EXHIBIT 4(a)(ii)
[LOGO]
[NATIONAL GRID COMPANY LETTERHEAD]
TNT
For the attention of Xx. Xxxxxx X'Xxxxxxx
Luxembourg. 20th November 2001 JU/SES/mts
SUBJECT: NATIONAL GRID (UK) PROJECT -- (FI No 0.9200) Finance Contract between
European Investment Bank and The National Grid Company plc dated 5th
December 1996 as amended by letter agreements dated 3 February 1997,
12 November 1998 and 29 March 1999 (the "Finance Contract")
______________________________________________________________________
Dear Sirs,
We refer to recent discussions concerning amendments to the Finance Contract
and replacement of the existing guarantee given by National Grid Group plc (the
"Existing Guarantor") by a guarantee from New National Grid plc (the
"Replacement Guarantor").
We propose amending the Finance Contract so as to take effect in the form of
Annex 1 to this letter. This amendment will be subject to and only take effect
on the occurrence of the following conditions to be satisfied on or prior to 31
March 2002:
1. receipt by the Bank of evidence acceptable to it that the Companies Act
scheme of arrangement as described to the Bank in the note received on 16
November 2001 entitled "Mechanics of the Scheme" has come into effect;
2. receipt by the Bank of a guarantee in the form of Annex 2 to this letter
duly executed by the Replacement Guarantor together with the Annexes
referred to therein; and
3. receipt by the Bank of the restructuring fee of EUR 25,000.
Upon the date of satisfaction of the above conditions, the Existing Guarantor
shall be released from its obligations under the Guarantee (as such term is
defined in the Finance Contract).
We should be grateful if you would kindly acknowledge and agree the terms of
this letter by countersigning the 4 enclosed copies and by returning 2 of
them to us.
Yours faithfully,
EUROPEAN INVESTMENT BANK
/s/ X.X. Xxxxxxxxxxxx /s/ X. Xxxxxxxx
X.X. Xxxxxxxxxxxx X. Xxxxxxxx
Deputy General Counsel Director
Agreed and accepted for and on behalf of
THE NATIONAL GRID COMPANY PLC
X. X'Xxxxxxx
----------------------------------------
Xxxxxx and accepted for and on behalf of
NATIONAL GRID GROUP PLC
X. X'Xxxxxxx
----------------------------------------
Xxxxxx and accepted for and on behalf of
NEW NATIONAL GRID PLC
X. X'Xxxxxxx
----------------------------------------
ANNEX 1
E U R O P E A N I N V E S T M E N T B A N K
FI No 0.9200 GB
________________________________________________________________________________
NATIONAL GRID (UK) PROJECT
________________________________________________________________________________
FINANCE CONTRACT
between
EUROPEAN INVESTMENT BANK
and
THE NATIONAL GRID COMPANY PLC
London, 2001
THIS CONTRACT IS MADE BETWEEN:
European Investment Bank having its Head Office at
000 xxxxxxxxx Xxxxxx Xxxxxxxx, Xxxxxxxxxx-Xxxxxxxxx, Xxxxx
Xxxxx xx Xxxxxxxxxx, represented by
hereinafter called: "THE BANK"
of the first part, and
The National Grid Company plc, a public company incorporated
with limited liability in England, and having its registered
office at National Grid House, Xxxxx Corner Road, Coventry
CV4 8JY, and represented by
hereinafter called: "THE BORROWER"
of the second part.
-2-
WHEREAS:
1. THE BORROWER is undertaking a project (hereinafter called "THE PROJECT")
comprising the reinforcement and enhancement of the existing electricity
transmission grid (275kV - 400kV) throughout England and Wales, and
consolidating the load dispatch from five to one control centre, as more
particularly described in the technical description set out in Schedule A
hereto as the same may be amended from time to time with the consent of THE
BANK (hereinafter called the "TECHNICAL DESCRIPTION").
2. The estimated total cost of THE PROJECT is GBP 443 million (four hundred
and forty-three million pounds sterling) including price and technical
contingencies.
3. The cost of THE PROJECT is to be financed as follows:
GBP million
-----------
Own funds 243
4. In order to complete the financing
THE BORROWERS has requested from THE
BANK a credit in an amount equivalent to GBP million 200
------------
Total 443
5. Since part of the credit granted under this Contract may be disbursed in
ecus, for the purposes of this Contract the term "currency" includes the
ecu as defined in Schedule B. The European Council took decisions at the
Madrid Summit of 15th and 16th December 1995 relating to the change of
name of the European monetary unit from "ecu" to "Euro" with effect from
the start of the third stage of European economic and monetary union (EMU).
