respect of the transactions contemplated by this Agreement.
17.2 It is agreed that:
(a) save as otherwise agreed by the parties in writing, the parties have not
entered into this Agreement in reliance upon any representation, warranty
or undertaking of any other party which is not expressly set out or
referred to in this Agreement or the Transaction Documents;
(b) all terms and conditions which are implied under the Sale of Goods Act in
a contract of sale of goods to which that Act applies are expressly
excluded from the sale and purchase under this Agreement, save that this
clause shall not exclude any liability under section 12 of the Sale of
Goods Act;
(c) the Buyer may claim in contract for breach of Warranty under this
Agreement but shall have no claim or remedy under this Agreement in
respect of misrepresentation (whether negligent or otherwise, and whether
made prior to, and/or in, this Agreement) or untrue statement made by
PowerGen; and
(d) this clause shall not exclude any liability for fraudulent
misrepresentation.
ANNOUNCEMENTS
18. During any period prior to or within 60 Business Days after Completion and
save to the extent necessary for applications pursuant to the provisions of
Schedules 3, 4 and 5 or to other relevant third parties for Consents save as
required by law or by any stock exchange or governmental or other regulatory or
supervisory body or Competent Authority having jurisdiction to whose rules the
party making the announcement or disclosure is subject, whether or not having
the force of law, no announcement or circular in connection with the existence
or the subject matter of this Agreement or any of the Transaction Documents
shall be made or issued by or on behalf of PowerGen or PowerGen's Group, the
Buyer or the Buyer's Group without such prior
consultation as is reasonable in the circumstances with the other parties and
after taking into account any reasonable comments made by the other parties
thereon.
COSTS
19. Except as expressly provided to the contrary in this Agreement, each of the
parties shall pay its own costs and expenses incurred in connection with the
negotiation, preparation and implementation of this Agreement and the
Transaction Documents.
INVALIDITY
20. If any provision of this Agreement is held to be invalid or unenforceable,
then such provision shall (so far as it is invalid or unenforceable) be given no
effect and shall be deemed not to be included in this Agreement but without
invalidating any of the remaining provisions of this Agreement. The parties
shall then use all reasonable endeavours to replace the invalid or unenforceable
provision with a valid provision the effect of which is as close as possible to
the intended effect of the invalid or unenforceable provision.
ACCESS TO INFORMATION
21.1 For a period of six (6) years from Completion and subject always to the
receipt by the Buyer of confidentiality undertakings from PowerGen on terms
reasonably satisfactory to the Buyer and as may be reasonably necessary either
to defend or dispute any claims or liability under or in connection with any
Contract, Pensions Contract, Property Agreement, Process Control Contract,
Business Software Licence, Operating Permit, employment contract, understanding,
arrangement, commitment or engagement between PowerGen and any Employee or
former employee of PowerGen or CEGB or, without limitation, such other third
party liability in relation to PowerGen's ownership of the Power Station, the
Buyer shall provide (at PowerGen's reasonable cost and with reasonable advance
notice being provided to the Buyer in respect thereof):
(a) copies of such of the Information; and
(b) access to, and use reasonable efforts to procure the co-operation of,
relevant Employees,
in each case, as may be reasonably requested by PowerGen from time to time.
Without prejudice to the foregoing provisions, in relation to Tax Information
the following shall apply:
(i) the Buyer shall provide or procure that there is provided to
PowerGen all Tax Information required by PowerGen (at PowerGen's
cost) (aa) for the completion of its corporation tax and VAT
returns and supporting schedules, including (without limitation)
Tax Information requested by PowerGen for the purpose of
determining the proper Tax treatment of all amounts accrued,
received or expended up to Completion, or (bb) for the purpose of
dealing with any audit process of, or enquiry raised or dispute
pursued, by any Tax or related governmental authority (including,
without limitation, the Valuation Office);
(ii) the Buyer shall provide or procure that PowerGen is provided with
access to, and use reasonable efforts to procure PowerGen has the
co-operation of, employees of members of the Buyer's Group for
the purpose of obtaining any Tax Information as is referred to in
subparagraph (i) above; and
(iii) the Buyer shall provide or procure that reasonable access to the
Power Station site is granted to representatives of any Tax or
related governmental authority (including, without limitation,
the Valuation Office) to the extent required for the purposes of
investigating, negotiating or agreeing any matter relevant to
PowerGen's Tax treatment, subject to PowerGen having given the
Buyer at least five Business Days' prior written notice of the
requirement for such access. Such access shall be granted on a
date to be mutually agreed between PowerGen and the Buyer, such
date to be between five and fifteen Business Days after such
notice is received by the Buyer.
21.2 Each party shall keep confidential:
(a) the terms and conditions of this Agreement and the other Transaction
Documents to which it is a party;
(b) any information, documents and materials (in whatever form) provided under
or in connection with this Agreement or any Transaction Document or any
transaction contemplated by any of them;
(c) any and all information, documents and materials (in whatever form)
regarding the Power Station, including without limitation the operation and
maintenance thereof, that it receives or obtains:
(i) from the other party; or
(ii) in the performance of its obligations under this Agreement;
(d) any and all information, documents and materials (in whatever form) it
obtains regarding the business activities of the other party or any
affiliate of that party; and
(e) the Information;
(the Confidential Information). Neither party (unless the other party expressly
permits it in writing) shall disclose or make the Confidential Information
available directly or indirectly to anyone other than those of its affiliates,
shareholders (direct or indirect), directors, employees, agents, consultants,
sub-contractors, auditors and advisers who need the Confidential Information to
enable it to perform its obligations under this Agreement. Each party shall
ensure that each of its employees, agents, consultants, sub-contractors and
advisers who has access to Confidential Information shall keep the Confidential
Information secret and that the Confidential Information and, if relevant, all
copies thereof are stored separately and in secure conditions. The parties
agree that notwithstanding the termination or expiry of this Agreement they
shall continue to be bound by the provisions of this clause 21.2 for a period of
6 years. The obligation set out in this clause 21.2 shall not apply, as regards
the Buyer only, to the Information delivered to the Buyer at Completion and, as
regards both parties, to any information which either party can show was:
(A) at the time of receipt published or otherwise generally available to the
public;
(B) after receipt, been published or become generally available to the public
otherwise than through any act or omission on the part of the relevant
party;
(C) already in the possession of the relevant party at the time of receipt
without any restrictions on its disclosure;
(D) rightfully acquired from third parties without any undertaking of
confidentiality imposed by the disclosing party and who, on reasonable
enquiry, claims to have no obligation of confidence to the other party;
(E) developed independently of the work under this Agreement;
(F) required to obtain financing or refinancing in respect of the Buyer and/or
the Power Station, including without limitation in connection with the
issuance of securities whether or not listed on a recognised securities
exchange;
(G) disclosed to any Competent Authority, whether or not required or requested
by it; or
(H) required or requested to be disclosed by any tax authority.
21.3 Subject to clause 21.2, forthwith upon any termination of this Agreement,
howsoever caused, each party shall discontinue all use of any Confidential
Information received from the other party and shall, upon the request of the
other party, surrender and deliver to the other party all such Confidential
Information received from the other party including any and all copies and
extracts thereof and shall execute and deliver to the other party all documents
and take such action as the other party may reasonably deem necessary to
evidence (i) that such party has ceased using the Confidential Information and
(ii) the termination of all such party's right to use the Confidential
Information.
21.4 The parties agree (the Buyer for itself and as agent for Edison Mission
Energy Limited) that the provisions of clauses 21.2 to 21.4 supersede, terminate
and expressly exclude the Confidentiality Undertaking and survive any
termination whatsoever of this Agreement.
NOTICES
22.1 Any notice or other communication to be given under, or in connection
with, this Agreement shall be in writing and signed by or on behalf of the party
giving it. It shall be served by sending it by fax to the number set out in
clause 22.2 (together with a copy of such fax following by post), or delivering
it by hand, or sending it by pre-paid recorded delivery, special delivery or
registered post, to the address set out in clause 22.2 and in each case marked
for the attention of the relevant party set out in clause 22.2 (or as otherwise
notified from time
to time in accordance with the provisions of this clause 22). Any notice so
served by hand, fax or post shall be deemed to have been received:
(a) in the case of delivery by hand, when delivered;
(b) in the case of fax, at the time of transmission;
(c) in the case of pre-paid recorded delivery, special delivery or registered
post, at 10 a.m. on the second Business Day following the date of posting,
provided that in each case where delivery by hand or by fax occurs after 6 p.m.
on a Business Day or on a day which is not a Business Day, service shall be
deemed to occur at 9 a.m. on the next following Business Day.
References to time in this clause are to local time in the country of the
addressee.
22.2 The addresses and fax numbers of the parties for the purpose of clause 22.1
are as follows:
PowerGen:
Address: 00 Xxx Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
For the attention of: Company Secretary
Fax: 0171 826 2716
Buyer:
Address: c/o Edison Mission Energy Limited
Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
For the attention of: General Counsel
Fax: 0171 312 4041
22.3 A party may notify the other of a change to its name, address, relevant
addressee or fax number for the purposes of this clause 22, provided that such
notice shall only be effective on:
(a) the date specified in the notice as the date on which the change is to
take place; or
(b) if no date is specified or the date specified is less than five Business
Days after the date on which notice is given, the date following five
Business Days after notice of any change has been given.
22.4 In proving such service it shall be sufficient to prove that the envelope
containing such notice was properly addressed and delivered either to the
address shown thereon or into the custody of the postal authorities as a pre-
paid recorded delivery, special delivery or registered post letter, or that the
facsimile transmission was made after obtaining, in person or by telephone,
appropriate evidence of the capacity of the addressee to receive the same, as
the case may be.
ASSIGNMENT
23.1 The Buyer shall enter into the Transaction Documents in its own name.
23.2 Prior to 1 April 2000 the Buyer shall not assign, transfer, charge,
declare trusts over or otherwise deal in anyway whatsoever with the benefit or
burden of this Agreement (in whole or in part) or any right, benefit or
obligation arising under this Agreement or agree to do any such matter, other
than in favour of a permitted assignee or chargee of the Lease.
23.3 Without prejudice to the provisions of clause 23.2, neither party shall be
entitled to assign all or any of their rights, title and interest in and to this
Agreement without the prior written consent of the other, provided that the
Buyer, on or at any time after 1 April 2000 (Transfer Date), may assign or
transfer its rights under this Agreement to any other member of the Buyer's
Group or to any other permitted assignee or transferee of the Lease on
condition, subject to clause 23.6, that such permitted assignee or transferee of
the Lease agrees directly with PowerGen that it shall not be entitled to enforce
any of the rights of the Buyer under this Agreement unless it agrees to observe
and perform the obligations of the Buyer under this Agreement.
23.4 If the benefit of the whole or any part of this Agreement is assigned by
the Buyer to any member of the Buyer's Group in accordance with clause 23.3,
where any such assignee will cease to be a member of the Buyer's Group the Buyer
shall procure that, before it so ceases, it shall assign that benefit to the
Buyer or to another continuing member of the Buyer's Group.
23.5 In the event that the Buyer, on or after the Transfer Date, enters into
any transaction in connection with the Lease other than an assignment or
transfer of the whole or the whole of the reversion of the Lease, the Buyer may,
at its election, hold such rights as it may have under this Agreement on trust
for itself, the relevant disponee(s) or either or both of them; provided that
following such election all such persons shall be jointly and severally liable
in respect of such obligations.
23.6 To the extent that the Buyer's lenders who are financing the transactions
to be carried out pursuant to the Transaction Documents or any representative on
their behalf is regarded as a permitted assignee or chargee of the Lease
(Lenders), PowerGen agrees to negotiate in good faith a form of a direct
agreement with the Lenders or their representatives on their behalf with respect
to this Agreement and agrees to use reasonable endeavours to finalise such
agreement as soon as reasonably practicable after the date hereof and prior to
Completion in terms which meet the reasonable requirements of both PowerGen and
the Lenders and, without prejudice to the generality of the foregoing, on terms
consistent with market practice for such a document in the context of a secured
financing on a limited recourse basis which, for the avoidance of doubt, shall
not prejudice PowerGen's right to be indemnified by the Buyer under paragraph
15.2 of Schedule 2 to the Lease; provided that any permitted assignee or
transferee of this Agreement pursuant to this clause 23.6 shall be required to
agree in such direct agreement that it shall not be entitled to enforce any of
the rights of the Buyer hereunder unless it agrees to observe and perform the
obligations of the Buyer under this Agreement which are related thereto.
VARIATION
24. No variation of any of the terms of this Agreement (or of any other
documents referred to in this Agreement) shall be valid unless it is in writing
and signed by or on behalf of each of the parties to it. The
expression "variation" shall include any variation, supplement, deletion or
replacement however effected.
WAIVER
25.1 Any delay by PowerGen or the Buyer in exercising, or any failure to
exercise, any right or remedy under this Agreement shall not constitute a waiver
of the right or remedy or a waiver of any other rights or remedies and no single
or partial exercise of any rights or remedy under this Agreement or otherwise
shall prevent any further exercise of the right or remedies or the exercise of
any other right or remedy.
25.2 The rights and remedies of the parties under or pursuant to this Agreement
are cumulative and are in addition to any rights or remedies provided under
general law.
FURTHER ASSURANCE
26. PowerGen shall from time to time, on being required to do so by the Buyer,
now or at any time in the future, do or procure the carrying out of all such
acts and/or execute or procure the execution of all such documents in a form
satisfactory to the Buyer as the Buyer may reasonably consider necessary for
giving effect to this Agreement and the transactions contemplated by it.
DISPUTE RESOLUTION
27.1 Any dispute, controversy or claim arising out of, under, in connection with
or in relation to this Agreement, including any question regarding its
existence, validity or termination (a Dispute) (other than one to be determined
in accordance with clause 15 or paragraph 7 of Schedule 8) shall be resolved in
accordance with the terms of this clause.
27.2 If any Dispute arises any party may, by notice to the others identifying
the nature of the Dispute, require the matter to be the subject of good faith
discussions between board directors or other senior officers of the relevant
parties.
27.3 If the Dispute has not been resolved following reference to the relevant
parties' directors or other officers in accordance with clause 27.2 within 30
days of the notice requiring the Dispute to be referred to good faith
discussions, the Dispute shall be referred to and finally resolved by
arbitration under the rules of the London Court of
International Arbitration (the Rules) which Rules are deemed to be incorporated
by reference into this clause. The seat of the arbitration shall be London.
27.4 Subject to the provisions of clause 27.5 below, arbitration shall be before
three arbitrators. PowerGen and the Buyer shall each be entitled to nominate
one arbitrator, the third arbitrator being appointed by the President of the
London Court of International Arbitration.
27.5 If the Dispute:
(a) touches or concerns any matter or thing arising out of Schedules 3 and 4,
the Lease or the Leasehold Assignment or as to the rights, duties or
obligations of PowerGen or the Buyer under those Schedules or the Lease or
the Leasehold Assignment; or
(b) relates to Environmental Liabilities, Operating Permits, Environmental Laws
or Remedial Works;
the Dispute shall be referred to arbitration in accordance with the Rules before
a sole arbitrator. The arbitrator shall be appointed by the London Court of
International Arbitration which shall, in appointing the arbitrator, take
account of the nature of the Dispute and the qualifications or identities of the
proposed arbitrator set out in the Request for Arbitration and the Response in
accordance with articles 1 and 2 of the Rules. Any arbitrator appointed under
this clause 27.5 shall have at least ten (10) years experience relevant to the
matters which appear, from the Request for Arbitration and the Response, to be
in issue.
TAX
28.1(a) All amounts payable under this Agreement are exclusive of VAT
chargeable in respect thereof and the party paying such amount shall, in
addition, pay any VAT properly chargeable thereon against provision of a
valid VAT invoice.
(b) If any amounts paid under this Agreement are required to be reimbursed to
the paying party (the Payer), the party making the reimbursement shall,
within a period of twenty eight (28) days from the date that the
reimbursement is agreed (i) reimburse any VAT charged to the Payer on the
original payment and (ii) deliver to the Payer a valid VAT credit note in
respect of such amount.
28.2 PowerGen agrees with the Buyer that:
(a) PowerGen shall not on or prior to Completion make an election under
paragraph 2 of Schedule 10 to VATA 1994 to waive the exemption from VAT in
relation to the Power Station; and
(b) PowerGen shall on Completion provide the Buyer with written confirmation
that it has not made such an election.
28.3 PowerGen warrants to the Buyer that it will on Completion be a registered
taxable person for the purposes of VAT.
28.4 Both parties agree that the transfer of the Power Station Assets shall be
treated as neither a supply of goods nor services under article 5 of The Value
Added Tax (Special Provisions) Order 1995. Accordingly, the Buyer represents,
warrants and undertakes to PowerGen as follows:
(a) that it will on Completion be a registered taxable person for the purposes
of VAT;
(b) following Completion, it intends to use the Power Station Assets in
carrying out the same kind of business as that carried out by PowerGen at
the Power Station prior to Completion; and
(c) there shall be no significant break in the normal trading pattern of the
Power Station immediately after Completion.
28.5 The following amounts are to be paid by the Buyer for the following assets:
(a) (pound sterling)3,000,000 for the Plant and Equipment; and
(b) (pound sterling)5,000,000 for the Stocks.
28.6 The parties acknowledge that, in calculating the Premium, they have
attributed a value of (pound sterling)150,000 to that part of the premises
comprised in the Lease which is not coloured yellow on the plan annexed thereto.
28.7 The amount referred to at 28.5(a) above (the Capital Allowances Sum) is to
be paid by the Buyer for the provision by PowerGen of the Plant and Equipment in
respect of which PowerGen has claimed capital allowances under Part II of the
Capital Allowances Act 1990 (or any statutory provision or provisions which that
legislation replaces or re-enacts).
28.8 PowerGen and the Buyer confirm that the Capital Allowances Sum is the
amount which they consider, on a just apportionment, to be properly attributable
to the Plant and Equipment and the Buyer shall not (and shall procure that no
member of the Buyer's Group shall) argue that either the amount to be brought
into account as disposal value by PowerGen in respect of the Plant and Equipment
or the amount of capital expenditure which the Buyer is to be treated as having
incurred on the provision of the Plant and Equipment is different to the Capital
Allowances Sum.
28.9 PowerGen and the Buyer agree that, other than in respect of the Plant and
Equipment, the Buyer shall not and shall procure that no member of the Buyer's
Group shall seek to claim capital allowances by reference to the transactions
contemplated in this Agreement.
28.10 The Buyer represents that it is solely resident in the United Kingdom for
tax purposes and undertakes that it will remain so for a period of six (6) years
from Completion. If, at any time thereafter PowerGen notifies the Buyer that it
intends to make a payment to the Buyer under any of the Transaction Documents,
the Buyer undertakes to inform PowerGen if it has been informed by a relevant
tax authority that it is no longer regarded as being solely resident in the
United Kingdom for tax purposes.
28.11 PowerGen undertakes that it will on Completion or within ten (10)
Business Days of any subsequent request to PowerGen by the Buyer provide all
information required by the Buyer to determine the application to the Power
Station of the provisions of Part XV of the Value Added Tax Regulations 1995,
save to the extent that such information has already been made available to the
Buyer.
SET-OFF
29. Either party may deduct and set-off against any amounts of whatsoever
nature which are due and payable by it under or in connection with this
Agreement or any other of the Transaction Documents, any undisputed amounts due
and payable by the other party to it under or in connection with this Agreement
or any other of the Transaction Documents.
GOVERNING LAW
30. This Agreement and, save as expressly referred to therein, the documents to
be entered into pursuant to it shall be governed by and construed in accordance
with English law.
COUNTERPARTS
31. This Agreement may be executed in any number of counterparts and by the
parties to it on separate counterparts, each of which shall be an original, but
all of which shall together constitute one and the same instrument.
As witness this Agreement has been executed as a Deed by or on behalf of the
parties the day and year first before written.
SCHEDULE 1
PREMIUM
Subject as provided in paragraph 5 of Part 2, this Schedule 1 shall apply in the
event that completion of the proposed disposal of the power station known as
Ferrybridge `C', pursuant to the Ferrybridge Agreement, (a) does not take place
or (b) takes place before Completion under this Agreement.
In the case where the disposal of the Power Station takes place after the
completion of the Power Station known as Ferrybridge `C' pursuant to the
Ferrybridge Agreement, this Schedule 1 shall apply but its effect shall be
modified so that aggregate effect of Schedule 1 of this Agreement and Schedule 1
of the Ferrybridge Agreement would give rise to the same effect had Completion
under this Agreement taken place on the same day as completion of the power
station known as Ferrybridge `C' pursuant to the Ferrybridge Agreement.
