CONFORMED COPY
Dated 6 August 2001
NPOWER YORKSHIRE LIMITED
INNOGY HOLDINGS PLC
CE ELECTRIC UK PLC
AND
NORTHERN ELECTRIC PLC
SHARE SALE AGREEMENT
- relating to -
the sale of 94.75% of the issued share capital of
Yorkshire Power Group Limited
LINKLATERS
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Telephone: (▇▇-▇▇) ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇-▇▇) ▇▇▇▇ ▇▇▇▇
Ref: IAR
SHARE SALE AGREEMENT
THIS AGREEMENT is made on 6 August 2001
BETWEEN:
(1) NPOWER YORKSHIRE LIMITED registered in England and Wales with
registered number 3937808 and whose registered office is at Windmill
Hill Business Park, ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (INNOGY);
(2) INNOGY HOLDINGS PLC registered in England and Wales with registered
number 3987817 and whose registered office is at Windmill Hill Business
Park, ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the INNOGY Guarantor);
(3) CE ELECTRIC UK PLC registered in England and Wales with registered
number 3271033 having its registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (NORTHERN); and
(4) NORTHERN ELECTRIC PLC registered in England and Wales with registered
number 2366942 having its registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (NE PLC).
IT IS AGREED as follows:
INTERPRETATION
In this Agreement, including its Schedules, the headings shall not
affect its interpretation and, unless the context otherwise requires,
the provisions in this Clause 1 apply:
1.1 Definitions
AGREED TERMS means, in relation to any document, such document in the
terms agreed between the parties and signed by Northern or Northern's
Solicitors, on the one hand, and Innogy or Innogy's Solicitors, on the
other hand, in each case for the purposes of identification, and which
are attached as an annexure to this Agreement as that document may be
amended by agreement in writing between Innogy and Northern from time
to time for any reason, including to take account of any changes
between the date of this Agreement and Completion;
AMBAC means Ambac Insurance UK Limited;
AMBAC BONDS means the (pound)200 million bonds @ 7.25% due 2022 issued
by CE Electric UK Funding Company and guaranteed by Ambac;
ASSIGNMENT AGREEMENT means the assignment and assumption of expenses
agreement in the agreed terms between the Innogy Guarantor, Yorkshire
Capital Trust (the TRUST) and NE plc pursuant to which NE plc will
assume and receive all of the rights and obligations of the Innogy
Guarantor under the Agreement for Expenses and Liabilities dated 1 June
(as amended) between the Innogy Guarantor and the Trust;
ASSUMED FACILITIES means each of the credit facilities provided
pursuant to:
(a) Norddeutsche Landesbank Girozentrale, London Branch's facility
letter dated 11 April 2000 to YEG;
(b) The Toronto-Dominion Bank's facility letter dated 22 May 1992 to
YEG;
(c) Banco di Napoli S.p.A, London Branch's facility letter dated 21
October 1999 to YEG;
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(d) KBC Bank N.V., London Branch's facility letter dated 4 September
2000 to YEG;
(e) Midland Bank plc's (HSBC) facility letter dated 27 August 1999
to YEG; and
(f) YEG's overdraft with National Westminster Bank plc referred to
in a letter from National Westminster Bank plc dated 28 October
1999;
ASSUMED YORKSHIRE DEBT means indebtedness in respect of moneys borrowed
or raised pursuant to the following:
(a) (pound)200 million bonds @ 9.25% due 2020 issued by YEG plc;
(b) (pound)200 million bonds @ 7.25% due 2028 issued by Yorkshire
Power Finance Limited;
(c) (pound)155 million Reset Notes due 2020 issued by Yorkshire
Power Finance 2 Limited;
(d) $275 million Junior Subordinate Debentures @ 8.08% due 2038
issued by Yorkshire Power Finance Limited;
(e) $300 million series B notes @ 6.496% due 2008 issued by
Yorkshire Power Finance Limited; and
(f) Retained Company Intra-Group Loans;
together with the associated liabilities and obligations of the Sale
Companies in connection with such debt.
ASSUMED YORKSHIRE SWAPS means the swaps entered into under:
(a) in relation to the (pound)155 million Reset Notes due 2020
issued by Yorkshire Power Finance 2 Limited held by Yorkshire
Power Pass-Through Asset Trust 2001:
(i) ISDA Master Agreement and Schedule thereto dated 1 February
2000 between UBS AG, London Branch and the Bank of New York
(acting as Trustee for Yorkshire Power Pass-Through Asset
Trust 2000-1) and (i) related Confirmation dated 9 February
2000 (Option 1 - UBS Call Option with Trust); and (ii)
related Confirmation dated 9 February 2000 (Swap 1 -
Sterling to US Dollar Swap between UBS and Trust,
reference: YPF2 PATS 2000-1 Sterling-Dollar Swap); and
(ii) ISDA Master Agreement and Schedule thereto dated 1 February
2000 between UBS AG, London Branch and Yorkshire Power
Finance 2 Limited and related confirmation dated 9 February
2000 (Option 2 - Company Call Option with UBS reference:
YPF2 Call Option);
(b) in relation to the $275 million Junior Subordinated Debentures
8.08% due 2038 issued by Yorkshire Power Finance Limited:
(i) ISDA Master Agreement and Schedule thereto dated 22 July
1997 between Yorkshire Power Group Limited and National
Westminster Bank PLC and related Confirmation dated 9 June
1998 (Amended Reference: NYO 3073); and
(ii) ISDA Master Agreement and schedule thereto dated 15 August
1997 between Yorkshire Power Group Limited and Nationsbank
N.A. and related Confirmation dated 20 March 2000 (Ref:
▇▇▇▇▇▇▇▇▇/311425-LI998a);
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AUDITED ACCOUNTS means the audited consolidated group accounts of
Yorkshire and its subsidiary undertakings for the financial period
ended on the Balance Sheet Date;
BALANCE SHEET DATE means 31 December 2000;
BASE RATE has the meaning set out in Clause 8.3;
BIG FIVE means KPMG Audit Plc, Ernst & Young, PricewaterhouseCoopers,
▇▇▇▇▇▇▇▇ and Deloitte;
BORROWINGS means:
(a) money borrowed or raised and debit balances at banks;
(b) any bond, note, loan stock, debenture or similar debt
instrument;
(c) acceptance credit facilities and documentary credit facilities;
(d) receivables sold or discounted (otherwise than on a non-recourse
basis);
(e) finance leases and hire purchase contracts; and
(f) any swap, hedging or similar treasury instrument taking the ▇▇▇▇
to market valuation of the relevant instrument;
BUSINESS means (a) the Northern Sale Business in relation to the sale
of the Northern Sale Business pursuant to the Northern Electricity
Business Sale Agreement and the Northern Non-Electricity Business Sale
Agreement and (b) the Yorkshire Sale Business in relation to the sale
of the Yorkshire Shares;
BUSINESS DAY means a day on which banks are open for business in
England (excluding Saturdays, Sundays and public holidays);
CAA 2001 means Capital Allowances ▇▇▇ ▇▇▇▇;
CHAPS means clearing houses automated payment systems;
COMPETENT AUTHORITY means any legal person (including any government
department, authority or agency), including the EC Commission and Ofgem
having regulatory powers and/or authority at law and/or any court of
law or tribunal;
COMPLETION means the completion of the sale and purchase of the
Yorkshire Shares pursuant to this Agreement;
COMPLETION AMOUNT has the meaning set out in Clause 3.1;
COMPLETION DATE means the date on which Completion occurs;
CONFIDENTIAL INFORMATION means business, technical, financial,
operational, administrative, staff management, marketing and economic
information, the identities of customers and all other information of a
secret and/or proprietary nature but shall not include such information
which is in, or which comes into the public domain or a party's
possession other than as a result of (i) a breach of any obligations
imposed by this Agreement or (ii) a breach of any other duty of
confidentiality relating to that information;
CONFIDENTIALITY AGREEMENT means the agreement between the Innogy
Guarantor and NE plc dated 15 March 2001 as to the confidentiality of
information exchanged between the Innogy Guarantor and NE plc;
CONNECTED COMPANY has the meaning set out in Clause 13.4;
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DEED OF GUARANTEE AND INDEMNITY means the deed of guarantee and
indemnity between, among others, the Innogy Guarantor and NE plc in the
agreed terms;
DEED OF WARRANTY means the deed of warranty dated today between NE plc,
NEAGL and Npower Northern Limited;
DISCLOSURE LETTER means the letter of even date with this Agreement
from Innogy to Northern disclosing:
(a) information constituting exceptions to the Warranties; and
(b) details of other matters referred to in this Agreement;
DRAFT POST-CLOSING STATEMENT has the meaning given to that term in
Schedule 7;
ELECTRIC LINE has the same meaning as in Section 64 of The Electricity
▇▇▇ ▇▇▇▇;
ENCUMBRANCE means any claim, charge, mortgage, security, lien, option,
equity, power of sale, hypothecation or other third party right;
ENVIRONMENT has the meaning set out in paragraph 2.1.9 of Part A of
Schedule 2;
ENVIRONMENTAL LAW has the meaning set out in paragraph 2.1.9 of Part A
of Schedule 2;
ESPS means the Electricity Supply Pensions Scheme;
ESTIMATED YORKSHIRE CASH AND WORKING CAPITAL STATEMENT has the meaning
given to that term in Schedule 7;
ESTIMATED YORKSHIRE NET CASH AND WORKING CAPITAL has the meaning given
to that term in Schedule 7;
FTA means the Fair Trading ▇▇▇ ▇▇▇▇;
GROUP means, in respect of any company, the company, its parent
undertaking and any subsidiary undertaking of that company or of its
parent undertaking;
INFORMATION TECHNOLOGY means computer systems, communications systems,
software and hardware owned by or licensed to any Sale Company;
INNOGY PRICE MATRIX has the meaning set out in Clause 5.4;
INNOGY GROUP means the Innogy Guarantor and its subsidiary undertakings
(excluding Sale Companies to be sold pursuant to this Agreement);
INNOGY'S SOLICITORS means Linklaters of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇;
INTELLECTUAL PROPERTY means trade marks, service marks, trade names,
logos, get-up, patents, inventions (whether patentable or not),
registered and unregistered design rights, utility models, copyright,
semi-conductor topography rights, domain names, database rights and all
other similar proprietary rights and the goodwill attaching to them
which may subsist in any part of the world (including Know-how)
including, where such rights are obtained or enhanced by registration,
any registration of such rights and applications and rights to apply
for such registrations;
KNOW-HOW means all material know-how, trade secrets and confidential
industrial and commercial information and techniques in any form
(including paper, electronically stored data, magnetic media, film and
microfilm) including without limitation drawings, formulae, test
results, reports, project reports and testing procedures, instruction
and training manuals, tables of operating conditions, market forecasts,
lists and particulars of customers and
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suppliers, sales targets, sales statistics, price, discounts, margins,
tenders, price sensitive information and any information derived from
them;
LONG-STOP DATE means midnight on 31 December 2001 or such later date as
the parties may agree in writing;
LOSSES means all losses, liabilities, damages, costs (including,
without limitation, reasonable legal costs), charges, expenses,
actions, proceedings, claims and demands;
MATERIAL PROPERTIES means the properties briefly described in Part A of
Schedule 3 and MATERIAL PROPERTY means any of them and includes every
part of each of them;
NEAGL means Northern Electric & Gas Limited;
NET CASH has the meaning given to that term in Schedule 7;
NETTING AGREEMENT means the agreement of the date herewith between,
inter alia, Northern, NE plc, NEAGL, Innogy and the Innogy Guarantor
with respect to the netting of consideration payable by Northern
hereunder and by Npower Northern Limited under the Northern Electricity
Business Sale Agreement and the Northern Non-Electricity Business Sale
Agreement;
NON-ASSUMED YORKSHIRE BONDS means:
(i) $350 million series B senior notes due 2003 issued by
Yorkshire Power Finance Limited; and
(ii) (pound)150 million 8 5/8% bonds due 2005 issued by
YEG plc;
NON-ASSUMED YORKSHIRE SWAPS means any transactions, other than the
Assumed Yorkshire Swaps, which have been entered into by any Sale
Company and the relevant swap counterparty and which is a rate swap
transaction, basis swap, forward rate transaction, equity or equity
index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other
similar transaction of a treasury nature;
NON-RETAINED INTER-COMPANY LOANS means all loans or other indebtedness
(including any Borrowings) between any Sale Company and any company in
the Vendor's Group company referred to in Part 1 of Schedule 1 or in
Schedule 2 of the Yorkshire Hiveout Agreement, including:
(a) overdraft facility provided by YEG to Scarcroft Investments
Limited dated 27 March 2000;
(b) overdraft facility provided by YEG to Yeleco 29 Limited dated 27
March 2000;
(c) overdraft facility provided by YEG to YE Gas Limited dated 6
August 1999 (as amended);
(d) inter-company loan between Yorkshire Electric Power Limited and
YEG dated 27 March 2000;
(e) inter-company loan between Scarcroft Leasing (September) Limited
and YEG dated 27 March 2000; and
(f) inter-company loan agreement between Yorkshire Energy Limited
and YEG dated 27 March 2000.
