Exhibit 99(w)
THIS SECOND SUPPLEMENTAL TRUST DEED is made on 26th February, 2002 BETWEEN:
(1) TXU EASTERN FUNDING COMPANY (the "Issuer");
(2) TXU EUROPE LIMITED (the "Guarantor"); and
(3) THE LAW DEBENTURE TRUST CORPORATION p.l.c. (the "Trustee").
WHEREAS:
(A) On 8th March, 2000 the Issuer issued(pound)225,000,000 7.25 per cent. Notes
due 2030 ("Tranche One") constituted by and in accordance with the Trust
Deed dated 15th December, 1999 made between the Issuer, the Guarantor and
the Trustee (the "Principal Trust Deed"), as modified and supplemented by a
Pricing Supplement dated 6th March, 2000 (as subsequently modified, the
"Tranche One Pricing Supplement") and a Supplemental Trust Deed dated 12th
October, 2000 (the "First Supplemental Trust Deed" and, together with the
Principal Trust Deed, the "Subsisting Trust Deeds") made between the
Issuer, the Guarantor and the Trustee. On 12th October, 2000 the Issuer
issued(pound)50,000,000 7.25 per cent. Notes due 2030 ("Tranche Two")
constituted by and in accordance with the Principal Trust Deed as modified
and supplemented by a Pricing Supplement dated 6th October, 2000 (the
"Tranche Two Pricing Supplement" and, together with the Pricing Supplement
dated 6th March, 2000, the "Pricing Supplements"). Tranche One and Tranche
Two are consolidated and form a single series of (pound)275,000,000 7.25
per cent. Notes due 2030 (the "Notes").
(B) This Second Supplemental Trust Deed is supplemental to the Subsisting Trust
Deeds and the Pricing Supplements.
(C) The terms and conditions of the Notes (the "Conditions") are as set out in
the First Schedule to the Principal Trust Deed as modified and supplemented
by the Pricing Supplements and the First Supplemental Trust Deed.
(D) At an adjourned meeting (the "Meeting") of the holders of the Notes (the
"Noteholders") held on 26th February, 2002, the extraordinary resolution
(the "Extraordinary Resolution") set out in the notice convening the
Meeting dated 12th February, 2002 (the "Notice of Meeting") was duly
passed, and the Issuer and the Guarantor are executing this Second
Supplemental Trust Deed in order to give effect to the Extraordinary
Resolution.
(E) The Trustee is executing this Second Supplemental Trust Deed (which is
substantially in the form of the draft submitted to the Meeting) in
accordance with the authorisation and instruction in the Extraordinary
Resolution.
NOW THIS SECOND SUPPLEMENTAL TRUST DEED WITNESSES AND IT IS AGREED AND DECLARED
as follows:
1. INTERPRETATION
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Unless the context otherwise requires, all words and expressions defined in
the Subsisting Trust Deeds and the Pricing Supplements shall have the same
meanings in this Second Supplemental Trust Deed.
2. MODIFICATIONS
2.1 The Issuer represents and warrants to the Trustee that the Eastern Disposal
(as defined in the Notice of Meeting) completed on 18th January, 2002, and
that accordingly the condition referred to the Notice of Meeting to the
modifications hereinafter contained becoming effective has been satisfied.
2.2 Each of the Pricing Supplements is modified with effect from the date
hereof as follows:
2.2.1 by the insertion of the words "(i) On the occurrence of a Potential
Put Event" as a separate line after the words "(e) Redemption at the
option of the Noteholders" in Appendix A;
2.2.2 by the insertion of the following as a separate paragraph immediately
before the words "In this Condition 6(e)":
"(ii) On 8th March, 2015
The Issuer shall, at the option of the holder of any Note, redeem such
Note on 8th March, 2015 at its Redemption Amount together with unpaid
interest accrued to 8th March, 2015.
To exercise such option the holder must deposit such Note (together
with all unmatured Receipts and Coupons and unexchanged Talons) with
any Paying Agent at its specified office, together with a duly
completed option exercise notice ("Exercise Notice") in the form
obtainable from any Paying Agent, not less than 30, nor more than 60,
days prior to 8th March, 2015. No Note so deposited and option
exercised may be withdrawn without the prior consent of the Issuer,
except that such Note will be returned to the relevant Noteholder by
the Paying Agent with which it has been deposited if, prior to the due
date for its redemption or the exercise of the option, the Note
becomes immediately due and payable or if upon due presentation
payment of the redemption moneys is not made or exercise of the option
is denied.";
2.2.3 by the insertion of the following immediately following the
definition of "Control":
"The "Eastern Disposal" means the sale of Eastern Electricity Limited
under an agreement dated 19th November, 2001, as more fully described
in the explanatory memorandum referred to in the Notice of Meeting (as
defined in the second supplemental trust deed dated 26th February,
2002 between the Issuer, the Guarantor and the Trustee)"; and
2.2.4 by the insertion of the words ", save that the Eastern Disposal (and
each stage thereof and any consequences thereof) shall not constitute
a Loss of Control Event" immediately before the full stop at the end
of the definition of "Loss of Control Event".
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2.3 The Issuer and the Trustee each undertake to take all reasonable steps to
procure the holder of the Global Notes representing the Notes to replace
the Pricing Supplements currently attached to such Global Notes with the
revised Tranche One Pricing Supplement and the revised Tranche Two Pricing
Supplement incorporating the above changes which are attached as Annexes I
and II hereto.
3. NOTICE
The Issuer confirms that it will publish notice of the passing of the
Extraordinary Resolution and of the fact that the modifications herein
contained have become effective on the date hereof in accordance with the
Subsisting Trust Deeds. Such notice shall be in a form approved by the
Trustee.
4. INCORPORATION
The Subsisting Trust Deeds, the Pricing Supplements and this Second
Supplemental Trust Deed shall henceforth be read and construed together as
one document.
5. COUNTERPARTS
This Second Supplemental Trust Deed may be executed in one or more
counterparts each of which taken together shall constitute one and the same
instrument.
6. MEMORANDUM
A memorandum of this Second Supplemental Trust Deed shall be endorsed by
the Trustee on the Principal Trust Deed and by the Issuer and the Guarantor
on the duplicates thereof.
7. THIRD PARTY RIGHTS
A person who is not a party to the Subsisting Trust Deeds or this Second
Supplemental Trust Deed has no right under the Contracts (Rights of Third
Parties) Xxx 0000 to enforce any term thereof, but this does not affect any
right or remedy of a third party which exists or is available apart from
that Act.
8. GOVERNING LAW
This Second Supplemental Trust Deed is governed by, and shall be construed
in accordance with, English law.
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ANNEXE I
PRICING SUPPLEMENT
TXU EASTERN FUNDING COMPANY
6th March, 2000
(pound)225,000,000 7.25 per cent. Notes due 2030
issued pursuant to the (euro) 2,000,000,000 Euro Medium Term Note Programme
(the "Programme")
(Terms used herein shall be deemed to be defined as such for the purposes of the
Conditions)
The Notes constitute longer term debt securities issued in accordance with
regulations made under section 4 of the Banking Xxx 0000. The Issuer of the
Notes is not an authorised institution or a European authorised institution (as
such are defined in the Banking Xxx 0000 (Exempt Transactions) Regulations
1997). Repayment of the principal and payment of any interest or premium in
connection with the Notes has been guaranteed by TXU Europe Limited, which is
not an authorised institution or a European authorised institution.
This Pricing Supplement, under which the Notes described herein (the "Notes")
are issued, is supplemental to, and should be read in conjunction with, the
Offering Circular (the "Offering Circular") dated 15th December, 1999 issued in
relation to the Programme. The Notes will be issued on the terms of this Pricing
Supplement read together with the Offering Circular.
