Contract
EXHIBIT 99.5
| C L I F F O R D | LIMITED LIABILITY PARTNERSHIP | ||
| C H A N C E |
| ||
| EXECUTION COPY |
CE
ELECTRIC UK FUNDING COMPANY
AND
AMBAC
ASSURANCE UK LIMITED
AND
THE LAW
DEBENTURE TRUST CORPORATION p.l.c.
in
relation to the
£200,000,000
7.25% Guaranteed Bonds due 2022
unconditionally
and irrevocably guaranteed as to scheduled payments
of
principal and interest pursuant to a financial guarantee issued by
AMBAC
Assurance UK Limited
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CONTENTS | ||
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Clause |
Page | |
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1. |
DEFINITIONS |
1 |
|
2. |
ACKNOWLEDGMENT |
1 |
|
3. |
AMENDMENT |
2 |
|
4. |
COUNTERPARTS |
2 |
|
5. |
GOVERNING
LAW |
2 |
|
6. |
THIRD
PARTY RIGHTS |
2 |
|
7. |
FURTHER
ASSURANCE |
2 |
|
SCHEDULE
1 |
Amendments
to Terms and Conditions |
3 |
THIS
SUPPLEMENTAL TRUST DEED is made
on 5 May 2005
BETWEEN
| (1) |
CE
ELECTRIC UK FUNDING COMPANY (the
"Issuer"),
a company incorporated in England and Wales with unlimited liability under
registered number 3476201;
|
| (2) |
AMBAC
ASSURANCE UK LIMITED ("Ambac"),
a company incorporated in England and Wales with limited liability under
registered number 3248674; and
|
| (3) |
THE
LAW DEBENTURE TRUST CORPORATION p.l.c., a
company incorporated in England and Wales with limited liability under
registered number 1675231 (the "Trustee",
which expression shall, where the context so admits, include all persons
for the time being the trustee or trustees of the Trust Deed (as defined
below)).
|
WHEREAS
| (A) |
The
The Issuer has issued £200,000,000 7.25% Guaranteed Bonds due 2022 (the
"Bonds")
unconditionally and irrevocably guaranteed as to scheduled payments of
principal and interest pursuant to a financial guarantee issued by Ambac.
|
| (B) |
The
parties hereto have executed a trust deed constituting the Bonds, dated 15
December 1997 (as amended and/or supplemented from time to time, the
"Trust
Deed").
|
| (C) |
The
parties wish to amend and modify the Trust Deed as set out in this
instrument, which is supplemental to the Trust Deed.
|
NOW
THIS DEED WITNESSES AND IT IS HEREBY DECLARED as
follows:
| 1. |
DEFINITIONS |
Words and
expressions defined in the Trust Deed (or incorporated therein by reference)
shall, except where the context otherwise requires, have the same meanings in
this Supplemental Trust Deed. If there is any inconsistency between the
definitions herein and the Trust Deed the definitions used herein shall
apply.
| 2. |
ACKNOWLEDGMENT
|
| 2.1 |
The
parties hereto agree and acknowledge that (i) Ambac is the Controlling
Party for the purposes of the Bonds, (ii) Ambac has given written notice
to the Trustee of its intention to exercise the Trust Rights, and (iii)
Ambac has directed the Trustee to consent to the amendments and
modifications to the Trust Deed set out herein.
|
| 2.2 |
The
Trustee, by its execution hereof, hereby consents to such amendments and
modifications.
|
-1-
| 3. |
AMENDMENT
|
| 3.1 |
The
Conditions shall be amended as set out in Schedule 1 hereto.
|
| 3.2 |
The
Bonds currently outstanding shall be deemed amended and modified to
conform to the amendments and modifications herein contemplated with
effect from the date hereof.
|
| 3.3 |
Clause
10 (Covenants
by the Issuer in favour of Ambac)
of the Trust Deed shall be amended by the deletion of sub-paragraph (A)
and the substitution of the following:
|
"not
modify or amend, or agree to any modification or amendment to any Electricity
Distribution Licence without the consent of OFGEM;"
| 4. |
COUNTERPARTS
|
This
Supplemental Trust Deed may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument.
| 5. |
GOVERNING
LAW
|
This
Supplemental Trust Deed is governed by, and shall be construed in accordance
with, English law.
| 6. |
THIRD
PARTY RIGHTS
|
A person
who is not a party hereto has no right under the Contracts (Rights of Third
Parties) Xxx 0000 to enforce any term of this Supplemental Trust
Deed.
| 7. |
FURTHER
ASSURANCE
|
The
parties agree to take such action and enter into such documents, agreements or
deeds as are necessary or desirable to give effect to this Supplemental Trust
Deed.