NORTHERN BONDS means:
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(a) (pound)100 million 8.875% bonds due 2020 issued by Northern
Electric Finance plc;
(b) (pound)100 million 8.625% bonds due 2005 issued by Northern
Electric Finance plc; and
(c) the Ambac Bonds.
NORTHERN DATA ROOM has the meaning set out in Disclosure Letter (as
defined in the Deed of Warranty);
NORTHERN ELECTRICITY BUSINESS SALE AGREEMENT means the agreement dated
today between the Npower Northern Limited and NE plc for the sale and
purchase of the electricity assets of the Northern Sale Business and
certain metering assets of NE plc;
NORTHERN NON-ELECTRICITY BUSINESS SALE AGREEMENT means the agreement
dated today between Npower Northern Limited and NEAGL and others for
the sale and purchase of the non-electricity assets of the Northern
Sale Business;
NORTHERN GROUP or NORTHERN GROUP COMPANIES means NE plc, its parent
undertaking and any subsidiary undertaking of that company or of its
parent undertaking and NORTHERN GROUP COMPANY means any of them;
NORTHERN SALE BUSINESS means the business of Northern to be acquired
pursuant to the Northern Electricity Business Sale Agreement and the
business of NEAGL and certain other assets to be acquired pursuant to
the Northern Non-Electricity Business Sale Agreement;
NORTHERN SENIOR EMPLOYEE has the meaning set out in the Northern
Non-Electricity Business Sale Agreement;
NORTHERN'S SOLICITORS means ▇▇▇▇▇▇▇ ▇▇▇▇▇ of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
NORTHERN TRANSFER SCHEME means a transfer scheme for the transfer and
separation of, inter alia, the Tariff Supply Business (as defined in
the Northern Electricity Business Sale Agreement) to the Successor
Supply Company (as defined in the Northern Electricity Business Sale
Agreement) (to the extent not already transferred under the Northern
Electricity Business Sale Agreement) as agreed between the parties
after the date hereof or as may be required to be made by the Secretary
of State for Trade and Industry under the Utilities ▇▇▇ ▇▇▇▇;
NORTHERN WARRANTIES means the warranties and representations given by,
inter alia, NE plc and NEAGL contained in the Deed of Warranty;
OFGEM means the Office of Gas and Electricity Markets;
PAYMENT ACCOUNT DETAILS means, in relation to any relevant payment to
be made under or pursuant to this Agreement, the name, account number,
sort code, account location and other details specified by the payee
and necessary to effect payment to the payee in accordance with this
Agreement;
PERSON means any person, company, firm, partnership, association or
body corporate;
PLANNING ACTS means the Town and Country Planning ▇▇▇ ▇▇▇▇, the
Planning (Listed Buildings and Conservation Areas) ▇▇▇ ▇▇▇▇, the
Planning (Hazardous Substances) ▇▇▇ ▇▇▇▇, the Planning (Consequential
Provisions) ▇▇▇ ▇▇▇▇ and the Planning and Compensation ▇▇▇ ▇▇▇▇;
PROPERTIES means:
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(a) the Material Properties; and
(b) the Secondary Substations;
PURCHASER means:
(a) Npower Northern Limited in relation to the purchase of the
Northern Sale Business; and
(b) Northern in relation to the purchase of the Yorkshire Shares;
RECEIVABLES AGREEMENT means the amended and restated receivables
purchase agreement dated 16th October 2000 and made between (1)
Northern Electric Plc (2) Cragside Limited (3) Mont Blanc Capital
Corp. and (4) ING Barings (U.S.) Capital Markets LLC;
REGULATION means Council Regulations (EEC) No. 4064/89 (as amended by
Regulation (EC) 1310/97;
REPORTING ACCOUNTANTS means a firm of Chartered Accountants which is
one of the Big Five, independent to Northern and Innogy, to be agreed
between Northern and Innogy within seven days of a notice by one to the
other requiring such agreement and failing such, agreement means a firm
of Chartered Accountants which is nominated as a result of the
application of either of them by or on behalf of the President for the
time being of the Institute of Chartered Accountants in England and
Wales;
RESTRICTED ACTIVITY means a business operating in the United Kingdom
which is competitive with the Northern Sale Business, in relation to
the Northern Sale Business, or the Yorkshire Sale Business, in relation
to the Yorkshire Sale Business;
RETAINED COMPANY INTRA-GROUP LOANS means loans or other indebtedness
between Sale Companies, including;
(a) inter-company loan agreement between Yorkshire Power Group
Limited and Yorkshire Holdings plc dated 11 September 1997
relating to loan dated 23 February 1997;
(b) promissory note between Yorkshire Power Group Limited and
Yorkshire Power Finance Limited dated 9 June 1998 (as amended);
(c) promissory note between Yorkshire Power Group Limited and
Yorkshire Power Finance Limited for $298,050,000 dated 25
February 1998;
(d) (pound)143,500,000 notes due 2019 issued by Yorkshire Power
Group Limited to Yorkshire Power Finance 2 Limited;
(e) inter-company loan agreement between Yorkshire Power Finance
Limited and Yorkshire Power Group Limited dated 4 February 1998;
(f) promissory note between Yorkshire Electricity Group plc and
Yorkshire Power Finance 2 Limited dated 16 February 2000;
(g) inter-company loan agreement between Yorkshire Power Finance 2
Limited and Yorkshire Electricity Group plc dated 16 February
2000;
(h) inter-company loan agreement between Yorkshire Power Finance
Limited and Yorkshire Electricity Group plc dated 3 February
1998; and
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(i) inter-company loan agreement between Yorkshire Power Finance
Limited and Yorkshire Electricity Group plc dated 20 December
1999;
SALE COMPANIES means Yorkshire and the Yorkshire Subsidiaries and SALE
COMPANY means any of them;
SECONDARY SUBSTATIONS means all of the substations (other than the
principal substations listed in Part A of Schedule 3) which are at the
date of this Agreement used for the Yorkshire Sale Business;
SENIOR EMPLOYEE means (i) a Northern Senior Employee in relation to the
sale of the Northern Sale Business and (ii) a Yorkshire Senior Employee
in relation to the Yorkshire Warranties and the sale of the Yorkshire
Shares;
SHARE AMOUNT has the meaning set out in Clause 3.1;
SHAREHOLDERS AGREEMENT DEED OF ADHERENCE means the deed of adherence to
the Yorkshire Shareholders Agreement in the agreed terms to be entered
into between Xcel Energy International, Inc, Northern, Yorkshire,
Innogy and the Innogy Guarantor;
STERLING BONDS means the (pound)200 million bonds @ 9.25% due 2020
issued by YEG plc and the (pound)200 million bonds @ 7.25 % due 2028
issued by Yorkshire Power Finance Limited;
TAXATION has the meaning given to that term in the Tax Deed of
Covenant;
TAX DEED OF COVENANT means the deed of covenant against Taxation in the
agreed terms to be entered into at Completion;
TAXES ACT means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
TCGA 1992 means the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
TRANSFER NOTICE INCORPORATING THE TAG ALONG NOTICE means the transfer
notice incorporating the tag along notice to be agreed between the
parties and to be given by Innogy to Xcel Energy International, Inc.