Provisions appearing on the face of the Notes
1. Series No.: 1
2. Tranche No.: 1
3. ISIN: XS0108297044
4. Currency: pounds sterling ("(pound)")
5. Nominal Amount of Tranche: (pound)225,000,000
6. Issue Date: 8th March, 2000
Provisions appearing on the back of the Notes
7. Form: Bearer
8. Denomination(s): (pound)1,000,(pound)10,000
and(pound)100,000
9. Redenomination into Euro (of Notes Redenomination not applicable
denominated in a currency that may be
redenominated into Euro in accordance
with Condition 7(i)):
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10. Interest Commencement Date Issue Date
(other than Zero Coupon Notes):
11. Interest Rate (including after Maturity 7.25 per cent. per annum
Date):
12. Interest Payment Date(s) (other than Zero 8th March of every year
Coupon Notes): commencing 8th March, 2001
13. Relevant Time (Floating Rate Notes): N/A
14. Interest Determination Date (Floating Rate N/A
Notes:
15. Primary Source for the Floating Rate N/A
(Floating Rate Notes):
16. Reference Banks (Floating Rate Notes - if N/A
Primary Source is "Reference Banks"):
17. Relevant Financial Centre (Floating Rate N/A
Notes):
18. Benchmark (Floating Rate Notes): N/A
19. Representative Amount (Floating Rate Notes): N/A
20. Relevant Currency (Floating Rate Notes): N/A
21. Effective Date (Floating Rate Notes): N/A
22. Specified Duration (Floating Rate Notes): N/A
23. Margin (if applicable): N/A
24. Rate Multiplier (if applicable): N/A
25. Maximum/Minimum Interest Rate (if N/A
applicable):
26. Maximum/Minimum Instalment Amount (if N/A
applicable):
27. Maximum/Minimum Redemption Amount (if N/A
applicable):
28. Interest Amount (Fixed Rate Note or (pound)72.50 per each(pound)
Variable Coupon Amount Note): 1,000 denomination Note
(pound)725.00 per each(pound)
10,000 denomination Note
(pound)7,250.00 per each
(pound)10,000 denomination
Note
29. Day Count Fraction 30/360
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30. Interest Period Date(s) (if applicable): N/A
31. Redemption Amount (including early Nominal Amount, save for
redemption): early redemption upon the
occurrence of a Category II
Restructuring Event - see
Appendix A hereto
32. Maturity Date: 8th March, 2030
33. Redemption for Taxation Reasons permitted Yes
on days other than Interest Payment Dates:
34. Amortisation Yield (Zero Coupon Notes): N/A
35. Terms of redemption at the option of the N/A
Issuer or description of any other
Issuer's option (if applicable):
36. Issuer's Option Period (if applicable): N/A
37. Terms of redemption at the option See Appendix A hereto
of the Noteholders or description of any
other Noteholders' option (if applicable):
38. Noteholders' Option Period (if applicable): See Appendix A hereto
39. Instalment Date(s) (if applicable): N/A
40. Instalment Amount(s) (if applicable): N/A
41. Unmatured Coupons to become void Yes
upon early redemption:
42. Talons to be attached to Notes and, if Yes in respect of Definitive
applicable, the number of Notes (15 Interest
Interest Payment Dates between the Payment Dates between the
maturity of each Talon) (if applicable): maturity of each Talon)
43. Business Day Jurisdictions for London
Condition 7(g) (jurisdictions required
to be open for payment):
44. Additional steps that may only be taken N/A
following approval by an Extraordinary
Resolution in accordance with Condition
11(a) (if applicable):
45. Details of any other additions or See Appendix B
variations to the Conditions (if
applicable):
46. The Agents appointed in respect of the Citibank, N.A.
Notes are:
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Provisions applicable to Global Notes and Global Certificates
47. Notes to be represented on issue by: Temporary Global Note
48. Applicable TEFRA exemption (if "C TEFRA D
Rules" or "not applicable"):
49. Temporary Global Note exchangeable for The Temporary Global Note
Definitive Notes (if yes): is exchangeable for
interests in the Permanent
Global Note upon
certification as to non-U.S.
beneficial ownership not
earlier than 40 days after
the Issue Date
50. Permanent Global Note exchangeable The Permanent Global Note
for Definitive Notes at the request of is exchangeable in whole,
the holder (if yes) but not in part, for
Definitive Notes (with
attached Coupons and Talons):
(i) upon not less than 60
days' written notice
being given to the
Issuing and Paying Agent
by Euroclear and/or
Clearstream, Luxembourg,
(acting on the
instructions of any
holder of an interest in
the Permanent Global
Note); or
(ii) not later than 60 days
after the receipt of
notice by the Issuing
and Paying Agent from
Euroclear and/or
Clearstream, Luxembourg
(acting on the
instructions of any
holder of an interest in
the Permanent Global
Note) or the Trustee
following the occurrence
of an Exchange Event,
where "Exchange Event"
means:
(1) an Event of Default
has occurred and is
continuing;
(2) the Issuer has been
notified that either
Euroclear or
Clearstream,
Luxembourg has been
closed for business
for a continuous
period of 14 days
(other than by
reason of holiday,
statutory or
otherwise) or has
announced an
intention
permanently to cease
business or has in
fact done so and no
alternative clearing
system satisfactory
to
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the Trustee is
available; or
(3) the Issuer has or
will become obliged
to pay additional
amounts as provided
for or referred to
in Condition 8 which
would not be
required were the
Notes in definitive
form.
Provisions relating only to the sale and listing of the Notes
51. Issue Price: 99.428 per cent.
52. Details of any additions or variations N/A
to the selling restrictions:
53. Listing: Luxembourg
54. Dealer's Commission: 0.25 per cent.
55. Method of issue of Notes: Syndicated Issue
56. The following Dealers are subscribing the Barclays Bank PLC
Notes: Deutsche Bank AG London
The Royal Bank of Scotland
plc
57. Common Code: 010829704
58. Net Proceeds: (pound)222,306,750
59. Use of Proceeds (if different from that N/A
stated in the Offering Circular):
The Issuer confirms that:
(a) as at the date hereof, it has complied with its obligations under the
listing rules of the Luxembourg Stock Exchange in relation to the admission
to, and continuing listing of, the Programme and of any previous issues
made under it and listed on the same exchange as the Programme; and
(b) it will have complied with its obligations under the listing rules of the
Luxembourg Stock Exchange by the time when the Notes are so admitted; and
(c) as at the date hereof, it has not, since the last publication of
information in compliance with the listing rules of the Luxembourg Stock
Exchange about the Programme, any previous issues made under the Programme
and listed on the Luxembourg Stock Exchange, or the Notes, having made all
reasonable enquiries, become aware of any change in circumstances which
could reasonably be regarded as significantly and adversely affecting its
ability to meet its obligations as issuer in respect of the Notes as they
fall due; and
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(d) as at the date hereof, it has complied and will continue to comply with,
its obligations under the Banking Xxx 0000 (Exempt Transactions)
Regulations 1997 to lodge all relevant information in relation to the Notes
with the London Stock Exchange.
Responsibility
The Issuer and the Guarantor accept responsibility for the information appearing
in this Pricing Supplement.
Signed on behalf of the Issuer Signed on behalf of the Guarantor
By: By:
------------------------------- -------------------------------
Duly Authorised Signatory Duly Authorised Signatory
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APPENDIX A
Condition 6(e) is deleted and replaced with the following:
"(e) Redemption at the option of the Noteholders
(i) On the occurrence of a Potential Put Event
If, at any time while any of the Notes remains outstanding, a Potential Put
Event occurs and during the Relevant Period, or (other than where the
Potential Put Event is a Category II Restructuring Event) prior to the
commencement of the Relevant Period, an Independent Financial Adviser shall
have certified in writing to the Trustee that such Potential Put Event will
not be or is not, in its opinion, materially prejudicial to the interests
of the Noteholders, the following provisions of this Condition 6(e) shall
cease to have any effect in relation to such Potential Put Event.
If, at any time while any of the Notes remains outstanding, a Potential Put
Event occurs and an Independent Financial Adviser shall have certified in
writing to the Trustee that such Potential Put Event is, in its opinion,
materially prejudicial to the interests of the Noteholders (a "Negative
Certification"), then, unless at any time the Issuer shall have given a
notice under Condition 6(c), the holder of each Note will, upon the giving
of a Put Event Notice (as defined below), have the option (the "Put
Option") to require the Issuer to redeem or, at the option of the Issuer,
purchase (or procure the purchase of) that Note on the Put Date (as defined
below), at its Put Event Redemption Amount together with (or, where
purchased, together with an amount equal to) interest (if any) accrued to
(but excluding) the Put Date.
Any certification by an Independent Financial Adviser as aforesaid as to
whether or not, in its opinion any Potential Put Event is materially
prejudicial to the interests of the Noteholders shall, in the absence of
manifest error, be conclusive and binding on the Trustee, the Issuer, the
Guarantor and the Noteholders.
Promptly upon, and in any event within 14 days after, the Issuer becoming
aware that a Potential Put Event has occurred, the Issuer shall, and at any
time upon the Trustee becoming similarly so aware the Trustee may, and if
so requested by the holders of at least one-quarter in nominal amount of
the Notes then outstanding shall, give notice (a "Put Event Notice") to the
Noteholders in accordance with Condition 16 specifying the nature of the
Potential Put Event and the procedure for exercising the Put Option,
provided that where the Potential Put Event is a Category II Restructuring
Event the Issuer shall again give such notice 90 days prior to the
Revocation Date (such latter notice, a "Category II Put Event Notice").
To exercise the Put Option, the holder of a Note must deposit such Note
with any Paying Agent at its specified office, on a day which is a Business
Day in the City of London and in the place of such specified office falling
within the period (the "Put Period") of (i), in the case where the Put
Option is in respect of an event other than a Category II Restructuring
Event, 45 days after that on which a Put Event Notice is given or (ii)
otherwise, at any time up to 15 days prior to the Put Date, accompanied by
a duly completed and signed notice of exercise in the form (for the time
being current) obtainable from any specified office of any Paying Agent (a
"Put Notice") and in which the holder may specify a bank account to which
payment is to be made under this Condition 6. Where any Note is delivered
without all Coupons relating to it which mature after the day (the "Put
Date") being (i) in the case where the Put Option is in respect of
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an event other than a Category II Restructuring Event, the fifteenth day
after the date of expiry of the Put Period or (ii) otherwise, the
Revocation Date (provided that such day is a Business Day in the City of
London, otherwise the next day which is a Business Day in the City of
London), the exercise of the Put Option in respect of such Note shall be
subject to the provision of such indemnity as the Issuer may reasonably
require. The Paying Agent to which such Note and Put Notice are delivered
shall issue to the Noteholder concerned a non-transferable receipt in
respect of the Note so delivered. Payment in respect of any Note so
delivered shall be made, if the holder duly specifies in the Put Notice an
account with a bank to which payment is to be made, on the Put Date by
transfer to that bank account and, in every other case, on or after the Put
Date in each case against presentation and surrender or (as the case may
be) endorsement of such receipt at any specified office of any Paying
Agent. A Put Notice, once given, shall be irrevocable. For the purposes of
Conditions 9, 10, 11, 12, 14, 16 and 17 and for certain other purposes
specified in the Trust Deed, receipts issued pursuant to this Condition
6(e) shall be treated as if they were Notes. The Issuer shall redeem or, at
the option of the Issuer, purchase (or procure the purchase of) the
relevant Note on the applicable Put Date unless previously redeemed or
purchased.