Part 1: Pre-Completion Adjustment of Premium
1. Subject to paragraph 5 of Part 2 of this Schedule, if the Actual IPC
Authorisation is issued (whether by way of new issue or a variation to the
Assumed IPC Authorisation) prior to Completion, the Premium shall be the amount
which is calculated by the following formula:
Premium = (pound sterling)526,000,000 + Sulphur Dioxide Adjustment
((pound sterling)m)
Where:
--- ---
- -
Sulphur - Actual Sulphur Dioxide `B' Limit - Assumed Sulphur Dioxide `B' Limit -
Dioxide Sum - P P -
Adjustment = \p1 - p7\ - ------------------------------------------------------------------------ - x [F / kt]
((pound sterling)m) - tx -
- (1 + R ) -
- -
--- ---
And:
R is 5%
tx for each of Periods 1 to 7 is the number of years from the
above Completion Date to the mid point of
the Period in question
t0 is the Completion Date
F is (pound sterling)2,100,000 in any case
where the Actual Sulphur Dioxide `B'
Limit is lower than the Assumed
Sulphur Dioxide `B' Limit and
(pound sterling)220,000 in any case where
the Actual Sulphur Dioxide `B' Limit
is higher than the Assumed Sulphur
Dioxide `B' Limit
and where the amounts of the Assumed Sulphur Dioxide `B' Limits are derived as
follows:
Period (p): Assumed Sulphur
(being years or part years as set out in Dioxide 'B' Limit
the IPC Authorisation) (kt)
p1 January 1999 to September 1999 58.8
p2 October 1999 to September 2000 72.3
p3 October 2000 to September 2001 57.3
p4 October 2001 to September 2002 37.5
p5 October 2002 to September 2003 37.5
p6 October 2003 to September 2004 37.5
p7 October 2004 to September 2005 34.5
2. If the Periods (p) by which the Actual Sulphur Dioxide `B' Limits are
determined differ from those set out above, unless otherwise agreed by the Buyer
and PowerGen, the parties shall adjust the Assumed Sulphur Dioxide `B' Limits by
applying a straight-line apportionment by reference to the new Periods (p).
3. If the amount of sulphur dioxide (SO2) emitted by the Power Station from
the commencement of the Period (p) during which Completion occurs until
Completion (the Pre-Completion Period) exceeds the Actual Sulphur Dioxide `B'
Limits for the Pre-Completion Period calculated on a straight line basis over
such period (the Apportioned Sulphur Dioxide `B' Limits), PowerGen shall
increase the Actual Sulphur Dioxide `B' Limits for the remainder of the Period
(p) during which Completion occurs by an amount equal to the difference between
the amount of SO2 emitted by the Power Station during the Pre-Completion Period
and the Apportioned Sulphur Dioxide `B' Limits. Such increase to the Actual
Sulphur Dioxide `B' Limits shall be effected by way of a variation to PowerGen's
retained IPC Authorisation and a corresponding increase in the Actual Sulphur
Dioxide `B' Limits in the Actual IPC Authorisation which the parties shall
ensure takes effect.
4. For the purposes of the calculation of the Sulphur Dioxide Adjustment, the
Actual Sulphur Dioxide `B' Limits from the Completion Date up to the date from
which the Actual Sulphur Dioxide `B' Limits become effective shall be deemed to
be the Assumed Sulphur Dioxide `B' Limits set out above. If the Actual Sulphur
Dioxide `B' Limits become effective during any one of the Periods (p), the
Assumed Sulphur Dioxide `B' Limits shall be deemed to apply proportionately
throughout the Period (p).
5. No adjustment to the Premium shall be made if the Sulphur Dioxide
Adjustment is less than (pound sterling)5,000,000. The maximum increase to the
Premium pursuant to these provisions shall be (pound sterling)13,000,000. The
greatest reduction to the Premium pursuant to these provisions shall be (pound
sterling)124,000,000.
Part 2: Post-Completion Adjustment of Premium
1. Calculation of Premium
1.1 Subject to paragraph 5 below, if the Actual IPC Authorisation is issued
(whether by way of new issue or a variation to the Assumed IPC Authorisation)
after Completion, the basic amount of the Premium shall be the aggregate of the
First Instalment and the Second Instalment.
1.2 The First Instalment of (pound sterling)526,000,000 (the First
Instalment), shall be payable at Completion in accordance with the provisions of
clause 5.3.1(a).
1.3 Subject to paragraph 1.4 of this Part of Schedule 1, the Second Instalment
of (pound sterling)13,000,000 (the Second Instalment) shall be payable in
accordance with the provisions of paragraph 3 of this Part 2 of Schedule 1.
1.4 The amounts of the First Instalment and Second Instalment shall be
contingent on the amount of the Actual Sulphur Dioxide 'B' Limits in certain
circumstances and, accordingly, may be reduced when the Actual Sulphur Dioxide
`B' Limits become effective. The aggregate amount of these reductions (the
Variation) shall be calculated by reference to paragraph 2 of this Part 2 of
Schedule 1.
2. Variation
--- ---
- -
2.1 Variation Sum - Capped Sulphur Dioxide `B' Limit - Actual Sulphur Dioxide `B' Limit -
((pound sterling)m) = \pl-p7\ - P P -
- -------------------------------------------------------------------- - x [ F / kt ]
- tx
- (1 + R ) -
- -
--- ---
(fm)
Where:
R is 5%
tx for each of Periods 1 is the number of years from the Completion
to 7 above Date to the mid point of the Period in
question
t0 is the Completion Date,
F is (pound sterling)2,100,000 in any case where the
Actual Sulphur Dioxide `B' Limit is lower than the
Assumed Sulphur Dioxide `B' Limit and
(pound sterling)220,000 in any case where the
Actual Sulphur Dioxide `B' Limit is higher than
the Assumed Sulphur Dioxide `B' Limit
and where the amounts of the Capped Sulphur Dioxide `B' Limits and the Assumed
Sulphur Dioxide `B' Limits are derived as follows:
Period (p): Assumed
(being years or part years as set Sulphur Capped Sulphur
Dioxide `B' Limit Dioxide `B' Limit
out in the IPC Authorisation) (kt) (kt)
p/1/ January 1999 to September 58.8 68.8
1999
p/2/ October 1999 to September 72.3 82.3
2000
p/3/ October 2000 to September 57.3 67.3
2001
p/4/ October 2001 to September 37.5 47.5
2002
p/5/ October 2002 to September 37.5 47.5
2003
p/6/ October 2003 to September 37.5 47.5
2004
p/7/ October 2004 to September 34.5 44.5
2005
2.2 If the Periods (p) by which the Actual Sulphur Dioxide `B' Limits are
determined differ from those set out above, unless otherwise agreed by the Buyer
and PowerGen, the parties shall adjust the Assumed Sulphur Dioxide `B' Limits
and the Capped Sulphur Dioxide `B' Limits by applying a straight line
apportionment by reference to the new Periods (p).
2.3 If the amount of sulphur dioxide (SO\2\) emitted by the Power Station from
the commencement of the Period (p) during which Completion occurs until
Completion (the Pre-Completion Period) exceeds the Assumed Sulphur Dioxide `B'
Limits for the Pre-Completion Period calculated on a straight line basis over
such period (the Apportioned Sulphur Dioxide `B' Limits), PowerGen shall
increase the Assumed Sulphur Dioxide `B' Limits for the remainder of the
Period (p) during which Completion occurs by an amount equal to the difference
between the amount of SO\2\ emitted by the Power Station during the Pre-
Completion Period and the Apportioned Sulphur Dioxide `B' Limits. Such
increase to the Assumed Sulphur Dioxide `B' Limits shall be effected by way of
a variation to PowerGen's retained IPC Authorisation and a corresponding
increase in the Actual Sulphur
Dioxide `B' Limits in the Actual IPC Authorisation which the parties shall
ensure takes effect.
2.4 For the purposes of the calculation of the Variation, the Actual Sulphur
Dioxide `B' Limits from the Completion Date up to the date from which the
Actual Sulphur Dioxide `B' Limits become effective shall be deemed to be the
Assumed Sulphur Dioxide `B' Limits set out above. If the Actual Sulphur
Dioxide `B' Limits become effective during any one of the Periods (p), the
Assumed Sulphur Dioxide `B' Limits shall be deemed to apply proportionately
throughout the Period (p).
2.5 If the amount of the Variation is less than (pound sterling)5,000,000 or
is a negative amount, no adjustment shall be made. Otherwise, the Second
Instalment shall be reduced by the amount of the Variation, subject always to a
maximum adjustment to the Second Instalment of (pound sterling)13,000,000, which
would therefore result in no amount of the Second Instalment being payable.
2.6 If the Variation is greater than (pound sterling)13,000,000, the amount of
the First Instalment shall be reduced by an amount equal to the excess and in
that event PowerGen shall be liable to reimburse that excess amount to the Buyer
in accordance with the provisions of paragraph 4 of this Part 2 of Schedule 1,
subject always to a maximum total Variation of (pound sterling)137,000,000.
3. Payment of Second Instalment
3.1 Subject to paragraph 1.4 of this Part 2 of Schedule 1, the Buyer shall
cause the Second Instalment (together with the amount of interest calculated in
accordance with paragraph 3.2 below) to be paid by an electronic funds transfer
to the PowerGen Account within a period of twenty eight (28) days from the date
that the Actual IPC Authorisation is issued (whether by way of new issue or a
variation to any IPC Authorisation held by PowerGen at the date hereof).
3.2 Interest, calculated at the rate of one (1) per cent. above the base rate
of HSBC Bank, shall be payable (net of any applicable taxes) on the amount of
the Second Instalment actually payable in accordance with paragraph 3.1 of this
Part 2 of Schedule 1 (if any) and shall accrue from the Completion Date to the
due date in accordance with paragraph 3.1 above. If the Buyer fails to pay any
amounts due to PowerGen pursuant to the foregoing and paragraph 3.1, the Buyer
shall pay interest on such amounts from the due date to the date of actual
payment at the rate of
three (3) per cent. above the base rate of HSBC Bank (net of any applicable
taxes) as well after as before judgment.
4. Reimbursement of Premium
4.1 Subject always to the maximum reduction provided in paragraph 2 above, in
the event that the application of this Part 2 of Schedule 1 results in a
reduction to the First Instalment, PowerGen shall cause the relevant amount (as
calculated in accordance with paragraph 2 above) (together with the amount of
interest calculated in accordance with paragraph 4.2 below) to be paid by an
electronic funds transfer to the Buyer's bank account (which shall be notified
to PowerGen by the Buyer) within a period of twenty eight (28) days from the
date that the Actual IPC Authorisation is issued (whether by way of a new issue
or a variation to any IPC Authorisation held by PowerGen at the date hereof).
4.2 Interest, calculated at the rate of one (1) per cent. above the base rate
of HSBC Bank, shall be payable (net of any applicable taxes) by PowerGen on any
amount due pursuant to paragraph 4.1 above and shall accrue from the Completion
Date to the due date in accordance with paragraph 4.1 above. If PowerGen fails
to pay any amounts due to the Buyer pursuant to the foregoing and paragraph 4.1,
PowerGen shall pay interest on such amount from the due date to the date of
actual payment at the rate of three (3) per cent. above the base rate of HSBC
Bank (net of any applicable taxes) as well after as before judgment.
5. Replacement Schedule
The provisions of this Schedule 1 shall be replaced in their entirety and
substituted by the provisions of Schedule 1A upon Completion (as defined
therein) of the Ferrybridge Agreement having occurred on the same day as
Completion under this Agreement and the Buyer either (a) being permitted under
its Assumed IPC Authorisation or Actual IPC Authorisation (if then issued) to
transfer any Assumed Sulphur Dioxide `B' Limits or Actual Sulphur Dioxide
`B' Limits (as applicable) between the Power Station and the power station
purchased pursuant to the Ferrybridge Agreement or (b) receiving an IPC
Authorisation in respect of the Power Station and the power station purchased
pursuant to the Ferrybridge Agreement on an aggregate portfolio basis.
Part 3: Adjustment of Assumed Incentive Allowance Payment
1. Subject to paragraph 4 below, the Incentive Allowance Payment shall be
adjusted if the Actual Incentive Allowance provides for a lower level of
additional `B' emission limits for sulphur dioxide emissions than the Assumed
Incentive Allowance such that it shall result in a repayment to the Buyer in
accordance with paragraph 2 below calculated in accordance with the following
formula:
E
Repayment = ----xP
((pound sterling)m) 82.5
Where:
E is the amount of the aggregate additional `B' emission limits
of sulphur dioxide emissions per year per GW of capacity being
fitted with FGD (expressed in kilotonnes) comprised in the Actual
Incentive Allowance
P is the Incentive Allowance Payment.
No increase in the Incentive Allowance Payment shall result from the Actual
Incentive Allowance being higher than the Assumed Incentive Allowance.
2. In the event that the application of paragraph 1 above results in a
repayment of part or all of the Incentive Allowance Payment, PowerGen shall
cause the relevant amount (as calculated in accordance with paragraph 1 above)
(together with the amount of interest calculated in accordance with paragraph 3
below) to be paid by an electronic funds transfer to the Buyer's bank account
(which shall be notified to PowerGen by the Buyer) within a period of twenty
eight (28) days from the Consultation Paper Implementation.
3. Interest, calculated at the rate of one (1) per cent, above the base rate
of HSBC Bank, shall be payable to the Buyer on any amount due pursuant to
paragraphs 2 or 4 and shall accrue from the Completion Date to the due date in
accordance with paragraphs 2 or 4. If PowerGen fails to pay any amounts due to
the Buyer pursuant to the foregoing and paragraphs 2 and 4, PowerGen shall pay
interest on such amounts from the due date to the date of actual payment at the
rate of three (3) per
cent. above the base rate of HSBC Bank (net of any applicable taxes) as well
after as before judgment.
4. In the event that the Consultation Paper Implementation does not take place
within twelve (12) months following the date hereof, unless PowerGen and the
Buyer agree to extend this deadline following notification from the Environment
Agency that the Consultation Paper Implementation will take place within a
specified time period, the Incentive Allowance Payment shall be repaid in full
(together with the amount of interest calculated in accordance with paragraph 3
above) and PowerGen shall cause such amount to be paid to the Buyer's bank
account in accordance with the procedure set out in paragraph 2 above within a
period of twenty eight (28) days from when the Incentive Allowance Payment was
deemed to be no longer valid.
For the purposes of this Part 3 of Schedule 1:
Actual Incentive Allowance means the Assumed Incentive Allowance as adjusted on
Consultation Paper Implementation;
Assumed Incentive Allowance means the proposed incentive and flexibility
allowances set out in paragraphs 49 and 50 of the Consultation Paper of `B'
emission limits of an aggregate additional 82.5 kilotonnes of sulphur dioxide
emissions per year per GW of capacity being fitted with FGD which comprises 45
kilotonnes of sulphur dioxide emissions per GW of capacity being fitted with FGD
(incentive allowance), and during each of the two years prior to the date agreed
with the Environment Agency for the start-up of the plant, 37.5 kilotonnes of
sulphur dioxide emissions per year per GW of capacity being fitted with FGD
(flexibility allowance);
Consultation Paper means the consultation paper published by the Environment
Agency entitled "Controlling Pollution from Existing Coal and Oil-Fired Power
Stations' dated 23 March 1999;
Consultation Paper Implementation means the publication by the Environment
Agency of its finalised policy in respect of the Assumed Incentive Allowance as
described in paragraphs 49 and 50 of the Consultation Paper, subject to any
modifications thereto, following completion of the public consultation period in
respect of the Consultation Paper;
Incentive Allowance Payment means (pound sterling)29,000,000, subject to any
adjustment under paragraph 1 of this Part 3;
FGD means flue gas desulphurisation which reduces sulphur dioxide emissions.
SCHEDULE 1A
PREMIUM
Subject as provided in paragraph 5 of Part 2 in Schedule 1, this Schedule shall
only apply in the event that both the Power Station and the power station known
as Ferrybridge `C' are disposed of on the same day pursuant to this Agreement
and the Ferrybridge Agreement respectively.
Part 1: Pre-Completion Adjustment of Premium
1. If the Actual IPC Authorisation is issued (whether by way of new issue or a
variation to any Assumed IPC Authorisation) prior to Completion, the Premium
shall be the amount which is calculated by the following formula:
Premium = (pound sterling)526,000,000 + Sulphur Dioxide Adjustment ((pound
sterling)m)
Where:
--- ---
- -
Sulphur - Actual Sulphur Dioxide `B' Limit - Assumed Sulphur Dioxide `B' Limit -
Dioxide Sum - P P -
Adjustment = \p1 - p7\ - --------------------------------------------------------------------- - x [F / kt] x 0.5
((pound sterling)m) - tx -
- (1 + R ) -
- -
--- ---
And:
R is 5%
tx for each of Periods 1 to 7 is the number of years from the Completion
above Date to the mid point of the Period in
question
t0 is the Completion Date
F is
(a) in respect of the first 10 kt of any
adjustment in any Period (p),
(pound sterling)0.75m;
(b) in respect of the next 5 kt of any
adjustment in any Period (p):
- (pound sterling)1,000,000 in any case
where the Actual Sulphur
Dioxide `B' Limit is lower than
the Assumed Sulphur Dioxide `B'
Limit; and
- (pound sterling)220,000 in any
case where the Actual Sulphur
Dioxide `B' Limit is higher than
the Assumed Sulphur Dioxide `B'
Limit; and
(c) in respect of any additional
adjustment in any Period (p):
- (pound sterling)2,100.000 in any
case where the Actual Sulphur
Dioxide `B' Limit is lower than
the Assumed Sulphur Dioxide `B'
Limit; and
- (pound sterling)220,000 in any
case where the Actual Sulphur
Dioxide `B' Limit is higher than
the Assumed Sulphur Dioxide `B'
Limit.
and where the amounts of the Assumed Sulphur Dioxide `B' Limits are derived as
follows:
Period (p): Assumed Sulphur
(being years or part years as set out in Dioxide `B' Limit
the IPC Authorisation) (kt)
p1 January 1999 to September 1999 117.6
p2 October 1999 to September 2000 144.6
p3 October 2000 to September 2001 114.6
p4 October 2001 to September 2002 75.0
p5 October 2002 to September 2003 75.0
p6 October 2003 to September 2004 75.0
p7 October 2004 to September 2005 69.0
2. If the Periods (p) by which the Actual Sulphur Dioxide `B' Limits are
determined differ from those set out above, unless otherwise agreed by the Buyer
and PowerGen, the parties shall adjust the Assumed Sulphur Dioxide `B' Limits
by applying a straight-line apportionment by reference to the new Periods (p).
2. If the amount of sulphur dioxide (SO/2/) emitted by the Power Station from
the commencement of the Period (p) during which Completion occurs until
Completion (the Pre-Completion Period) exceeds the Actual Sulphur Dioxide `B'
Limits for the Pre-Completion Period calculated on a straight line basis over
such period (the Apportioned Sulphur Dioxide `B' Limits), PowerGen shall
increase the Actual Sulphur Dioxide `B' Limits for the remainder of the Period
(p) during which Completion occurs by an amount equal to the difference between
the amount of SO/2/ emitted by the Power Station during the Pre-Completion
Period and the Apportioned Sulphur Dioxide `B' Limits. Such increase to the
Actual Sulphur Dioxide `B' Limits shall be effected by way of a variation to
PowerGen's retained IPC Authorisation and a corresponding increase in the Actual
Sulphur Dioxide `B' Limits in the Actual IPC Authorisation which the parties
shall ensure takes effect.
4. For the purposes of the calculation of the Sulphur Dioxide Adjustment, the
Actual Sulphur Dioxide `B' Limits from the Completion Date up to the date from
which the Actual Sulphur Dioxide `B' Limits become effective shall be deemed
to be the Assumed Sulphur Dioxide `B' Limits set out above. If the Actual
Sulphur Dioxide `B' Limits become effective during any one of the Periods (p),
the Assumed Sulphur Dioxide `B' Limits shall be deemed to apply
proportionately throughout the Period (p).
5. No adjustment to the Premium shall be made if the Sulphur Dioxide
Adjustment is less than (pound sterling)5,000,000. The maximum increase to the
Premium pursuant to these provisions shall be (pound sterling)26,500,000. The
greatest reduction to the Premium pursuant to these provisions shall be (pound
sterling)97,000,000.
Part 2: Post-Completion Adjustment of Premium
1. Calculation of Premium
1.1 If the Actual IPC Authorisation is issued (whether by way of new issue or
a variation to any Assumed IPC Authorisation), the basic amount of the Premium
shall be the aggregate of the First Instalment and the Second Instalment.
1.2 The First Instalment of (pound sterling)526,000,000 (the First
Instalment), shall be payable at Completion in accordance with the provisions of
clause 5.3(a).
1.3 Subject to paragraph 1.4 of this Part of Schedule 1A, the Second
Instalment of (pound sterling)26,500,000 (the Second Instalment) shall be
payable in accordance with the provisions of paragraph 3 of this Part 2 of
Schedule 1A.
1.4 The amounts of the First Instalment and Second Instalment shall be
contingent on the amount of the Actual Sulphur Dioxide `B' Limits in certain
circumstances and, accordingly, may be reduced when the Actual Sulphur Dioxide
`B' Limits become effective. The aggregate amount of these reductions (the
Variation) shall be calculated by reference to paragraph 2 of this Part 2 of
Schedule 1A.