pursuant to Clauses 6 and 11 of the Yorkshire Shareholders Agreement;
VAT means United Kingdom Value Added Tax;
VATA means Value Added Tax ▇▇▇ ▇▇▇▇;
VENDOR means:
(a) Innogy in relation to the sale of the Yorkshire Shares; and
(b) Northern and NEAGL in relation to the sale of the Northern Sale
Business;
VENDOR INTELLECTUAL PROPERTY means all rights and interests held by the
Sale Companies (whether as owner, licensee or otherwise) in
Intellectual Property;
VENDOR'S GROUP means the Vendor its parent undertaking or any
subsidiary undertaking of the Vendor or of its parent undertaking
(excluding Sale Companies to be sold by the Vendor pursuant to this
Agreement);
WARRANTIES means the warranties and representations given by Innogy
contained in Part A of Schedule 2;
WORKING CAPITAL has the meaning given to that term in Schedule 7;
WORKING CAPITAL DETERMINATION DATE has the meaning given to that term
in Schedule 7;
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XCEL OPTION AGREEMENT means the agreement in agreed terms between
Innogy and Northern in relation to the 23,100,001 Ordinary Shares of
(pound)1 each in the capital of Yorkshire held, as at the date of this
Agreement, by Xcel Energy International, Inc;
YEG means Yorkshire Electricity Group plc;
YORKSHIRE means Yorkshire Power Group Limited, details of which are
contained in Part 1 of Schedule 1;
YORKSHIRE CASH AND WORKING CAPITAL STATEMENT has the meaning given to
that term in Schedule 7;
YORKSHIRE HIVEOUT AGREEMENT means the agreement for the intra group
sale of the Yorkshire electricity supply business assets and other
assets dated 1 August 2001 between YEG plc and Npower Yorkshire Limited
(as amended);
YORKSHIRE NET CASH AND WORKING CAPITAL has the meaning given to that
term in Schedule 7;
YORKSHIRE SALE BUSINESS means the entire business carried on by the
Sale Companies;
YORKSHIRE SHAREHOLDERS AGREEMENT means the shareholders agreement
relating to Yorkshire dated 26 February 2001 between Innogy, the Innogy
Guarantor, Xcel Energy Inc, Xcel Energy International, Inc and
Yorkshire;
YORKSHIRE SENIOR EMPLOYEE means an employee of a Sale Company who is in
receipt of an annual basic salary (on the basis of full-time
employment) in excess of (pound)56,000;
YORKSHIRE SHARES means 416,900,001 Ordinary Shares of(pound)1 each in
the capital of Yorkshire, being 94.75 per cent. of the issued share
capital of Yorkshire;
YORKSHIRE SUBSIDIARIES means the subsidiary undertakings Yorkshire
brief details of which are set out in Part 2 of Schedule 1; and
YORKSHIRE TRANSFER SCHEME means a transfer scheme for the transfer and
separation of, inter alia, the Tariff Supply Business (as defined in
the Yorkshire Hiveout Agreement) to the Successor Supply Company (as
defined in the Yorkshire Hiveout Agreement) (to the extent not already
transferred under the Yorkshire Hiveout Agreement) as agreed between
the parties after the date hereof or as may be required to be made by
the Secretary of State for Trade and Industry under the Utilities Act.
1.2 Subordinate Legislation
Any reference to a statutory provision shall include any subordinate
legislation made from time to time under that provision;
1.3 Modification etc. of Statutes
Any reference to a statutory provision:
1.3.1 shall include such provision as from time to time modified or
re-enacted or consolidated whether before or after the date of
this Agreement so far as such modification, re-enactment or
consolidation applies or is capable of applying to any
transactions entered into under this Agreement on or prior to
Completion; and
1.3.2 (so far as any liability thereunder may exist or can arise)
shall include also any past statutory provision (as from time to
time modified, re-enacted or consolidated) which such provision
has directly or indirectly replaced;
1.4 Companies ▇▇▇ ▇▇▇▇
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The terms PARENT UNDERTAKING and SUBSIDIARY UNDERTAKING and
WHOLLY-OWNED SUBSIDIARY shall have the same meanings in this Agreement
as their respective definitions in the Companies ▇▇▇ ▇▇▇▇ as amended;
1.5 Interpretation ▇▇▇ ▇▇▇▇
The Interpretation Act 1978 shall apply to this Agreement in the same
way as it applies to an enactment;
1.6 Accounts
Any reference to "ACCOUNTS" shall include the directors' and auditors'
reports, relevant balance sheets and profit and loss accounts and
related notes together with all documents which are or would be
required by law to be annexed to the accounts of the company concerned
to be laid before that company in general meeting in respect of the
accounting reference period in question;
1.7 References
References to this Agreement shall include any Schedules to it and
references to Clauses and Schedules are to Clauses of, and Schedules
to, this Agreement;
1.8 Singular/Plural
References in this Agreement (including the definitions in Clause 1.1)
to the singular include the plural and vice versa;
1.9 Information
Any reference to books, records or other information means books,
records or other information in any form including paper,
electronically stored data, magnetic media, film and microfilm;
1.10 Indemnity on an After-Tax Basis
Where any indemnity contained in this Agreement is expressed to be ON
AN AFTER TAX BASIS, then in calculating the liability of the
indemnifying party, there shall be taken into account, having regard to
the time value of money:
1.10.1 the amount by which any liability to Taxation of the party to be
indemnified (or any member of the Innogy Group (in the event of
Innogy being such party) or the Northern Group (in the event of
Northern being such party)) is actually reduced or extinguished
as a result of the matter giving rise to the indemnity claim;
and
1.10.2 the amount by which any liability to Taxation of the party to be
indemnified (or any member of the Innogy Group (in the event of
Innogy being such party) or the Northern Group (in the event of
Northern being such party)) is actually increased as a result of
the payment by the indemnifying party in respect of the matter
giving rise to the indemnity claim; and
1.11 Awareness
Any Warranty which is qualified as being made SO FAR AS INNOGY IS AWARE
or TO THE BEST OF THE KNOWLEDGE, INFORMATION AND BELIEF OF INNOGY means
so far as Innogy is aware or to the best of Innogy's knowledge,
information and belief, as the case may be, having made all reasonable
enquiries. REASONABLE ENQUIRIES for this purpose means those enquiries
made of those persons identified in the Disclosure Letter (including
any supplemental enquiries arising therefrom that it would be
reasonable to make); and
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1.12 Headings
1.12.1 Headings shall be ignored in construing this Agreement.
1.12.2 Mentioning anything after "include" or "including" does not
limit what else might be included.
2. AGREEMENT TO BUY AND SELL SHARES
2.1 Sale and Purchase of Yorkshire Shares
Innogy agrees to sell and Northern agrees to purchase the Yorkshire
Shares free from all encumbrances and together with all rights and
advantages now and hereafter attaching thereto.
3. CONSIDERATION
3.1 Purchase Price
The consideration for the purchase of the Yorkshire Shares shall be
equal to:
(a) the cash sum of 57.207962 ▇▇▇▇▇ for each Yorkshire Share making
an aggregate amount of (pound)238,500,000 (the SHARE AMOUNT)
plus
(b) an amount equal to the Estimated Yorkshire Net Cash and Working
Capital
(the Share Amount plus the Estimated Yorkshire Net Cash and Working
Capital together being referred to herein as the COMPLETION AMOUNT);
and the Completion Amount shall be paid to Innogy on Completion
(subject to adjustment as expressly provided for in Clause 8 of this
Agreement and subject to the Netting Agreement).
3.2 Payment Details
Wherever in this Agreement provision is made for the payment of cash by
one party to another, such payment shall be made in pounds sterling and
shall be effected by crediting the account specified in the Payment
Account Details of the party or entity entitled to the payment by way
of CHAPS on or before the due date for payment unless the payee by
notice to the payer, not later than three Business Days prior to the
due date for payment, elects to be paid by banker's draft drawn on any
international bank reasonably acceptable to the payer and having an
office in London. Payment of such sum shall be a good discharge to the
payer of its obligation to make such payment.
4. CONDITIONS
4.1 Conditions Precedent
The agreement for the sale and purchase of the Yorkshire Shares
contained in Clause 2 is conditional upon (and accordingly beneficial
ownership in the Yorkshire Shares will not pass until) satisfaction of
the following conditions, or their satisfaction subject only to
Completion of this Agreement:
4.1.1 to the extent the transactions contemplated by this Agreement
fall within the scope of the EC Merger Regulation, the EC
Commission:
(a) taking a decision under Article 6(1)(b) of the Regulation
that the transaction hereby contemplated does not raise
serious doubts as to its compatibility with the Common
Market, any conditions attached to the EC Commission's
12
decision of compatibility being in form and substance
satisfactory to Northern (or the EC Commission allowing
its jurisdiction to lapse by allowing the time limit for
opening proceedings under Article 6(1)(c) of the
Regulation to expire without opening proceedings in
respect of the transaction and accordingly the transaction
being deemed compatible with the Common Market); or
(b) declaring, if the EC Commission has initiated proceedings
pursuant to Article 6(1)(c) of the Regulation, that the
transaction hereby contemplated is compatible with the
Common Market, any conditions attached to the Commission's
decision of compatibility being in form and substance
satisfactory to Northern (or that the Commission has
allowed its jurisdiction to lapse by failing to take a
decision on compatibility with the Common Market within
the time limit prescribed by the Regulation following the
opening of proceedings and accordingly the transaction,
pursuant to Article 10(6) of the Regulation, is deemed to
be compatible with the Common Market); or
(c) referring the transaction hereby contemplated to the
national authorities of the United Kingdom under Article 9
of the Regulation;
in each case, any application of the provisions of Articles 81
and 82 EC Treaty (ex Articles 85 and 86) and/or the Regulation
by the EC Commission in the course of its consideration of the
transaction resulting in the imposition of no conditions, or
only of conditions satisfactory in form and substance to
Northern; or
4.1.2 either:
(a) receipt of a notice in a form reasonably satisfactory to
Northern and Innogy of a confirmation from Xcel Energy
International Inc. that it will not exercise any rights
pursuant to the Yorkshire Shareholders Agreement to
purchase the Yorkshire Shares; or
(b) the expiry of the Preemption Offer Period (as defined in
the Yorkshire Shareholders Agreement), following issue of
the Transfer Notice incorporating the Tag Along Notice,
without acceptances having been received for all of the
Yorkshire Shares;
4.1.3 either
(a) the Sale Companies obligations in respect of the
redemption of the Non-Assumed Yorkshire Bonds having been
satisfied in full in accordance with the terms and
conditions of such bonds having fully discharged such
Non-Assumed Yorkshire Bonds; or
(b) (a) the Sale Companies having irrevocably deposited with
the relevant paying agent funds sufficient to fully
discharge such Non-Assumed Yorkshire Bonds and (b)
irrevocable notice of redemption of such Non-Assumed
Yorkshire Bonds having been given and (c) irrevocable
instructions to the relevant paying agents having been
given to pay such funds to the bondholders or the relevant
trustee in accordance with the terms of such bonds;
4.1.4 the trustees of the Northern Bonds and in the case of the Ambac
Bonds, Ambac (and/or the trustee of the Ambac bonds, as
appropriate) and/or (in each case) any independent financial
adviser appointed under the documents relating to such bonds:
13
(a) having issued or agreed to issue any approvals or
certifications under the relevant bond documents; and/or
(b) having agreed all documentation required to amend the
relevant bond documents;
in each case, as may be required in connection with the sale
of the Northern Sale Business;
4.1.5 the Sale Companies having reduced their aggregate Borrowings to
below (pound)10 million (without any other liability on the
part of the Sale Companies in respect of such Borrowings other
than in relation to the retained Borrowings below
(pound)10,000,000);
4.1.6 Yorkshire holding (by way of deposit in a bank account) the
cash sum of not less than(pound)180 million.