6. THE BORROWER is a wholly-owned subsidiary of National Grid Group plc which
in turn is a wholly-owned subsidiary of New National Grid plc (hereinafter
called the "GUARANTOR") which has agreed to execute a guarantee
(hereinafter called the "GUARANTEE") in respect to THE BORROWER's financial
obligations hereunder.
7. THE BANK, being satisfied that the financing of THE PROJECT comes within
the scope of its functions and having regard to the matters recited above,
has decided to give effect to THE BORROWER's request by granting to THE
BORROWER under this Finance Contract (hereinafter called the "CONTRACT") a
loan in an amount equivalent to GBP 200 million (two hundred million
pounds sterling).
8. The board of directors of THE BORROWER has authorised the borrowing
provided for hereunder by resolution in the terms set out in Annex 1 by
which THE BORROWER's signatories are duly authorised to sign this Contract
on its behalf; and it has been duly certified in the form set out in Annex
II that such borrowing is within the corporate powers of THE BORROWER.
9. References herein to Articles, Recitals, Schedules and Annexes are
references respectively to articles of, and recitals, schedules and
annexes to, this Contract and the following terms have the respective
meanings assigned to them in the following Recitals and Articles:
-3-
Term Article
---- -------
Accounting Date 6.01(f)
Authority 7.07(1)B
Business Day 5.03(3)
Companies Act Subsidiary 8.05
Contract seventh Recital
Conversion 3.01C(2)(i)
Conversion Date 3.01C(2)(ii)
Conversion Option Date 3.01C(2)(i)
Conversion Request 3.01C(2)(i)
Conversion Year 3.01C(2)(i)
Converted Fixed-Rate Tranche 3.01C(2)(ii)
Credit 1.01
Disbursement Notice 1.02(3)
Electricity Act 7.07(1)B
Environmental Laws 7.07(2)
Financial Indebtedness 8.05
Fixed-Margin Convertible Tranche 1.02(2)(c)
Fixed-Margin Interest Rate 3.01C
Fixed-Margin Non-Convertible Interest Rate 3.01D
Fixed-Margin Non-Convertible Tranche 1.02(2)(c)
Fixed-Rate Tranche 1.02(2)(c)
Group 8.05
Guarantee sixth Recital
Guarantor sixth Recital
LIBOR Schedule C
Loan 2.01
Material Adverse Change 1.04B(b)
Maturity Date 3.01B(2)(ii)
Moody's 8.05
NG Group 8.05
Notice Day 3.01B(3)(ii)(a)
Notice Period 3.01B(3)(ii)(a)
Payment Date 4.02(1)(A)
Pre-disbursement Date 1.04B(b)
Prepayment Amount 4.02(1)(A)
Prepayment Date 4.02(1)(A)
Prepayment Notice 4.02(1)(A)
Project first Recital
Project Finance Borrowing 8.05
Project Finance Company 8.05
Proposal 3.01C(2)(i)
Quarter Date 3.01C(1)
Reference Period 3.01C(1)
Reference Rate 4.02(1)(B)(2)
Relevant Assets 8.05
Request 1.02(2)
Review Date 4.01(B)(2)
Revisable Fixed-Rate Tranche 1.02(2)(c)
Revisable Reference Period 3.01B(2)
Revisable Test Date 4.01B
Revision Date 3.01B(3)(ii)(a)
Revision Notice 3.01B(3)(ii)(a)
Security Interest 8.05
Subsidiaries 8.05
Subsidiary Undertaking 8.05
Standard & Poors 8.05
Technical Description first Recital
Test Date 4.01(B)(2)
Tranche 1.02(1)
-4-
Transmission Business 8.05
Transmission License 8.05
NOW THEREFORE it is hereby agreed as follows:
ARTICLE 1
DISBURSEMENT
1.01 AMOUNT OF CREDIT
By this Contract THE BANK establishes in favour of THE BORROWER, and
THE BORROWER accepts, a credit (hereinafter called the "CREDIT") in an
amount equivalent to GBP 200 million (two hundred million pounds
sterling), to be used for the purpose of the financing of THE PROJECT.