2. Variation
--- ---
- -
- Capped Sulphur Dioxide `B' Limited - Actual Sulphur dioxide `B' Limit -
Sum - P P -
2.1 Variation = \p1 - p7\ - ------------------------------------------------------------------------ - x [F / kt] x 0.5
((pound sterling)m) - tx -
- (1 + R ) -
- -
--- ---
Where:
R is 5%
tx for each of Periods 1 is the number of years from the Completion Date
to 7 above to the mid point of the Period in question
t0 is the Completion Date,
F is
(a) in respect of the first 10 kt of any
adjustment in any Period (p),
(pound sterling)0.75m;
(b) in respect of the next 5 kt of any
adjustment in any Period (p):
- (pound sterling)1,000,000 in any case
where the Actual Sulphur Dioxide `B'
Limit is lower than the Assumed Sulphur
Dioxide `B' Limit; and
- (pound sterling)220,000 in any case
where the Actual Sulphur Dioxide `B'
Limit is higher than the Assumed
Sulphur Dioxide `B' Limit; and
(c) in respect of any additional adjustment in
any Period (p):
(pound sterling)2,100,000 in any case
where the Actual Sulphur Dioxide `B' Limit
is lower than the Assumed Sulphur Dioxide
`B' Limit; and
(pound sterling)220,000 in any case where
the Actual Sulphur Dioxide `B' Limit is
higher than the Assumed Sulphur Dioxide
`B' Limit,
and where the amounts of the Capped Sulphur Dioxide `B' Limits and the Assumed
Sulphur Dioxide `B' Limits are derived as follows:
Period (p): Assumed Capped Sulphur
(being years or part years as set Sulphur Dioxide `B' Limit
out in the IPC Authorisation) Dioxide `B' Limit (kt)
(kt)
p1 January 1999 to September 1999 117.6 137.6
p/2/ October 1999 to September 2000 144.6 164.6
p/3/ October 2000 to September 2001 114.6 134.6
p/4/ October 2001 to September 2002 75.0 95.0
p/5/ October 2002 to September 2003 75.0 95.0
p/6/ October 2003 to September 2004 75.0 95.0
p/7/ October 2004 to September 2005 69.0 89.0
2.2 If the Periods (p) by which the Actual Sulphur Dioxide `B' Limits are
determined differ from those set out above, unless otherwise agreed by the Buyer
and PowerGen, the parties shall adjust the Assumed Sulphur Dioxide `B' Limits
and the Capped Sulphur Dioxide `B' Limits by applying a straight line
apportionment by reference to the new Periods (p).
2.3. If the amount of sulphur dioxide (SO\2\) emitted by the Power Station from
the commencement of the Period (p) during which Completion occurs until
Completion (the Pre-Completion Period) exceeds the Assumed Sulphur Dioxide `B'
Limits for the Pre-Completion Period calculated on a straight line basis over
such period (the Apportioned Sulphur Dioxide `B' Limits), PowerGen will
increase the Assumed Sulphur Dioxide `B' Limits for the remainder of the
Period (p) during which Completion occurs by an amount equal to the difference
between the amount of SO\2\ emitted by the Power Station during the Pre-
Completion Period and the Apportioned Sulphur Dioxide `B' Limits. Such
increase to the Assumed Sulphur Dioxide `B' Limits shall be effected by way of
a variation to PowerGen's retained IPC Authorisation and a corresponding
increase in the Actual Sulphur Dioxide `B' Limits in the Actual IPC
Authorisation which the parties shall ensure takes effect.
2.4 For the purposes of the calculation of the Variation, the Actual Sulphur
Dioxide `B' Limits from the Completion Date up to the date from which the
Actual Sulphur Dioxide `B' Limits become effective shall
be deemed to be the Assumed Sulphur Dioxide `B' Limits set out above. If the
Actual Sulphur Dioxide `B' Limits become effective during any one of the
Periods (p), the Assumed Sulphur Dioxide `B' Limits shall be deemed to apply
proportionately throughout the Period (p).
2.5 If the amount of the Variation is less than (pound sterling)5,000,000 or
is a negative amount, no adjustment shall be made. Otherwise, the Second
Instalment shall be reduced by the amount of the Variation, subject always to a
maximum adjustment to the Second Instalment of (pound sterling)26,500,000, which
would therefore result in no amount of the Second Instalment being payable.
2.6 If the Variation is greater than (pound sterling)26,500,000, the amount of
the First Instalment shall be reduced by an amount equal to the excess and in
that event PowerGen shall be liable to reimburse that excess amount to the Buyer
in accordance with the provisions of paragraph 4 of this Part 2 of Schedule 1A,
subject always to a maximum total Variation of (pound sterling)123,500,000.
3. Payment of Second Instalment
3.1 The Buyer shall cause the Second Instalment (together with the amount of
interest calculated in accordance with paragraph 3.2 below) to be paid by an
electronic funds transfer to the PowerGen Account within a period of twenty
eight (28) days from the date that the Actual IPC Authorisation is issued
(whether by way of new issue or a variation to any IPC Authorisation held by
PowerGen at the date hereof).
3.2 Interest, calculated at the rate of one (1) per cent. above the base rate
of HSBC Bank, shall be payable by the Buyer on the amount of the Second
Instalment actually payable in accordance with paragraph 3.1 of this Part 2 of
Schedule 1A (if any) and shall accrue from the Completion Date to the due date
in accordance with paragraph 3.1 above. If the Buyer fails to pay any amounts
due to PowerGen pursuant to the foregoing and paragraph 3.1, the Buyer shall pay
interest on such amounts from the due date to the date of actual payment at the
rate of three (3) per cent. above the base rate of HSBC Bank (net of any
applicable taxes) as well after as before judgment.
4. Reimbursement of Premium
4.1 Subject always to the maximum reduction provided in paragraph 2 above, in
the event that the application of this Part 2 of Schedule 1 results in a
reduction to the First Instalment, PowerGen shall
cause the relevant amount (as calculated in accordance with paragraph 2 above)
(together with the amount of interest calculated in accordance with paragraph
4.2 below) to be paid by an electronic funds transfer to the Buyer's bank
account (which shall be notified to PowerGen by the Buyer) within a period of
twenty eight (28) days from the date that the Actual IPC Authorisation is issued
(whether by way of a new issue or a variation to any IPC Authorisation held by
PowerGen at the date hereof).
4.2 Interest, calculated at the rate of one (1) per cent. above the base rate
of HSBC Bank, shall be payable by PowerGen on any amount due pursuant to
paragraph 4.1 above and shall accrue from the Completion Date to the due date in
accordance with paragraph 4.1 above. If PowerGen fails to pay any amounts due
to the Buyer pursuant to the foregoing and paragraph 4.1, PowerGen shall pay
interest on such amount from the due date to the date of actual payment at the
rate of three (3) per cent. above the base rate of HSBC Bank (net of any
applicable taxes) as well after as before judgment.
Part 3: Adjustment of Assumed Incentive Allowance Payment
1. Subject to paragraph 4 below, the Incentive Allowance Payment shall be
adjusted if the Actual Incentive Allowance provides for a lower level of
additional `B' emission limits for sulphur dioxide emissions than the Assumed
Incentive Allowance such that it shall result in a repayment to the Buyer in
accordance with paragraph 2 below calculated in accordance with the following
formula:
E
Repayment = ---xP
((pound sterling)m) 82.5
Where:
E is the amount of the aggregate additional `B'
emission limits of sulphur dioxide emissions per year
per GW of capacity being fitted with FGD (expressed in
kilotonnes) comprised in the Actual Incentive
Allowance
P is the Incentive Allowance Payment.
No increase in the Incentive Allowance Payment shall result from the Actual
Incentive Allowance being higher than the Assumed Incentive Allowance.
2. In the event that the application of paragraph 1 above results in a
repayment of part or all of the Incentive Allowance Payment, PowerGen shall
cause the relevant amount (as calculated in accordance with paragraph 1 above)
(together with the amount of interest calculated in accordance with paragraph 3
below) to be paid by an electronic funds transfer to the Buyer's bank account
(which shall be notified to PowerGen by the Buyer) within a period of twenty
eight (28) days from the Consultation Paper Implementation.
3. Interest, calculated at the rate of one (1) per cent, above the base rate
of HSBC Bank, shall be payable to the Buyer on any amount due pursuant to
paragraphs 2 or 4 and shall accrue from the Completion Date to the due date in
accordance with paragraphs 2 or 4. If PowerGen fails to pay any amounts due to
the Buyer pursuant to the foregoing and paragraphs 2 and 4, PowerGen shall pay
interest on such amounts from the due date to the date of actual payment at the
rate of three (3) per cent. above the base rate of HSBC Bank (net of any
applicable taxes) as well after as before judgment.
4. In the event that the Consultation Paper Implementation does not take place
within twelve (12) months following the date hereof, unless PowerGen and the
Buyer agree to extend this deadline following notification from the Environment
Agency that the Consultation Paper Implementation will take place within a
specified time period, the Incentive Allowance Payment shall be repaid in full
(together with the amount of interest calculated in accordance with paragraph 3
above) and PowerGen shall cause such amount to be paid to the Buyer's bank
account in accordance with the procedure set out in paragraph 2 above within a
period of twenty eight (28) days from when the Incentive Allowance Payment was
deemed to be no longer valid.
For the purposes of this Part 3 of Schedule 1:
Actual Incentive Allowance means the Assumed Incentive Allowance as adjusted on
Consultation Paper Implementation;
Assumed Incentive Allowance means the proposed incentive and flexibility
allowances set out in paragraphs 49 and 50 of the Consultation Paper of `B'
emission limits of an aggregate additional
82.5 kilotonnes of sulphur dioxide emissions per year per GW of capacity being
fitted with FGD which comprises 45 kilotonnes of sulphur dioxide emissions per
GW of capacity being fitted with FGD (incentive allowance), and during each of
the two years prior to the date agreed with the Environment Agency for the
start-up of the plant, 37.5 kilotonnes of sulphur dioxide emissions per year per
GW of capacity being fitted with FGD (flexibility allowance);
Consultation Paper means the consultation paper published by the Environment
Agency entitled "Controlling Pollution from Existing Coal and Oil-Fired Power
Stations' dated 23 March 1999;
Consultation Paper Implementation means the publication by the Environment
Agency of its finalised policy in respect of the Assumed Incentive Allowance as
described in paragraphs 49 and 50 of the Consultation Paper, subject to any
modifications thereto, following completion of the public consultation period in
respect of the Consultation Paper;
Incentive Allowance Payment means (pound sterling)29,000,000, subject to any
adjustment under paragraph 1 of this Part 3;
FGD means flue gas desulphurisation which reduces sulphur dioxide emissions.
SCHEDULE 2
THE WARRANTIES
PowerGen warrants to the Buyer as follows:
Capacity of PowerGen and Information
1.1 PowerGen is a company duly incorporated and validly existing under the
laws of England and Wales.
1.2 PowerGen has or will, when executed, have the legal right and full power
and authority to enter into and perform the Transaction Documents and any other
document to be executed by PowerGen in connection with the Transaction Documents
to which it is or will be a party.
1.3 The Transaction Documents and any other document to be executed by
PowerGen or the relevant member of PowerGen's Group in connection with the
Transaction Documents will, when executed, constitute valid and binding
obligations of PowerGen or the relevant member of PowerGen's Group enforceable
in accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganisation, moratorium or
other similar laws affecting creditors' rights generally, including those based
on equitable principles, or any failure by any counterparty (other than
PowerGen) to pay stamp duty thereon and/or register the same with the relevant
authority or body.
1.4 The execution and delivery of, and the performance by PowerGen of its
obligations under, this Agreement and any other documents to be executed by
PowerGen pursuant to or in connection with this Agreement will not result in a
breach of any agreement, licence or other instrument or of any order, judgment
or decree of any court, governmental agency or regulatory body to which PowerGen
is a party or by which PowerGen is bound.
1.5 To the extent that operations are carried on by PowerGen at the Power
Station on behalf of the Buyer after Completion, PowerGen will have the legal
right and the necessary power and authority to carry on such operations on the
terms set out or referred to in this Agreement or the Transaction Documents.
1.6 Except in relation to Environmental Liabilities and the Replies to
Preliminary Enquiries, the written information attached to or deemed disclosed
pursuant to the Disclosure Letter was provided in good faith and is, so far as
PowerGen is aware, in all material respects true, complete and accurate and
PowerGen is not aware of any fact or matter or circumstances not disclosed in
writing to the Buyer which renders any such information untrue, inaccurate or
incomplete in any material respect.
1.7 Except in relation to Environmental Liabilities and the Replies to
Preliminary Enquiries, so far as PowerGen is aware, there are fully and
reasonably disclosed in the Disclosure Letter all facts and matters which are
necessary to qualify the statements set out in this Schedule in order that such
statements, as so qualified, are true and accurate.
1.8 No written information (including any Contracts) has been supplied to XX
Xxxxxx by or on behalf of PowerGen whether or not in response to any request for
information which XX Xxxxxx has made to PowerGen (its officers or employees) to
assist them to prepare the drafts of the Phase I and Phase II Reports dated 28
January 1999 and February 1999 respectively and the draft supplemental reports
thereto dated 1 March 1999 and 21 April 1999 in relation to the Power Station
(the Reports) which, when supplied, was untrue or inaccurate nor, so far as
PowerGen is aware, is there any such information which has not been disclosed,
in either case which is such as to have a materially adverse effect on any
recommendation or conclusion set out in the Reports.
Ownership of Power Station Assets
2.1 Each of the Power Station Assets and the Fixed Plant and Equipment (other
than those in respect of which title has been deduced) is owned both legally and
beneficially by PowerGen (or in the case of any of the Fixed Plant and Equipment
which is affixed to land belonging to a third party, would so be but for the law
of fixtures) free from any third party rights (other than those arising by
operation of law).
2.2 No option, right to acquire, mortgage, charge, pledge, lien (other than a
lien arising by operation of law in the ordinary course of trading in respect of
non-material amounts so far as the same are not overdue) or other form of
security or encumbrance or equity on or over any of the Power Station Assets is
outstanding and there is no agreement or commitment to give or create any and no
claim has been made by any
person to be so entitled, save to the extent that the same has been deduced to
the Buyer or is evident from documentation supplied to the Buyer.
Litigation
3. In respect of the Power Station Assets or otherwise in connection with the
operations carried on at the Power Station, PowerGen is not involved in any
litigation or arbitration in which the amount claimed exceeds (pound
sterling)500,000 or in any administrative or criminal proceedings, whether as
plaintiff, defendant or otherwise and, so far as PowerGen is aware, no such
litigation, arbitration or proceedings is pending or threatened.
Adequacy and Condition of Assets
4.1 The operation of, and generation of electricity at, the Power Station does
not depend in any material respect upon the use of the Excluded Assets or other
assets provided by PowerGen (or any other member of PowerGen's Group) which are
not the subject of this Agreement, other than the Retained IPR and the Retained
IP Agreements.
4.2 At Completion, the Spare Parts and Stocks will not be materially less in
value than the Spare Parts and Stocks listed in the inventory dated 3 January
1999 for the Power Station (as adjusted in accordance with PowerGen's usual
ordering procedures) as the same is attached to the Disclosure Letter.
4.3 Except for Major Plant Items, the Plant and Equipment has been maintained
in accordance with Good Industry Practice, the business plan of the Power
Station (annexed to the Disclosure Letter) and PowerGen's own procedures for
such maintenance.
4.4 All the Power Station Assets and the Fixed Plant and Equipment are, where
capable of possession, in the possession of or under the control of PowerGen, or
PowerGen is entitled to take possession or control, and are situated in the
United Kingdom.
Operation of the Power Station
5. To the best of PowerGen's knowledge, the Power Station has been operated
in accordance with all Applicable Laws which, in the event of a failure to
comply with the provisions thereof, could result either in the
Power Station being withdrawn from service or in a fine in excess of
(pound sterling)50,000 imposed on the owner of the Power Station, in each case,
by any Competent Authority.
Replies, Material Contracts and Compliance
6.1 The Replies to Preliminary Enquiries, when taken as a whole, are true,
complete and accurate in all material respects subject to the preliminary notes,
provisos to, and other matters contained in, such Replies to Preliminary
Enquiries.
6.2 So far as PowerGen is aware there has been no breach of any material term
or condition of any Material Contract.
6.3 There is attached to the Disclosure Letter an insurance certificate issued
by J&H Xxxxx & XxXxxxxx summarising the terms of the Insurance Policy. In
respect of the Insurance Policy:
(i) all premiums have been duly paid to date;
(ii) the Insurance Policy is in full force and effect and no act nor, so far as
PowerGen is aware, omission, misrepresentation or non-disclosure by or on
behalf of PowerGen has occurred which makes the Insurance Policy voidable
and, so far as PowerGen is aware, no circumstances have arisen which would
render the Insurance Policy void or unenforceable for illegality or
otherwise, nor has there been any breach of the terms, conditions and
warranties of the Insurance Policy that would entitle the relevant
insurers to decline to pay all or any part of any claim made under it.
6.4 So far as PowerGen is aware and in relation to the operations carried on
at the Power Station, all contracts having a value in excess of (pound
sterling)50,000 per annum and/or those which are material to the operation of
the Power Station (which, for the avoidance of doubt, include the Material
Contracts as defined in this Agreement) are valid, binding and enforceable
obligations of PowerGen and the terms thereof have been complied with in all
material respects by PowerGen and PowerGen has not received any notice of
termination or intention to terminate from the relevant counterparty in respect
thereof.
6.5 The Disclosure Letter contains details of all Contracts which are material
to the operation of the Power Station.
Taxation
7.1 None of the Power Station Assets are subject to any security interest
arising in connection with the failure (or alleged failure) of PowerGen to pay
tax. All customs duties, VAT and other taxes payable to any revenue authority
(including, but without limitation, HM Customs & Excise) upon the importation or
acquisition of any of the Power Station Assets and all excise duties payable to
any revenue authority (including, but without limitation, HM Customs & Excise)
in respect of any of the Power Station Assets have been paid in full, and none
of the Power Station Assets is liable to confiscation or forfeiture (whether by
virtue of non-payment or underpayment of any taxation or duty or by virtue of
non-compliance with any legislation or regulation relating to any taxation or
duty or otherwise howsoever).
7.2 All of the records referred to in section 49(1)(b) of the VATA 1994 which
relate to the Power Station during the period prior to the Completion Date are
complete, correct and up-to-date in all material respects.
7.3 All National Insurance contributions and sums due and payable to the
Inland Revenue under the P.A.Y.E. system by PowerGen up to the date hereof in
respect of the Employees have been paid and PowerGen has made all such
deductions and retentions as should have been made in respect of the Employees
under section 203 to 203J of the Taxes Act and all regulations made thereunder.
Intellectual Property
8.1 So far as PowerGen is aware, none of the operations of the Power Station
as carried on by PowerGen infringe any intellectual property rights held by any
third party or involve the unauthorised use of confidential information
disclosed in circumstances which might entitle a third party to make a claim
against PowerGen. No written claims of infringement of such rights or
unauthorised use of such information has been made by any third party.
8.2 So far as PowerGen is aware, each Process Control Contract which is current
at the date of this Agreement, or, when this warranty is deemed to be repeated
immediately before Completion, the Process Control Contracts to which clauses
7.6 and 7.7 refer are in full force and effect, no notice having been given on
either side to terminate them, the
obligations of all parties have been fully complied with, and no disputes have
arisen.
8.3 All IPRs to be assigned under clause 7.1 are legally and beneficially
owned by PowerGen and, so far as PowerGen is aware, are valid and enforceable.
PowerGen has not received any written claims which if pursued would be material
to the truth and accuracy of this paragraph 8.3.
8.4 Schedule 11 identifies all computer systems (including software) and
information technology maintenance and support services and telecommunications
services, in each case where such services are provided by third parties other
than members of PowerGen's Group which, so far as PowerGen is aware, are
material to the operation of, and the generation of electricity at, the Power
Station as carried on by PowerGen and the attachments to the Disclosure Letter
contain copies of all Process Control Contracts in the possession of PowerGen.
8.5 All confidential information of PowerGen comprised in or relating to the
Power Station Assets (insofar as it relates to the operation of, and the
generation of electricity at, the Power Station as carried on by PowerGen) has
been treated as confidential and, so far as PowerGen is aware, there has been no
unauthorised disclosure of such confidential information. So far as PowerGen is
aware, any disclosure of such confidential information has been made in the
ordinary course of business and on the basis that such disclosure is to be
treated as being of a confidential nature.
8.6 So far as PowerGen is aware, there are no patentable inventions made by
employees of PowerGen and used or intended to be used in the operation of and
generation of electricity at the Power Station as carried on by PowerGen.
8.7 PowerGen has in place (in relation to the operation of and generation of
electricity at the Power Station as carried on by PowerGen) procedures to
prevent unauthorised access, the introduction of viruses and the taking and
storing of on-site back-up copies of software and data.
8.8 There has been undertaken or performed by or on behalf of PowerGen as
described in the Disclosure Letter (a) the investigations of whether computer
and communications technology used at the Power Station is able to handle date
data relating to a date on or after 1 January
2000 and (b) the actions intended to ensure such technology is able to handle
such data.
Pensions
9.1 PowerGen or its advisers have disclosed to the Buyer or its advisers
copies of the trust deed and rules governing the Pension Scheme together with
the current explanatory booklet and announcements (if any) under which Employees
are granted special benefits not documented in the trust deed and rules
governing the Pension Scheme.
9.2 Other than the state pension scheme, the Pension Scheme is the only
arrangement under which PowerGen provides or is liable to provide relevant
benefits (as defined in section 612(1) of the Taxes Act) in respect of any
Employee.
9.3. No proposal has been announced to establish any other scheme for providing
any relevant benefits (as defined in section 612(1) of the Taxes Act), and
PowerGen does not provide and has not promised to provide any such benefits in
respect of any Employees except under the Pension Scheme.
9.4 The Pension Scheme is exempt approved within the meaning of Chapter I of
Part XIV of the Taxes Act. A contracting-out certificate (within the meaning of
section 7 of the Pension Schemes Act 1993) is in force in respect of the Pension
Scheme. PowerGen has complied in all material respects and, so far as PowerGen
is aware the trustees of the Pension Scheme have complied in all material
respects, with their respective obligations under the Pension Scheme in relation
to Employees (other than any obligations for sex equalisation attributable to
sex inequality in relation to guaranteed minimum pensions).
9.5 All amounts due and payable by PowerGen to the trustees of the Pension
Scheme in respect of the Employees have been paid.