The Trustee is under no obligation to ascertain whether a Potential Put
Event or any event which could lead to the occurrence of, or could
constitute a, Potential Put Event has occurred and until it shall have
actual knowledge or express notice to the contrary, the Trustee may assume
that no Potential Put Event or such other event has occurred.
(ii) On 8th March, 2015
The Issuer shall, at the option of the holder of any Note, redeem such Note
on 8th March, 2015 at its Redemption Amount together with unpaid interest
accrued to 8th March, 2015.
To exercise such option the holder must deposit such Note (together with
all unmatured Receipts and Coupons and unexchanged Talons) with any Paying
Agent at its specified office, together with a duly completed option
exercise notice ("Exercise Notice") in the form obtainable from any Paying
Agent, not less than 30, nor more than 60, days prior to 8th March, 2015.
No Note so deposited and option exercised may be withdrawn without the
prior consent of the Issuer, except that such Note will be returned to the
relevant Noteholder by the Paying Agent with which it has been deposited
if, prior to the due date for its redemption or the exercise of the option,
the Note becomes immediately due and payable or if upon due presentation
payment of the redemption moneys is not made or exercise of the option is
denied.
In this Condition 6(e):
"Business Day" means, in relation to any place, a day on which commercial banks
and foreign exchange markets generally settle payments in that place.
"Category I Restructuring Event" means the occurrence of any one or more of the
following events:
(A) (aa) the Secretary of State and/or Director General of Electricity Supply
(or any successor) gives the Guarantor or the holder of the PES
Licence written notice of revocation (or issues a public notice
generally) of the PES Licence (excluding any second tier supply
licence and provided that the giving of notice pursuant to paragraph 3
of Part 1 of the PES Licence in each case as in effect on the date of
the Pricing Supplement, or any
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other similar provision in any other PES Licence, shall not be deemed
to constitute the revocation of the PES Licence); or
(bb) the Guarantor or the holder of the PES Licence agrees in writing with
the Secretary of State and/or Director General of Electricity Supply
to any revocation or surrender of the PES Licence; or
(cc) any legislation (whether primary or subordinate) is enacted
terminating or revoking the PES Licence,
except in any such case in circumstances where a licence or licences (each,
a "Successor Licence") on substantially not less favourable terms is or are
granted to the Guarantor or one or more Relevant Subsidiaries or
Subsidiaries (not being an Excluded Subsidiary) of the Guarantor at least
51 per cent. of the ordinary share capital of which is owned directly or
indirectly by the Guarantor and which is Controlled by the Guarantor; or
(B) any modification (other than a modification which is of a formal, minor or
technical nature) is made to the terms and conditions of the, PES Licence
on or after the date of the Pricing Supplement, unless two directors of the
Guarantor have certified in good faith to the Trustee that the modified
terms and conditions are not materially less favourable to the business of
the Group; or
(C) (aa) the Pooling and Settlement Agreement is terminated under Clause 67.4
thereof and not replaced by one or more agreements commercial
arrangements or open market mechanisms or frameworks, in each case on
terms which two directors of the Guarantor certify in good faith to
the Trustee to be not materially less favourable to the business of
the Group; or
(bb) a holder of the PES Licence is given notice pursuant to Clause 67.3.2
of the Pooling and Settlement Agreement requiring it to cease to be a
party thereto; or
(cc) any notice declaring an event of default (as defined in the Pooling
and Settlement Agreement) is given to a holder of the PES Licence
under Clause 66.1.1 or 66.2 thereof and such default remains
unremedied or unwaived; or
(dd) any modification (other than a modification which is of a formal,
minor or technical nature) is made to the Pooling and Settlement
Agreement on or after the date of the Pricing Supplement, unless two
directors of the Guarantor have certified in good faith to the Trustee
that any such modification has not had and will not have a materially
adverse effect on the financial rights and obligations of a holder of
the PES Licence under the Pooling and Settlement Agreement or a
materially adverse effect on the business of the Group, provided that
any such modification shall, to the extent it grants or confers powers
or discretions on the Director General of Electricity Supply (or any
successor) under or in respect of the Pooling and Settlement
Agreement, be deemed not to have a materially adverse effect as
aforesaid, but for the avoidance of doubt any modification to the
Pooling and Settlement Agreement made by the Director General of
Electricity Supply (or any successor) by virtue of or pursuant to any
such powers or discretions and which otherwise would have a materially
adverse effect as provided above shall not by virtue of this
sub-paragraph be deemed not to have such an effect; or
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(ee) a holder of the PES Licence ceases to be a party to the Pooling and
Settlement Agreement for any other reason (other than pursuant to (bb)
and (cc) above) except where a licence or licences is or are granted
to one or more Subsidiaries as contemplated by sub-paragraph (A) above
and at or about the same time all rights and obligations of such
holder pursuant to the Pooling of Settlement Agreement which are
attributable to such licence(s) are assigned and transferred to such
Subsidiary and/or Subsidiaries in such manner as the Trustee may
approve (such approval not to be unreasonably withheld or delayed) or
such Subsidiary or Subsidiaries enters or enter into one or more
agreements, commercial arrangements or open market mechanisms or
frameworks in relation to such licence(s) which two directors of each
of the Issuer and Guarantor certify to be not materially less
favourable to the business of the Group; or
(D) any legislation (whether primary or subordinate) is enacted which removes,
qualifies or amends (other than an amendment which if of a formal, minor or
technical nature) the duties of the Secretary of State and/or the Director
General of Electricity Supply under Section 3 of the Electricity Act as in
force on the date of the Pricing Supplement, unless two directors of the
Guarantor have certified in good faith to the Trustee that such removal,
qualification or amendment is unlikely to have a materially adverse effect
on the financial condition of the Group or any Relevant Subsidiary.
A "Category II Restructuring Event" occurs where the Secretary of State and/or
Director General of Electricity Supply (or any successor) gives the Guarantor or
the holder of the PES Licence written notice of revocation (or issues a public
notice generally) of the PES Licence pursuant to paragraph 3 of Part 1 of the
PES Licence, except in any such case in circumstances where a licence or
licences (each, a "Successor Licence") on substantially not less favourable
terms is or are granted to the Guarantor or one or more Relevant Subsidiaries or
Subsidiaries (not being an Excluded Subsidiary) of the Guarantor at least 51 per
cent. of the ordinary share capital of which is owned directly or indirectly by
the Guarantor and which is Controlled by the Guarantor.
"Control" means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person, whether through
the ownership of voting securities, by contract or otherwise (and references to
"Controlled" shall be construed accordingly).
The "Eastern Disposal" means the sale of Eastern Electricity Limited under an
agreement dated 19th November, 2001, as more fully described in the explanatory
memorandum referred to in the Notice of Meeting (as defined in the second
supplemental trust deed dated 26th February, 2002 between the Issuer, the
Guarantor and the Trustee).
"Electricity Act" means the Electricity Xxx 0000 as amended or re-enacted from
time to time and all subordinate legislation made pursuant thereto.
"Excluded Subsidiary" means any Subsidiary of the Guarantor:
(i) which is a single purpose company whose principal assets and business
comprise the ownership, acquisition, development and/or operation of assets
comprising a Project;
(ii) in its capacity as a partner in, and whose only material asset is its
interest in, a single purpose partnership whose principal assets and
business comprise a Project (as defined in Condition 10 (Events of
Default));
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(iii)none of whose indebtedness for borrowed money in respect of the financing
of such ownership, acquisition, development and/or operation of such assets
comprising a Project is subject to any recourse whatsoever to any member of
the Group (other than such Subsidiary or another Excluded Subsidiary) in
respect of the repayment thereof, except as expressly referred to in
sub-paragraph (ii) of the definition of Project Finance Indebtedness (as
defined in Condition 10 (Events of Default)); and
(iv) which has been designated as such by the Guarantor by written notice to the
Trustee,
provided that the Guarantor may give notice to the Trustee at any time that any
Excluded Subsidiary is no longer an Excluded Subsidiary, whereupon it shall
cease to be an Excluded Subsidiary.
"Generation Licence" means the electricity generation licence granted by the
Secretary of State to Eastern Merchant Generation Limited under the Electricity
Act as in effect on the date of the Pricing Supplement.
The "Gross Redemption Yield" on the Notes and the Reference Stock will be
expressed as a percentage and will be calculated on the basis indicated by the
Joint Index and Classification Committee of the Institute and Faculty of
Actuaries as reported in the Journal of the Institute of Actuaries, Vol. 105,
Part I, 1978, page 18 or such other basis as the Trustee may approve.
"Group" means the Guarantor and its Subsidiary Undertakings and "member of the
Group" shall be construed accordingly.