4.2 Responsibility for Satisfaction
4.2.1 Northern hereby undertakes to use all reasonable endeavours to
ensure the satisfaction of the conditions set out in Clauses
4.1.1 and 4.1.4 and Innogy hereby undertakes to use all
reasonable endeavours to ensure the satisfaction of the
conditions set out in Clauses 4.1.2, 4.1.3, 4.1.5 and 4.1.6, in
each case on or before the Long-Stop Date.
4.2.2 Without prejudice to the foregoing, each of the parties agrees
that it shall, upon a request from the other, promptly
co-operate with and provide all necessary information
reasonably required by the other party or by any Competent
Authority or any government, governmental, supranational or
trade agency, court or other regulatory body, or any other
third party in respect of all requests and enquiries in
connection with this Agreement and the arrangements relating
thereto (including, in relation to the satisfaction of the
condition precedent set out in Clause 4.1) from any such
Competent Authority or government, governmental, supranational
or trade agency, court or other regulatory body and Innogy
shall use its reasonable endeavours to procure that the Sale
Companies do so).
4.2.3 If the EC Commission decides to initiate proceedings pursuant
to Article 6(1)(c) of the Regulation in relation to the
transaction or matters arising therefrom, each of the parties
undertakes to use its reasonable endeavours to persuade the EC
Commission to issue a decision declaring the transaction
compatible with the Common Market without any conditions or
obligations attaching thereto (subject to the Purchaser
indemnifying the Vendor in respect of any costs or expenses
incurred to third parties in connection with fulfilling its
obligations hereunder).
4.2.4 The Purchaser shall file with the EC Commission the Form CO
required under the Regulation as soon as reasonably practicable
and (provided the Vendor has provided all relevant information
in respect of the Sale Companies or the Vendor required for the
Form CO) in any event no later than ten Business Days after the
date of this Agreement and shall consult with the Vendor and
the Vendor's Solicitors on the content of the Form CO prior to
its submission to the EC Commission.
4.3 Satisfaction
14
4.3.1 Northern shall give notice to Innogy of the satisfaction of the
conditions set out in Clauses 4.1.1 and 4.1.4, and Innogy shall
give notice to Northern of the satisfaction of the conditions
set out in Clauses 4.1.2, and 4.1.3, 4.1.5 and 4.1.6 in each
case within two Business Days of becoming aware of the same.
4.3.2 Northern in its sole discretion may waive satisfaction of any
of the conditions set out in Clause 4.1 (other than clause
4.1.2) by written notice to the Vendor.
4.4 Break-fee
4.4.1 (a) If any of the conditions contained in Clause 4.1.4 are
not satisfied by the Long-Stop Date, then this Agreement
shall (save for Clauses 12 and 13) terminate and Northern
shall pay to Innogy within three Business Days of the
Long-Stop Date an amount in cash of (pound)20 million.
(b) If the condition contained in Clause 4.1.1 is not
satisfied by the Long-Stop Date, then this Agreement
shall (save for Clauses 12 and 13) terminate and, if the
only reason for such non-satisfaction relates to a
request for any disposal, undertaking or other action
related to activities not carried on by Mid-American
Energy Holding Company and its subsidiaries and
affiliates, (and all other conditions contained in Clause
4.1 have been satisfied) Northern shall pay Innogy within
three Business Days of the Long-Stop Date an amount in
cash of(pound)5 million; and, if the reason for such
non-satisfaction relates to a request for any disposal,
undertaking or other action related to activities of
Mid-American Energy Holding Company and its subsidiaries
and affiliates, Northern (and all other conditions
contained in Clause 4.1 have been satisfied) shall pay
Innogy within three Business Days of the Long-Stop Date
an amount in cash of(pound)10 million,
provided always that, if on the Long-Stop Date the condition
in Clause 4.1.1 remains unsatisfied and also the condition in
Clause 4.1.4 remains unsatisfied, then notwithstanding the
previous of 4.4.1(b), the amount payable by Northern shall be
the relevant amount referred to in Clause 4.4.1(a) (and not
the amount referred to in Clause 4.4.1(b)).
4.4.2 If any of the conditions contained in Clause, 4.1.2, 4.1.3,
4.1.5 or 4.1.6 are not satisfied by the Long-Stop Date, then
this Agreement shall terminate (save for Clauses 12 and 13) and
Innogy shall pay to Northern within three Business Days of the
Long-Stop Date an amount in cash of (pound)20 million.
4.5 Covenant
4.5.1 Innogy covenants to Northern that all amounts outstanding and
owed by Innogy to Xcel International Inc. under Clauses 10.6 or
10.7 of the Yorkshire Shareholders Agreement as at Completion
will be paid in full by Completion and any further sums payable
under such Clauses following Completion will be paid by Innogy
in accordance with the terms of such Clauses.
4.5.2 Innogy covenants to Northern that it will procure that
Borrowings of the Sale Companies (other than in respect of the
Assumed Yorkshire Debt and the Assumed Yorkshire Swaps) are,
prior to Completion, reduced to below(pound)10 million (without
any other liability on the part of any Sale Companies in
respect of such Borrowings other than in relation to the
retained Borrowings) and all of the Non-Retained Inter-Company
Loans are repaid in full (without any further liability on the
part of any of the
15
Sale Companies in respect of such Loans) and on or prior to
Completion Innogy shall provide Northern with such
information as Northern may reasonably require to show that
Innogy has complied with its obligations under this Clause.
4.5.3 Innogy covenants to Northern that it will procure that all
Non-Assumed Yorkshire Swaps are closed out and settled prior to
Completion (without any further liability on the part of the
Sale Companies in respect of such Swaps) and on or prior to
Completion Innogy shall provide Northern with such information
as Northern may reasonably require to show that Innogy has
complied with its obligations under this Clause. Without
prejudice to any liability for failure to close out and settle
all Non-Assumed Yorkshire Swaps, if after Completion Northern
becomes aware that there were any Non-Assumed Yorkshire Swaps
in existence at Completion (and which have not been already
taken into account in the Working Capital adjustment), Northern
shall be entitled within five Business Days of Northern
becoming aware of such Swaps to close out and settle such
Non-Assumed Yorkshire Swaps and, if such Non-Assumed Yorkshire
Swaps are so closed-out and settled with any payment due to any
Sale Company, Northern shall account to Innogy for such monies
and if the close-out and settlement results in any Sale Company
making a payment to any third party which results in the Sale
Company making a payment or having any other liability to a
third party, Innogy shall forthwith on demand indemnify the
relevant Sale Company in respect thereof or, at the option of
Northern, pay such amounts directly to Northern or as Northern
may direct.
4.5.4 Innogy covenants to Northern to procure that the Sale Companies
will keep in place and not cancel the Assumed Facilities.
4.5.5 Innogy covenants to Northern that it will procure that, on or
prior to Completion, all intra-group contracts between the
Innogy Group and any of the Sale Companies entered into between
3 April and Completion, other than contracts entered into in
the ordinary course of business and the Yorkshire Hiveout
Agreement and agreements entered into pursuant to the Yorkshire
Hiveout Agreement shall be terminated.
5. ACTION PENDING COMPLETION
5.1 Mutual Undertakings
Subject to Clauses 5.2 to 5.5 below each of Innogy (in relation to the
Sale Companies) and the Northern Guarantor (in relation to the Northern
Sale Business) shall procure that:
5.1.1 in the case of Innogy, no Sale Company shall and, in the case
of NE plc, no Northern Group Company shall in relation to the
Northern Sale Business:
(i) incur any expenditure on capital account exceeding
(pound)100,000 in relation to the Northern Sale
Business, (pound)200,000 in relation to the Sale
Companies (exclusive of VAT) in the case of any
single item or (pound)1 million in relation to the
Northern Sale Business, (pound)2 million in relation
to the Sale Companies (exclusive of VAT) in
aggregate, in both cases other than any such
expenditure details of which are set out in Schedule
8; or
(ii) sell or dispose of or purchase or agree to sell or
dispose of or purchase or grant any option or right
of pre-emption in respect of any asset or any
interest in any asset for a consideration in excess
of (pound)100,000 in relation to the
16
Northern Sale Business, (pound)200,000 in relation to
the Sale Companies (exclusive of VAT) or create any
encumbrance over any material part of its assets
(other than pursuant to the existing financing of the
Sale Companies, details of which are set out in
Schedule 8); or
(iii) create or raise any debt or borrow any money or make
any payments (except payments in the ordinary course
of business including pursuant to existing
contractual commitments) in each case except as
described in Schedule 8 or between Sale Companies; or
(iv) enter into:
(a) (save as provided in Clause 5.1.1 (ix) in
respect of any additional employee) any
contracts, transactions or commitments outside
the ordinary course of business or which are not
on arms-length commercial terms; or
(b) except for contracts entered into in accordance
with Clause 5.5, any contracts, transactions or
commitments which are (i) not capable of being
terminated without compensation at any time in
the case of Yorkshire with three months' notice
or less and in the case of Northern Group
Company with three months' notice or less or
(ii) which involve or may involve total annual
expenditure in excess of (x)(pound)250,000 in
relation to the Northern Sale Business,
(pound)500,000 in relation to the Sale
Companies, in each case in the case of any
single contract, transaction or commitment or
(y)(pound)1 million in relation to the Northern
Sale Business,(pound)2 million in relation to
the Sale Companies, in aggregate (in each case
exclusive of VAT) in each case other than those
details of which are contained in Schedule 8;
provided that nothing in this subparagraph (iv) shall
prevent any Sale Company or Northern Group Company
from entering into connection agreements, use of
system agreements and quotations and other agreements
where in each case it is obliged to do so pursuant to
its licence or any other legal or regulatory
requirement and any contracts in relation thereto or
contracts in relation to the routine repair,
replacement, reinforcement, maintenance and new
connections of the distribution network; or
(v) substantially amend the terms of any existing
contracts or agreements involving revenue or
expenditure in excess of (pound)100,000 per annum
(exclusive of VAT) in relation to the Northern Sale
Business or (pound)200,000 per annum (exclusive of
VAT) in relation to the Sale Companies; or
(vi) in the case of the Yorkshire Sale Companies declare,
make or pay any dividend or other distribution other
than (a) to another Sale Company or (b) to meet
interest payments in respect of the existing
financing arrangements of any Sale Company or (c) any
stock dividend or other similar distribution as
described in Schedule 8; or
(vii) grant, issue or redeem any mortgage, charge,
debenture or other security or give any guarantee or
indemnity (other than in the ordinary course); or
17
(viii) make any change in the material terms and conditions
of employment of any of its directors or Senior
Employees or any material change to the terms and
conditions or rates of pay pursuant to any
collective agreement affecting more than 100
employees in aggregate; or
(ix) terminate the employment of any Senior Employee
(save for gross misconduct) or make an offer of
employment to any additional employee (unless on
either a fixed term contract of less than one year's
duration or a contract with a notice period of less
than three months), save as required by the terms of
this agreement or as required by the terms of any
agreement existing at the date of this agreement as
described in Schedule 8; or
(x) announce or agree any redundancies or redundancy
terms in relation to more than 35 employees in
aggregate during the period to which this covenant