9.6 Neither PowerGen nor, so far as PowerGen is aware, the trustees of the
Pension Scheme have received written notice of any material claim (other than
routine claims for benefits) by any Employee which remains unresolved.
Employees
Definitions
10.1 For the purposes of this warranty 10:
appropriate representatives has the meaning given in Regulation 10 of the
Transfer Regulations;
contract of employment has the meaning given in Regulation 2 of the Employment
Regulations;
employee has the meaning given in Regulation 2 of the Employment Regulations;
employee representatives means any and all appropriate representatives, trade
union, association of trade unions, European Works Council, works council, staff
association, staff council or shop xxxxxxx committee;
Former Employees means any employee who was employed at the Power Station at any
time within the period of 12 months preceding the date of this Agreement but who
is not employed in the Power Station at the date of this Agreement;
relevant transfer has the meaning given in the Employment Regulations.
Employees and Terms of Employment
10.2.1 All Employees are employed exclusively in the Power Station and none is
required to perform employment duties for any person other than PowerGen.
10.2.2 PowerGen is not involved in any negotiation, and no decision has been
taken relating to any change to any term or condition of employment of, or
remuneration or benefit receivable by, any Employee (other than in the ordinary
course of business) PowerGen is under no obligation to make any such change.
10.2.3 The Disclosure Letter as updated at Completion contains full details of:
(i) the total number of Employees;
(ii) in respect of each Employee, the name, date of birth, sex, date of
commencement of employment, period of continuous employment, location,
salary and other benefits, including any severance schemes or
arrangements (whether contractual or not), notice period, grade and the
particulars of any collective agreement affecting the terms and
conditions of employment of each Employee and all information required
by law to be included in written particulars of employment;
10.2.4 No Employee will be entitled to give notice specifically as a result of
this Agreement.
10.2.5 PowerGen is not aware of any claim of any individual seeking employment,
employed (or formerly employed) at the Power Station alleging any right to
damages, compensation, reinstatement, re-engagement or breach of any law
relating to his or her employment or its termination.
Liabilities to and for Employees
10.3.1 No agreement has been made to pay or provide any benefit to any Employee
or Former Employee in connection with the actual or proposed termination or
suspension of employment or variation of any term of condition of employment of
any Employee or Former Employee.
10.3.2 No order to reinstate or re-engage any Former Employee has been made and
not complied with nor has any request been made to reinstate or re-engage any
Former Employee, nor is PowerGen under any other obligation to reinstate or re-
engage any Former Employee.
10.3.3 So far as PowerGen is aware, there is no investigation or enquiry
outstanding by the Health and Safety Executive, the Commission for Racial
Equality, the Equal Opportunities Commission or the Inland Revenue.
Trade Disputes, Collective Agreements and Trade Union etc. Issues
10.4.1 PowerGen is not (and has not been within the period of 12 months
preceding the date of this Agreement) involved in any dispute regarding the
dismissal, suspension, disciplining or varying or amending of any term or
condition of employment of any Employee or Former Employee concerning the
Employees with any employee representatives and there are no facts known which
would indicate that
there may be any such dispute (including, but not limited to, the sale of the
Power Station pursuant to the terms of this Agreement).
10.4.2 Copies of all the collective agreements or other agreements between
PowerGen and any trade union or employee representative body which relate to the
Employees have been disclosed to the Buyer.
Dismissals, Redundancies, the Transfer Regulations and Claims
10.5 Within the period of 12 months preceding the date of this Agreement:
(i) no notice of dismissal has been given to any Employee which has not
expired on 16 April 1999; or
(ii) no notice of any redundancies has been given to the relevant Secretary
of State nor has any information and consultation exercise started with
a trade union or unions or appropriate representatives under the
provisions of Part IV of the Trade Union and Labour Relations
(Consolidation) Xxx 0000 or Regulation 10 of the Transfer Regulations in
respect of the Employees or Former Employees.
Compliance with statutes
10.6 PowerGen has in relation to each Employee or Former Employee complied in
all material respects with:
(i) all obligations imposed upon it by all applicable laws and regulations
relevant to the relations between it and any Employee or Former Employee
or any employee representatives;
(ii) all the terms of any agreements with any employee representatives or the
terms and conditions of service of any of the Employee or Former
Employee; and
(iii) all orders, declarations and awards made under any applicable laws or
regulations affecting the conditions of service of any Employee or
Former Employee,
other than any obligations for sex equalisation attributable to sex inequality
in relation to guaranteed minimum pensions.
Agency Staff etc.
10.7 There is no agreement or arrangement in existence at the date of this
Agreement or will be in existence at the date of Completion concerning the
supply of one or more workers in relation to PowerGen including, but not limited
to, temporary workers, secondees, contract staff or agency staff.
10.8 All personnel whose services are wholly or mainly utilised at the Power
Station are employed by PowerGen.
10.9 The Employees are all the personnel needed to operate the Power Station in
accordance with PowerGen's current practices and operating regime.
SCHEDULE 3
THE POWER STATION
Part 1
GENERAL
The Lease, the Decommissioning Deed and the Leasehold Assignment
1.1 The rental payments due under the Lease will commence from the date stated
in the Lease.
1.2 Vacant possession of the Power Station shall be given on Completion subject
to any leases, licences and other rights of occupation and any other matters
contained or referred to in the documents brief details of which are set out in
Part 2 of this Schedule so far as any of the same are still subsisting and
capable of taking effect and affect the Power Station and subject to the matters
referred to in paragraph 3 of this Schedule.
Title
2.1 Title to the Power Station (other than the Leasehold Property and the Fixed
Plant and Equipment) is freehold and:
2.1.1 as to part is registered at HM Land Registry under title no.
CH273308 and comprises office copy entries of the Registers of the same
(including a filed plan);
2.1.2 as to the remainder commences with the following conveyances:
DATE DOCUMENT PARTIES
17 December 1968 Conveyance ICI Limited (1)
CEGB (2)
28 April 1967 Conveyance British Railways Board (1)
CEGB (2)
26 October 1977 Deed of Exchange CEGB (1)
Greenall Whitley & Co Ltd (2)
28 April 1967 Conveyance British Railways Board (1)
CEGB (2)
9 June 1986 Conveyance Cheshire CC (1)
CEGB (2)
8 February 1965 Conveyance XX Xxxxxxxxxx (1)
CEGB (2)
23 April 1963 Conveyance R Xxxxxxxxx (1)
CEGB (2)
12 December 1963 Conveyance Sir R Brooke and others (1)
CEGB (2)
15 January 1964 Conveyance RN Brooke and EJC Xxxxx and others (1)
CEGB (2)
13 December 1965 Conveyance Penketh Industrial Estates Ltd (1)
CEGB (2)
15 September 1965 Conveyance XX Xxxxxxxxxx (1)
CEGB (2)
27 January 1966 Conveyance XX Xxxxxxxxx (1)
CEGB (2)
and continues with and includes all dealings with the legal title details
of which are set out in Part 2 of this Schedule.
2.2.1 Title to the Leasehold Property comprises the lease dated 25 September
1996 made between the Queen's Most Excellent Majesty (1) and PowerGen (2).
2.2.2 For the avoidance of doubt no evidence of title to the reversion
(mediate or immediate) to the Leasehold Property shall be provided to the Buyer
and the Buyer accepts such title as has been deduced and shall not raise any
requisitions or enquiries or make any objections in respect thereof.
2.3 The Buyer shall not raise any requisition nor make any objection in
respect of or concerning the fact that:
(a) PowerGen is unable to provide either copies, examined copies or
originals of the following documents:
(i) a conveyance dated 25 January 1934 and made between Xxxxx
Xxxxxxxxxx (1) and the Penketh Tanning Co. Limited (2) and a
wayleave agreement dated 3 October 1952 and
made between the Penketh Tanning Co. Limited (1) and the
Merseyside and North Wales Electricity Board (2) and as referred
to in the conveyance dated 13 December 1965 and made between
Penketh Industrial Estates Limited (1) and the CEGB (2) (the 1965
Conveyance) listed in Part 2 of this Schedule;
(ii) a deed of grant dated 13 August 1953 and made between Xxx Xxxxxxx
Xxxxxxxxxxx Xxxxxx (1) Xxxx Xxxx Xxxxx Xxxxx and Xxxxxxxx Xxxxxxx
Warburton (2) Imperial Chemical Industries Limited (3) and The
United Sulphuric Acid Corporation Limited (4) and as referred to
in the conveyance dated 17 December 1968 and made between
Imperial Chemical Industries Limited (1) and the CEGB (2) (the
1968 Conveyance) listed in Part 2 of this Schedule;
(iii) a deed dated 16 August 1954 and made between Xxxxxxx Xxxxxxx
Brooke (1) Xxxx Xxxx Xxxxx Xxxxx and Xxxxxxxx Xxxxxxx Xxxxxxxxx
(2) and The United Sulphuric Acid Corporation Limited (3) and two
deeds dated respectively 14 January 1960 and 31 December 1962 and
made between Xxxxxxx Xxxxxxx Brooke (1) Xxxx Xxxx Xxxxx Xxxxx and
Xxxxxxxx Xxxxxxx Warburton (2) and the Liverpool Corporation (3)
and as referred to in the conveyance dated 15 January 1964 and
made between Xxxxxxx Xxxxxxx Xxxxxx (1) Xxxx Xxxx Xxxxx Xxxxx,
Xxxxx Xxxxxxxx and Xxxxx Xxxxxxx Xxxxxxxxx (2) and the CEGB (3)
listed in Part 2 of this Schedule;
(iv) a conveyance dated 23 March 1967 and made between XX Xxxxx and
Son Limited (1) and the CEGB (2) as referred to in the conveyance
dated 30 March 1973 and made between the CEGB (1) and the Mayor
Aldermen and Burgesses of the Borough of St Helens (2) listed in
Part 2 of this Schedule;
(v) a Wayleave of unknown date in favour of Liverpool Corporation;
(vi) a Conveyance dated 11 January 1946 between Xxx Xxxxxxx
Xxxxxxxxxxx Xxxxxx (1), Xxxx Xxxx Xxxxx Xxxxx and Xxxxxxxx
Xxxxxxx Xxxxxxxxx (2) and Bowmans (Warrington) Limited (3) as
referred to in a Conveyance
dated 1 September 1953 between Xxxxxx Chemicals Limited (1) and
ICI Limited (2) listed in Part 2 of this Schedule;
(vii) a Conveyance dated 2 February 1917 between Xxxxxx Xxxx Xxxxxxx
(1), Penketh Tanning Co Limited (2) and a Conveyance dated 23
May 1953 between Penketh Tanning Co Limited (1), ICI Limited
(2) and United Sulphuric Acid Corporation Limited (3) and a
Conveyance dated 26 August 1919 between Xxxxxx Xxxx Xxxxxxx (1)
and United Alkali Company Limited (2) each as referred to in
a Conveyance dated 6 July 1960 between Broadland Properties
Limited (1) and Xxxxxx Xxxx Xxxxxxxxx (2) referred to in a
Conveyance dated 27 January 1966 between X X Xxxxxxxxx (1) and
CEGB (2) listed in Part 2 of this Schedule;
(viii) a lease dated 11 January 1912 between X X Xxxxxx (1) and J
Millington (2);
(ix) a wayleave agreement dated 3 October 1952 between the Penketh
Tanning Co. Limited (1) MANWEB (2);
(x) a conveyance dated 29 February 1960 between the Penketh
Tanning Co. Limited (1) Broadland Properties Limited (2);
(xi) a conveyance dated 6 July 1960 between Broadland Properties
Limited (1) X X Xxxxxxxx (2);
(xii) an agreement dated 29 July 1964 between BRB (1) CEGB (2);
(xiii) a licence dated 5 March 1991 between North West Water Authority
(1) CEGB (2);
(xiv) a deed dated 14 January between R N Brooke (1) EJC Xxxxx and XX
Xxxxxxxxx (2) Liverpool Corporation (3); and
(xv) a deed dated 31 December 1962 between R N Brooke (1) EJC Xxxxx
and XX Xxxxxxxxx (2) Liverpool Corporation (3);
(b) PowerGen is unable to provide the originals of any of the documents listed
in the index of documents supplied to the Buyer as being copy documents
only; and
(c) the 1968 Conveyance referred to at (a) above erroneously recites a deed of
grant dated 1 September 1964 and made between Xxx Xxxxxxx Xxxxxxxxxxx
Xxxxxx (1) Xxxx Xxxx Xxxxx Xxxxx and Xxxxxxxx Xxxxxxx Xxxxxxxxx (2)
Imperial Chemical Industries Limited (3) and The United Sulphuric Acid
Corporation Limited (4) when the copy deed contained with the relevant
deeds and to which it presumably relates is made between the same parties,
but is dated 1 September 1954.
2.4 The titles, as aforesaid, to the Power Station having been deduced to the
Buyer prior to the date hereof which the Buyer hereby acknowledges, the Buyer
shall be deemed to take the Lease and the Leasehold Assignment with full
knowledge thereof and shall not raise any enquiries or requisitions thereon nor
make any objection in respect thereof after the date hereof save for formal pre-
completion requisitions and requisitions arising from, or as a direct result of,
any pre-completion search at HM Land Registry or HM Land Charges Registry.
Matters affecting the Power Station
3. The Power Station (other than the Leasehold Property) is let and the
Leasehold Property is assigned (as the case may be) subject to and with the
benefit of the following matters so far as the same are applicable and relate to
the Power Station and are still subsisting and capable of taking effect at
Completion:
3.1 the matters contained or referred to in the Lease and the Leasehold
Assignment;
3.2 any matters contained or referred to in the documents listed in the
Lease, the Leasehold Assignment, and Part 2 of this Schedule other than
mortgages or charges to secure the repayment of monies;
3.3 as to the part or parts which are registered at H M Land Registry
any matters contained or referred to in the Property or Charges
Registers of the registered title as at the date hereof (other than
mortgages or charges to secure the repayment of monies);
3.4 all rights of way, light and air, support, drainage and other
rights, easements, quasi-easements, liabilities and public or private
rights whatsoever (whether or not amounting to an interest in land) and
to any future liability to repair or contribute to the repair of roads,
pathways, passages, sewers, drains, pipes, party structures and other
like matters;
3.5 all matters being, or being in the nature of, overriding interests
as set out in Section 70(1) of the Land Registration Act 1925 (as
amended);
3.6 all Local Land Charges (whether or not registered before the date
of this Agreement) and all matters capable of registration as Local
Land Charges (whether or not actually registered) and whether or not
coming into existence before or after the date hereof;
3.7 all notices served and orders, demands, proposals or requirements
made by any local or other Public Authority (whether before or after
the date of this Agreement);
3.8 all actual or proposed orders, directions, notices, charges,
restrictions, conditions, agreements or other matters arising under any
statute relating to Town and Country Planning (including the contents
of any Structure Plan and any laws and regulations intended to preserve
or protect the environment, whether made or served before or after the
date of this Agreement);
3.9 any matters permitted pursuant to paragraph 5 of this Part of this
Schedule;
3.10 (without prejudice to the generality of the foregoing) all matters
which would have been discovered by the Buyer having made all usual
searches and enquiries of relevant competent authorities and others and
having regard to the nature of the Power Station;
and the Buyer shall be deemed to take with full knowledge and notice of the
matters aforesaid and shall not raise any objection nor make any requisition in
respect of the same.
General Conditions and variations thereof
4. The General Conditions shall be deemed to be incorporated herein insofar as
they are applicable to a letting and/or an assignment by private treaty and are
not varied by or inconsistent with the provisions of this Agreement and for the
interpretation of this Agreement:
4.1 where any provision of this Agreement conflicts with the General Conditions
such provision shall prevail;
4.2 the following expressions unless the context otherwise requires shall be
construed as follows and not according to any definition thereof which is
contained in the provision entitled "Definitions" in the General Conditions:
(a) seller means the party of the first part, that is PowerGen and includes the
persons deriving title under PowerGen;
(b) buyer means the party of the second part that is the Buyer; and
(c) working day means a Business Day.
4.3 The Standard Conditions of Sale (3rd Edition) are amended as follows:
(a) General Conditions 1.1.1(a), 1.1.1(e), 1.1.1(g), 1.1.1(i), 1.1.1(n), 1.3,
1.4, 2, 3.2.1, 3.3.2(c), 3.4, 4.1, 4.2, 4.5.1, 5.1, 5.2, 6.1, 6.2, 6.3,
6.4, 6.7, 6.8, 7.1, 7.2(a), 7.3, 7.5, 7.6, 8.2.4, 8.2.6, 8.2.7, 8.3 and 9
shall not apply to this Agreement;
(b) Condition 3.1.2(c): delete the words "and could not";
(c) Condition 3.1.2(d): delete the word "except" and replace it with the word
"including";
(d) Condition 3.3.2(a): delete the words "full details" and insert the words
"such details as it has";
(e) Condition 3.3.2(b): delete the words "the seller is then to act "to the end
of the condition and insert the words "and the seller is on request from
the buyer to use its reasonable endeavours to negotiate a renewal of the
lease"; and
(f) Condition 4.3.2: delete the words "pay for" and substitute the words "at
the buyer's expense".
Dealings
5.1 Subject to paragraph 5.3 between the date of this Agreement and
Completion, PowerGen shall not (except pursuant to any statutory duty or
contractual obligation and except with the consent of the Buyer (such consent
not to be unreasonably withheld or delayed)) do any of the following in relation
to that part of the Power Station shown coloured yellow on the plan annexed to
the Lease:
5.1.1 grant any lease, licence or other right of or consent to occupation;
5.1.2 terminate or accept a surrender of any lease;
5.1.3 vary the terms of any existing leases details of which are provided in
part 2 of this Schedule;
5.1.4 grant any consent under the existing leases details of which are provided
in part 2 of this Schedule;
5.1.5 grant any easement, quasi easement, profit a prendre, right or liberty;
5.1.6 enter into any covenant which will bind the Power Station; or
5.1.7 enter into an agreement to do any of the foregoing.
5.2 Without prejudice to paragraph 5.1, PowerGen shall not create, or so far
as lies within its power permit the creation of, any overriding interests as set
out in Section 70(1)(g) of the Land Registration Act 1925 (as amended) over the
Power Station.
5.3 In relation to the following proposed dealings, details of which have
been supplied to the Buyer by PowerGen, the Buyer shall raise no objection to
any such dealing insofar as the dealing materially gives effect to the details
supplied and will take subject to and with the benefit of the same:
5.3.1 grant of an underlease by PowerGen to the Environment Agency in respect
of part of the Leasehold Property;
5.3.2 variation of the lease dated 31 March 1990 between PowerGen (1) and NGC
(2);
5.3.3 grant of a deed of easement in respect of fibre optic cables between
PowerGen (1) NGC(2).
Notices
6.1 PowerGen shall supply to the Buyer forthwith following receipt or issue
between the date hereof and Completion copies of all notices and other relevant
information received or issued by or on behalf of PowerGen in connection with
the Power Station and/or the operation thereof.
6.2 PowerGen shall act reasonably in respect of any notices received between
the date hereof and the date of Completion from any Competent Authority relating
to the Power Station and/or the operation thereof but shall first consult the
Buyer and shall reasonably consider any reasonable representation of the Buyer
in relation thereto but shall not be obliged to act in accordance with any such
representations.
6.3 The Buyer shall within three months of the Completion Date at the expense
of the Buyer give to Shell Chemicals UK Limited (or the owner of the pipeline
pursuant to a deed of grant dated 14 December 1998 between PowerGen (1) and
Shell Chemicals UK Limited (2) written notice of the grant and terms of the
Lease.
6.4 The Buyer shall remove any sign or logo or other indication that suggests
that PowerGen is in occupation of any part of the same:
6.4.1 from the Power Station and as soon as reasonably practicable and in any
event by the tenth Business Day following Completion;
6.4.2 from any structures the subject of the Property Agreements as soon as
reasonably practicable and in any event by the tenth Business Day
following the assignment or novation of the relevant Property Agreement.
6.5 PowerGen shall observe and perform all material obligations on its behalf
contained or referred to in the deeds and documents listed in Part 2 of this
Schedule and Schedules 4 and 5 up to Completion.
The Substations
7.1 In relation to the 275Kv/400Kv substation comprised within the Power
Station, the Buyer acknowledges and agrees:
(a) the rights and ownership of NGC and MANWEB of certain plant and equipment
and all other matters as contained or referred to in documents listed in
Part 2 of this Schedule to which either or both of them is or are a party;
(b) that the Buyer, as requested by NGC or MANWEB (as the case may be), will
enter into such deeds of covenants or other arrangements as are
contemplated by any of the documents referred to in sub-paragraph (a) above
in such form as NGC or MANWEB (as the case may be) shall reasonably request
pursuant to the terms of those documents; and
(c) that, in applying to HM Land Registry for the registration of the Lease
(and/or any of the other Transaction Documents where appropriate), the
Buyer will make application in accordance with the provisions of the
documents referred to in sub-paragraph (a) above.
7.2 PowerGen shall give notice to NGC of the assignment of the Interface
Agreement dated 31 March 1990 made between NGC (1) and PowerGen (2) pursuant to
clause 15.5 of that document within one month following completion of such
assignment.
Landlord's Consent
8.1 Insofar as the consent of the Landlord of the Leasehold Property to the
Leasehold Assignment has not been applied for or obtained prior to the date of
this Agreement, PowerGen shall forthwith at its own cost apply for the same and
PowerGen and the Buyer shall co-operate and use all reasonable endeavours
(including on the part of both PowerGen and the Buyer supplying such information
and on the part of the Buyer providing collateral security (provided that the
Buyer shall not be required to procure any guarantee or collateral security from
the Guarantor or provide any fixed or floating charge or other security over the
Buyer's assets other than a rent deposit deed or agreement) as shall reasonably
be requested by either of the parties or any other person) to obtain the same.