"indebtedness for borrowed money" means any present or future indebtedness
(whether being principal, premium, interest or other amounts) for or in respect
of (i) money borrowed, (ii) liabilities under or in respect of any acceptance or
acceptance credit, or (iii) any notes, bonds, debentures, debenture stock, loan
stock or other securities offered, issued or distributed whether by way of
public offer, private placing, acquisition consideration or otherwise and
whether issued for cash or in whole or in part or for a consideration other than
cash.
"Independent Financial Adviser" means a financial adviser appointed by the
Issuer and approved by the Trustee (such approval not to be unreasonably
withheld or delayed) or, if the Issuer shall not have appointed such an adviser
within 21 days after becoming aware of the occurrence of a Potential Put Event
and the Trustee is indemnified to its satisfaction against the costs of such
adviser, a financial adviser appointed by the Trustee following consultation
with the Issuer.
A "Loss of Control Event" occurs where TXU Europe Limited ceases to own directly
or indirectly at least a majority of the ordinary share capital of TXU Europe
Group plc and all Principal Subsidiaries (as defined in Condition 10 (Events of
Default)) or ceases to Control TXU Europe Group plc and all Principal
Subsidiaries, save that the Eastern Disposal (and each stage thereof and any
consequences thereof) shall not constitute a Loss of Control Event.
"PES Licence" means the public electricity supply licence granted by the
Secretary of State to Eastern Electricity plc under the Electricity Act (but for
the avoidance of doubt excluding for this purpose any second tier licence) as in
effect on the date of the Pricing Supplement and/or any Successor Licence.
"Potential Put Event" means any of (a) a Rating Downgrade Event, (b) a Loss of
Control Event, (c) a Category I Restructuring Event or (d) a Category II
Restructuring Event.
15
"Pooling and Settlement Agreement" means the agreement dated 30th March, 1990
(as amended and restated as at 22nd April, 1994) made by Eastern Electricity plc
with The National Grid Company plc and others setting out the rules and
procedures for the operation of an electricity trading pool and of a settlement
system and, while the same has effect, the Initial Settlement Agreement also
dated 30th March, 1990 and made between the same parties, in each case as in
force on the date of the Pricing Supplement.
A "Put Event" occurs on the date of the last to occur of (a) a Potential Put
Event and (b) the relevant Negative Certification.
The "Put Event Redemption Amount" of a Note means its principal amount, save
that where the Put Event arose as a result of a Category II Restructuring Event
"Put Event Redemption Amount" means the higher of:
(i) the principal amount thereof; and
(ii) that price (the "Redemption Price"), expressed as a percentage rounded to
three decimal places (0.0005 being rounded downwards), at which the Gross
Redemption Yield on the Notes, if they were to be purchased at such price
on the third dealing day prior to the publication of the Category II Put
Event Notice, would be equal to the Gross Redemption Yield on such dealing
day of the 6 per cent. Treasury Stock due 7th December, 2028 or such other
United Kingdom Government Stock as the Trustee, with the advice of three
leading brokers operating in the gilt-edged market and/or gilt-edged market
makers, shall determine to be appropriate (the "Reference Stock") on the
basis of the middle market price of the Reference Stock prevailing on such
dealing day, as determined by Deutsche Bank AG London (or such other
person(s) as the Trustee may approve). Any reference in the Terms and
Conditions to "principal" shall be deemed to include any sum payable as the
Redemption Price.
"Rated Securities" means the Notes, if at any time and for so long as they have
a rating from a Rating Agency, and otherwise any other unsecured and
unsubordinated debt of the Issuer or a Relevant Subsidiary (or of any Subsidiary
of the Guarantor which is guaranteed on an unsecured and unsubordinated basis by
the Guarantor or a Relevant Subsidiary) having an initial maturity of five years
or more which is rated by a Rating Agency.
"Rating Agency" means any of Standard & Poor's Rating Service, a division of the
XxXxxx-Xxxx Companies, Inc., Xxxxx'x Investors Service Limited or Duff & Xxxxxx
Credit Rating Co. or any of their respective Subsidiaries and their successors
or any rating agency substituted for either of them (or any permitted substitute
of them) by the Issuer from time to time with the prior written approval of the
Trustee (such approval not to be unreasonably withheld or delayed).
A "Rating Downgrade Event" shall be deemed to have occurred if the then current
rating assigned to the Rated Securities by any Rating Agency (whether provided
by a Rating Agency at the invitation of the Issuer or by its own volition) is
withdrawn or reduced from an investment grade rating (BBB-/Baa3, or their
respective equivalents for the time being, or better) to a non-investment grade
rating (BB+/Ba1, or their respective equivalents for the time being, or worse)
or, if the Rating Agency shall then have already rated the Rated Securities
below investment grade (as described above), the rating is lowered one full
rating category (from BB+/Ba1 to BB/Ba2 or such similar lowering), PROVIDED that
a Rating Downgrade Event shall be deemed not to have occurred if the rating
assigned to the Rated Securities by each Rating Agency making the relevant
reduction in rating or, where applicable,
16
declining to assign a rating of at least investment grade as provided in this
Condition 6(e), is subsequently increased to, or, as the case may be, there is
assigned to the Notes or other unsecured and unsubordinated debt of the Issuer,
the Guarantor or a Relevant Subsidiary (or of any Subsidiary of the Guarantor
which is guaranteed on an unsecured and unsubordinated basis by the Guarantor or
a Relevant Subsidiary) having an initial maturity of five years or more by such
Rating Agency, an investment grade rating (BBB-/Baa3 or their respective
equivalents for the time being) or better prior to any Negative Certification
being issued.
"Relevant Indebtedness" means any present or future indebtedness (whether being
principal, premium, interest or other amounts) in the form of or represented by
notes, bonds, debentures, debenture stock, loan stock or other securities,
whether issued for cash or in whole or in part for a consideration other than
cash, and which, with the agreement of the person issuing the same, are quoted,
listed or ordinarily dealt in on any stock exchange or recognised
over-the-counter or other securities market, but shall in any event not include
Project Finance Indebtedness.
"Relevant Licences" means the Generation Licence and the PES Licence and, in any
such case, and from time to time any other licence or licences relating to the
generation and/or distribution of electricity granted to the Guarantor and/or
any Relevant Subsidiary or Subsidiary as contemplated pursuant to paragraph (A)
of "Category I Restructuring Event" below and "Relevant Licence" shall be
construed accordingly.
"Relevant Period" means the period of 90 days, starting from and including the
day on which the Category I Restructuring Event, Rating Downgrade Event or Loss
of Control Event, as the case may be, occurs or, in relation to a Category II
Restructuring Event, the period commencing 90 days prior to the Put Date up to
but excluding the Put Date.
"Relevant Subsidiary" means a member of the Group that holds a Relevant Licence.
"Revocation Date" means the date of the determination of the PES Licence
following the 25 year notice period pursuant to a Category II Restructuring
Event.
"Secretary of State" means the Secretary of State for Trade and Industry (or any
successor).
"Subsidiary" means a "subsidiary" within the meaning of Section 736 of the
Companies Act.
"Subsidiary Undertaking" shall have the meaning given to it by Section 258 of
the Companies Xxx 0000 (but, in relation to the Issuer, shall exclude any
undertaking (as defined in the Companies Act 1985) whose accounts are not
included in the then latest published audited consolidated accounts of the
Issuer, or (in the case of an undertaking which has first become a subsidiary
undertaking of a member of the Group since the date as at which any such audited
accounts were prepared) would not have been so included or consolidated if it
had become so on or before that date).
Any reference to an obligation being guaranteed shall include a reference to an
indemnity being given in respect of the obligation."
00
XXXXXXXX X
1. The following new Condition 18 is inserted after Condition 17:
"18 Financial Covenant
(a) Interest Cover Covenant
The Guarantor shall ensure that at each financial year end by reference to the
annual audited consolidated financial statements of the Group produced under US
GAAP, the ratio of Net Revenues to Net Interest in respect of the immediately
preceding 12 months shall not be less than 1.75 to 1.0;
where:
"Distribution" means any payment of dividends or other distribution and any
return of capital including, without limitation, any payment in respect of, or
on the redemption of, any share capital whether at a premium or otherwise, or
any payment in respect of indebtedness for borrowed money to any person in the
Group or to any person on their behalf, whether in cash or in kind and whether
by way of interest, repayment of principal or otherwise and shall, for the
avoidance of doubt, include any payment in respect of Subordinated Debt and
Subordinated Loan Stock;
"Net Interest" includes, in relation to any period, the aggregate amount of all
of the following insofar as they are payable by, or accrue in respect of
indebtedness of, any member of the Group (except to another member of the Group)
during that period: interest, commissions and fees in respect of moneys
borrowed, discounts in respect of bills, notes or debts discounted, and that
part of any amount under a financing lease or hire purchase, credit sale,
conditional sale or deferred payment agreement which represents any of the
foregoing save for interest payments in respect of Subordinated Debt or which
constitute Distributions less the aggregate amount of interest income of the
Group (excluding such income from another member of the Group) for such period.