applies; or
(xi) in respect of any employees of the Sale Companies
(in the case of the Sale Companies) or in respect of
any employees of the Northern Sale Business (in the
case of any Northern Group Company), initiate any
alterations to pension scheme contributions and
rules (save in relation to the introduction of bulk
transfer provisions to Northern's Scheme), or
initiate any increase in the pension benefits or
reduction in member contributions; or
(xii) introduce any new share incentive, share option,
profit sharing, bonus or other incentive scheme or
vary in any way the terms of any such scheme as it
currently operates, including any variation to
performance targets, objectives, quanta of payment
or any variation to the identities of participants;
or
(xiii) enter into or settle any litigation which is
material to the Sale Companies or the Northern Sale
Business, as the case may be; or
(xiv) permit any of its insurances to lapse or knowingly
do any thing which would make any policy of
insurance void or voidable or fail to notify any
material insurance claim of which such Sale Company
or Northern Group Company as the case may be, has
become aware, in accordance with the provisions of
the relevant policy or settle any such claim
materially below the amount claimed; or
(xv) create, issue, purchase or redeem any class of share
or loan capital; or
(xvi) manage its debtors and creditors otherwise than
substantially in accordance with the current
practice of the Sale Companies or the Northern Sale
Companies as the case may be; or
(xviii) in the case of any Northern Group Company, alter any
published tariffs that apply to any date after
Completion in relation to the supply of electricity
or gas or other consumer products where (i) a
Northern Group Company has sole discretion on
pricing and (ii) where such products are sold
directly by a Northern Group Company to residential
customers, small or medium enterprise customers or
any customer of any Northern Group Company which
accounts for one per cent. or more of the turnover
of the Northern Sale Business; or
18
(xix) terminate any contracts or agreements with sales
agents (and in the event that any such contracts are
to lapse, expire or otherwise terminate under their
terms, to notify NE plc (in the case of Innogy) or
Innogy (in the case of NE plc) as far in advance as
reasonably practicable prior to such termination or
expiry and at the other party's cost take such
action as the other party may reasonably require in
relation to the same) or appoint any new or enter
into any further contracts with sales agents; or
(xx) terminate any contracts or agreements involving
revenue or expenditure in excess of (pound)100,000
per annum (exclusive of VAT) in relation to the
Northern Sale Business or (pound)200,000 per annum
(exclusive of VAT) in relation to the Sale Companies
(other than where such contracts or agreements
lapse, expire or otherwise terminate under their
terms); or
(xxi) make any changes in its accounting policies other
than as required by law or any relevant accounting
body; or
(xxii) in the case of the Sale Companies, make any
alterations to its memorandum or articles of
association or acquire any shares in any other
company; or
(xxiii) give any undertakings to any Competent Authority or
agree with any Competent Authority or consent to the
adoption by any Competent Authority of any
additions, deletions, amendments or modifications to
the terms or conditions of any licence which licence
is material to the Sale Companies taken as a whole
or the Northern Sale Business taken as a whole; or
(xxiv) not sell, dispose or agree to sell or dispose any of
the shares (or any interest in any of the shares) in
any of the Sale Companies; or
(xxv) implement any material new advertising or marketing
campaigns in respect of the Business; or
(xxvi) in the case of the Sale Companies make any amendment
to the terms of the Yorkshire Hiveout Agreement or
the Agency Agreement (as defined in the Yorkshire
Hiveout Agreement); or
(xxvii) agree, conditionally or otherwise, to do any of the
foregoing.
5.1.2 subject to the restrictions contained in Clause 5.1.1 above
and in subparagraphs 5.1.3, 5.1.4 and 5.1.5 below, each
Northern Group Company and the Sale Company shall carry on
its Business in the ordinary course and in particular, no
Northern Group Company nor any Sale Company will enter into
any contract (a) for the supply of electricity or gas to
industrial and/or commercial customers or (b) in the case of
the Sale Companies for the provision of external contracting
services, in each case which is, in the opinion of the
management of the relevant entity acting reasonably entered
into on the basis of a loss making transaction;
5.1.3 Innogy in relation to the Sale Companies shall procure that
no member of the Innogy Group shall, before Completion:
(i) dispose of any interest in the Yorkshire Shares or
grant any option or right of pre-emption over, or
mortgage, charge or otherwise encumber the Yorkshire
Shares or any of them; or
(ii) except as required by law permit any Sale Company to
pass any resolution in general meeting; or
19
(iii) liquidate any Sale Company or dispose of any shares
in any Sale Company;
5.1.4 so far as permitted by law and subject to Clauses 13.2 and
13.3 the other party and its agents will, upon reasonable
notice and during normal working hours, be allowed
reasonable access to, and, where reasonably practicable to
take copies of, the books and records of each Sale Company,
or of each Northern Group Company to the extent such books
and records relate to the Northern Sale Business, as the
case may be, subject to such access not interfering with the
carrying on of the business of any Sale Company or of the
Northern Sale Business, as the case may be or the business
of the relevant party allowing access or any member of its
Group;
5.1.5 so far as permitted by law and subject to Clauses 13.2 and
13.3 each party will consult, and, in the case of Innogy,
will cause the relevant Sale Companies to consult, and in
the case of Northern will cause the relevant Northern Group
Companies to consult with one or more of the other party's
representatives with respect to any action between the date
of this agreement and Completion which may materially affect
the business of the relevant Sale Company or Northern Sale
Business. Such party will provide, and will cause the
relevant Yorkshire Sale Company, or Northern Group Company
as the case may be to provide to such representatives such
information as the other party's representatives may
reasonably request for this purpose;
5.1.6 Innogy shall consult with NE plc and NE plc shall consult
with Innogy before making arrangements under Clause 14(5) of
Innogy's Scheme and Northern's Scheme respectively to deal
with any surpluses disclosed in Innogy's Scheme and
Northern's Scheme respectively by the actuarial valuations
as at 31 March 2001 in relation to whether and how those
arrangements would affect Yorkshire Scheme Relevant
Employees and Northern Scheme Relevant Employees
respectively;
5.1.7 NE plc shall consult with Innogy in relation to renewal of
the Northern Group's insurance policies to the extent that
such policies relate to the Northern Sale Business and take
into account the reasonable requirements of Innogy in
relation to such insurance renewal to the extent they
require Northern to maintain in all material respects the
existing scope and level of insurance cover which applies to
the Northern Sale Business as at the date hereof; and
5.1.8 Innogy undertakes to provide that as soon as practicable and
in any event no later than 10 August 2001, additional
information to the extent required to comply with the
Warranties in respect of each of the Telecom Employees as
defined in the Disclosure Letter.
5.2 Consent
Innogy may permit a Sale Company to do any of the matters set out in
Clauses 5.1 or 5.5 with the prior written consent of Northern. Northern
may permit a Northern Group Company to do any of the matters set out in
Clauses 5.1 or 5.5 with the prior written consent of Innogy.
5.3 Compliance with laws etc.
Consent shall not be required (i) in respect of actions taken to comply
with any legal, licence or regulatory requirements or (ii) where Innogy
or NE plc as the case may be can demonstrate that it was necessary for
it to take the relevant action without the prior consent of the other
20
party due to emergency operational requirements which would have caused
significant operational difficulties if not remedied before it was
practicable to consult with and obtain the consent of the other party
and Clauses 5.1 and 5.5 shall not apply in the circumstances set out in
this Clause.
5.4 Innogy Price Matrices
Prior to the date of this agreement the Innogy Guarantor shall provide
NE plc with matrices of prices in accordance with standard practice in
the gas and electricity industries, and in a format and manner agreed
by Northern and Innogy, setting out prices at which the Innogy
Guarantor would be willing for the period of this agreement, up to and
including September 2003, to sell wholesale (i) electricity and (ii)
gas to the Northern Sale Business (the INNOGY PRICE MATRIX). Further,
Innogy shall provide NE plc with a matrix of supplier Balancing Service
Use of System (BSUoS) costs prior to the date of this agreement and in
a format and manner agreed by Northern and Innogy. Innogy shall be
entitled to alter the Innogy Price Matrices prospectively on any
business day if any such alterations are in accordance with standard
industry practice in the gas and electricity industries. Alterations to
any Innogy price matrix are not to apply retrospectively.
5.5 Trading Contracts
Provided that the Innogy Guarantor has provided the Innogy Price Matrix
(or, if any alterations are made to the Innogy Price Matrix in
accordance with Clause 5.4, the Innogy Price Matrix so altered) to
Northern (to the address for notices set out in Clause 13.12.1 and via
fax to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ at Northern (fax number ▇▇▇▇ ▇▇▇ ▇▇▇▇), and
subject to Clauses 5.2 and 5.3, Northern shall procure that none of the
Group Companies operating the Northern Sale Business shall in the
period from the date of this agreement and before Completion:
5.5.1 enter into any option, forward contract or other commitment
to purchase wholesale electricity or gas which is not
intended in the reasonable judgement of Northern, to cover
its expected demand; or
5.5.2 purchase or enter into any option, forward contract or other
commitment to purchase wholesale electricity or gas at
prices above those in the most recent Innogy Price Matrix (a
"EXCLUDED PURCHASE COMMITMENT") provided that on any date on
which Northern notifies ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇
at Innogy (fax number: ▇▇▇▇▇ ▇▇▇▇▇▇) that Northern wishes to
enter into any Excluded Purchase Commitment, and Innogy is
unwilling to enter into such Excluded Purchase Commitment at
prices indicated in the then current Innogy Price Matrix and
for the volumes which Northern so notifies Innogy, then
Northern shall be permitted to do any of the foregoing on
such date at such prices and for the volumes notified by
Northern to Innogy ; or
5.5.3 sell or enter into any option, forward contract or other
commitment to sell wholesale electricity or gas at prices
below those in the most recent Innogy Price Matrix (an
"EXCLUDED SALE COMMITMENT") provided that on any date on
which Northern notifies ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇
at Innogy (fax number: ▇▇▇▇▇ ▇▇▇ ▇▇▇) that Northern wishes
to enter into any Excluded Sale Commitment, and Innogy is
unwilling to enter into such Excluded Sale Commitment at the
prices indicated in the then current Innogy Price Matrix and
for the volumes which Northern so notifies Innogy, then
Northern shall be permitted to do any of the foregoing on
such date at such prices and for the volumes notified by
Northern to Innogy; or
21
5.5.4 enter into any electricity spill contract other than in
respect of the Viking power plant located at Seal Sands,
Teesside in substantially the form set out in Document 8.2.7
in the Black Data Room,
Provided that nothing in this Clause 5.5 shall prevent NE plc or NEAGL
(or any other company in the Northern Group) from entering into any
forward contract or other commitment to purchase wholesale electricity
or gas to trade out of speculative positions existing as at the date of
this agreement.