8.2 If the Landlord of the Leasehold Property requires, and is entitled to
require, an authorised guarantee agreement (under section 16 of the Landlord and
Tenant (Covenants) Act 1995) from PowerGen, PowerGen will enter into such an
agreement in relation to the Leasehold
Assignment provided that the Buyer shall indemnify PowerGen in the terms of the
agreed form of the Leasehold Assignment.
Rent Authority Letters
9. PowerGen shall on Completion hand to the Buyer a letter or letters in such
form as the Buyer shall reasonably request addressed to each of the third party
tenants under any lease or tenancy of any part or parts of the Power Station
current at the Completion Date, informing the third party tenant of the
completion of the Lease or the Leasehold Assignment (as the case may be) to the
Buyer and directing the third party tenant to pay all sums becoming due under
its lease, tenancy or other arrangement to the Buyer as and from the Completion
Date.
Non-Merger
10. The provisions of this Agreement and in particular but not limited to this
Schedule shall not merge on Completion so far as the same remain to be performed
or observed by any relevant party.
Land Registry
11. PowerGen shall at the request and cost of the Buyer use all reasonable
endeavours to assist the Buyer to deal with any requisitions raised by H M Land
Registry in relation to the registration of the Lease.
Pillar of Support
12. PowerGen shall, at the Buyer's cost, enter into a novation of the pillar of
support agreement made between the National Coal Board and the CEGB and dated 14
November 1977 (or such other agreements in relation thereto) in the agreed form
or in such form as PowerGen shall reasonably agree.
Part 2
DOCUMENTS OF TITLE
Date Document Parties
1.1 1 September 1953 Conveyance Bowmans Chemicals Ltd (1)
ICI (2)
1.2 16 August 1954 Deed of xxxxx XX Xxxxxx (1)
The United Sulphuric Acid
Corporation Ltd (2)
1.3 1 September 1954 Deed of grant Sir R Xxxxxx Xxxx (1)
The United Sulphuric Acid
Corporation Ltd (2)
1.4 12 January 1955 Conveyance Xxx XX Xxxxxx Bart (1)
ICI (2)
1.5 1957 Abstract of title
of Xxx Xxxxxxx
Xxxxxxxxxxx
Xxxxxx
1.6 3 May 1957 Conveyance Xxx XX Xxxxxx Xxxx and others (1)
ICI (2)
1.7 17 December Conveyance ICI Limited (1)
1968 CEGB (2)
2.1 30 December Appointment XX Xxxxxx, A Lascelles and G
1850 and release Wilbraham (1)
St Helens Canal and Railway
Co (2)
2.2 2 March 1967 Statutory
declaration of
XX Xxxxxx
2.3 28 April 1967 Conveyance British Railways Board (1)
CEGB (2)
3.1 17 June 1927 Conveyance Xxx XX Xxxxxx, ACWI Cross and
XX Xxxxx (1)
Greenall Whitley & Co Ltd (2)
3.2 26 October 1977 Deed of CEGB (1)
Exchange Greenall Whitley & Co Ltd (2)
4.1 2 June 1852 Conveyance E and M Xxxxxx (1)
St Helens Canal and Railway
Co (2)
4.2 28 April 1967 Conveyance British Railways Board (1)
CEGB (2)
5.1 9 June 1986 Conveyance Cheshire CC (1)
CEGB (2)
5.2 9 June 1986 Deed of indemnity Cheshire CC (1)
CEGB (2)
6.1 21 May 1951 Deed of grant Executors of J Ditchfield (decd)
(1)
W Xxxx and Co Ltd (2)
6.2 12 August 1953 Deed of grant Pers rep J Ditchfield (decd) (1)
The United Sulphuric Acid Corporation
Ltd (2)
6.3 8 February 1965 Conveyance XX Xxxxxxxxxx (1)
CEGB (2)
7.1 4 September 1936 Conveyance and Xxx XX Xxxxxx and Trustees (1)
grant of Lord Mayor Aldermen and Citizens of
easement City of Liverpool (the City of
Liverpool) (2)
7.2 11 December Agreement The City of Liverpool (1)
1947 Xxx XX Xxxxxx and others (2)
7.3 18 January 1949 Conveyance Xxx XX Xxxxxx and Others (1)
RD Brooke (2)
7.4 13 August 1953 Deed of xxxxx XX Xxxxxx (1)
The United Sulphuric Acid
Corporation
Ltd (2)
7.5 13 August 1953 Deed of grant Xxx XX Xxxxxx (1)
The United Sulphuric Acid
Corporation Ltd (2)
7.6 14 January 1960 Deed of xxxxx XX Brooke and Trustees (1)
The City of Liverpool (2)
7.7 31 December Duplicate deed RN Brooke and Trustees (1)
1962 of grant The City of Liverpool (2)
7.8 23 April 1963 Conveyance R Xxxxxxxxx (1)
CEGB (2)
7.9 12 December Conveyance Sir R Brooke and others (1)
1963 CEGB (2)
8.1 10 May 1887 Deed of grant Sir R Xxxxxx Xxxx and others (1)
The City of Liverpool (2)
8.2 4 September 1936 Conveyance and Xxx XX Xxxxxx and his Trustees (1)
grant of easement The City of Liverpool (2)
8.3 13 August 1953 Deed of xxxxx XX Xxxxxx (1)
The United Sulphuric Acid
Corporation Ltd (2)
8.4 13 August 1953 Deed of grant Xxx XX Xxxxxx (1)
The United Sulphuric Acid
Corporation Ltd (2)
8.5 15 January 1964 Conveyance RN Brooke and EJC Xxxxx and
others (1)
CEGB (2)
9.1 21 July 1953 Deed of xxxxx Xxxxxxx Tanning Co Ltd (1)
ICI and the United Sulphuric Acid
Corporation Ltd (2)
9.2 14 January 1961 Conveyance Broadland Properties Ltd (1)
Penketh Industrial Estates Ltd (2)
9.3 00 Xxxxxxxx Xxxxxxxxxx Xxxxxxx Xxxxxxxxxx Xxxxxxx Ltd (1)
1965 CEGB (2)
10.1 2 June 1852 Conveyance E and M Xxxxxx (1)
St Helens Canal and Railway Co
(2)
10.2 7 June 1877 Conveyance M Xxxxxx (1)
London and North Western
Railway (2)
10.3 15 September Conveyance XX Xxxxxxxxxx (1)
1965 CEGB (2)
10.4 20 October 1966 Xxxxxxxxxxxxxx
00.0 0000 Xxxxxxxx of title
11.2 27 January 1966 Conveyance XX Xxxxxxxxx (1)
CEGB (2)
12.1 4 April 1967 Conveyance British Railways Board (1)
Xxxx Xxxxx Xxxxx Limited (2)
12.2 3 March 1987 Conveyance Xxxx Xxxxx Xxxxx Ltd (1)
CEGB (2)
13.1 18 January 1967 Conveyance CEGB (1)
Mayor Aldermen and Burgesses
of the Borough of Widnes (2)
13.2 30 March 1973 Conveyance CEGB (1)
St Helens Corporation (2)
13.3 3 August 1979 Conveyance CEGB (1)
North West Water Authority (2)
13.4 24 February 1977 Conveyance CEGB (1)
Cheshire CC (2)
13.5 15 May 1978 Conveyance CEGB (1)
North West Water Authority (2)
13.6 29 July 1994 Transfer PowerGen (1)
North West Water Limited (2)
14.1 31 March 1990 Lease PowerGen (1)
NGC (2)
14.2 31 March 1990 Interface NGC (1)
agreement PowerGen (2)
14.3 30 March 1990 Licence CEGB (1)
MANWEB (2)
14.4 31 March 1990 Deed of grant PowerGen (1)
NGC (2)
15.1.1 13 August 1991 Agricultural PowerGen (1)
tenancy Westlake Aqua Farms Ltd and S
Fitzherbert-Brockholes and PH
Chan (2)
15.1.2 13 August 1991 Agreement PowerGen (1) Westlake Aqua
Farms Ltd and S Fitzherbert-
Brockholes and PH Chan (2)
15.2 1 September 1985 Lease agreement CEGB (1)
XX Xxxxxxxxxx (2)
15.3 13 June 1988 Agreement CEGB (1)
JH and A Xxxxx (2)
15.3.1 23 March 1993 Memorandum of PowerGen (1)
rent review JH and A Xxxxx (2)
15.3.2 17 January 1990 Notice PowerGen (1)
JH and A Xxxxx (2)
15.3.3 Various Correspondence Various
re occupancy
15.4 27 July 1988 Licence CEGB (1)
British Association for Shooting
and Conservation (2)
15.5 25 March 1987 Licence CEGB(1)
Xxxx Xxxxx Xxxxx Ltd (2)
16.1.1 13 August 1953 Deed of xxxxx XX Brooke (1)
The United Sulphuric Acid
Corporation Ltd (2)
16.1.2 13 August 1953 Deed of grant Xxx XX Xxxxxx (1)
The United Sulphuric Acid
Corporation Ltd (2)
16.1.3 Various Correspondence Fisons Limited (Agrochemical
re easement Division)
16.2.1 21 July 1958 Wayleave R Xxxxxxxxx (1)
MANWEB (2)
16.2.2 22 July 1958 Wayleave J Xxxxxx-Xxxxx (1)
MANWEB (2)
16.2.3 22 July 1958 Wayleave J Xxxxxx-Xxxxx & Sons (1)
MANWEB (2)
16.2.4 15 October 1959 Wayleave J Xxxxxx-Xxxxx & Sons (1)
MANWEB (2)
16.2.5 8 June 1961 Wayleave J Xxxxxx-Xxxxx & Sons (1)
MANWEB (2)
16.2.6 3 July 1961 Wayleave R Xxxxxxxxx (1)
MANWEB (2)
16.3.1 21 September Notice to treat The City of Liverpool (1)
1962 RN Brooke (2)
16.3.2 6 February 1964 Notices of entry The City of Liverpool (1)
(4) CEGB (2)
16.3.3 27 January 1967 Deed of grant CEGB (1)
The City of Liverpool (2)
16.3.4 22 February 1988 Deed of variation North West Water Authority (1)
CEGB (2)
16.4.1 24 February 0000 Xxxxxxxx XXXX (1)
MANWEB (2)
16.4.2 25 August 0000 Xxxxxxxx XXXX (1)
MANWEB (2)
16.4.3 29 June 0000 Xxxxxxxx XXXX (1)
MANWEB (2)
16.4.4 21 July 0000 Xxxxxxxx XXXX (1)
MANWEB (2)
16.4.5 9 June 0000 Xxxxxxxx XXXX (1)
MANWEB (2)
16.4.6 25 April 0000 Xxxxxxxx XXXX (1)
MANWEB (2)
16.4.7 Various Correspondence Various
re easements
16.5.1 28 September 1970 Deed of grant CEGB (1)
ICI (2)
16.5.2 20 November 1975 Letter re CEGB (1)
easement ICI (2)
16.5.3 23 December Letter re ICI (1)
1975 easement CEGB (2)
16.5.4 7 January 1976 Letter re CEGB (1)
easement ICI (2)
16.6.1 15 May 1978 Deed of grant CEGB (1)
North West Water Authority (2)
16.7 28 February 1979 Deed of grant CEGB (1)
Greenall Whitley & Co Ltd (2)
16.8 3 August 1979 Deed of grant CEGB (1)
North West Water Authority (2)
16.9 25 August 1982 Agreement National Coal Board (1)
CEGB (2)
16.10 8 July 1993 Agreement PowerGen (1)
BT (2)
16.11 14 December 1993 Deed of grant PowerGen (1)
Shell Chemicals UK Ltd (2)
16.12 28 October 1994 Deed of grant PowerGen (1)
North West Water Limited (2)
16.13 7 April 1998 Wayleave PowerGen (1)
NORWEB (2)
17.1 18 December Agreement CEGB (1)
1969 Warrington Rural District Council (2)
17.2 23 December Deed of grant British Railways Board (1)
1966 CEGB (2)
17.3 21 December Deed of xxxxx Xxxx Xxxxx Xxxxx Limited (1)
1970 CEGB (2)
17.4 17 June 1971 Agreement British Railways Board (1)
CEGB (2)
17.5 30 April 1982 Deed of xxxxx Xxxxxxxxxx BC (1)
CEGB (2)
17.6 26 August 1988 Deed of grant British Railways Board (1)
CEGB (2)
17.7 28 March 1994 Agreement British Railways Board (1)
PowerGen (2)
18.1 9 February 1966 Licence Mersey and Xxxxxx River
Authority (1)
CEGB (2)
18.2 2 November 1966 Licence North West Water Authority (1)
CEGB (2)
18.3 15 May 1968 Licence Mersey and Xxxxxx River
Authority (1)
CEGB (2)
18.4 29 September Agreement Mayor Aldermen and Burgesses of the
0000 Xxxxxxx xx Xxxxxxxxxx (1)
CEGB (2)
18.5 5 July 1971 Consent Mersey and Xxxxxx River
Authority (1)
CEGB (2)
18.6 1 April 1979 Agreement North West Water Authority (1)
CEGB (2)
18.7 25 March 1991 Consent National Rivers Authority (1)
Station Manager for Fiddlers
Ferry (2)
18.8 25 September Licence National Rivers Authority (1)
1992 PowerGen (2)
18.9 22 June 1995 Variation of Licence National Rivers Authority (1)
PowerGen (2)
Part 3
FORM OF THE LEASEHOLD ASSIGNMENT
THIS ASSIGNMENT is made on _____ _____ _____ 1999
BETWEEN
POWERGEN UK plc (registered number 2366970) whose registered office is at 00 Xxx
Xxxxx Xxxxxx Xxxxxx XX0X 0XX (xxx Seller)
EDISON FIRST POWER LIMITED (registered number 35167) whose registered office is
at 0 Xx Xxxxxxxx Xxxxxx, Xx Xxxxx Xxxx, Xxxxxxxx, Channel Xxxxxxx XX 0 0XX (xxx
Xxxxx)
WHEREAS
(A) By a Lease dated 25 September 1996 made between The Queen's Most Excellent
Majesty (1) and the Seller (2) (the Lease) ALL THOSE premises forming part of
the foreshore at Fiddlers Ferry in the County Palatine of Lancaster (the
Property) were demised to the Seller for a term of 10 years from 25 March 1996
subject to the performance and observance of the covenants on the part of the
tenant and the conditions therein contained.
(B) The Seller changed its name from PowerGen plc to PowerGen UK plc on 9
December 1998.
(C) The Lease remains vested in the Seller.
(D) The Seller has agreed with the Buyer to assign the Property to the Buyer
for all the unexpired residue of the term granted by the Lease.
NOW THIS DEED WITNESSES as follows:
Assignment
1. In consideration of the sum of one pound ((pound sterling)1) receipt of
which is hereby acknowledged the Seller with full title guarantee (subject as
provided in clause 2) hereby assigns the Property to the Buyer for all the
residue now unexpired of the term created by the Lease subject to the payment of
the rents reserved and the performance and observance of the covenants on the
part of the tenant and conditions contained in the Lease.
Declarations
2. It is hereby declared that:
(i) notwithstanding the covenants implied by section 3(1) of the Law of
Property (Miscellaneous Provisions) Act 1994 (the 1994 Act) the Property is
assigned subject to all matters to which it is expressed to be subject in the
Agreement dated the _____ day of _____ _____ 1999 made between the Seller (1)
and the Buyer (2);
(ii) the covenant by the Seller under section 4(1)(b) of the 1994 Act is
modified so that the Seller is not liable for any breach of a condition or
tenant's obligation relating to the physical state or condition of the Property.
Buyer's indemnity covenant
3. The Buyer hereby covenants with the Seller with the object and intention of
affording the Seller a full and sufficient indemnity but not further or
otherwise that the Buyer will from the date hereof during the continuance of the
term created by the Lease until the Seller is released pursuant to the Landlord
and Tenant (Covenants) Xxx 0000 from [(a)] the tenant covenants of the Lease
(including any period of statutory continuation of the tenancy created by the
Lease) [and (b) the Authorised Guarantee Agreement dated the _____ day of _____
19__] and made between _____ _____ (1) and _____ _____ (2) (the Authorised
Guarantee Agreement)] pay the rents thereby reserved and perform and observe the
covenants and the conditions binding on the Seller contained in the Lease and
will also at all times hereafter keep the Seller indemnified from and against
all actions proceedings costs claims demands and liabilities whatsoever arising
by reason of any breach non-observance or non-performance of any of those
covenants and conditions [and any liability arising under the Authorised
Guarantee Agreement.]
[The inclusion or otherwise of references to an Authorised Guarantee Agreement
depends upon whether or not one is required by the Crown. The Lease is a new
lease.]
DULY DELIVERED AS A DEED on the date inserted on page 1
EXECUTED and DELIVERED )
as a DEED by )
)
for and on behalf of )
POWERGEN UK plc )
in the presence of: )
)
SIGNED and DELIVERED )
as a DEED )
for and on behalf of )
EDISON FIRST )
POWER LIMITED )
by an authorised signatory in )
accordance with the laws of Guernsey )
in the presence of: )
SCHEDULE 4
PROPERTY AGREEMENTS
Part 1
GENERAL
1. To the extent that the benefit of any Property Agreement may be assigned by
PowerGen to the Buyer without any Consent, it shall be assigned to the Buyer at
Completion by an assignment in the agreed form.
2. In so far as any of the Property Agreements are not assignable to the Buyer
without any Consent, this Agreement shall not constitute an assignment or
attempted assignment if such assignment or attempted assignment would constitute
a breach of such Property Agreement.
3. In the event that a Consent is required and insofar as such Consent has not
been applied for or obtained prior to the date of this Agreement, PowerGen shall
forthwith at the Buyer's request and PowerGen's own cost apply for the Consent
and the parties shall co-operate and use all reasonable endeavours, including
supplying such information as shall be reasonably requested by either of the
parties or any other person, to obtain the Consent prior to Completion and shall
not assign any Property Agreement until such Consent is obtained.
4. On the Completion Date or, if later, the date on which PowerGen obtains the
relevant Consent of the relevant counterparty, PowerGen shall assign to the
Buyer such Property Agreements.
5. Following Completion, unless and until any such Consent is obtained and the
relevant Property Agreement is so assigned, PowerGen shall be deemed to hold the
benefit of such Property Agreement as trustee for the Buyer and the Buyer shall
(if such sub-contracting is permissible and lawful under the relevant Property
Agreement) as PowerGen's sub-contractor or agent perform all the obligations of
PowerGen under such Property Agreement.
6. If any Property Agreement to which paragraph 5 above applies does not permit
subcontracting or agency the parties shall at their own respective costs make
such other arrangements between themselves as may be permissible to implement as
far as possible the effective transfer of the benefit of such Property Agreement
to the Buyer.
7. Unless and until such Consent is obtained and the relevant Property
Agreement assigned accordingly, or is terminated pursuant to paragraph 8 below,
PowerGen will (so far as it is able) give all such assistance to the Buyer, and
at the Buyer's cost, take such steps as the Buyer may reasonably require to
enable the Buyer to enforce PowerGen's rights under such Property Agreement.
8. If such Consent is refused or otherwise not obtained on terms reasonably
satisfactory to the Buyer within 60 Business Days of Completion, the Buyer shall
be entitled to require PowerGen to terminate the relevant Property Agreement,
provided that the Buyer shall indemnify PowerGen (on an after tax basis) for any
costs incurred by PowerGen in connection with any such termination.
9. Notwithstanding any of the foregoing, subject to Completion taking place and
with effect from Completion, the Buyer undertakes to PowerGen to assume the
obligations and become entitled to the benefits of PowerGen under the Property
Agreements and the Buyer undertakes to carry out, perform and complete all the
obligations and liabilities created by or arising under the Property Agreements
(except for any obligations or liabilities attributable to a breach on the part
of PowerGen or its employees, agents or sub-contractors) and shall indemnify
PowerGen and keep it fully indemnified (on an after tax basis) against all
liabilities, losses, actions, proceedings, costs, claims, demands and expenses
brought or made against or incurred by PowerGen in respect of the non-
performance or wrongful or defective or negligent performance by the Buyer or
its employees, agents or subcontractors of the Property Agreements after
Completion.
Part 2
PROPERTY AGREEMENTS
Date Document Parties
25 March 1991 Consent to discharge trade National Rivers Authority (1)
effluent via 2 outfalls into PowerGen (2)
St Helen's Canal
28 March 1994 Sidings agreement British Railways Board (1)
PowerGen (2)
23 December 1966 Deed of grant British Railways Board (1)
CEGB (2)
30 April 1982 Deed of grant British Railways Board (1)
CEGB (2)
26 August 1988 Deed of grant British Railways Board (1)
CEGB (2)
17 June 1971 Agreement British Railways Board (1)
CEGB (2)
21 December 1970 Deed of Xxxxx Xxxx Xxxxx Xxxxx Ltd (1)
CEGB (2)
SCHEDULE 5
OPERATING PERMITS, ETC.
Part 1
GENERAL
1. PowerGen shall, to the extent that each Operating Permit is capable of
assignment and/or transfer, assign and/or transfer to the Buyer such Operating
Permit.
2. To the extent that any Operating Permit cannot be assigned or transferred to
the Buyer, PowerGen shall, to the extent permissible, hold the benefit thereof
for the Buyer pending the relevant party obtaining a new permit in replacement
therefor.