THIS
SUPPLEMENTAL TRUST DEED has been
executed as a deed by all the parties hereto and is delivered by them on the
date specified above.
-2-
SCHEDULE 1
Amendments
to Terms and Conditions
| 1. |
The
Terms and Conditions shall be amended as follows:
|
| 1.1 |
By
the deletion of Condition 4 (Limitation
on Distributions)
in its entirety and the substitution of the following:
|
"4. Limitation
on Distributions
The
Company has undertaken with Ambac that so long as any of the Bonds remain
outstanding and for so long as no Ambac Event of Default has occurred and is
continuing, the Company will not make any Distribution unless:
| (i) |
in
the period commencing on 5 May 2005 and ending on 30 December 2006, the
ratio of Consolidated Senior Total Net Debt (as at the end of the month
immediately preceding the date on which the Distribution is to be made and
calculated on a pro
forma
basis as if the Distribution had been made) to RAV does not exceed 0.79:1;
or
|
| (ii) |
in
the period commencing on 31 December 2006 and ending on 30 December 2007,
the ratio of Consolidated Senior Total Net Debt (as at the end of the
month immediately preceding the date on which the Distribution is to be
made and calculated on a pro
forma
basis as if the Distribution had been made) to RAV does not exceed 0.77:1;
or
|
| (iii) |
on
or after 31 December 2007, the ratio of Consolidated Senior Total Net Debt
(as at the end of the month immediately preceding the date on which the
Distribution is to be made and calculated on a pro
forma
basis as if the Distribution had been made) to RAV does not exceed
0.75:1."
|
| 1.2 |
By
the deletion in its entirety of the definition of "Interest Coverage
Ratio" in Condition 3 (Definitions).
|
| 1.3 |
By
the addition in Condition 3 (Definitions)
of the following definitions: |
"Cash
Equivalents" means
investments in sterling demand or time deposits, certificates of deposit and
short term debt obligations (including commercial paper), synthetic sterling
deposits, shares in money market liquidity funds or a guaranteed investment
contract, provided
that in all
cases such investments have a maturity of not longer than nine months from the
date of their acquisition subject to meeting the following credit criteria: (1)
money market funds with a minimum credit rating of AAA or equivalent from any
two Rating Agencies (or, in the case of shares in money market liquidity funds,
from any single Rating Agency); (2) all other counterparties and other specific
instruments with a minimum short term credit rating of A-1 from S&P or of
P-1 from Xxxxx'x.
-3-
"Consolidated
Senior Total
Net Debt" means,
at any time, the aggregate amount (without double counting) of all obligations
of the Group for or in respect of Financial Indebtedness (other than between
members of the Group) which ranks at least pari
passu with the
Bonds but:
| (i) |
deducting
the aggregate amount of all obligations of any member of the Group in
respect of Project Finance Indebtedness;
|
| (ii) |
deducting
the aggregate amount of all obligations of any member of the Group in
respect of Financial Indebtedness to the extent that the repayment or
redemption of such Financial Indebtedness is provided for by the purchase
by a member of the Group of a GIC; and
|
| (iii) |
deducting
the
aggregate amount of freely available cash and Cash Equivalents held by any
member of the Group at such time,
|
and so
that no amount shall be excluded more than once.
"Electricity
Distribution Licence" means
the electricity distribution licence granted or treated as granted to Northern
Electric Distribution Limited or Yorkshire Electricity Distribution plc under
section 6(1)(c) of the Electricity Act.
"Final
Proposals" means
the final proposals document published by OFGEM for each electricity
distribution price control review.