For this purpose, a discount shall be apportioned in accordance with US GAAP
over the period for which that xxxx, note or debt is to be outstanding and shall
be deemed to accrue from day to day during that period;
"Net Revenues" means, in relation to any period, the consolidated income of the
Group for that period before Tax, interest and minority interests and before all
extraordinary items, all as shown in the statements of consolidated income of
the Group for that period, adding back all amounts provided (through the
statements of consolidated income) for depreciation, goodwill and amortisation;
"Subordinated Debt" means any indebtedness for borrowed money of the Issuer
which ranks subordinate to the Notes under the former's terms and conditions;
"Subordinated Loan Stock" means any loan stock issued by the Issuer which is not
redeemable at the instance of the holder thereof on terms whereby all payments
thereunder rank subordinate to the Notes under the terms of the relevant loan
documentation; and
"Taxes" or "Tax" means any present or future taxes of any nature (including,
without limitation, value added tax), levy, impost, duty or other charge of a
similar nature now or hereafter imposed by the laws of the United Kingdom or the
United States and any other jurisdiction or any political subdivision thereof
(including, without limitation, any penalty or interest payable in connection
with any failure to pay or any delay in paying the same).
18
(b) Certification of Compliance with Interest Cover Covenant
The Guarantor will, within 10 Business Days (as defined in Condition 6(e)) in
London ("London Business Day") of the filing with the Registrar of Companies of
each set of yearly audited financial statements, deliver to the Trustee a
certificate signed on its behalf by two of their respective directors or one
director and the Company Secretary:
(i) confirming compliance with Condition 18(a) as at the end of the preceding
financial year; and
(ii) setting out in reasonable detail and in a form satisfactory to the Trustee
the computations necessary to demonstrate such compliance.
(c) Auditor's Certification of Compliance
Within 30 London Business Days of the filing with the Registrar of Companies of
such financial statements in Condition 18(b), the Guarantor will deliver to the
Trustee a certificate of the independent auditors of the Guarantor confirming
compliance with Condition 18(a) as at the end of the preceding financial
period.".
2. Paragraph (f) of Condition 6 (Redemption, Purchase and Options) is amended by
deleting the phrase "at any time" in the second line of the first sentence and
by inserting the following text after the word "price" at the end of that
sentence: ", provided that such purchase(s) may only take place at any time
after the third anniversary of the Issue Date".
3. Paragraph (b) of Condition 10 (Events of Default) is amended by inserting the
following text between the words "Notes" and "the Guarantee" in the second line
of that paragraph: "(which, for the avoidance of doubt, includes the Guarantor's
obligations under Condition 18(a), 18(b) and 18(c))"
4. Paragraph (i) of Condition 10 (Events of Default) is deleted.
19
ANNEXE II
PRICING SUPPLEMENT
TXU EASTERN FUNDING COMPANY
6th October, 2000
(pound)50,000,000,000 7.25 per cent. Notes due 2030 issued pursuant to the
(euro)2,000,000,000 Euro Medium Term Note Programme (the "Programme") to be
consolidated and form a single series with the(pound) 225,000,000 7.25 per cent.
Notes due 2030 issued on 8th March, 2000 ("Tranche 1")
(Terms used herein shall be deemed to be defined as such for the purposes of the
Conditions)
The Notes constitute longer term debt securities issued in accordance with
regulations made under section 4 of the Banking Xxx 0000. The Issuer of the
Notes is not an authorised institution or a European authorised institution (as
such are defined in the Banking Xxx 0000 (Exempt Transactions) Regulations
1997). Repayment of the principal and payment of any interest or premium in
connection with Notes has been guaranteed by TXU Europe Limited, which is not an
authorised institution or a European authorised institution.
This Pricing Supplement, under which the Notes described herein (the "Notes")
are issued, is supplemental to, and should be read in conjunction with, the
Offering Circular (the "Offering Circular") dated 15th December, 1999 issued in
relation to the Programme. The Notes will be issued on the terms of this Pricing
Supplement read together with the Offering Circular.
Provisions appearing on the face of the Notes
1 Series No: 1
2. Tranche No: 2
3. ISIN: XS0108297044 on
consolidation with Tranche
1 issued on 8th March, 2000
4. Temporary ISIN: XS0118715183
5. Currency: pounds sterling ("(pound)")
6. Nominal Amount of Tranche: (pound)50,000,000
7. Issue Date: 12th October, 2000
Provisions appearing on the back of the Notes
8. Form: Bearer
20
9. Denomination(s): (pound)1,000,(pound)10,000
and(pound)100,000
10. Redenomination into Euro (of Notes Redenomination not applicable
denominated in a currency that may be
redenominated into Euro in accordance
with Condition 7(i)):
11. Interest Commencement Date (other than 8th March, 2000
Zero Coupon Notes):
12. Interest Rate (including after Maturity 7.25 per cent. per annum
Date):
13. Interest Payment Date(s) (other than Zero 8th March of every year
Coupon Notes): commencing 8th March, 2001
14. Relevant Time (Floating Rate Notes): N/A
15. Interest Determination Date (Floating N/A
Rate Notes):
16. Primary Source for the Floating Rate N/A
(Floating Rate Notes):
17. Reference Banks (Floating Rate Notes - if N/A
Primary Source is "Reference Banks"):
18. Relevant Financial Centre (Floating Rate N/A
Notes):
19. Benchmark (Floating Rate Notes): N/A
20. Representative Amount (Floating Rate N/A
Notes):
21. Relevant Currency (Floating Rate Notes): N/A
22. Effective Date (Floating Rate Notes): N/A
23. Specified Duration (Floating Rate Notes): N/A
24. Margin (if applicable): N/A
25. Rate Multiplier (if applicable): N/A
26. Maximum/Minimum Interest Rate (if N/A
applicable):
21
27. Maximum/Minimum Instalment Amount (if N/A
applicable):
28. Maximum/Minimum Redemption Amount (if N/A
applicable):
29. Interest Amount (Fixed Rate Note or (pound)72.50 per each(pound)
Variable Coupon Amount Note): 1,000 denomination Note
(pound)725.00 per each(pound)
10,000 denomination Note
(pound)7,250.00 per each
(pound)100,000 denomination
Note
30. Day Count Fraction: 30/360
31. Interest Period Date(s) (if applicable): N/A
32. Redemption Amount (including early Nominal Amount, save for
redemption): early redemption upon the
occurrence of a Category II
Restructuring Event - see
Appendix A hereto
33. Maturity Date: 8th March, 2030
34. Redemption for Taxation Reasons permitted Yes
on days other than Interest Payment Dates:
35. Amortisation Yield (Zero Coupon Notes): N/A
36. Terms of redemption at the option of the N/A
Issuer or description of any other
Issuer's option (if applicable):
37. Issuer's Option Period (if applicable): N/A
38. Terms of redemption at the option of the See Appendix A hereto
Noteholders or description of any other
Noteholders' option (if applicable):
39. Noteholders' Option Period (if See Appendix A hereto
applicable):
40. Instalment Date(s) (if applicable): N/A
41. Instalment Amount(s) (if applicable): N/A
42. Unmatured Coupons to become void upon Yes
early redemption:
43. Talons to be attached to Notes and, if Yes in respect of Definitive
applicable, the number of Interest Notes 15 Interest Payment
Payment Dates between maturity of Dates between the maturity
22
each Talon (if applicable): of the Talon
44. Business Day Jurisdictions for London
Condition 7(g) (jurisdictions required
to be open for payment):
45. Additional steps that may only be taken N/A
following approval by an Extraordinary
Resolution in accordance with
Condition 11(a) (if applicable):
46. Details of any other additions or See Appendix B
variations to the Conditions (if
applicable):
47. The Agents appointed in respect of Citibank, N.A.
the Notes are (*):
Provisions applicable to Global Notes and Global Certificates
48. Notes to be represented on issue by: Temporary Global Note
49. Applicable TEFRA exemption (if "C Rules" TEFRA D
or "not applicable"):
50. Temporary Global Note exchangeable The Temporary Global Note
for Definitive Notes: is exchangeable for interests
in the Permanent Global Note
upon certification as to
non-U.S. beneficial ownership
not earlier than 40 days
after the Issuer Date
51. Permanent Global Note exchangeable The Permanent Global Note is
for Definitive Notes at the request exchangeable in whole, but
of the holder (if yes): not in part, for Definitive
Notes with attached Coupons
and Talons):
(i) upon not less than 60
days' written notice
being given to the
Issuing and Paying Agent
by Euroclear and/or
Clearstream, Luxembourg,
(acting on the
instructions of any
holder of an interest in
the Permanent Global
Note); or
(ii) not later than 60 days
after the receipt of
notice by the Issuing
and Paying Agent from
Euroclear and/or
Clearstream, Luxembourg
(acting on the
instructions of any
holder of an interest in
the Permanent Global
Note) or the Trustee
following the occurrence
of an Exchange Event,
where "Exchange Event"
means:
23
(1) an Event of Default
has occurred and is
continuing;
(2) the Issuer has been
notified that either
Euroclear or
Clearstream,
Luxembourg has been
closed for business
for a continuous
period of 14 days
(other than by
reason of holiday,
statutory or
otherwise) or has
announced an
intention
permanently to cease
business or has in
fact done so and no
alternative clearing
system satisfactory
to the Trustee is
available; or
(3) the Issuer has or
will become obliged
to pay additional
amounts as provided
for or referred to
in Condition 8 which
would not be
required were the
Notes in definitive
form.