3. From the date hereof, in relation to each Operating Permit and in relation
to any variation or any application PowerGen makes as the result of the
assignment and/or transfer of any Operating Permit each party shall use its best
endeavours to provide promptly, at its own cost and expense, to the other party
such information and assistance (including expert or other appropriate
personnel) as that other party shall from time to time reasonably request and
shall consult and co-operate with the other party (in each case) as required
from time to time for the purpose of enabling the parties:
(i) to comply with the terms of the relevant permit (and any Act of
Parliament relating thereto);
(ii) to agree how to perform, satisfy or comply with any obligation or
liability under a permit (or any Act of Parliament relating thereto) or
any notice, order, requisition or direction which may be served or made
by the Competent Authority in respect of the permit which requires the
consultation and co-operation of the parties for its performance,
satisfaction or compliance; and
(iii) to obtain such new permits or, insofar as the same are capable of
assignment or transfer, effect the transfer or assignment of Operating
Permits to the extent necessary for the proper performance and
functioning of the Power Stations.
4. Each party shall, upon the happening of any occurrence or upon the receipt
of any notice, order, requisition, direction or other thing
which may be relevant to or capable of affecting another party's interest in a
permit promptly, at its own cost and expense, deliver full particulars
(including, where available, a copy thereof) to each other party.
Part 2
OPERATING PERMITS
All licences, consents, permissions and agreements required for the operation of
the Power Station and in particular (without prejudice to the generality of the
foregoing) the following documents:-
Date Document Parties
7 April 1993 IPC Authorisation i) Her Majesty's
(ref AA3301) Inspectorate of Pollution
13 March 1998 IPC Variation i) Environment Agency
(ref AZ8625)
25 November 1998 IPC Variation i) Environment Agency
(ref BE1496)
15 May 1968 Abstraction Licence i) Mersey Xxxxxx Rivers
(ref 2569/24/22) Authority
22 June 1995 Variation to Abstraction i) National Rivers
Licence Authority
(ref 2569/24/22)
23 November 1998 Variation to Abstraction i) Environment Agency
Licence
(ref 2569/24/22)
25 September 1992 Abstraction Licence i) National Rivers
(ref 2569/24/22) Authority
SCHEDULE 6
MATERIAL CONTRACTS
Name of Contract Parties Date
(and disclosure bundle
document reference number)
Station Facilities and Support i) Xxxxx & Root AOC 11 January 1996
Contract ii) PowerGen
FF/07/04
Boiler Overhaul Contract i) ABB Power 27 October 1998;
FF/07/05 + FF/07/06 Construction Limited 29 March 1996
ii) PowerGen
Access Maintenance Contract i) Xxxxxx Scaffolding plc 1 April 1999
ADFF/42 + FF/07/07 ii) PowerGen
Thermal Insulation, Painting & i) Cape Industrial Services 1 April 1999
Housekeeping Contract Limited
ADFF/48 + FF/07/08 ii) PowerGen
Dampers & PF Pipework Overhauls i) Xxxxx X Xxxxxxx 5 March 1999
Contract Engineering Limited
ADFF/65 + FF/07/09 ii) PowerGen
Boiler Housekeeping Contract i) CBR Services Limited 1 April 1999
ADFF/43 + FF/07/10 ii) PowerGen
Valve Maintenance Contract i) Hopkinsons 5 March 1999
ADFF/40 + FF/07/11 Engineering Services
ii) PowerGen
Precipitator Structural Overhaul i) Xxxxx X Xxxxxxx 5 March 1999
Contract Engineering Limited
ADFF/44 + FF/07/12 ii) PowerGen
Damper Overhaul and Maintenance i) Exeeco Limited 5 March 1999
Contract ii) PowerGen
ADFF/38 + FF/07/14
Airheater and Fan Overhauls i) Howden Sirocco 5 March 1999
Contract Limited
ADFF/41 + FF/07/15 ii) PowerGen
Coal Plant Miscellaneous Repairs i) Butterley Engineering 19 January 1998
Contract Limited
FF/07/16 ii) PowerGen
Name of Contract Parties Date
(and disclosure bundle document
reference number)
Sootblower Maintenance Contract i) Diamond Power 5 March 1999
ADFF/46 + FF/07/17 Speciality Limited
ii) PowerGen
Switchgear Maintenance Contract i) Boulting Group plc 1 April 1999
ADFF/35 + FF/07/19 ii) PowerGen
HV Systems and Transformer i) NGC 6 April 1998
Maintenance Contract ii) PowerGen
FF/07/22
Precipitator Maintenance Contract i) Coventry & Co. Limited 5 March 1999
ADFF/39 + FF/07/24 ii) XxxxxXxx
Xxxxx 00 Siding Modification Contract i) Xxxx Xxxxxxxxx 0 Xxxxx 0000
XXXX/00 + FF/07/13 Limited
ii) PowerGen
Generator Stator and Rotor i) ABB Combustion 26 February 1999
Maintenance & Inspection Contract Services
ADFF/45 ii) PowerGen
Secure Supplies Contract i) Boulting Group plc 15 December 1998
FF/07/21 ii) PowerGen
Overhaul & Maintenance of Station i) Thyssen Lifts & 24 September 1998
Lifts Contract Escalators
FF/07/23 ii) PowerGen
Rail Weighbridge Installation i) Railweight 16 February 1999
Contract ii) PowerGen
ADFF/37
Engineering & Facilities Services i) Promanex Limited 29 March 1999
Contract ii) PowerGen
ADFF/66
Mill & Feeder Servicing Contract i) Xxxxx X Xxxxxxx 1 April 1999
ADFF/47 + FF/07/18 Engineering Limited
ii) PowerGen
Generator Rotor Endbells Contract i) ABB Industrial Systems 28 January 1999
Purchase Order Limited
ADFF/34 ii) PowerGen
Name of Contract Parties Date
(and disclosure bundle document
reference number)
HP Steam Strainer Casings Contract i) Xxxxxxx Xxxx Hi-Tec 22 February 1999
Purchase Order Integrity
ADFF/34 ii) PowerGen
Overhaul 2A SSBFP Cartridge i) Xxxx Engineering 12 January 1999
Contract Purchase Order Services
ADFF/34 ii) PowerGen
Bottom and Top Interceptor Valves i) Xxxxxxx Xxxx Hi-Tec 3 February 1999
Contract Integrity
Purchase Order ii) PowerGen
ADFF/34
Sootblowers 842mm and 811mm i) Diamond Power 10 March 1999
Contract Speciality
Purchase Order Limited
ADFF/34 ii) PowerGen
Generator Rotor Endbells Contract i) ABB Industrial Systems 18 March 1999
Purchase Order Limited
ADFF/34 ii) PowerGen
SCHEDULE 7
FUEL
Part 1
OIL STOCKS
1. PowerGen will have in place stocks of oil at the Power Station on the
Completion Date.
2. As close to the Completion Date as is reasonably practicable and in no
event earlier than five (5) Business Days prior to the Completion Date, the oil
stocks in place at the Power Station shall be determined by competent
independent persons who shall be appointed jointly by the Buyer and PowerGen
(Determined Station Oil Stock). Such persons shall determine the tonnage and net
calorific value of the oil stocks, as follows:
(a) the tonnage of the oil stocks shall be determined by measuring each oil
storage tank with an appropriate calibrated measurement device making due
allowance for residual sediment and water that does not form part of the
oil stock and converting the measurement results into volume by the use of
appropriate tank calibration tables, such calibration tables to be suitably
validated by competent independent persons. The converted volume shall
then be converted into volume at 15...C and into metric tonnes (using the
density of the oil stocks determined in accordance with sub-paragraph (b)
of this paragraph 2) in accordance with the relevant Institute of Petroleum
and/or ASTM methods as appropriate; and
(b) the net calorific value, sulphur content and density of the oil stocks
shall be determined by (i) taking representative samples of oil in each
storage tank at the Power Station in accordance with the prevailing
Institute of Petroleum methods of manually sampling bulk oil storage tanks
and (ii) providing from each sample taken a net calorific value and density
analysis in accordance with the prevailing Institute of Petroleum and/or
ASTM methods as appropriate.
The Determined Station Oil Stock will be adjusted using records of deliveries
and burn and known losses at the Power Station to reflect changes in the level
of oil stocks between the date of survey and the
Completion Date (Actual Station Oil Stock). The costs of the independent persons
shall be met equally by the Buyer and PowerGen. The opinion of the independent
persons shall, save in the case of manifest error, be binding on the Buyer and
PowerGen.
3. On the Completion Date, the Buyer shall buy from PowerGen each gigajoule of
Actual Station Oil Stock located at the Power Station at a price of 303.7p/GJ
net for distillate and 157.7p/GJ net for reclaimed fuel oil. The Oil Stocks
shall be deemed to be delivered on the Completion Date and title to the Oil
Stocks shall pass on delivery.
4. PowerGen represents and warrants to the Buyer that:
(a) as at the Completion Date, the Actual Station Oil Stock will be fit for the
purpose for which it has been used up to the date of this Agreement at the
Power Station, subject to the on-site conditioning of the Actual Station
Oil Stock by the supplier(s) in accordance with the relevant supply
contracts; and
(b) as at the date of this Agreement, the Actual Station Oil Stock has, as far
as PowerGen is aware, not caused any breach of environmental laws or
permits relating to such operations.
Part 2
COAL STOCKS
1. PowerGen will have in place stocks of coal at the Power Station on the
Completion Date.
2. As close to the Completion Date as is reasonably practicable and in no
event earlier than five (5) Business Days prior to the Completion Date, the coal
stocks in place at the Power Station shall be determined by competent
independent persons who shall be appointed jointly by the Buyer and PowerGen
(Determined Station Coal Stock). Such persons shall determine the tonnage and
net calorific value of the coal stocks, as follows:
(a) the tonnage of the Determined Station Coal Stock shall be determined by (i)
gathering the data on the coal stocks in place using calibrated Spectra
Precision Geotronics electronic total stations (traceable to NAMAS), and
(ii) converting such data into tonnage through volumetric calculations
using coal density measurements in accordance with the relevant British
Standard
and/or ISO Standard as appropriate conducted with the use of XXXX Ground
Modelling software; and
(b) the average net calorific value of the Determined Station Coal Stock shall
be determined by (i) taking representative core samples from the coal
stocks in place and (ii) providing a net calorific value analysis from each
core sample taken, in each case in accordance with the relevant British
Standard and/or ISO Standard as appropriate.
The Determined Station Coal Stock will be adjusted using records of deliveries
and burn and known losses at the Power Station to reflect changes in the level
of coal stocks between the date of survey and the Completion Date (Actual
Station Coal Stock). The costs of the independent persons shall be met equally
by the Buyer and PowerGen. The opinion of the independent persons shall, save
in the case of manifest error, be binding on the Buyer and PowerGen.
3. On the Completion Date, the Buyer shall, subject to the provisions of
paragraph 4 below, buy from PowerGen each gigajoule of Actual Station Coal Stock
located at the Power Station at a price of 120.9p/GJ net AR, provided that the
maximum Actual Station Coal Stock for which the Buyer shall be required to pay
shall be 800,000 Standard Tonnes (as that term is defined in the Coal Supply
Contract). The Actual Station Coal Stock shall be deemed to be delivered on the
Completion Date and title to the Actual Station Coal Stock shall pass on
delivery.
4. The sulphur, chlorine and ash content of the Actual Coal Stocks shall be
determined by the independent persons appointed pursuant to paragraph 2 of this
Part 2. The sulphur, chlorine and ash content shall be determined by taking
representative core samples from the coal stocks in place and providing a
sulphur, chlorine and ash content analysis of each core sample taken, in each
case in accordance with the relevant British Standard and/or ISO Standard as
appropriate.
5. The upward and downward Consistency Price Adjustments set forth in clauses
9.5(b), (c) and (d) of the Coal Supply Contract shall be deemed to be included
in this Schedule 7 to apply, mutatis mutandis, to the Actual Station Coal Stocks
and the price in paragraph 3 shall be adjusted accordingly. The costs of the
independent persons shall be met equally by the Buyer and PowerGen. The opinion
of the independent
persons shall, save in the case of manifest error, be binding on the Buyer and
PowerGen.
SCHEDULE 8
PENSIONS
Part 1
DEFINITIONS
1. For the purposes of this Schedule and paragraph 9 of Schedule 2 the
following expressions shall have the following meanings:
Actuarial Methods and Assumptions means the actuarial methods and assumptions
set out in the Actuary's Letter;
Actuary means a person who is a Fellow of the Institute of Actuaries or Faculty
of Actuaries;
Actuary's Letter means the letter agreed between PowerGen's Actuary and the
Buyer's Actuary, a copy of which is contained in the Appendix to this Schedule;
Administration Costs means that proportion of the costs of administration of
PowerGen's Scheme during the Interim Period which is attributable to the Member
Employees being 0.75% of Pensionable Salaries (as defined in the PowerGen's
Scheme) plus VAT;
Agreed Rate means one per cent above the base rate from time to time prescribed
by National Westminster Bank plc calculated on a daily basis;
AVC Fund means those assets which are referable to or derived from additional
voluntary contributions paid under PowerGen's Scheme by Transferring Members and
which are used to provide money-purchase benefits;
Buyer's Actuary means Xxxxx Xxxxxx of Xxxxx & Xxxxxxx or such other actuary as
the Buyer notifies in writing to PowerGen;
Buyer's Plan means the pension scheme which is to be established or nominated by
the Buyer in accordance with paragraph 2.1;
Group Pensions Manager means Xxxxxx Xxxxxx of PowerGen UK plc, Xxxxxxxx Xxx,
Xxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxx XX0 0XX;
Independent Actuary means the actuary appointed in accordance with paragraph 7
of this Schedule;
Interim Period means the period commencing on the day immediately following the
Completion Date and ending on the day immediately preceding the Membership
Transfer Date (both days inclusive);
Interim Period Pension Contributions means the contributions (excluding any
additional voluntary contributions paid to Equitable Life Assurance Society or
Nationwide Building Society) made following the Completion Date in respect of
the Interim Period to PowerGen's Scheme by or in respect of the Transferring
Members under paragraph 4.
Member Employees means Employees who are also active members of PowerGen's
Scheme and who were transferred at the Completion Date to the Buyer pursuant to
the Employment Regulations;
Membership Transfer Date means the date which is six months after the Completion
Date or another earlier date agreed in writing by PowerGen and the Buyer or if
earlier, such date as the Inland Revenue may require for the cessation of the
participation of the Buyer in PowerGen's Scheme;
Notification Date means the date on which the Buyer shall notify PowerGen of the
names of all the Transferring Members in accordance with paragraph 3.1, which
date shall be no more than 30 days after the date of issue of the Option Forms
to the Member Employees in accordance with paragraph 2.7, and in any event not
less than 30 days before the Membership Transfer Date;
Option Form means an option form containing a discharge (other than in respect
of any legal right that the Transferring Member may successfully establish
against the trustees of PowerGen's Scheme to receive additional pension benefits
from PowerGen's Scheme as a direct result of the breach (if successfully
established) by PowerGen of its obligations under clause 13 of PowerGen's Scheme
and ineffective (if successfully established) arrangements made under clause 14
of PowerGen's Scheme following the actuarial valuations as at 31 March 1992 and
31 March 1995 of PowerGen's Scheme) in favour of PowerGen's Scheme in a form
approved by PowerGen;
Past Service Liabilities means the actuarial value of the accrued rights in
PowerGen's Scheme as at the Completion Date (referable to the
Transferring Members) calculated in accordance with the Actuarial Methods and
Assumptions and based on the benefit scale of PowerGen's Scheme as applies at
the Completion Date but including the benefit improvements contained in the deed
of amendment dated 19 April 1999 relating to the use of surplus in the actuarial
valuation as at 31 March 1998 (as disclosed);
Payment Date means, in relation to the Transfer Xxxxxx, 00 Business Days after
the date on which all of the conditions referred to in paragraph 5.1 have been
fulfilled or such other date as may be agreed in writing between PowerGen and
the Buyer;
PowerGen's Actuary means in respect of PowerGen's Scheme, Xxx Xxxx of Xxxxx &
Xxxxxxx or such other actuary as PowerGen notifies in writing to the Buyer;
PowerGen's Scheme means the PowerGen Group of the Electricity Supply Pension
Scheme, governed by a trust deed and rules which came into operation on 1 April
1983 and which has been amended from time to time;
Protected Employee means a Member Employee who is a protected employee as
defined in Regulation 3 of the Protection Regulations;
Protection Regulations means the Electricity (Protected Persons) (England and
Wales) Pensions Regulations 1990 (SI 1990 No. 346);
Retained Costs means that part of the Interim Period Pension Contributions
relating to the notional cost borne by PowerGen's Scheme in providing benefits
payable on death in service during the Interim Period which is attributable to
the Transferring Members being 0.74% of Pensionable Salaries (as defined in
PowerGen's Scheme);
Rules means the trust deeds, rules and other documents governing PowerGen's
Scheme, as from time to time amended;
Section 9(2B) Rights has the same meaning as in the Occupational Pension Schemes
(Contracting out) Regulations 1996;
Transfer Amount means the amount determined under paragraph 3 and calculated in
accordance with the Actuary's Letter to be transferred from PowerGen's Scheme to
the Buyer's Plan; and
Transferring Member means a Member Employee in respect of whom PowerGen's Scheme
receives a completed Option Form which is not withdrawn before the Payment Date
selecting the option to transfer his benefits under PowerGen's Scheme to the
Buyer's Plan and who becomes a member of the Buyer's Plan with effect from the
Membership Transfer Date.
The buyer's plan
Establishment of the Buyer's Plan
2.1 The Buyer will nominate or establish a final salary pension scheme (the
Buyer's Plan) on, or before, the Membership Transfer Date which shall provide to
Member Employees who accept the offer of membership referred to in paragraph
2.7, in respect of service after the Membership Transfer Date, benefits of at
least equivalent value to those provided by PowerGen's Scheme immediately before
the date of this Agreement but including the benefit improvements contained in
the deed of amendment dated 19 April 1999 relating to the use of surplus in the
actuarial valuation as at 31 March 1998 (as disclosed), and in respect of Member
Employees who are Protected Persons such level of benefits as is required by the
Protection Regulations.
2.2 The Buyer's Plan shall at the Membership Transfer Date be an exempt
approved scheme under Chapter I Part XIV of the Taxes Act or capable of being
treated as such a scheme, and contracted-out (within the definition in section 7
of the Pension Schemes Act 1993) in relation to the Transferring Members'
employment.
Protected Employees
2.3 The Buyer undertakes to PowerGen and warrants that it will comply with the
provisions of the Protection Regulations in respect of the Protected Employees.
2.4 The Buyer agrees that, should it fail to comply in any way or if such
arrangements that it sets in place in order to comply fail or are held not to be
sufficient to comply with the Protection Regulations and liability attaches to
PowerGen as a consequence of the Buyer's failure to comply with the Protection
Regulations, it shall fully indemnify (on an after tax basis) PowerGen in
respect of any such liability, including but not limited to any costs incurred
or awards made.
2.5 The Buyer agrees that, should it request that the Protected Employees waive
their rights under the Protection Regulations, it shall be responsible for all
and any consideration payable to the Protected Employees in respect of the
waiving of such rights and shall indemnify (on an after tax basis) PowerGen
against any costs, liabilities or claims for which PowerGen may be held
responsible or which it may incur as a consequence of such a request or such a
waiver, including, but not limited to any claim that the waiver is ineffective
or has been improperly obtained.
2.6 If the accrued or future pension rights in respect of any Protected
Employees are transferred to any other employer (successor) in circumstances
where they remain protected beneficiaries under the Protection Regulations, the
Buyer will ensure that the successor enters into an identical undertaking with
PowerGen as the Buyer's undertaking to PowerGen in paragraph 2.3. It will also
ensure that undertaking includes an undertaking by the successor to ensure that
identical obligations are imposed on any subsequent employers to whom such
rights are transferred. The Buyer will indemnify (on an after tax basis)
PowerGen against any failure by the successor or any such subsequent employer to
comply with those obligations and any breach by the successor or any subsequent
employer of those obligations will be treated as if it were a breach by the
Buyer of its obligations under paragraph 2.3.
Invitation to join the Buyer's Plan
2.7 The Buyer will as soon as possible but not less than 60 days before the
Membership Transfer Date send to all Member Employees who have at the Completion
Date:
(a) not ceased to be in the employment of PowerGen's Group; and
(b) not attained their Normal Pension Age (as defined in the rules of
PowerGen's Scheme),
an announcement, in a form agreed by PowerGen and including an Option Form, (the
Announcement) setting out particulars of the Buyer's Plan and offering those
Member Employees membership of the Buyer's Plan with effect on and from the
Membership Transfer Date in accordance with paragraph 2.1 and including an
invitation to consent to a transfer of assets being made from PowerGen's Scheme
to the Buyer's Plan.
2.8 The Buyer shall procure that the originals of the Option Forms returned by
Member Employees are received by the Group Pensions Manager on behalf of the
trustees of PowerGen's Scheme on the Notification Date.