1.02 DISBURSEMENT PROCEDURES
(1) Subject to the provisions of Articles 1.04 and 1.07, the Credit
shall be disbursed in up to a maximum of eight tranches (each being
referred to individually as a "TRANCHE") which shall each be in a
minimum amount equivalent to GBP 25,000,000 and in an amount which is
a multiple of GBP 5,000,000 or the equivalent thereof.
(2) Disbursement of each Tranche shall be subject to receipt by THE
BANK of a written request (a "REQUEST") from THE BORROWER specifying:
(a) the amount (expressed in GBP) of the Tranche;
(b) the currency in which THE BORROWER prefers the Tranche to be
disbursed, being a currency referred to in Article 1.03;
(c) the interest rate basis selected under Article 3.01 specifying
whether the Tranche is to bear a fixed rate of interest (such
Tranche being referred to as a "FIXED-RATE TRANCHE") or a
revisable rate of interest (such Tranche being referred to as a
"REVISABLE FIXED-RATE TRANCHE") or a convertible interest rate
basis (such Tranche being referred to as a "FIXED-MARGIN
CONVERTIBLE TRANCHE") or a fixed margin to LIBOR rate of interest
(such Tranche being referred to as a "FIXED-MARGIN
NON-CONVERTIBLE TRANCHE");
(d) THE BORROWER's preferred payment schedule, chosen in accordance
with Article 4.01A; and
(e) the preferred date for disbursement, it being understood that THE
BANK may disburse the Tranche up to four calendar months from the
date of the Request.
-5-
THE BORROWER may also at its discretion specify in the Request (a) the
applicable interest rate, if any, previously indicated by THE BANK
without commitment to be applicable to the currency of the Tranche
during its lifetime or, in the case of a Revisable Fixed-Rate Tranche,
for its initial Revisable Reference Period or, in the case of a
Fixed-Margin Convertible Tranche or a Fixed-Margin Non-Convertible
Tranche, for the first Reference Period; and/or (b) the fixed margin
to LIBOR previously indicated by THE BANK as applicable to the Tranche
and/or (c) the Conversion Year preferred by it.
No Request may be made before the elapse of one month from the
immediately preceding Request nor may any Request be made later than
31st December 1999. Subject to the proviso to Article 1.02(3) each
Request is irrevocable.
(3) THE BANK shall, as soon as practicable and in any event no later
than a date falling between 10 and 15 days before the proposed date of
disbursement, if the Request conforms to Article 1.02(2) and subject
to Articles 1.03 and 1.07, deliver to THE BORROWER a notice
(hereinafter a "DISBURSEMENT NOTICE") which shall: (i) confirm the
amount and currency composition of the Tranche specified in the
Request; (ii) specify the interest rate or rates applicable during the
Tranche's lifetime pursuant to Article 3.01A or confirm or specify the
interest rate or rates applicable during the first Revisable Reference
Period pursuant to Article 3.01B, or, if calculated, the variable
interest rate as determined pursuant to Article 3.01C or 3.01D, as the
case may be; (iii) specify the repayment terms applicable thereto;
(iv) specify the date of disbursement of the Tranche; and (v) specify,
where relevant, the fixed margin to LIBOR applicable to the Tranche
and the Conversion Year or the expiry date of the first Revisable
Reference Period; Provided that if one or more of the elements
specified in the Disbursement Notice does not conform to the
corresponding element in the Request THE BORROWER may within three
London business days following receipt of the Disbursement Notice
revoke the Request by notice to THE BANK and thereupon the Request and
the Disbursement Notice shall be of no effect.
(4) THE BANK shall in any event not be obliged to issue a
Disbursement Notice unless it is reasonably satisfied that funds in
the currency and for maturities such as to enable THE BANK to fund the
Tranche contemplated in the Request are readily available to it upon
satisfactory terms and conditions, having regard among other matters
to administrative consents of the relevant monetary authorities; for
this purpose, whether terms and conditions are satisfactory shall be
determined on the basis of THE BANK's reasonable opinion as to whether
or not the terms and conditions relating to the procurement of such
funds are such that acceptance thereof would adversely affect THE
BANK's position or operations in any significant financial market.