5.6 Electricity Spot Trading
Northern shall use all reasonable endeavours to balance daily forecast
demand and purchase contract requirements to within plus or minus 5
percent of forecast demand. Northern and Innogy shall on a day ahead
basis review their requirements for short term balancing trades and
where possible, and to the extent that both Northern and Innogy agree,
conclude trades with each other to balance Northern's position.
5.7 Transfer Notice
Innogy shall send the Transfer Notice incorporating the Tag Along
Notice to Yorkshire as soon as reasonably practicable following the
execution of this Agreement.
5.8 Northern shall use reasonable endeavours to procure all balancing on a
daily average basis is within a mean tolerance of plus or minus 4 per
cent of actual demand.
5.9 Northern shall procure that the non-pool generator spill agreements
contained at document 8.5.12 to 8.5.19 (inclusive) in the Northern Data
Room shall not be amended to any material extent from the proposals as
set out in the Northern Data Room with respect to such contracts.
5.10 Northern shall observe and perform the TPL Realignment Document (as
contained at document 8.3.10 in the Black Data Room) in all material
respects in accordance with its terms and using the same practices as
conducted in relation thereto prior to the date of this Agreement.
5.11 Northern shall not, with Innogy's consent, engage in any further
development or investment in respect of the proposed data centre at
Team Valley, Gateshead.
6. COMPLETION
6.1 Date and Place
Subject to Clause 4, Completion shall take place at the offices of
Innogy's Solicitors in Brussels two Business Days following fulfilment
or waiver of the conditions set out in Clause 4.1 (or such later time
as the parties may agree).
6.2 Simultaneous Completion
Innogy shall not be obliged to sell, and Northern shall not be obliged
to purchase, the Yorkshire Shares unless NE plc and NPower Northern
Limited simultaneously complete the sale and purchase of the Northern
Sale Business and the NEAGL Sale Business pursuant to the Northern
Business Sale Agreement.
6.3 Northern's Obligations on Completion
22
On Completion, Northern shall procure that its obligations as set out
in Schedule 5 are fulfilled.
6.4 Innogy's Obligations on Completion
On Completion, Innogy shall procure that its obligations as set out in
Schedule 5 are fulfilled.
6.5 Payment of Price
Against compliance with the foregoing provisions, and subject to the
Netting Agreement, Northern shall pay Innogy the Completion Amount.
6.6 Right to Terminate
If the foregoing provisions of this Clause are not complied with in all
material respects by Innogy or Northern by or on the date set for
Completion, then Innogy (in the case of non-compliance by Northern) or
Northern (in the case of non-compliance by Innogy) shall be entitled
(in addition to and without prejudice to all other rights or remedies
available to it including the right to claim damages) by written notice
to the other party served on such date:
6.6.1 to effect Completion so far as practicable having regard to
the defaults which have occurred; or
6.6.2 to fix a new date for Completion (not being more than 20
Business Days after the agreed date for Completion) in which
case the foregoing provisions of this Clause 6.6 shall apply
to Completion as so deferred but provided such deferral may
only occur once, and if the other party continues to be
unable to comply with the foregoing provisions of this
Clause, the party able to comply shall be entitled (in
addition to and without prejudice to all other rights or
remedies available to it including the right to claim
damages) by written notice served on the other party to
terminate this Agreement without liability on its part.
6.7 Termination of VAT Group Registration
6.7.1 As soon as reasonably practicable after the date of this
Agreement, Innogy shall procure that (if one has not already
been made) an application shall be made to H.M. Customs &
Excise pursuant to Section 43B of the VATA 1994 for the
exclusion of each Sale Company from the bodies treated as
members of the same VAT group as Innogy for the purposes of
Section 43 of the VATA 1994 (the VENDOR VAT GROUP) and for
such exclusion to take effect on Completion or, if H.M.
Customs & Excise do not permit this, at the earliest date
following Completion permitted by Section 43B.
6.7.2 Pending the taking effect of such application and for so
long thereafter as may be necessary, each of Innogy and
Northern shall procure that such information (if applicable)
is provided to the other as may be required to enable the
continuing representative member of the Vendor VAT Group to
make all the returns required of it in respect of the Vendor
VAT Group.
6.7.3 When the exclusion takes effect after Completion, Innogy and
Northern shall procure that such payments shall be made
between such representative member and the Sale Companies as
may be appropriate to ensure that the resulting position as
between such companies is as close as possible to the
position which would have obtained if such application or
applications had taken effect on the date of Completion.
23
6.8 Back to Back Agreement
Innogy will use reasonable endeavours to procure that at Completion,
AEP Resources Inc. will enter into an agreement with Northern or a
member of the Northern Group nominated by Northern (a "NOMINEE"), in
form satisfactory to such parties acting reasonably, under which AEP
Resources Inc. will undertake to exercise all its rights under any
documents to which it is a party in respect of the $275 million Junior
Subordinated Debentures at 8.08% issued by Yorkshire Power Finance
Limited as agent and trustee for Northern (or such nominee) and act in
accordance with the directions of Northern (or such nominee) subject to
AEP Resources Inc. being indemnified by Northern (or such nominee) in
respect of any actions taken by it pursuant to such directions.
6.9 Transfer Scheme
Following Completion, Northern shall not make and shall procure that no
member of the Northern Group shall make or agree any amendment to the
Yorkshire Transfer Scheme which is material to the Yorkshire supply
business sold pursuant to the Yorkshire Hiveout Agreement without the
consent of Innogy (such consent not to be unreasonably delayed), save
as may be required by the Secretary of State for Trade and Industry.
7. WARRANTIES
7.1 Incorporation of Schedule 2
7.1.1 Innogy warrants and represents to Northern in the terms set
out in Schedule 2 (Part A) subject only to:
(i) any matter which is fairly disclosed in the
Disclosure Letter and any matter provided for under
the terms of this Agreement; and
(ii) any matter or thing hereafter done or omitted to be
done pursuant to this Agreement or otherwise at the
request in writing or with the approval in writing
of the Purchaser.
7.1.2 Save as expressly otherwise provided, the Warranties shall
be separate and independent and shall not be limited by
reference to any other paragraph of the said Schedule or by
anything in this Agreement or the Tax Deed of Covenant.
7.1.3 The only Warranties given in respect of the Properties are
those set out in paragraph 2.5 of Part A of Schedule 2 and
for the purposes of Schedule 2 only "assets" does not
include the Properties. The only Warranties given in respect
of the Environment or Environmental Law are those set out in
paragraph 2.1.9 of Part A of Schedule 2.
7.2 Limitation of Liability
The provisions of Schedule 6 shall apply.
7.3 Effect of Completion
The Warranties and all other provisions of this Agreement and the Tax
Deed of Covenant insofar as the same shall not have been performed at
Completion shall not be extinguished or affected by Completion, or by
any other event or matter whatsoever (including any satisfaction and/or
waiver of any condition contained in Clause 4.1), except by a specific
and duly authorised written waiver or release by the Purchaser.
7.4 Right of Termination
24
If prior to Completion, any event (or events) shall occur which would
result in any of the Northern Warranties (in the case of Northern) or
the Innogy Warranties (in the case of Innogy) being untrue or
misleading as if they had been given again at Completion which
individually (or in aggregate) results in or is reasonably likely to
result in a deterioration of 20 percent of the enterprise value of the
Northern Sale Business or the Sale Companies in each case as a whole
compared with the enterprise value of such Business or Companies (as
the case may be) as a whole as at the date of this Agreement (such
deterioration being a deterioration of (pound)94,400,000 in the case of
the Northern Sale Business and of (pound)200,800,000 in the case of the
Sale Companies), ignoring for this purpose any event (or events)
affecting or likely to affect generally all persons carrying on similar
businesses in the United Kingdom, then Northern (in the event such
deterioration occurs in relation to the Sale Companies) and the Innogy
Guarantor (in the event such deterioration occurs in relation to the
Northern Sale Business) shall be entitled by notice in writing to the
Innogy Guarantor or Northern respectively to terminate this Agreement;
but the occurrence of such an event (or events) shall not give rise to
any right to damages or compensation.
If Northern and the Innogy Guarantor are unable to agree within 5
Business Days from the date of service of written notice by Northern or
the Innogy Guarantor (as the case may be) in accordance with this
Clause 7.4 that such event or events has resulted in or would be
reasonably likely to result in a deterioration of 20 per cent of the
enterprise value (as described above), either Northern or Innogy may
call for an independent expert, jointly appointed by the parties (the
"EXPERT"), to determine whether such a deterioration has occurred or
would be reasonably likely to occur and the Expert shall make such
determination (but shall not address whether such deterioration arose
as a result of a breach of warranty) within 10 Business Days from the
date of the referral to him. If Northern and the Innogy Guarantor are
unable to agree upon the Expert within 5 business days from the date
either Northern or the Innogy Guarantor calls for an independent
expert, then the Expert shall be appointed by the President for the
time being of the Institute of Chartered Accountants in England and
Wales on the application of either Northern or the Innogy Guarantor.
The Expert shall act as an expert and not as an arbitrator and his
decision shall (in the absence of manifest error) be final and binding
on the parties. The fees and expenses of the Expert shall be borne by
Northern and the Innogy Guarantor in equal shares unless the Expert
otherwise determines.
7.5 Waiver
Save in the case of fraud, Innogy undertakes to Northern not to make or
pursue any claim against any Sale Company or its respective officers,
employees or agents in connection with assisting Innogy in giving the
Warranties, preparing the Disclosure Letter and/or entering into this
Agreement and the documents entered into pursuant to this Agreement.
7.6 Northern Warranties
Each of Northern and NE plc warrants and represents to Innogy in the
terms set out in Parts B and D respectively of Schedule 2.