Past service rights credited
2.9 Subject to payment of the Transfer Amount to the trustees of the Buyer's
Plan, the Buyer shall procure that the Buyer's Plan will provide benefits for
and in respect of each Transferring Member. Those benefits shall be, in the
opinion of PowerGen's Actuary and the Buyer's Actuary, or in the absence of
agreement, in the opinion of the Independent Actuary in accordance with
paragraph 7, at least equal in value on the basis set out in the Actuary's
Letter to the benefits which would have been payable under PowerGen's Scheme in
respect of each Transferring Member's service before the Membership Transfer
Date as if each Transferring Member had remained a member of PowerGen's Scheme
on the basis of the provisions thereof at the Membership Transfer Date as apply
to each Transferring Member. Contributing Service (as defined in PowerGen's
Scheme) under PowerGen's Scheme shall be treated in the Buyer's Plan as
continuous with such service under the Buyer's Plan. For the avoidance of doubt,
for the purposes of this paragraph 2.9, no account shall be taken of any
additional pension benefits as described in paragraph 10(iii) of this Schedule
unless and until a transfer of such additional pension benefits is made and the
corresponding amount is paid to the Buyer's Plan, both in accordance with
paragraph 10 of this Schedule.
2.10 The scale of benefits provided pursuant to paragraph 2.9 above for or in
respect of those Transferring Members who are not Protected Persons shall be
identical to those for Transferring Members who are Protected Persons.
2.11 Transferring Members' contributions shall be treated as member
contributions in the Buyer's Plan and there shall be no refund of those
contributions on subsequent cessation of service or membership except where a
refund is not prohibited by Inland Revenue restrictions or the preservation
requirements in force under the Xxxxxxx Xxxxxxx Xxx 0000.
CALCULATION OF THE TRANSFER AMOUNT
3.1 The Buyer shall notify PowerGen of the names of all the Transferring
Members on the Notification Date.
3.2 PowerGen shall procure that, as soon as practicable, and not later than 60
days, after the Notification Date, PowerGen's Actuary shall calculate the
estimated Transfer Amount and notify such calculation to the Buyer. PowerGen
shall procure that not later than 60 days after the Notification Date, the
Buyer's Actuary is provided with all information reasonably required by him to
verify PowerGen's Actuary's calculations. If PowerGen's Actuary and the Buyer's
Actuary cannot agree on the estimated Transfer Amount within 90 days of the
Notification Date either party may require the estimated Transfer Amount to be
determined by the Independent Actuary in accordance with paragraph 7.
3.3 PowerGen and the Buyer undertake to use their respective reasonable
endeavours to procure that all such information and data required for the
purpose of this Schedule shall be made available and that it shall be sufficient
to enable all calculations or determinations to be made for the purposes of this
Schedule.
PARTICIPATION IN POWERGEN'S SCHEME
PowerGen's obligations
4.1 PowerGen shall during and in respect of the Interim Period:
(a) subject to:
(i) the approval of PowerGen's Scheme as approved or capable of
approval under Chapter I of Part XIV of the Taxes Act not being
adversely affected thereby; and
(ii) the execution by the Buyer on or before the Completion Date of the
deed of adherence in accordance with paragraph 4.8 below,
permit the participation of the Buyer as a participating employer in
PowerGen's Scheme in respect of the Member Employees (but not any other
employees); and
(b) use reasonable endeavours to assist the Buyer to procure that the Member
Employees who are, at Completion, in contracted-out employment by reference
to PowerGen's Scheme shall continue to be in contracted-out employment by
reference to PowerGen's Scheme.
4.2 Except in respect of the deed of amendment dated 19 April 1999 relating to
the use of surplus in the actuarial valuation as at 31 March 1998 (as
disclosed), PowerGen shall not, during and in respect of the period from the
date of this Agreement to the Membership Transfer Date:
(a) alter the Rules to increase the obligations of the Buyer as a participating
employer;
(b) do or omit to do anything so as to affect adversely the amount to be
received by the Buyer's Plan under this Schedule; or
(c) amend, change or augment the interests of, or the benefits or prospective
benefits under PowerGen's Scheme payable or contingently payable to or in
respect of, any of the Member Employees,
save with the written consent of the Buyer (such consent not to be unreasonably
withheld or delayed) or as required by law or as is necessary or desirable, in
the opinion of PowerGen and agreed with the Buyer (such consent not to be
unreasonably withheld or delayed), to avoid prejudicing the position of
PowerGen's Scheme as a scheme which is approved or is capable of approval as an
exempt approved scheme under Chapter I of Part XIV of the Taxes Act or as a
contracted-out scheme.
Buyer's obligations
4.3 The Buyer shall during and in respect of the Interim Period:
(a) pay monthly on or before the fourth working day of the month following the
month in which contributions are deducted or collected or due and payable
to PowerGen's Scheme contributions on the following basis:
(i) Member Employees - at the rates payable by the Member Employees in
accordance with the Rules together with any amounts representing
Member Employees' contributions to purchase added years,
additional voluntary contributions to Equitable Life Assurance
Society and Nationwide Building Society and third-rate and half-
rate abatements deducted from pay by the Buyer; and
(ii) Buyer - a sum equal to twice the Member Employee contributions
including third-rate abatements (other than voluntary
contributions to purchase added years or additional voluntary
contributions and half-rate abatements).
Such payment shall be by cheque payable to PowerGen Group of ESPS.
If a payment is not made within this time limit, the trustees of PowerGen's
Scheme may require the Buyer to pay interest on it at the Agreed Rate and
for all or whatever part of the period of delay they decide;
(b) provide to the Group Pensions Manager in writing, on or before the 26th day
of the month in which such contributions are deducted, a summary of the
contributions collected from Member Employees in a form which enables such
Member Employees' contributions to be identified by each Member Employee
and type; regular or normal, added years, additional voluntary
contributions for Equitable Life Assurance Society or Nationwide Building
Society, third-rate and half-rate abatements;
(c) pay monthly the Administration Costs to PowerGen within 7 days of a valid
invoice being received by the Buyer;
(d) comply in all other respects with the provisions of PowerGen's Scheme and
the obligations imposed on the Buyer in relation to PowerGen's Scheme by
relevant legislation;
(e) take such steps as are necessary or desirable to procure that the Member
Employees remain in contracted-out employment in relation to PowerGen's
Scheme;
(f) except as permitted in paragraph 4.3(g) below, not exercise any power,
right or discretion conferred on the Buyer by PowerGen's Scheme or, in
relation to PowerGen's Scheme, by or under any legislation;
(g) not increase the remuneration of any of the Member Employees by an amount
exceeding the agreed level of pay increases for those Member Employees
covered by the current three year pay award agreed between PowerGen and its
unions dated 1997 or 6% per annum for those not covered by that agreement
or do or
omit to do anything which results or would result in an increase in the
liabilities under PowerGen's Scheme in respect of the Member Employees (and
in particular (but without prejudice to the generality of the foregoing)
(whether or not by exercise or failure to exercise a discretion under
PowerGen's Scheme) grant benefits on ill-health or redundancy of any Member
Employee) except with the prior written approval of PowerGen and on such
terms as PowerGen may specify as to the payment of additional contributions
to the PowerGen's Scheme or otherwise;
(h) not do or omit to do anything whereby the position of PowerGen's Scheme as
a scheme which is approved or capable of approval under Chapter I of Part
XIV of the Taxes Act as an exempt approved scheme or as a contracted-out
scheme would or might be prejudiced; and
(i) give written notice to PowerGen's Scheme terminating the Buyer's
participation with effect from the end of the Interim Period.
4.4 If the Buyer does anything, or omits to do something, which results in an
increase in the liabilities of PowerGen's Scheme in respect of Member Employees
except as permitted in paragraph 4.3(g) above, the Buyer shall pay an amount to
PowerGen's Scheme which is in the opinion of PowerGen's Actuary and which is
accepted by the Buyer's Actuary or in the absence of acceptance in the opinion
of the Independent Actuary, equal to the capital value of the additional
liability (by reference to the Actuarial Methods and Assumptions) (the Special
Contribution) and the professional fees of PowerGen's Actuary in calculating the
Special Contribution, within fourteen days of PowerGen's Actuary notifying the
Buyer's Actuary of his opinion, together with interest on the amount at the
Agreed Rate in respect of the period from fourteen (14) days after the
notification to actual payment of the Special Contribution. In the event that
the calculation of the Special Contribution is referred to the Independent
Actuary, the Buyer will pay the costs (if any) of the Independent Actuary.
PowerGen and the Buyer may agree in writing that instead of the whole or part of
any Special Contribution being made, the amount due will be deducted from the
Transfer Amount.
4.5 PowerGen and the Buyer acknowledge that the Pensions Xxx 0000 and
regulations already made under it or to be made under it in the
future (the Pensions Legislation) will impose requirements on and grant
discretions to employers under and in relation to PowerGen's Scheme.
(a) The Buyer agrees that PowerGen (or a company nominated by PowerGen (the
relevant company)) may make all decisions and exercise all discretions in
relation to PowerGen's Scheme envisaged by or desirable under the Pensions
Legislation as though PowerGen (or the relevant company) were the sole
employer participating in PowerGen's Scheme.
(b) While the Buyer remains an employer in relation to PowerGen's Scheme, the
Buyer shall procure that it will in relation to PowerGen's Scheme:
(i) exercise no right or discretion conferred on it by or under the
Pensions Legislation without the prior written consent of
PowerGen (such consent not to be unreasonably withheld or
delayed);
(ii) exercise each right or discretion conferred on it by or under the
Pensions Legislation as directed from time to time in writing by
PowerGen;
(iii) from time to time execute all deeds, documents, agreements,
consents or approvals for the purpose of complying with its
obligations under sub-paragraphs (i) or (ii) above as may be
considered necessary or desirable by PowerGen;
(iv) co-operate with PowerGen and PowerGen's Scheme in providing
information about, and access to, its employees from time to
time; and
(v) if requested by PowerGen, execute a deed irrevocably appointing
PowerGen (or the relevant company) as its attorney to execute (in
the name of the Buyer or otherwise) from time to time any of the
deeds, documents, agreements, consents or approvals specified in
paragraph (iii) above.
(c) PowerGen (or the relevant company, as appropriate) may exercise the
authorities and discretions envisaged by this paragraph in its absolute
unfettered discretion and in its own interests. The Buyer shall accept
that PowerGen (or the relevant
company, as the case may be) owes no duty or responsibility to the Buyer in
relation to the exercise of the authorities and discretions envisaged as
conferred on PowerGen (or the relevant company) by this paragraph.
4.6 The Buyer shall do everything in its power (and co-operate with PowerGen
and PowerGen's Scheme, as requested by them) to ensure that all of its employees
cease to be in pensionable service under PowerGen's Scheme by the end of the
Interim Period.
4.7 The Buyer shall procure that a relevant insolvency event for the purposes
of section 75 of the Pensions Act 1995 does not occur in relation to it while it
is an employer in relation to PowerGen's Scheme for the purposes of that
section.
4.8 The Buyer shall, on or before the Completion Date, duly execute a deed of
adherence to PowerGen's Scheme in relation to the Interim Period and the Member
Employees in the form set out in Part 2 of this Schedule and shall provide
PowerGen and the trustees of PowerGen's Scheme with such evidence as either of
them shall require confirming the due execution of such deed.
4.9 The Buyer shall procure that neither it nor any company in the Buyer's
Group or related company will encourage or financially assist (either directly
or indirectly) except where required by law, the provisions of PowerGen's Scheme
or by regulatory requirements a Transferring Member or dependant of a
Transferring Member in any claim against PowerGen's Scheme which would result in
PowerGen's Scheme having to pay a larger amount than the Transfer Amount to the
Buyer's Plan.
PAYMENT OF THE TRANSFER AMOUNT
Conditions in relation to payment
5.1 The Transfer Amount is only payable if the following conditions have been,
and remain, satisfied:
(a) the Buyer's Plan has been established or nominated and complies with
paragraph 2.2;
(b) the Group Pensions Manager on behalf of the trustees of PowerGen's Scheme
has received from the Buyer duly completed Option Forms from those of the
Member Employees who elect
for, or consent to, transfer their accrued benefits to the Buyer's Plan
under paragraph 3;
(c) the trustees of PowerGen's Scheme have received the prior written agreement
of the Inland Revenue to make a block transfer payment to the trustees of
the Buyer's Plan and the trustees of the Buyer's Plan having received the
prior written agreement of the Inland Revenue to accept a block transfer
payment from the trustees of PowerGen's Scheme;
(d) evidence has been produced to the satisfaction of PowerGen and the trustees
of PowerGen's Scheme that insofar as any part of the payment would
represent amounts in respect of accrued rights to guaranteed minimum
pensions (as defined in the Pension Schemes Act 1993) or Section 9(2B)
Rights, the Buyer's Plan is a contracted-out scheme (as defined in the
Pension Schemes Act 1993);
(e) the trustees of PowerGen's Scheme have received written confirmation from
the trustees of the Buyer's Plan that they are willing and able to receive
the Transfer Amount and will provide the benefits as agreed in accordance
with paragraph 2.9;
(f) the Transfer Amount has been calculated in accordance with paragraph 3 or
determined in accordance with paragraph 7;
(g) the satisfaction of any other conditions which are required to be satisfied
in connection with the transfer of assets and rights in respect of the
Transferring Members in accordance with statutory provisions or Inland
Revenue requirements; and
(h) all amounts due and payable by the Buyer under paragraphs 4.3 and 4.4 above
have been received by PowerGen and/or the trustees of PowerGen's Scheme.
PowerGen's obligation to pay the Transfer Amount
5.2 Subject to paragraph 5.1, PowerGen shall use its reasonable endeavours to
procure that the trustees of PowerGen's Scheme shall on or before the Payment
Date, transfer to the trustees of the Buyer's Plan the notional holdings of
units (excluding holdings in Index-Linked sectors) of the Electricity Supply
Pension Scheme unitised fund as allocated under the Actuary's Letter having a
mid-market value on the day before the Payment Date equal to the Transfer Amount
in full and
final satisfaction of all interests (other than in relation to the AVC Fund) of
or in respect of the Transferring Members in PowerGen's Scheme. If any of the
unit holdings notionally allocated in respect of the Transfer Amount in
accordance with the Actuary's Letter represents less than one per cent of the
Transfer Amount, PowerGen's Scheme trustees may offer alternative unit holdings
to the Buyer's Plan's trustees (excluding holdings in Index-Linked sectors of
the Electricity Supply Pension Scheme unitised fund). If the Buyer's Plan's
trustees refuse to accept any assets or PowerGen's Scheme trustees and the
Buyer's Plan trustees cannot agree the mid-market value of any assets then cash
shall be transferred equal to 98% of the proportion of the Transfer Amount
represented by the assets refused by the Buyer's Plan or in relation to which
the mid-market value cannot be agreed.
ADDITIONAL VOLUNTARY CONTRIBUTIONS
6.1 The AVC Fund shall be disregarded for the purposes of the Transfer Amount.
6.2 PowerGen will use its reasonable endeavours to procure that the trustees of
PowerGen's Scheme will transfer the AVC Fund to the trustees of the Buyer's Plan
as soon as practicable after the Payment Date (subject to the Buyer having
complied with its obligations under this Schedule).
6.3 The Buyer shall procure that the trustees of the Buyer's Plan shall apply
the AVC Fund so as to provide appropriate money purchase benefits for, and in
respect of, the appropriate Transferring Members.
DISPUTES
7.1 Any dispute between PowerGen and the Buyer or PowerGen's Actuary and the
Buyer's Actuary concerning the calculation of the Transfer Amount or any other
matter of an actuarial nature shall, in the absence of agreement between them,
be referred to the Independent Actuary.
7.2 The Independent Actuary shall be appointed by agreement between PowerGen
and the Buyer or, failing such agreement, shall be appointed by the President
for the time being of the Institute of Actuaries at the request of either
PowerGen or the Buyer.
7.3 The Independent Actuary shall act as an expert and not as an arbitrator.
Any decision of the Independent Actuary as to the relevant
provisions of the Schedule and application of the Actuarial Methods and
Assumptions shall be final and binding on all concerned.
7.4 Except as provided under paragraph 4.4 above, the costs (if any) of the
Independent Actuary shall be borne equally by PowerGen and the Buyer or as the
Independent Actuary may otherwise direct.
Shortfall
8. Subject to paragraph 5, if the amount which has been actually transferred
(if any) by PowerGen's Scheme to the Buyer's Plan on or before the Payment Date
in respect of the Transferring Members is less than the Transfer Amount, then
PowerGen shall forthwith pay to the Buyer, by way of adjustment to consideration
payable for the Power Station Assets pursuant to this Agreement, and the Buyer
shall then immediately pay to the Buyer's Plan, a sum in cash (the Shortfall)
both calculated according to the following formula:
((A - B) + C) x (100 - D)
-------------------------
100
where:
A = the Transfer Amount;
B = the amount actually transferred on or before the Payment Date;
C = the amount representing interest at the Agreed Rate on an amount
equal to A-B for the period from and including the Payment Date to
and excluding the date on which payment is made under this
sub-paragraph; and
D = the percentage rate of corporation tax (the full rate not the small
companies rate) in force at the date on which payment is made under this
paragraph 8 (ignoring any retrospective alteration to that percentage
rate) and applicable to PowerGen.
The amount of the Shortfall shall be determined by PowerGen's Actuary and agreed
by the Buyer's Actuary or, in default of agreement, shall be determined under
paragraph 7.
EXCESS
9. If, leaving aside any amounts dealt with under paragraphs 8 and 10, the
amount actually transferred from PowerGen's Scheme to the
Buyer's Plan in respect of the Transferring Members is in excess of the Transfer
Amount (the amount of such difference being referred to in this paragraph as the
Excess), then the Buyer shall pay to PowerGen by way of an adjustment of the
consideration payable for the Power Station Assets pursuant to this Agreement
within five Business Days after the Excess is paid a sum in cash equal to the
Excess together with interest thereon (whether before or after judgement) at the
Agreed Rate in respect of the period from and including the date of payment of
the Excess to and excluding the date of final payment under this paragraph.
LITIGATION UNDERTAKING
10. PowerGen undertakes to the Buyer that if:
(i) it is successfully established that there has been a breach by PowerGen of
its obligations under Clause 13 of PowerGen's Scheme and failure to make
effective arrangements under Clause 14 of PowerGen's Scheme following the
actuarial valuations as at 31 March 1992 and 31 March 1995 of PowerGen's
Scheme (the Breach);
(ii) as a result of the Breach, PowerGen is obliged to pay an amount to the
trustees of PowerGen's Scheme;
(iii) a Transferring Member has a legal right to receive additional pension
benefits from PowerGen's Scheme which arises as a direct result of the
Breach and (ii); and
(iv) neither the Buyer nor the Buyer's Plan trustees assists, facilitates or
encourages any Transferring Member to establish a legal right to receive
additional pension benefits from PowerGen's Scheme which arises as a
direct result of the Breach,
PowerGen will procure, so far as is necessary on the advice of the actuary to
PowerGen's Scheme that there are insufficient assets in PowerGen's Scheme to
meet any additional pension benefits mentioned in (iii) above, payment of such
further amounts to the trustees of PowerGen's Scheme in order to meet those
additional pension benefits. To the extent that:
(a) a Transferring Member requests the trustees of PowerGen's Scheme to
transfer such additional pension benefits to the Buyer's Plan;
(b) the Transferring Member and the Buyer's Plan trustees discharge PowerGen
and the trustees of PowerGen's Scheme in respect of such additional pension
benefits in such a form as PowerGen and the Group Pensions Manager on
behalf of the trustees of PowerGen's Scheme may require; and
(c) the trustees of PowerGen's Scheme are able to make such a transfer to the
Buyer's Plan,
PowerGen will use its reasonable endeavours to procure that the trustees of
PowerGen's Scheme make such a transfer to the Buyer's Plan and the Buyer will
procure that the Buyer's Plan grants such additional equivalent pension benefits
as PowerGen's Actuary and the Buyer's Actuary determine, or failing agreement,
as determined by the Independent Actuary in accordance with paragraph 7, in
respect of the additional transfer. Any additional transfer will be calculated
using the Actuarial Methods and Assumptions subject to any changes that
PowerGen's Actuary determines and are agreed by the Buyer's Actuary, as
appropriate, in view of the lapse of time since the Completion Date. In the
absence of agreement, PowerGen may refer any such changes in the Actuarial
Methods and Assumptions to the Independent Actuary.
APPENDIX TO SCHEDULE 8
THE ACTUARY'S LETTER
SCHEDULE 8
PENSIONS
Part 2
1999
POWERGEN UK plc
EDISON FIRST POWER LIMITED
======================================
DEED OF ADHERENCE
in respect of the
POWERGEN GROUP of the
ELECTRICITY SUPPLY PENSION
SCHEME
======================================
A DEED OF ADHERENCE made on 1999
Between
POWERGEN UK plc (registered number 2366970) whose registered office is at 00 Xxx
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (xxx Principal Employer)
EDISON FIRST POWER LIMITED (registered number 35167) whose registered office is
at 0 Xx Xxxxxxxx Xxxxxx, Xx Xxxxx Port, Guernsey, Channel Islands GY1 4HP (New
Employer)
Whereas
(A) By a Resolution of The Electricity Council passed on 20 January 1983 the
Electricity Supply Pension Scheme (the Scheme) was established to provide
relevant benefits as presently defined in section 612(1) of the Income and
Corporation Taxes Xxx 0000.
(B) PowerGen UK plc is the Principal Employer of PowerGen Group of the Scheme
(the PowerGen Group).
(C) The PowerGen Group is governed by clauses and rules which came into
operation on 1 April 1983 and which have been amended from time to time.
(D) By clause 2B(4A) of the PowerGen Group the Principal Employer may consent
to participation by the New Employer on the terms set out in that clause.