Provided that if THE BANK is unable to fund any Tranche in application
of the provisions of this paragraph (4), THE BANK shall, after
consultation with THE BORROWER, extend the period for disbursement of
the Credit for such period as THE BANK shall decide in agreement with
THE BORROWER.
(5) Disbursement shall be made to such bank account of THE BORROWER
as it shall notify to THE BANK not less than ten days before the date
of disbursement.
1.03 CURRENCY OF DISBURSEMENT
Subject to availability, THE BANK shall disburse each Tranche in the
currency for which THE BORROWER has expressed a preference; provided
that Fixed-Margin Convertible Tranches and Fixed-Margin
Non-Convertible Tranches shall, unless otherwise agreed by THE BANK,
be available in GBP, in Japanese Yen or Swiss Francs.
Each currency of disbursement shall be the ecu, a currency of one of
the Member States of THE BANK or any other currency (including
Japanese Yen, Swiss francs and US Dollars) which is widely traded on
the principal foreign exchange market.
-6-
For the calculation of the sums to be disbursed in currencies other than
GBP, THE BANK shall apply the middle-market exchange rate prevailing on
the London foreign exchange market or, failing which, any other major
internationally recognised market chosen by THE BANK, on such date (being
days on which banks are open for business in London, Luxembourg and the
relevant other market) before disbursement as THE BANK shall decide.
1.04 CONDITIONS OF DISBURSEMENT
A. Disbursement of the first Tranche under Article 1.02 is subject to
fulfilment of each of the following conditions to the satisfaction of THE
BANK before the date fixed for disbursement:
(a) the condition mentioned in Article 8.01 shall have been satisfied;
(b) all material approvals and consents necessary to proceed with the
implementation of THE PROJECT shall have been received by THE BORROWER; and
(c) that insurances in accordance with the requirements of Article 7.05
shall be in place.
B. Disbursement of each Tranche under Article 1.02 is subject to
fulfilment of each of the following conditions to the satisfaction of THE
BANK before the date fixed for disbursement:
(a) following drawdown of the relevant Tranche the aggregate amount of the
Credit drawdown will not exceed the aggregate expenditure incurred or
contractually committed by THE BORROWER in respect of THE PROJECT up to the
date of the relevant Request;
(b) at the latest two Business Days prior to the date of disbursement (the
"PRE-DISBURSEMENT DATE"), there shall not have occurred any Material
Adverse Change in relation to THE BORROWER or the Guarantor since the date
of this Contract; provided THE BANK shall act reasonably in determining
the occurrence or non-occurrence of a Material Adverse Change; for the
purpose of this subparagraph (b), "MATERIAL ADVERSE CHANGE" means, in
relation to THE BORROWER, any event or condition which materially impairs
the ability of THE BORROWER to perform its financial and other obligations
under this
Finance Contract; or (ii) in relation to the Guarantor an event
or condition which materially impairs its ability to perform its financial
obligations under the Guarantee; and
(c) receipt by THE BANK of a certificate from THE BORROWER in the form of
Xxxxx XXX.
1.05 DEFERMENT COMMISSION
If any disbursement of any Tranche under Article 1.02 is deferred at the
request of THE BORROWER, with the consent of THE BANK, or by reason of
non-fulfilment of the conditions of disbursement, THE BORROWER shall pay
deferment commission on the amount of which disbursement is deferred at an
annual rate of 1% calculated from the original specified disbursement date
to the actual disbursement date or, if the Tranche is not wholly disbursed,
to the date of annulment or cancellation of the Tranche. The request for
deferral must be received by THE BANK at least seven days before the
original disbursement date. Such commission shall accrue from day to day
and shall be payable on each date specified in Article 5.03(1).
-7-
1.06 ANNULMENT OF CREDIT
If the cost of THE PROJECT should fall short of the figure stated in the
Recitals, THE BANK may, by notice to THE BORROWER, annul the Credit in
proportion to the amount of the shortfall and in an amount such as to
ensure that the Credit (including any amount disbursed hereunder) does not
exceed 50% of such cost.
THE BORROWER may at any time, by notice to THE BANK, in whole or in part
annual any undisbursed portion of the Credit.
If THE BORROWER annuls any undisbursed Tranche for which the relevant
Request has not been revoked pursuant to the proviso to Article 1.02(3), it
shall pay a flat commission calculated on the amount annulled at half the
rate of interest applied by THE BANK at the date of annulment to loans made
by it in the European Union in the same proportions between currencies and
for the same maturities as the Tranche in question. Such commission shall
be payable in addition to any commission payable under Article 1.05.