Provisions relating only to the sale and listing of the Notes
52. Issue Price: 99.755 per cent., plus 214
days accrued interest
53. Details of any additions or variations to N/A
the selling restrictions:
54. Listing: Luxembourg
55. Dealer's Commission: N/A
56. Method of issue of Notes: Non-Syndicated
57. The following Dealers subscribing the Royal Bank of Canada Europe
Notes: Limited
58. Common Code: 010829704 on consolidation
with Tranche 1 issued on 8th
March, 2000
59. Temporary Common Code: 11871518
60. Net Proceeds: (pound)52,012.361
61. Use of Proceeds (if different from that N/A
stated in the Offering Circular):
The Issuer confirms that:
(a) as at the date hereof, it has complied with its obligations under the
listing rules of the Luxembourg Stock Exchange in relation to the admission
to, and continuing listing of, the
24
Programme and of any previous issues made under it and listed on the same
exchange as the Programme;
(b) it will have complied with its obligations under the listing rules of the
Luxembourg Stock Exchange by the time when the Notes are so admitted;
(c) as at the date hereof, it has not, since the last publication of
information in compliance with the listing rules of the Luxembourg Stock
Exchange about the Programme, any previous issues made under the Programme
and listed on the Luxembourg Stock Exchange, or the Notes, having made all
reasonable enquiries, become aware of any change in circumstances which
could reasonably be regarded as significantly and adversely affecting its
ability to meet its obligations as issuer in respect of the Notes as they
fall due; and
(d) as at the date hereof, it has complied and will continue to comply with,
its obligations under the Banking Xxx 0000 (Exempt Transactions)
Regulations 1997 to lodge all relevant information in relation to the Notes
with the London Stock Exchange.
Responsibility
The Issuer and the Guarantor accept responsibility for the information appearing
in this Pricing Supplement.
Signed on behalf of the Issuer Signed on behalf of the Guarantor
By: By:
------------------------------- -------------------------------
Duly Authorised Signatory Duly Authorised Signatory
25
APPENDIX A
Condition 6(e) is deleted and replaced with the following:
"(e) Redemption at the option of the Noteholders
(i) On the occurrence of a Potential Put Event
If, at any time while any of the Notes remains outstanding, a Potential Put
Event occurs and during the Relevant Period, or (other than where the
Potential Put Event is a Category II Restructuring Event) prior to the
commencement of the Relevant Period, an Independent Financial Adviser shall
have certified in writing to the Trustee that such Potential Put Event will
not be or is not, in its opinion, materially prejudicial to the interests
of the Noteholders, the following provisions of this Condition 6(e) shall
cease to have any further effect in relation to such Potential Put Event.
If, at any time while any of the Notes remains outstanding, a Potential Put
Event occurs and an independent Financial Advisor shall have certified in
writing to the Trustee that such Potential Put Event is, in its opinion,
materially prejudicial to the interests of the Noteholders (a "Negative
Certification"), then, unless at any time the Issuer shall have given a
notice under Condition 6(c), the holder of each Note will, upon the giving
of a Put Event Notice (as defined below). have the option (the "Put
Option") to require the Issuer to redeem or, at the option of the Issuer,
purchase (or procure the purchase of) that Note on the Put Date (as defined
below), at its Put Event Redemption Amount together with (or, where
purchased, together with an amount equal to) interest (if any) accrued to
(but excluding) the Put Date.
Any certification by an Independent Financial Adviser as aforesaid as to
whether or not, in its opinion any Potential Put Event is materially
prejudicial to the interests of the Noteholders shall, in the absence of
manifest error, be conclusive and binding on the Trustee, the Issuer, the
Guarantor and the Noteholders.
Promptly upon, and in any event within 14 days after the Issuer becoming
aware that a Potential Put Event has occurred, the Issuer shall, and at any
time upon the Trustee becoming similarly so aware the Trustee may, and if
so requested by the holders of at least one-quarter in nominal amount of
the Notes then outstanding shall, give notice (a "Put Event Notice") to the
Noteholders in accordance with Condition 16 specifying the nature of the
Potential Put Event and the procedure for exercising the Put Option,
provided that where the Potential Put Event is a Category II Restructuring
Event the Issuer shall again give such notice 90 days prior to the
Revocation Date (such latter notice, a "Category II Put Event Notice").
To exercise the Put Option, the holder of a Note must deposit such Note
with any Paying Agent at its specified office, on a day which is a Business
Day in the City of London and in the place of such specified office falling
within the Period (the "Put Period") of (i), in the case where the Put
Option is in respect of an event other than a Category II Restructuring
Event, 45 days after that on which a Put Event Notice is given or (ii)
otherwise, at any time up to 15 days prior to the Put Date, accompanied by
a duly completed and signed notice of exercise in the form (for the time
being current) obtainable from any specified office of any Paying Agent (a
"Put Notice") and in which the holder may specify a bank account to which
payment is to be made under this Condition 6. Where any Note is delivered
without all Coupons relating to it which mature after the day (the "Put
Date") being (i) in the case where the Put Option is in respect of an event
other than a Category II Restructuring Event, the fifteenth day after the
date of expiry
26
of the Put Period or (ii) otherwise, the Revocation Date (provided that
such day is a Business Day in the City of London, otherwise the next day
which is a Business Day in the City of London), the exercise of the Put
Option in respect of such Note shall be subject to the provision of such
indemnity as the Issuer may reasonably require. The Paying Agent to which
such Note and Put Notice are delivered shall Issue to the Noteholder
concerned a non-transferable receipt in respect of the Note so delivered.
Payment in respect of any Note so delivered shall be made if the holder
duly specifies in the Put Notice an account with a bank to which payment is
to be made, on the Put Date by transfer to that bank account and, in every
other case, on or after the Put Date in each case against presentation and
surrender or (as the case may be) endorsement of such receipt at any
specified office of any Paying Agent. A Put Notice, once given, shall be
irrevocable. For the purposes of Conditions 9, 10, 11, 12, 14, 16 and 17
and for certain other purposes specified in the Trust Deed, receipts issued
pursuant to this Condition 6(e) shall be treated as if they were Notes. The
Issuer shall redeem or, at the option of the Issuer, purchase (or procure
the purchase of) the relevant Note on the applicable Put Date unless
previously redeemed or purchased.
The Trustee is under no obligation to ascertain whether a Potential Put
Event or any event which could lead to the occurrence of, or could
constitute a, Potential Put Event has occurred and until it shall have
actual knowledge or express notice to the contrary, the Trustee may assume
that no Potential Put Event or such other event has occurred.
(ii) On 8th March, 2015
The Issuer shall, at the option of the holder of any Note, redeem such Note
on 8th March, 2015 at its Redemption Amount together with unpaid interest
accrued to 8th March, 2015.
To exercise such option the holder must deposit such Note (together with
all unmatured Receipts and Coupons and unexchanged Talons) with any Paying
Agent at its specified office, together with a duly completed option
exercise notice ("Exercise Notice") in the form obtainable from any Paying
Agent, not less than 30, nor more than 60, days prior to 8th March, 2015.
No Note so deposited and option exercised may be withdrawn without the
prior consent of the Issuer, except that such Note will be returned to the
relevant Noteholder by the Paying Agent with which it has been deposited
if, prior to the due date for its redemption or the exercise of the option,
the Note becomes immediately due and payable or if upon due presentation
payment of the redemption moneys is not made or exercise of the option is
denied.
In this Condition 6(e):
"Business Day" means, in relation to any place, a day on which commercial banks
and foreign exchange markets generally settle payments in that place.