(E) By an agreement for the sale, purchase and leasing of certain assets at
Fiddler's Ferry Power Station, Warrington, Cheshire (the Agreement) dated _____
1999 between (1) the Principal Employer and (2) the New Employer, the New
Employer acquired and leased on _____ (the Closing Date) certain assets at
Fiddler's Ferry Power Station, Warrington, Cheshire (hereinafter referred to as
the Business).
(F) On the Closing Date the employees of the Principal Employer engaged in the
Business (the Employees) will become, pursuant to clause 12 of the Agreement and
the Transfer of Undertakings (Protection of Employment) Regulations 1981
employees of the New Employer.
(G) It has been agreed that the New Employer shall take part in the PowerGen
Group on the terms of this Deed with effect on and from the Closing Date and
that the benefits of the PowerGen Group shall continue for those of the
Employees who are members of the PowerGen Group at the Closing Date.
NOW THIS DEED WITNESSES
1. The New Employer undertakes to participate in the PowerGen Group on the
terms of this Deed and covenants with the Principal Employer to observe and
perform the provisions of the PowerGen Group as amended from time to time so far
as they relate to it as a participating employer.
2. Subject to the consent of the Pension Schemes Office of the Inland Revenue
and to the position of the Scheme as one which is an exempt approved retirement
benefits scheme not being prejudiced thereby, the Principal Employer hereby
admits the New Employer to participation in the PowerGen Group with effect from
the Closing Date subject to the terms and conditions set out in this Deed.
3. It is hereby agreed and declared that (notwithstanding anything in the
PowerGen Group to the contrary):
(a) no employee of the New Employer shall be or become or remain a member of
the PowerGen Group in pensionable service (a Member) unless either he was a
Member on the Closing Date and enters the employ of the New Employer on
that date or the Principal Employer and the New Employer otherwise agree in
relation to any particular employee;
(b) the participation in the PowerGen Group of the New Employer shall cease and
determine on the date which is six months after the Closing Date or another
earlier date agreed in writing by the Principal Employer and the New
Employer or if earlier, such date as the Pension Schemes Office of the
Inland Revenue may require for the cessation of participation of the New
Employer in the PowerGen Group save that (in any case) such cessation of
participation shall be without prejudice to the liability of the New
Employer to make any contributions which relate to a period beginning on or
after the Closing Date and ending prior to such cessation;
(c) the New Employer shall, during and in respect of the period of
participation by the New Employer in the PowerGen Group comply with the
obligations imposed on it by Schedule 8 of the Agreement (Pensions);
(d) on the New Employer ceasing to participate in the PowerGen Group the New
Employer shall cease to have any rights or powers in relation to the
PowerGen Group or to be entitled to any benefits under the PowerGen Group.
4. The provisions of this Deed are in addition to and do not derogate from, any
of the obligations of the New Employer under the Agreement.
5. This Deed is governed by, and shall be interpreted according to, the laws of
England.
EXECUTED as a DEED
EXECUTED and DELIVERED )
as a DEED )
by _________________________ )
for and on behalf of )
POWERGEN UK plc )
in the presence of: )
SIGNED and DELIVERED )
as a DEED )
by _________________________ )
for and on behalf of )
EDISON FIRST POWER LIMITED )
by an authorised signatory )
in accordance with the laws )
of Guernsey in the presence of: )
SCHEDULE 9
EXCLUDED ASSETS
1. Hired equipment or equipment belonging to third parties (including
contractors and subcontractors);
2. anything at the Power Station belonging to, or being (or being in the
nature of) tenants' fixtures of, either of The National Grid Company plc,
Manweb plc or any other tenant or licensee of any part or parts thereof;
3. telecommunications links comprised in PowerGen's wide area network together
with the Trade Marks, the Retained IPR and the Retained IP Agreements;
4. any fixed plant, equipment and machinery at the Leasehold Property.
SCHEDULE 10
MAJOR PLANT ITEMS CALCULATIONS
Part 1
Warranty Period 1 : (pound sterling)250,000
Warranty Period 2 : (pound sterling)240,000
Warranty Period 3 : (pound sterling)230,000
Warranty Period 4 : (pound sterling)220,000
Warranty Period 5 : (pound sterling)210,000
Warranty Period 6 : (pound sterling)200,000
Part 2
Warranty Period 1 : 65%
Warranty Period 2 : 62.5%
Warranty Period 3 : 60%
Warranty Period 4 : 57.5%
Warranty Period 5 : 55%
Warranty Period 6 : 52.5%
SCHEDULE 11
INFORMATION TECHNOLOGY AND
TELECOMMUNICATIONS ASSETS AND SERVICES
Part 1
Computer software licensed to and retained by PowerGen, but which PowerGen will
use reasonable endeavours to make available to the Buyer during the 3 months
following Completion: see clause 7.8
. AVI - Automatic Vehicle Identification
Part 2
Computer software licensed to and retained by PowerGen and which will be made
available to the Buyer under transitional arrangements.
. OLAS - Company Accounts System (part of functionality)
Part 3
IT maintenance, support and telecommunications services currently provided by
third parties (other than members of PowerGen's Group).
Maintenance and Support Contracts including:
. FMS - Cap Gemini
. Visual Kismet - Trinity Expert Systems Limited
. TOPS - Railtrack
. PABX - Cable & Wireless (Siemens)
. PAX - Cable & Wireless (Siemens)
. VMS (Voicebox) - Cable & Wireless (Siemens)
. Ganetime - Gane International
. LAN & Cross Site Services - GR Technical Services
. DEC hardware maintenance (INSTEM)
Other Telecommunications Services
. Cable & Wireless DDI/DASS Lines
. Direct Lines/Exchange Lines
. Telephone Bills/One Xxxx
. Vodafone Mobile Telephones
. Private Wires
. Megastream
. Government Telephone Preference Scheme
. Radio Licence Frequencies Used
. Radios (Radio Licences excluded)
. Pager System Licence
. Television/Sat TV Licence (Sports & Social Club)
. Class Licence for PAX Telephone System
Part 4
Part 4(a)
Process control systems licensed to PowerGen or procured by PowerGen and the
subject of Process Control Contracts.
Process Control System - Operating System Software.
. DEC RSX11M operating system V4.5
. DECnet comms software V4.5
. Microsoft Windows NT
. Microsoft Windows 95
. DEC Unix V4.0G
Process Control System - Packaged Software.
. NP APMS V4.01
. Hewlett Packard Rtap
. Xxxxxxxx XX Links
. Xxxxxxxx XX LOGIX 5
. Xxxxxxxx XX LOGIX 500
. Rockwell Panel Builder
. Rockwell ABBASIC
. Borland Paradox
. Oil Systems PI
. CONLOG configuration software
. BBL configuration software
. BBL CALDISC
. GEM80 programmer
. TEXAS programmer
. ETC 4000 logger
. ETC CemView
. Bentley Nevada DM2000
. Wonderware INTOUCH
. LABVIEW
. Quickbasic
. TOPS system software
. Castelet PMS
Process Control System - Application Software.
. GEC AVR Application software
. Dewplan 5TI water treatment plant software
. PowerGen CUTLASS application software
. SLS oil burner PLC software
. INTELLECT HP & IP drains software
. THURNALL boiler interlocks software
. THURNALL ash plant software
. THURNALL secure supplies software
. THURNALL vacuum raising plant software
. THURNALL general services software
. Dickinsons feed & turbine interlocks software
. Dickinsons CW system software
. Dickinsons purge system software
. RRIC secondary air damper control software
. SO3 plant software
. Dust plant PLC software
. INSTEM softdesk software
. Turbine Controls GT control software
. Dickinsons remote alarm monitoring system software
. BBL alarm system software
Part 4(b)
Business Systems licensed to PowerGen or procured by PowerGen.
Business Systems - Operating System Software
. Novell IntranetWare 4.11
. Intranetware Software Upgrade 4.11 (from 3.12)
. Microsoft DOS 6.22
. Microsoft Windows 3.11
. Microsoft Windows 95
. Microsoft SQL Client 6.5
. Microsoft Windows NT Server/Client 3.51
. Microsoft Windows NT Server/Client 4
. SCO Unix Open Server v5 Enterprise system
. SCO Informix SQL
. XXX XxxxXxxxxx 0
. XXX XXX Xxxxx
. XXX XXX VisionFS
. SCO SQL Retriever 3.23
. PC/TCP Networks
. Kommunicate Rightfax NT 6
Business Systems - Packaged Software
. ADS Nettools
. Autodesk AutoCad 12
. Cheyenne ARCserve NT SQL DB Agent
. Cheyenne ARCserve 6.1
. Cheyenne ARCserve 6 NT Enterprise
. Elron Software Softrack 3.1b
. Firefox Novos
. Firefox Novos
. Firefox Novos Elite for Oslan 5.0
. IBM OS/2 2
. IMRI Alchemy Gold 4.1
. IMRI CAD2CD 4.1
. Informix Smartware II Access Node
. Informix SmartwareII
. Kommunicate Ltd Rightfax 6
. Lotus 123 4.01
. Lotus 123 5.0
. Lotus cc Mail
. Lotus Freelance Graphics for Windows 2.0
. Lotus PP Inst/Maint Notes
. McAfee Nettools
. Microsoft Visual Basic Professional
. PC Control PC Control 4.5
. Drawing Office Cad Software
. Textbridge OCR Scanning Software
. Trio Communication Software 5.1
. Adaptec Easy CD Creator 3.01a
. Adobe Pagemaker 6.0
. Alchemy Gold/Pro 4.1
. Alps Photo Deluxe
. Autocad V12i-C2
. Corel draw 5
. Xxxxxx Electronic Employment Law & Employment Law & Practice
July 97
. Xxxxxx Record and Procedures for windows
. Xxxxxx reference book for employers
. Xx Xxxxxxxx Anti Virus Toolkit 7.91
. Lotus Freelance 2
. Microsoft Excel 5
. Microsoft Internet Explorer 4
. Microsoft Technet
. Microsoft Word 6.0c
. Microsoft Access 2
. Microsoft Access 97
. Microsoft Office 97 Professional 8.0
. Microsoft Powerpoint 4.0
. Microsoft Project 4
. Multitone Pager Programming Software RPR530S Ver 01.06
. PC Anywhere PC Anywhere 32Blt v8
. PI Data Archive for NT&Unix 1.3
. Power Chute Plus V4.2.3
. Presto Page Mgr SE
. Quaterdeck WinProbe 4.0
. Rumba for Netware 4.0
. SCO Sql Retriever Pack R 3.5.0 for Windows
. SERIF Page Plus Lite
. Softrack Software Monitoring for Netware 250 User Token 3.00
. Softrack Token Disk 250 User Authorisation
. Spectrum Element Mgr 1.02
. Symanatac PC Anywhere For Dos 5.00
. TRINITY EXPERT SYSTEMS Opequus WINNT 95
. Winpods 2.31
Business Systems - Application Software
. CDP (Customer Driven Procurement)
. LMI's (Local Management Instructions)
. TRD (Training Records Database)
. Y2K Inventory Database
. Policy Handbooks
. IT Inventory (Asset Register)
. Technical Memo's Database
. FINSYS - Fiddler's Ferry Financial Information System
. Various other Databases/Spreadsheets/Documents
Part 5
Deliberately left blank.
Part 6
Retained IPR licensed to the Buyer to use and develop see clause 7.3.
. CUTLASS development software
. CUTLASS (Targets)
. CUTLASS-AB
. CUTLASS-APMS
. CUTLASS (host)
. MIDAS
. FMS - Fuel Management System
. VK2 - Visual Kismet Maintenance System
. SHAP - Station Heat Accounting System (spreadsheet)
. EDS/EMS - Environmental System
. Y2K Lotus Notes Database
. PIMOPS - Purchase Inventory Management Order Processing System
Part 7
Retained IPR which is not licensed to the Buyer and software licensed to and
retained by PowerGen which will not be made available to the Buyer.
. DELPHI - Payroll System
. EMC Systems - Trading and Settlement
. SPITS - Station Pool Income Transfer System
. Telebrief
Part 8
IPR Exclusive to the Power Station
Business Systems - Application Software
. CDP (Customer Driven Procurement) database
. LMI's (Local Management Instructions) database
. TRD (Training Records Database) database
. IT Inventory (Asset Register) database
. Technical Memo's Database
. Certain spreadsheets developed by station staff.
. Certain databases developed by station staff
. PC programs developed by the Power Station.
Process Control System - Application Software
. Performance Monitor System
. CUTLASS display & control software developed by the Power Station.
. Xxxxx Xxxxxxx control software developed by the Power Station.
. CONLOG software developed by the Power Station.
. Equipment configurations developed by the Power Station (alarms &
databases).
. Various other systems developed/implemented by station staff
SCHEDULE 12
DESCRIPTION OF MAJOR PLANT ITEMS
1. Generator Transformers
2 off Xxxxxxxx 570 MVA (Units 1 & 3)
2 off Xxxxxxx 600 MVA (Units 2 & 4)
Principal Components: . Transformer tank & storage conservator
. Core
. Windings
. On-load tap changer divertor and selector switches
. High and low voltage bushings including protection Cts
. Transformer condition monitoring equipment
. Tap changer mechanism
Termination Points: LV & HV Bushing connections
2. Alternator Stators
English Electric 588MVA rated capacity stator
Principal Components: . Stator inner & outer frames
. Stator core and integrated condition monitoring
. Stator windings
. Internal stator water cooling system
. Internal hydrogen cooling system
Termination Points: . Alternator stator terminal connections
. External stator water connections
. External hydrogen cooler connections
3. Main Chimneys
Principal Components: . Reinforced concrete windshield
. 4 off reinforced concrete flues
. Reinforced concrete foundation
Termination Points: 'Induced draught' ducting expansion
joint/chimney seals
4. Cooling Towers
Principal Components: . Cooling Tower Shell
. Cooling Tower Shell Support Columns - vertical and
inclined
. Concrete inlet culvert/surge vents
. Concrete support structure for eliminators and cooling
pack
. Water recovery ponds
. De-icing system
. Internal plastic pack
Termination Points: . Tower inlet isolation valve
. Outlet culvert isolation facility
5. Alternator Rotors
Principal Components: . Rotor forging
. Conductor bars
. End bells
. Slip rings (excluding brushgear)
Termination Points: . Shaft couplings
SCHEDULE 13
"on an after tax basis"
1. Where any indemnity or payment covenant in this Agreement is
expressed to be on an after tax basis, the following provisions shall apply.
2. In this Schedule, terms have the meanings given below:
Payer means the party required to make payment under the relevant indemnity or
payment covenant;
Recipient means the person to whom the payment under the relevant indemnity or
payment covenant is to be made; and
Relief includes, unless the context otherwise requires, any allowance, credit,
deduction, exemption or set-off in respect of any Tax or relevant to the
computation of any income, profits or gains for the purposes of Tax, or any
right to repayment of or saving of Tax, and any reference to the use or set off
of relief shall be construed accordingly.
3. If any Tax authority brings into charge to Tax for the Recipient (or
any member of PowerGen's Group in the event of PowerGen being the Recipient or
the Buyer's Group in the event of the Buyer being the Recipient) any sum paid
under the relevant indemnity or payment covenant then the Payer shall pay to the
Recipient such additional amount as shall be required to ensure that the total
amount paid, less the tax chargeable on such amount, is equal to the amount that
would otherwise be payable under the relevant indemnity or payment covenant.
4. Any additional payment under paragraph 3 (an additional amount)
shall be payable by reference to the accounting period(s) (the relevant
period(s)) in which the sum referred to in paragraph 3 is actually charged to
Tax, taking account of Reliefs available to the Recipient to offset or reduce
any charge to tax which would otherwise arise in accordance with paragraph 5
below. In cases where the sum in question is finally determined to be
chargeable more than 11 months after the beginning of the relevant period, the
payment of the additional amount shall be made, together with an amount equal to
interest (net of any applicable taxes) at 1% above the base rate of HSBC Bank
from that date to the date of payment, within five Business Days of the date the
final determination is made. In other cases where the payment of an
additional amount is due, it shall be payable 11 months after the beginning of
the relevant period.
5. The Recipient will be obliged to use Reliefs available to the
Recipient to offset or reduce any charge to Tax which would otherwise arise to
the Recipient in respect of the sum referred to paragraph 3 in the following
manner. The Recipient shall be obliged to use any Relief available to it in the
relevant period which is not otherwise used by the Recipient in that relevant
period or in prior periods against its other taxable income and chargeable
gains. If such a Relief is so utilised in the relevant period by the Recipient
against the receipt of any sum referred to in paragraph 3 and, in a subsequent
accounting period or periods, the Recipient suffers a charge to Tax as a direct
result of the inability to use the Relief which was so utilised in the relevant
period (having utilised all other Reliefs available to it in that subsequent
period or periods), then the Payer shall pay such additional amount as shall be
required to ensure that the amount of Tax payable by the Recipient in that later
accounting period(s) is no more than it would have been had the Relief so
utilised in the relevant period not been so utilised. Such additional amount
shall be payable by reference to the accounting period(s) (the actual period(s))
in which such charge to Tax is actually suffered. In cases where the charge is
finally determined to be suffered more than 11 months after the beginning of the
actual period, the payment of the additional amount shall be made, together with
an amount equal to interest (net of any applicable tax) at 1% above the base
rate of HSBC Bank from that date to the date of payment, within five Business
Days of the date the final determination is made. In other cases where the
payment of an additional amount is due, it shall be payable 11 months after the
beginning of the actual period.
6. If the matter which gives rise to the relevant indemnity or covenant
claim gives rise to a Relief for the Recipient (or any member of PowerGen's
Group in the event of PowerGen being the Recipient or the Buyer's Group in the
event of the Buyer being the Recipient) which would not otherwise have arisen,
the Recipient shall make a payment to the Payer equal to the amount of Tax
actually saved by virtue of the availability of such Relief.
7. Any payment due under paragraph 6 above shall be payable by reference to
the accounting period (the relevant period) in relation to which the Relief in
question is utilised to reduce or eliminate tax otherwise payable by the
Recipient (treating any Relief deriving from
the payable amounts as being so utilised before any other forms of Relief which
are available to the Recipient where this is in doubt). In cases where the
Relief in question is finally determined to have arisen at a time more than 11
months after the beginning of the relevant period, the payment shall be made
together with an amount equal to interest (net of any applicable tax) at 1%
above the base rate of HSBC Bank from that date to the date of payment, seven
days following the date when the final determination is made. In other cases
where a payment is due, it shall be payable 11 months after the beginning of the
relevant period.
8. If any payment is made in accordance with this Schedule and it later
transpires that taxable amounts or Tax saved through use of a Relief differs
from the relevant amount previously assumed to be chargeable to tax or available
for Relief, any necessary adjustment payments shall be made between the Payer
and the Recipient.
9. In respect of any payment or subsequent adjustment pursuant to this
Schedule, either party may request that the other shall procure that, at the
requesting party's cost, the other party's auditors shall provide to the
requesting party a letter confirming their satisfaction that the principles in
this Schedule are accurately reflected in the amounts and timing of payments
made between the parties under this Schedule. To the extent the auditors
consider that those principles have not been so reflected, any necessary
adjustment payments shall be made between the parties.
SCHEDULE 14
CLAUSE 3.1.2 TERMS
Part 1
(i) Any terms which already exist in the same or reasonably similar form in any
of the licences to generate electricity granted to PowerGen (other than
condition 4), British Energy Generation Ltd, First Hydro Company and
Eastern Merchant Generation Ltd; and
(ii) any terms which implement assurances (if any) given by the Buyer to the
Secretary of State in relation to approval by him of the acquisition of the
Power Station.
Part 2
Any term, in the same or reasonably similar form as any published term, which
appeared as a condition of an assurance or undertaking connected with, or which
was attached to, an approval by the Secretary of State relating to the following
transactions:
(a) the acquisition by Eastern Group plc of generating plant from PowerGen;
(b) the acquisition by Eastern Group plc of generating plant from National
Power PLC;
(including, in the case of paragraphs (a) and (b) above, the consent
issued to Eastern Electricity plc by the Director General of Electricity
Supply dated 19 December 1996 - CON/R/693 (with the exception of the second
dash point of that consent, beginning with the words "to those generating
sets only..." and ending with the words "consents to such use"));
(c) the acquisition by Edison Mission Energy of generating plant from NGC,
whether required to be implemented by way of licence condition (or amendment to
such condition) or in any other manner.
Part 3
(i) Any term in the same or reasonably similar form as any term which appeared
in the Transaction Documents as at the date of their signature;
(ii) any term, in the same or reasonably similar form as any published term,
which appeared as a condition of an assurance or undertaking connected
with, or which was attached to, an approval by the Secretary of State
relating to the following transactions:
(a) the acquisition by Eastern Group plc of generating plant from
PowerGen;
(b) the acquisition by Eastern Group plc of generating plant from
National Power PLC;
(including, in the case of paragraphs (a) and (b) above, the
consent issued to Eastern Electricity plc by the Director General
of Electricity Supply dated 19 December 1996 - CON/R/693 (with the
exception of the second dash point of that consent, beginning with
the words "to those generating sets only..." and ending with the
words "consents to such use"));
(c) the acquisition by Edison Mission Energy of generating plant from
NGC,
whether required to be implemented by way of licence condition (or
amendment to such condition) or in any other manner.
EXECUTED and DELIVERED )
as a DEED )
by _________________________ )
for and on behalf of )
POWERGEN UK plc )
in the presence of: )
SIGNED and DELIVERED )
as a DEED )
for and on behalf of )
EDISON FIRST POWER )
LIMITED )
by _________________________ )
an authorised signatory in accordance )
with the laws of Guernsey )
in the presence of: )