7.7 Whole Agreement
7.7.1 Except as otherwise expressly contemplated by this Agreement
or agreed in writing between the parties, this Agreement and
the Tax Deed of Covenant contains the whole agreement
between the parties relating to the subject matter of this
Agreement at the date hereof to the exclusion of any terms
implied by law which may be excluded by contract. Each of
Northern and NE plc acknowledges that it has not been
25
induced to enter this Agreement by and, so far as is
permitted by law (and except in the case of fraud), hereby
waives any remedy in respect of (and acknowledges that no
other party nor any of their agents, officers or employees
have given), any warranties, representations, indemnities,
undertakings or other statements whatsoever (written or
oral) not incorporated into this Agreement or the Tax Deed
of Covenant or any agreement expressly contemplated by this
Agreement.
7.7.2 So far as is permitted by law (and except in case of fraud),
each of the parties agree and acknowledge that the only
right and remedy which shall be available to it in
connection with or arising out of or related to any of the
statements contained in the Warranties shall be damages in
contract for breach of this Agreement and not rescission of
this Agreement, nor damages in tort or under statute
(whether under the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or otherwise),
nor any other remedy.
7.7.3 Each party to this Agreement confirms that it has received
independent legal advice relating to all the matters
provided for in this Agreement, including the provisions of
this Clause, and agrees, having considered the terms of this
Clause and the Agreement as a whole, that the provisions of
this Clause are fair and reasonable.
7.7.4 In this Clause 7.7, the term THIS AGREEMENT includes the
Disclosure Letter and all documents entered into pursuant to
this Agreement by Northern and/or Innogy and/or the Innogy
Guarantor and/or NE plc.
8. ADJUSTMENTS TO COMPLETION AMOUNT
8.1 Net Cash and Working Capital Statements
8.1.1 Innogy, shall, at least ten Business Days prior to (but not
more than 20 Business Days prior to) the Completion Date,
draw up and deliver to Northern an Estimated Yorkshire Cash
and Working Capital Statement showing Innogy's then best
good faith estimate as to the projected amount of Yorkshire
Net Cash and Working Capital as of the Completion Date.
8.1.2 Northern shall, within 60 days following Completion, draw up
a Draft Post-Closing Statement to determine the Yorkshire
Net Cash and Working Capital and the Yorkshire Cash and
Working Capital Statement in accordance with the provisions
set out in Schedule 7.
8.2 Adjustment to the Completion Amount
If the Yorkshire Net Cash and Working Capital exceeds the Estimated
Yorkshire Net Cash and Working Capital, then Northern shall pay to
Innogy, in immediately available funds, an additional amount equal to
the whole of the surplus of the Yorkshire Net Cash and Working Capital
above the Estimated Yorkshire Net Cash and Working Capital. If the
Estimated Yorkshire Net Cash and Working Capital exceeds the Yorkshire
Net Cash and Working Capital, then Innogy shall pay to Northern, in
immediately available funds, an additional amount equal to the whole of
the deficit of the Yorkshire Net Cash and Working Capital to the
Estimated Yorkshire Net Cash and Working Capital, in either case such
payments to be made, subject to Clause 8.3, on the day falling 10
Business Days after the Working Capital Determination Date. Any payment
under this Clause 8.2, shall constitute an adjustment to the Completion
Amount.
8.3 Net Interest
26
Any payment by way of an adjustment to the Completion Amount pursuant
to Clauses 8.2 shall include interest thereon calculated from the date
of Completion to the date of payment at the base rate from time to time
of National Westminster Bank PLC (the BASE RATE). Such interest shall
accrue day to day on the adjustment amount payable and, for the
avoidance of doubt, interest shall not be compounded.
9. PENSIONS
The provisions of Schedule 4 shall have effect
10. GUARANTEES
10.1 Release of Innogy Guarantees
Northern shall use all reasonable endeavours to procure that following
Completion Innogy and/or any member of the Innogy Group is released
from any guarantees and indemnities given by it in respect of the
obligations of any Sale Company details of which are notified to the
Northern and, pending such release, Northern shall indemnify Innogy or
the member of the Innogy Group against all liabilities under those
guarantees and indemnities provided that Northern shall have no
liability to Innogy under this sub-Clause to the extent that any such
guarantee contains any obligations on Innogy which extend beyond a
guarantee or indemnity of obligations of any Sale Company or which
extend the liability of Innogy beyond the liability which the relevant
Sale Company has in respect of such obligation.
10.2 Release of the Company Guarantees
Innogy shall procure that on Completion, or as soon as reasonably
practicable following Completion, each Sale Company is released from
all guarantees and indemnities given by it in respect of obligations of
Innogy and/or any member of the Innogy Group and pending such release,
Innogy shall indemnify the relevant Sale Company against all
liabilities under those guarantees and indemnities.
11. RESTRICTIONS
11.1 Restrictions
Each Vendor covenants with the Purchaser for itself and in the case of
Northern as trustee for each Sale Company that it shall not and shall
procure that no member of the Vendor's Group shall:
11.1.1 for a period of two years from Completion, directly or
indirectly induce or attempt to induce any director or
Senior Employee to leave his or her employment, provided
that the placing of an advertisement of a post available to
a member of the public generally and the recruitment of a
person through an employment agency shall not constitute a
breach of this Clause 11 provided that the Vendor does not
encourage or advise such agency to approach any such Senior
Employee; or
11.1.2 for a period of five years from Completion, make use of or
(except as required by law or any competent regulatory body
or stock exchange or to any tax authority in connection with
its tax affairs) disclose or divulge to any third party any
Confidential Information of a secret or confidential nature
relating to the Business acquired by the Purchaser; or
11.1.3 subject to Clause 11.2, for a period of one year from
Completion, carry on a Restricted Activity or canvass, or
solicit orders for services or goods similar to those
27
being provided by any Sale Company or Northern Group Company
(as the case may be) at Completion from any person, firm or
company who has within one year prior to Completion been a
customer of any Sale Company or Northern Group Company (as
the case may be) in connection with the Business.
11.2 Nothing in Clause 11.1.3 shall prevent or restrict:
11.2.1 any Northern Group Company or any Sale Company from
acquiring any group of companies (the "ACQUIRED Group") in
respect of which any company or companies in that group
carry on an electricity or gas supply business and, from
such acquisition, the carrying on of such businesses in the
same manner provided that such company or companies do not
solicit orders for services or goods similar to those being
provided by any Northern Group Company at Completion in
connection with the Business from any person, firm or
company who has within 1 year prior to Completion been a
customer of any Northern Group Company in connection with
the Business unless such person, firm or company was already
a customer of the supply business of the Acquired Group; or
11.2.2 the carrying on in the wholesale market of the oil and gas
and generation businesses carried on by companies in the
Northern Group, including Northern Electric Generation
Limited and CalEnergy Gas Limited.
11.3 Independence
Each of the restrictions in each paragraph or subClauses above shall be
enforceable independently of each of the others and its validity shall
not be affected if any of the others is invalid.
11.4 Validity
If any of those restrictions is void but would be valid if some part of
the restrictions were deleted the restriction in question shall apply
with such modification as may be necessary to make it valid.
11.5 Scope of protection
Each of Innogy and Northern acknowledges that the above provisions of
this Clause are no more extensive than is reasonable to protect the
other as the purchaser of the Northern Sale Business and the Yorkshire
Shares respectively.
12. GUARANTEE
12.1 Innogy Guarantee
The Innogy Guarantor hereby guarantees to Northern the due and punctual
performance and observance by Innogy of all its obligations,
commitments, undertakings and warranties under or pursuant to this
Agreement and the Tax Deed of Covenant (the INNOGY GUARANTEED
OBLIGATIONS). The liability of the Innogy Guarantor under this Clause
shall not be released or diminished by any variation of the terms of
the Innogy Guaranteed Obligations, or any forbearance, neglect or delay
in seeking performance of the Innogy Guaranteed Obligations or any
granting of time for such performance.
12.2 Vendor's Default
28
If and whenever Innogy defaults in the performance of any of the Innogy
Guaranteed Obligations the Innogy Guarantor shall forthwith upon demand
unconditionally perform (or procure performance of) and satisfy (or
procure the satisfaction of) the Innogy Guaranteed Obligations in
regard to which such default has been made in the manner prescribed by
this Agreement and so that the same benefits shall be conferred on
Northern as it would have received if the Innogy Guaranteed Obligations
had been duly performed and satisfied by Innogy (as the case may be).
12.3 Continuing Guarantee
The guarantee in Clause 12.1 is to be a continuing guarantee and
accordingly is to remain in force until all the Innogy Guaranteed
Obligations shall have been performed or satisfied. This guarantee is
in addition to and without prejudice to and not in substitution for any
rights or security which Northern may now or hereafter have or hold for
the performance and observance of the Innogy Guaranteed Obligations.
12.4 Legal limitations etc.
As a separate and independent stipulation the Innogy Guarantor agrees
that any of the Innogy Guaranteed Obligations (including, without
limitation, any moneys payable) which may not be enforceable against or
recoverable from Innogy by reason of any legal limitation, disability
or incapacity on or of Innogy or any other fact or circumstance (other
than any limitation imposed by this Agreement) shall nevertheless be
enforceable against and recoverable from the Innogy Guarantor.
12.5 Warranties
The Innogy Guarantor warrants and represents to Northern in the terms
set out in Part B of Schedule 2.
12.6 Northern Guarantee
NE plc hereby guarantees to Innogy the due and punctual performance and
observance by Northern of all its obligations, commitments,
undertakings and warranties under or pursuant to this Agreement (the NE
PLC GUARANTEED OBLIGATIONS). The liability of NE plc under this Clause
shall not be released or diminished by any variation of the terms of
the NE plc Guaranteed Obligations, or any forbearance, neglect or delay
in seeking performance of the NE plc Guaranteed Obligations or any
granting of time for such performance.
12.7 Vendor's Default
If and whenever Northern defaults in the performance of any of the NE
plc Guaranteed Obligations NE plc shall forthwith upon demand
unconditionally perform (or procure performance of) and satisfy (or
procure the satisfaction of) the NE plc Guaranteed Obligations in
regard to which such default has been made in the manner prescribed by
this Agreement and so that the same benefits shall be conferred on
Innogy as it would have received if the NE plc Guaranteed Obligations
had been duly performed and satisfied by NE plc (as the case may be).
12.8 Continuing Guarantee
The guarantee in Clause 12.6 is to be a continuing guarantee and
accordingly is to remain in force until all NE plc Guaranteed
Obligations shall have been performed or satisfied. This guarantee is
in addition to an without prejudice to and not in substitution for any
rights or
29
security which Innogy may now or hereafter have or hold for the
performance and observance of the NE plc Guaranteed Obligations.