"Category I Restructuring Event" means the occurrence of any one or more of the
following events:
(A) (aa) the Secretary of State and/or Director General of Electricity Supply
(or any successor) gives the Guarantor or the holder of the PES
Licence written notice of revocation (or issues a public notice
generally) of the PES Licence (excluding any second tier supply
licence and provided that the giving of notice pursuant to paragraph 3
of Part I of the PES Licence in each case as in effect on the date of
the Pricing Supplement, or any other similar provision in any other
PES Licence, shall not be deemed to constitute the revocation of the
PES Licence); or
27
(bb) the Guarantor or the holder of the PES Licence agrees in writing with
the Secretary of State and/or Director General of Electricity Supply
to any revocation or surrender of the PES Licence; or
(cc) any legislation (whether primary or subordinate) is enacted
terminating or revoking the PES Licence,
except in any such case in circumstances where a licence or licences (each
a "Successor Licence") on substantially not less favourable terms is or are
granted to the Guarantor or one or more Relevant Subsidiaries or
Subsidiaries (not being an Excluded Subsidiary) of the Guarantor at least
51 per cent. of the ordinary share capital of which is owned directly or
indirectly by the Guarantor and which is Controlled by the Guarantor; or
(B) any modification (other than a modification which is of a formal, minor or
technical nature) is made to the terms and conditions of the PES Licence on
or after the date of the Pricing Supplement, unless two directors of the
Guarantor have certified in good faith to the Trustee that the modified
terms and conditions are not materially less favourable to the business of
the Group; or
(C) (aa) the Pooling and Settlement Agreement is terminated under Clause 67.4
thereof and not replaced by one or more agreements, commercial
arrangements or open market mechanisms or frameworks, in each case on
terms which two directors of the Guarantor certify in good faith to
the Trustee to be not materially less favourable to the business of
the Group; or
(bb) a holder of the PES Licence is given notice pursuant to Clause 67.3.2
of the Pooling and Settlement Agreement requiring it to cease to be a
party thereto; or
(cc) any notice declaring an event of default (as defined in the Pooling
and Settlement Agreement) is given to a holder of the PES Licence
under Clause 66.1.1 or 66.2 thereof and such default remains
unremedied or unwaived; or
(dd) any modification (other than a modification which is of a formal,
minor or technical nature) is made to the Pooling and Settlement
Agreement on or after the date of the Pricing Supplement. unless two
directors of the Guarantor have certified in good faith to the Trustee
that any such modification has not had and will not have a materially
adverse effect on the financial rights and obligations of a holder of
the PES Licence under the Pooling and Settlement Agreement or a
materially adverse effect on the business of the Group, provided that
any such modification shall, to the extent it grants or confers powers
or discretions on the Director General of Electricity Supply (or any
successor) under or in respect of the Pooling and Settlement
Agreement, be deemed not to have a materially adverse effect as
aforesaid, but for the avoidance of doubt any modification to the
Pooling and Settlement Agreement made by the Director General of
Electricity Supply (or any successor) by virtue of or pursuant to any
such powers or discretions and which otherwise would have a materially
adverse effect as provided above shall not by virtue of this
sub-paragraph be deemed not to have such an effect; or
(ee) a holder of the PES Licence ceases to be a party to the Pooling and
Settlement Agreement for any. other reason (other than pursuant to
(bb) and (cc) above) except where, a licence or licences is or are
granted to one or more Subsidiaries as
28
contemplated by sub-paragraph (A) above and at or about the same time
all rights and obligations of such holder pursuant to the Pooling of
Settlement Agreement which are attributable to such licence(s) are
assigned and transferred to such Subsidiary and/or Subsidiaries in
such manner as the Trustee may approve (such approval not to be
unreasonably withheld or delayed) or such Subsidiary or Subsidiaries
enters or enter into one or more agreements, commercial arrangements
or open market mechanisms or frameworks in relation to such licence(s)
which two directors of each of the Issuer and Guarantor certify to be
not materially less favourable to the business of the Group; or
(D) any legislation (whether primary or subordinate) is enacted which removes,
qualifies or amends (other than an amendment which if of a formal, minor or
technical nature) the duties of the Secretary of State and/or the Director
General of Electricity Supply under Section 3 of the Electricity Act as in
force on the date of the Pricing Supplement, unless two directors of the
Guarantor have certified in good faith to the Trustee that such removal,
qualification or amendment is unlikely to have a materially adverse effect
on the financial condition of the Group or any Relevant Subsidiary.
A "Category II Restructuring Event" occurs where the Secretary of State and/or
Director General of Electricity Supply (or any successor) gives the Guarantor or
the holder of the PES Licence written notice of revocation (or issues a public
notice generally) of the PES Licence pursuant to paragraph 3 of Part I of the
PES Licence. except in any such case in circumstances where a licence or
licences (each, a "Successor Licence") on substantially not less favourable
terms is or are granted to the Guarantor or one or more Relevant Subsidiaries or
Subsidiaries (not being an Excluded Subsidiary) of the Guarantor at least 51 per
cent. of the ordinary share capital of which is owned directly or indirectly by
the Guarantor and which is Controlled by the Guarantor.
"Control" means the possession, direct or indirect. of the power to direct or
cause the direction of the management and policies of a person, whether through
the ownership of voting securities, by contract or otherwise (and references to
"Controlled" shall be construed accordingly).
The "Eastern Disposal" means the sale of Eastern Electricity Limited under an
agreement dated 19th November, 2001, as more fully described in the explanatory
memorandum referred to in the Notice of Meeting (as defined in the second
supplemental trust deed dated 26th February, 2002 between the Issuer, the
Guarantor and the Trustee).
"Electricity Act" means the Electricity Xxx 0000 as amended or re-enacted from
time to time and all subordinate legislation made pursuant thereto.
"Excluded Subsidiary" means any Subsidiary of the Guarantor:
(i) which is a single purpose company whose principal assets and business
comprise the ownership, acquisition, development and/or operation of assets
comprising a Project;
(ii) in its capacity as a partner in, and whose only material asset is its
interest in, a single purpose partnership whose principal assets and
business comprise a Project (as defined in Condition 10 (Events of
Default);
(iii) none of whose indebtedness for borrowed money in respect of the financing
of such ownership, acquisition, development and/or operation of such assets
comprising a Project is subject to any recourse whatsoever to any member of
the Group (other than such Subsidiary or another Excluded Subsidiary) in
respect of the repayment thereof, except as expressly referred to in
29
sub-paragraph (ii) of the definition of Project Finance Indebtedness (as
defined in Condition 10 (Events of Default)); and
(iv) which has been designated as such by the Guarantor by written notice to the
Trustee,
provided that the Guarantor may give notice to the Trustee at any time that any
Excluded Subsidiary is no longer an Excluded Subsidiary, whereupon it shall
cease to be an Excluded Subsidiary,
"Generation Licence" means the electricity generation licence granted by the
Secretary of State to Eastern Merchant Generation Limited under the Electricity
Act as in effect on the date of the Pricing Supplement.
The "Gross Redemption Yield" on the Notes and the Reference Stock will be
expressed as a percentage and will be calculated on the basis indicated by the
Joint Index and Classification Committee of the Institute and Faculty of
Actuaries as reported in the Journal of the Institute of Actuaries, Vol. 105,
Part 1, 1978, page 18 or such other basis as the Trustee may approve.
"Group" means the Guarantor and its Subsidiary Undertakings and "member of the
Group" shall be construed accordingly.
"indebtedness for borrowed money" means any present or future indebtedness
(whether being principal, premium interest or other amounts) for or in respect
of (i) money borrowed, (ii) liabilities under or in respect of any acceptance or
acceptance credit, or (iii) any notes, bonds, debentures, debenture stock, loan
stock or other securities offered, issued or distributed whether by way of
public offer, private placing, acquisition consideration or otherwise and
whether issued for cash or in whole or in part or for a consideration other than
cash.
"Independent Financial Adviser" means a financial adviser appointed by the
Issuer and approved by the Trustee (such approval not to be unreasonably
withheld or delayed) or, if the Issuer shall not have appointed such an adviser
within 21 days after becoming aware of the occurrence of a Potential Put Event
and the Trustee is indemnified to its satisfaction against the costs of such
adviser, a financial adviser appointed by the Trustee following consultation
with the Issuer.
A "Loss of Control Event" occurs where TXU Europe Limited ceases to own directly
or indirectly at least a majority of the ordinary share capital of TXU Europe
Group plc and all Principal Subsidiaries (as defined in Condition 10 (Events of
Default)) or ceases to Control TXU Europe Group plc and all Principal
Subsidiaries, save that the Eastern Disposal (and each stage thereof and any
consequences thereof) shall not constitute a Loss of Control Event.
"PES Licence" means the public electricity supply licence granted by the
Secretary of State to Eastern Electricity plc under the Electricity Act (but for
the avoidance of doubt excluding for this purpose any second tier licence) as in
effect on the date of the Pricing Supplement and/or any Successor Licence.
"Potential Put Event" means any of (a) a Rating Downgrade Event, (b) a Loss of
Control Event, (c) a Category I Restructuring Event or (d) a Category II
Restructuring Event.
"Pooling and Settlement Agreement" means the agreement dated 30th March, 1990
(as amended and restated as at 22nd April, 1994) made by Eastern Electricity plc
with The National Grid Company plc and others setting out the rules and
procedures for the operation of an electricity trading pool and of a settlement
system and, while the same has effect, the initial Settlement Agreement also
dated 30th
30
March, 1990 and made between the same parties, in each case as in force on the
date of the Pricing Supplement.
A "Put Event"' occurs on the date of the last to occur of (a) a Potential Put
Event and (b) the relevant Negative Certification.
The "Put Event Redemption Amount" of a Note means its principal amount, save
that where the Put Event arose as a result of a Category II Restructuring Event.
"Put Event Redemption Amount" means the higher of:
(i) the principal amount thereof; and
(ii) that price (the "Redemption Price"), expressed as a percentage rounded to
three decimal places (0.0005 being rounded downwards), at which the Gross
Redemption Yield on the Notes, if they were to be purchased at such price
on the third dealing day prior to the publication of the Category II Put
Event Notice, would be equal to the Gross Redemption Yield on such dealing
day of the 6 per cent. Treasury Stock due 7th December, 2028 or such other
United Kingdom Government Stock as the Trustee, with the advice of three
leading brokers operating in the gilt-edged market and/or gilt-edged market
makers, shall determine to be appropriate (the "Reference Stock") on the
basis of the middle market price of the Reference Stock prevailing on such
dealing day, as determined by Deutsche Bank AG London (or such other
person(s) as the Trustee may approve). Any reference in the Terms and
Conditions to "principal" shall be deemed to include any sum payable as the
Redemption Price.
"Rated Securities" means the Notes, if at any time and for so long as they have
a rating from a Rating Agency, and otherwise any other unsecured and
unsubordinated debt of the Issuer or a Relevant Subsidiary (or of any Subsidiary
of the Guarantor which is guaranteed on an unsecured and unsubordinated basis by
the Guarantor or a Relevant Subsidiary) having an initial maturity of Five years
or more which is rated by a Rating Agency.