"Financial
Indebtedness" means,
at any time, the outstanding principal, capital or nominal amount and any fixed
or minimum premium payable on prepayment or redemption of any indebtedness for
or in respect of:
| (i) |
moneys
borrowed and debit balances with financial institutions;
|
| (ii) |
any
amount raised by acceptance under any acceptance credit
facility;
|
| (iii) |
any
amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or any similar
instrument;
|
| (iv) |
the
amount of any liability in respect of any lease or hire purchase contract
which would, in accordance with UK GAAP, be treated as a finance or
capital lease;
|
-4-
| (v) |
receivables
sold or discounted (other than any receivables to the extent they are sold
on a non-recourse basis);
|
| (vi) |
any
counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by
a bank or financial institution (excluding any given in respect of trade
credit arising in the ordinary course of business);
|
| (vii) |
any
amount raised by the issue of redeemable shares which are redeemable prior
to 15 December 2022;
|
| (viii) |
any
amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a borrowing;
and
|
| (ix) |
(without
double counting) the amount of any liability in respect of any guarantee
or indemnity for any of the items referred to in paragraphs (i) to (viii)
above.
|
"GIC" means
each of (i) the investment agreement dated on or about 28 April 2005 between
Ambac Capital Funding, Inc., Ambac Assurance UK Limited and Northern Electric
Distribution Limited and/or Northern Electric Finance plc, (ii) the investment
agreement dated on or about 28 April 2005 between Ambac Capital Funding, Inc.,
Ambac Assurance UK Limited and Yorkshire Electricity Distribution plc and (iii)
any other guaranteed investment contract or similar investment agreement with a
maturity of 60 months or less from the date of purchase and which is provided by
a counterparty which has or whose obligations under such guaranteed investment
contract or other agreement are guaranteed by an entity that has a credit rating
of at least AA- from S&P and Aa3 from Xxxxx'x.
"OFGEM" means
the Gas and Electricity Markets Authority and/or the Office of Gas and
Electricity Markets, including their successor office or body, as
appropriate.
"Regulated
Asset Value" or
"RAV" means
the aggregate regulatory asset value of Northern Electric Distribution Limited
and Yorkshire Electricity Distribution plc, as set out in the most recent Final
Proposals, adjusted for inflation, as of the 31 March nearest to the date on
which the Company proposes to make any Distribution, provided
that there
shall be included in any determination of RAV the value of any assets which were
included in RAV as at 31 March 2005 but which (i) subsequently are excluded from
RAV by OFGEM, (ii) have become subject to a separate price control arrangement,
and (iii) are still owned by Northern Electric Distribution Limited or Yorkshire
Electricity Distribution plc as of the date of determination of RAV, and
provided
further that if at
any time OFGEM alters its methodology of determining RAV in a manner which
results in a change in RAV, the Company and Ambac shall promptly in good faith
negotiate appropriate adjustments to this definition (and to other terms defined
or described herein solely for the purposes of this definition) so that the
original intent of the undertaking set forth in Condition 4 is preserved and in
the absence of agreement between the Company and Ambac within 60 days, such
adjustments shall be determined by an independent accountant experienced in the
regulated electricity distribution market selected by the Company.
-5-
| 1.4 |
Condition
11 (The
Company's Covenants to Ambac)
shall be amended as follows:
|
by the
deletion of sub-paragraph (a) and the substitution of the
following:
"not
modify or amend, or agree to any modification or amendment to any Electricity
Distribution Licence without the consent of OFGEM;".
-6-
EXECUTION
PAGE
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EXECUTED
as
a DEED
and
delivered by |
) |
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CE
ELECTRIC UK FUNDING COMPANY |
) |
|
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acting
by a Director and the Secretary |
) |
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/s/
Xxxxxxx Xxxxxxx |
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| Xxxxxxx Xxxxxxx | ||
|
Director |
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| /s/ Xxxx Xxxxxxx | ||
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Xxxx Xxxxxxx |
||
|
Secretary |
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EXECUTED
and
DELIVERED
as
a DEED |
) |
Seal |
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under
the Common Seal of |
) |
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AMBAC
ASSURANCE UK LIMITED |
) |
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in
the presence of: |
) |
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| /s/ Xxxxxx Xxxxxxx | ||
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Xxxxxx
Xxxxxxx |
||
|
Authorised
Signatory |
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EXECUTED
and
DELIVERED
as
a DEED |
) |
Seal |
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under
the Common Seal of |
) |
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THE
LAW DEBENTURE TRUST |
) |
|
|
CORPORATION
p.l.c. |
) |
|
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in
the presence of: |
) |
|
| /s/ Xxxxx Xxxxxxx | ||
|
Xxxxx
Xxxxxxx |
||
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Authorised
Signatory |
||
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/s/ |
||
|
Director |
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