12.9 Legal limitations etc.
As a separate and independent stipulation NE plc agrees that any of the
NE plc Guaranteed Obligations (including, any moneys payable) which may
not be enforceable against or recoverable from Northern by reason of
any legal limitation, disability or incapacity on or of NE plc or any
other fact or circumstance (other than any limitation imposed by this
Agreement) shall nevertheless be enforceable against and recoverable
from the Innogy Guarantor.
12.10 Warranties
NE plc warrants and represents to Innogy in the terms set out in Part C
of Schedule 2.
13. OTHER PROVISIONS
13.1 Release, indulgence etc.
Any liability to any party under this Agreement may in whole or in part
be released, compounded or compromised or time or indulgence given by
that party in its absolute discretion without in any way prejudicing or
affecting its rights against the other under the same or a like
liability.
13.2 Confidentiality
13.2.1 The parties acknowledge that the Confidentiality Agreement
shall cease to have any force or effect from Completion.
13.2.2 Subject to Clause 13.2.4, Innogy shall (and shall procure
that other members of its Group shall) treat as confidential
and not disclose or use any information received or obtained
as a result of entering into this Agreement or the Northern
Electricity Business Sale Agreement or the Northern
Non-Electricity Business Sale Agreement (or any agreement
entered into pursuant to any such Agreement) which relates
to:
(a) the provisions of this Agreement and any agreement
entered into pursuant to this Agreement; or
(b) the negotiations relating to this Agreement (and
such other agreements);
(c) Northern's business, financial or other affairs.
13.2.3 Subject to Clause 13.2.4, Northern shall (and shall procure
that other members of its Group shall) treat as confidential
and not disclose or use any information received or obtained
as a result of entering into this Agreement or the Northern
Electricity Business Sale Agreement or the Northern
Non-Electricity Business Sale Agreement (or any agreement
entered into pursuant to any such Agreement) which relates
to:
(a) the provisions of this Agreement and any agreement
entered into pursuant to this Agreement; or
(b) the negotiations relating to this Agreement (and
such other agreements);
(c) Innogy's business, financial or other affairs.
13.2.4 Neither Clause 13.2.2 or 13.2.3 shall prohibit disclosure or
use of any information if and to the extent:
30
(a) the disclosure or use is required by law, any
regulatory body or the rules and regulations of any
recognised stock exchange;
(b) the disclosure or use is required for the purpose of
any judicial proceedings arising out of this
Agreement or any other agreement entered into under
or pursuant to this Agreement or the disclosure is
reasonably required to be made to a Taxation
authority in connection with the Taxation affairs of
the disclosing party;
(c) the disclosure is made to professional advisers of
the Purchaser or the Vendors on terms that such
professional advisers undertake to comply with the
provisions of Clause 13.2.2 or 13.2.3 in respect of
such information as if they were a party to this
Agreement;
(d) the information becomes publicly available (other
than by breach of the Confidentiality Agreement or
of this Agreement);
(e) the other party has given prior written approval to
the disclosure or use;
(f) the information is independently developed after
Completion,
provided that prior to disclosure or use of any information
pursuant to Clause 13.2.4 (i), (ii) (except in the case of
disclosure to a Taxation authority) or (iii), the party
concerned shall promptly notify the other party of such
requirement with a view to providing the other party with
the opportunity to contest such disclosure or use or
otherwise to agree the timing and content of such disclosure
or use.
13.3 Announcements
No announcement or circular in connection with the existence or the
subject matter of this Agreement shall be made or issued by or on
behalf of any party without the prior written approval of the other
parties hereto. This shall not affect any announcement or circular
required by law or any regulatory body or the rules of any recognised
stock exchange but the party with an obligation to make an announcement
or issue a circular shall consult with the other party/parties insofar
as is reasonably practicable before complying with such an obligation.
13.4 Successors And Assigns
13.4.1 Subject to Clause 13.4.2 this Agreement is personal to the
parties to it. Accordingly, no party may, without the prior
written consent of the others, assign the benefit of all or
any of the other's obligations under this Agreement, or any
benefit arising under or out of this Agreement.
13.4.2 Except as otherwise expressly provided in this Agreement,
any party may, without the consent of the others, assign to
a connected company the benefit of all or any of the other
parties' obligations under this Agreement provided that:
(i) if the assignee ceases to be a connected company of
the relevant party, the benefit of those obligations
shall be reassigned to the relevant party or a
connected party of the relevant party; and
(ii) the assignee shall not be entitled to receive under
this Clause any greater amount than that to which
the relevant assignor would have been entitled.
31
For the purposes of this sub-Clause a CONNECTED COMPANY is,
in relation to the Innogy Guarantor and Innogy, the Innogy
Guarantor and any wholly-owned subsidiary of the Innogy
Guarantor and, in relation to Northern and NE plc, NE plc
and any wholly-owed subsidiary of NE plc.
13.5 Third Party Rights
A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of
this Agreement.
13.6 Further Assurance
At any time after the date of this Agreement either party shall and
shall use reasonable endeavours to procure that any necessary third
party shall at the cost of the other party execute such documents and
do such acts and things as the other party may reasonably require for
the purpose of giving to the other party the full benefit of all the
provisions of this Agreement.
13.7 Variation etc.
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the parties to this Agreement.
13.8 Time of the Essence
Any time, date or period referred to in any provision of this Agreement
may be extended by mutual agreement between the parties but any time,
date or period so extended time shall be of the essence.
13.9 Costs
Each party shall bear all legal, accountancy and other costs and
expenses incurred by it in connection with this Agreement and all
agreements and transactions contemplated by this Agreement (and, in the
case of Innogy, by any of the Sale Companies prior to Completion in
relation to the Hiveout Agreement).
13.10 Interest
If any party defaults in the payment when due of any sum payable under
this Agreement (whether determined by agreement or pursuant to an order
of a court or otherwise) the liability of such party (as the case may
be) shall be increased to include a payment of interest on such sum
(subject to deduction or withholding of Taxation as appropriate) from
the date when such payment is due until the date of actual payment (as
well after as before judgement) at a rate per annum of two per cent
above the base rate from time to time of National Westminster Bank PLC.
Such interest shall accrue from day to day.
13.11 Withholdings and Deductions
13.11.1 All sums payable under this Agreement shall be paid free and
clear of all deductions or withholdings whatsoever save only
as provided in this Agreement or as may be required by law
and without abatement or set-off (whether equitable or
otherwise) save only as provided in this Agreement. If any
deductions or withholdings are required by law the party
making the payment shall (except in the case of payments of
interest) be obliged to pay the other party such sums as
will, after such deduction or withholding has been made,
leave the other party with the same amounts as it
32
would have been entitled to receive in the absence of any
such requirement to make a deduction or withholding provided
that, if either party shall have assigned the benefit in
whole or in part of this Agreement in accordance with the
provisions of Clause 13.4, the liability of the other party
under this Clause 13.11.1 shall be limited to that (if any)
which it would have been had no such assignment taken place.
13.11.2 If the party receiving the payment under this Agreement
receives a credit for or refund of any Taxation or other
monies payable by it or similar benefit by reason of any
deduction or withholding for or on account of Taxation or
any other matter then it shall reimburse to the other party
such part of such additional payments paid to it pursuant to
Clause 13.11.1 above as the party receiving the payment
certifies to the other party will leave it (after such
reimbursement) in no better or worse position than it would
have been if the other party had not been required to make
such deduction or withholding.
13.12 Notices
13.12.1 Any notice or other communication requiring to be given or
served under or in connection with this Agreement shall be
in writing and shall be sufficiently given or served if
delivered or sent:
In the case of Innogy or the Innogy Guarantor to:
Windmill Hill Business Park
▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: The Company Secretary
In the case of Northern or NE plc to:
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention: Company Secretary
(or such other representative or address in the United
Kingdom as either party may by notice in writing to the
other party expressly substitute).
13.12.2 Any such notice or other communication shall be delivered by
hand or sent by courier, fax or prepaid first class post. If
sent by hand or courier such notice or communication shall
be deemed to have been given or served at the time of
despatch, in case of service in the United Kingdom, or on
the following Business Day, in the case of international
service. If sent by fax such notice or communication shall
be deemed to have been given or served at the time of
despatch provided a suitable confirmation of such delivery
is received by the sender of such fax and a copy of the fax
containing such notice or communication (together with such
confirmation) is sent by post as soon as practicable
thereafter. If sent by post such notice or communication
shall be deemed to have been received two Business Days from
the
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time of posting, in the case of inland mail in the United
Kingdom, or four Business Days from the time of posting, in
the case of international mail. Notices sent by post shall
also be transmitted by fax. Any notice received after 5.00
pm on a Business Day at the place of receipt will be deemed
effective at 9.00 am on the following Business Day.
13.13 Severance
If at any time any term or provision hereof is or becomes illegal,
invalid or unenforceable, in whole or in part, under the law of any
jurisdiction or any enactment or rule of law, such term or provision or
part shall to that extent be deemed not to form part of this Agreement
but the legality, validity or enforceability of any other term or
provision of this Agreement (including under the law of any other
jurisdiction) shall not in any way be affected or impaired thereby.
13.14 Counterparts
This Agreement may be executed in any number of counterparts each of
which shall be deemed an original, but all the counterparts shall
together constitute one and the same instrument.
13.15 Governing Law and Submission to Jurisdiction
This Agreement and, save as expressly referred to therein, the
documents to be entered into pursuant to it shall be governed by and
construed in accordance with English law and the parties irrevocably
agree that the Courts of England shall have exclusive jurisdiction to
settle any claims or disputes which may arise out of or in connection
with this Agreement and such documents and each party irrevocably
submits to the jurisdiction of the Courts of England for such purpose.
13.16 Reduction in Consideration
Any payment made for the breach of any Warranties or any other breach
of this Agreement (or any agreement entered into pursuant to this
Agreement) or under the Tax Deed of Covenant or pursuant to any
indemnity hereunder shall be treated as an adjustment to the
consideration paid by Northern for the Yorkshire Shares under this
Agreement and the consideration paid shall be deemed to have been
reduced by the amount of such payment.
IN WITNESS whereof this Agreement has been duly executed the day and year first
before written.
SIGNED by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ /s/ C FAREBROTHER
as attorney for and on behalf of
NPOWER YORKSHIRE LIMITED
in the presence of:
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SIGNED by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as /s/ ▇ ▇ ▇▇▇▇▇▇▇▇
attorney for and on behalf of
INNOGY HOLDINGS PLC
in the presence of:
SIGNED by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
for and on behalf of
CE ELECTRIC UK PLC
in the presence of:
SIGNED by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ as /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
attorney for and on behalf of
NORTHERN ELECTRIC PLC
in the presence of:
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