"Rating Agency" means any of Standard & Poor's Rating Service, a division of the
McGrawHill Companies. Inc., Xxxxx'x Investors Service Limited or Duff & Xxxxxx
Credit Rating Co. or any of their respective Subsidiaries and their successors
or any rating agency substituted for either of them (or any permitted substitute
of them) by the Issuer from time to time with the prior written approval of the
Trustee (such approval not to be unreasonably withheld or delayed).
A "Rating Downgrade Event" shall be deemed to have occurred if the then current
rating assigned to the Rated Securities by any Rating Agency (whether provided
by a Rating Agency at the invitation of the issuer or by its own volition) is
withdrawn or reduced from an investment grade rating (BBB-/Baa3, or their
respective equivalents for the time being. or better) to a non-investment grade
rating (BB+/Bal, or their respective equivalents for the time being or worse)
or, if the Rating Agency shall then have already rated the Rated Securities
below investment grade (as described above), the rating is lowered one full
rating category (from BB+/Bal to BB/Ba2 or such similar lowering), PROVIDED that
a Rating Downgrade Event shall be deemed not to have occurred if the rating
assigned to the Rated Securities by each Rating Agency making the relevant
reduction in rating or, where applicable, declining to assign a rating of at
least investment grade as provided in this Condition 6(e), is subsequently
increased to, or, as the case may be, there is assigned to the Notes or other
unsecured and unsubordinated debt of the Issuer. the Guarantor or a Relevant
Subsidiary (or of any Subsidiary of the Guarantor which is guaranteed on an
unsecured and unsubordinated basis by the Guarantor or a Relevant Subsidiary)
having an initial maturity of five years or more by such Rating Agency. an
31
investment grade rating (BBB-/Baa3 or their respective equivalents for the time
being) or better prior to any Negative Certification being issued.
"Relevant Indebtedness" means any present or future indebtedness (whether being
principal, Premium. interest or other amounts) in the form of or represented by
notes, bonds, debentures, debenture stock, loan stock or other Securities,
whether issued for cash or in whole or in part for a consideration other than
cash, and which, with the agreement of the person issuing the same, are quoted,
listed or ordinarily dealt in on any stock exchange or recognised
over-the-counter or other securities market, but shall in any event not include
Project Finance Indebtedness.
"Relevant Licences" means the Generation Licence and the PES Licence and, in any
such case, and from time to time any other licence or licences relating to the
generation and/or distribution Of electricity granted to the Guarantor and/or
any Relevant Subsidiary or Subsidiary as contemplated pursuant to Paragraph (A)
of "Category I Restructuring Event" below and "Relevant Licence" shall be
construed accordingly.
"Relevant Period" means the period of 90 days, starting from and including the
day an which the Category I Restructuring Event, Rating Downgrade Event or Loss
of Control Event, as the case may be, occurs or, in relation to a Category II
Restructuring Event, the period commencing 90 days prior to the Put Date up to
but excluding the Put Date.
"Relevant Subsidiary" means a member of the Group that holds a Relevant Licence.
"Revocation Date" means the date of the determination of the PES Licence
following the 25 year notice period pursuant to a Category II Restructuring
Event.
"Secretary of State" means the Secretary of State for Trade and Industry (or any
successor).
"Subsidiary" means a "subsidiary" within the meaning of Section 736 of the
Companies Act.
"Subsidiary Undertaking" shall have the meaning given to it by Section 258 of
the Companies Xxx 0000 (but, in relation to the Issuer, shall exclude any
undertaking (as defined in the Companies Act 1985) whose accounts arc not
included in the then latest published audited consolidated accounts of the
Issuer, of (in the case of an undertaking which has first become a subsidiary
undertaking of a member of the Group since the date as at which any such audited
accounts were prepared) would not have been so included or consolidated if it
had become so on or before that date).
Any reference to an obligation being guaranteed shall include a reference to an
indemnity being given in respect of the obligation."
00
XXXXXXXX X
1. The following new Condition 18 is inserted after Condition 17:
"18. Financial Covenant
(a) Interest Cover Covenant
The Guarantor shall ensure that at each financial year end by reference to the
annual audited consolidated financial statements of the Group produced under US
GAAP, the ratio of Net Revenues to Net interest in respect of the immediately
preceding 12 months shall not be less than 1.75 to 1.0;
where:
"Distribution" means any payment of dividends or other distribution and any
return of capital including, without limitation, any payment in respect of, or
on the redemption of, any share capital whether at a premium or otherwise, or
any payment in respect of indebtedness for borrowed money to any person in the
Group or to any person on their behalf, whether in cash or in kind and whether
by way of interest, repayment of principal or otherwise and shall for the
avoidance of doubt include any payment in respect of Subordinated Debt and
Subordinated Loan Stock;
"Net Interest" includes, in relation to any period, the aggregate amount of all
of the following insofar as they are payable by, or accrue in respect of
indebtedness of, any member of the Group (except to another member of the Group)
during that period: interest, commissions and fees in respect of moneys
borrowed, discounts in respect of bills, notes or debts discounted, and that
part of any amount under a financing lease or hire purchase, credit sale,
conditional sale or deferred payment agreement which represents any of the
foregoing save for interest payments in respect of Subordinated Debt or which
constitute Distributions less the aggregate amount of interest income of the
Group (excluding such income from another member of the Group) for such period.
For this purpose, a discount shall be apportioned in accordance with US GAAP
over the period for which that xxxx, note or debt is to be outstanding and shall
be deemed to accrue from day to day during that period;
"Net Revenues" means, in relation to any period, the consolidated income of the
Group for that period before Tax, interest and minority interests and before all
extraordinary items, all as shown in the statements of consolidated income of
the Group for that period, adding back all amounts provided (through the
statements of consolidated income) for depreciation, goodwill and amortisation;
"Subordinated Debt" means any indebtedness for borrowed money of the Issuer
which ranks subordinate to the Notes under the former's terms and conditions;
"Subordinated Loan Stock" means any loan stock issued by the Issuer which is not
redeemable at the instance of the holder thereof on terms whereby ail payments
thereunder rank subordinate to the Notes under the terms of the relevant loan
documentation; and
"Taxes" or "Tax" means any present or future taxes of any nature (including,
without limitation, value added tax), levy, impost, duty or other charge of a
similar nature now or hereafter imposed by the laws of the United Kingdom or the
United States and any other jurisdiction or any political subdivision thereof
(including, without limitation, any penalty or interest payable in connection
with any Failure to pay or any delay in paying the same).
33
(b) Certification of Compliance with Interest Cover Covenant
The Guarantor will, within 10 Business Days (as defined in Condition 6(e)) in
London "London Business Day") of the filing with the Registrar of Companies of
each set of yearly audited financial statements, deliver to the Trustee a
certificate signed on its behalf by two of their respective directors or one
director and the Company Secretary.
(i) confirming compliance with Condition 18(a) as at the end of the
preceding financial year; and
(ii) setting out in reasonable detail and in a form satisfactory to the
Trustee the computations necessary to demonstrate such compliance.
(c) Auditor's Certification of Compliance
Within 30 London Business Days of the filing with the Registrar of Companies of
such financial statements in Condition 18(b), the Guarantor will deliver to the
Trustee a certificate of the independent auditors of the Guarantor confirming
compliance with Condition 18(a) as at the end of the preceding Financial
period".
2. Paragraph (f) of Condition 6 (Redemption, Purchase and Options) is amended by
deleting the phrase "at any time" in the second line of the first sentence and
by inserting the following text after the word "price" at the end of that
sentence: ", provided that such purchase(s) may only take place at any time
after the third anniversary of the Issue Date".
3. Paragraph (b) of Condition 10 (Events of Default) is amended by inserting the
following text between the words "Notes" and "the Guarantee" in the second line
of that paragraph: "(which, for the avoidance of doubt, includes the Guarantor's
obligations under Condition 18(a), 18(b) and 18(c))".
4. Paragraph (i) of Condition 10 (Events of Default) is deleted."
34
IN WITNESS whereof this Second Supplemental Trust Deed has been executed as a
deed by the Issuer, the Guarantor and the Trustee and entered into the day and
year first above written.
THE COMMON SEAL of TXU EASTERN )
FUNDING COMPANY was affixed )
to this deed in the presence of: )
THE COMMON SEAL of TXU EUROPE )
LIMITED was affixed to this deed )
in the presence of: )
THE COMMON SEAL of THE LAW )
DEBENTURE TRUST CORPORATION )
p.l.c. was affixed to this deed )
in the presence of: )
DATED 26TH FEBRUARY, 2002
TXU EASTERN FUNDING COMPANY
- and -
TXU EUROPE LIMITED
- and -
THE LAW DEBENTURE TRUST
CORPORATION p.l.c.
-------------------------------------------------
SECOND SUPPLEMENTAL TRUST DEED
further supplementing and modifying the
trust deeds and the Pricing Supplements
constituting the(pound)275,000,000 7.25 per cent.
Notes due 2030
-------------------------------------------------
[LOGO OF XXXXX & XXXXX COMPANY]
London
DATED 26TH FEBRUARY, 2002
TXU EASTERN FUNDING COMPANY
- and -
TXU EUROPE LIMITED
- and -
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
-------------------------------------------------------
SECOND SUPPLEMENTAL TRUST DEED
further supplementing and modifying the trust deeds and
the Pricing Supplements constituting the
(pound)275,000,000 7.25 per cent. Notes due 2030
[LOGO OF XXXXX & OVERY COMPANY]
London