1.07 CANCELLATION OF CREDIT
THE BANK may, by notice to THE BORROWER, cancel the undisbursed portion of
the Credit at any time and with immediate effect:
(a) following the occurrence of any event mentioned in Article 11.01(A) or
(B); or
(b) if exceptional circumstances shall arise which adversely and
materially affect THE BANK's access to national or relevant
international capital markets;
provided that THE BANK shall not be entitled to cancel, on grounds of case
(b), any Tranche which has been the subject of a Disbursement Notice.
Alternatively, if THE BANK is of the opinion that a situation described in
case (a) or (b) has arisen and is temporary, it may by notice to THE
BORROWER suspend the undisbursed portion of the Credit. In such case, the
suspension shall continue until THE BANK notifies THE BORROWER (which it
shall do as soon as reasonably possible) that it is again in a position to
issue a Disbursement Notice.
The Credit shall be considered as cancelled if THE BANK demands repayment
under Article 11.
If the Credit is cancelled by reason of the circumstances mentioned under
case (a) above, THE BORROWER shall pay commission on the cancelled amount
in respect of which a Disbursement Notice has been issued at an annual rate
of 0.75% calculated from the date of the relevant Request to the date of
cancellation.
Such commission shall be payable in addition to any commission payable
under Article 1.05 or 1.06.
1.08 CURRENCY OF SUMS DUE UNDER ARTICLE 1
Commission due from THE BORROWER to THE BANK under this Article 1 shall be
calculated and payable in pounds sterling.
- 8 -
ARTICLE 2
THE LOAN
2.01 AMOUNT OF LOAN
The loan (herein called the "LOAN") shall comprise the aggregate of
the amounts in the currencies disbursed by THE BANK, as notified by
THE BANK upon the occasion of the disbursement of each Tranche.
2.02 CURRENCY OF REPAYMENTS
Without prejudice to the terms of Article 4.02, each repayment under
Article 4 or, as the case may be, Article 11 shall be effected in the
currencies disbursed. The amount to be repaid on each repayment date
in each currency in respect of each Tranche shall be proportional to
the amount of the Tranche outstanding in that currency.
2.03 CURRENCY OF INTEREST AND OTHER CHARGES
Interest and other charges payable under Articles 3, 4 and 11 shall be
calculated and be payable in respect of each Tranche in each currency
in which the Tranche is repayable.
Subject to Article 1.08, any other payment shall be made in the
currency specified by THE BANK having regard to the currency of the
expenditure to be reimbursed by means of that payment.
2.04 NOTIFICATION BY THE BANK
After disbursement of a Tranche, THE BANK shall deliver to THE
BORROWER a summary statement showing the disbursement date, amount,
repayment terms and the fixed or prevailing variable interest rate of
and for that Tranche. Such confirmation shall include the relevant
amortisation table referred to in Article 4.01A.
ARTICLE 3
INTEREST
3.01 RATE OF INTEREST
3.01A FIXED-RATE TRANCHES
The outstanding balance of each Tranche which is a Fixed-Rate Tranche
shall bear interest at the rate or rates specified in the Disbursement
Notice, each of which rates shall be the interest rate offered by THE
BANK at the date of issue of the relevant Disbursement Notice in
respect of loans to be made in the relevant currency and granted by
THE BANK to borrowers in the EU on the same repayment terms and on the
same terms for the payment of interest as the Tranche in question.
THE BORROWER shall pay interest on Fixed-Rate Tranches semi-annually
in arrears on the payment dates specified in Article 5.03(2) or in the
relevant Disbursement Notice.
- 9 -
3.01B REVISABLE FIXED-RATE TRANCHES
(1) Interest shall accrue on the principal amount of Revisable
Fixed-Rate Tranches outstanding at nominal fixed interest rates
applicable to successive Revisable Reference Periods as determined
pursuant to Article 3.01B(3).
(2) "REVISABLE REFERENCE PERIOD" means, subject to Article 3.01B(4),
a period commencing on the date of disbursement of the relevant
Tranche or the date of expiry of the immediately preceding relevant
Revisable Reference Period and expiring as follows:
(i) the first Revisable Reference Period shall expire on such
date as is specified in the relevant Disbursement Notice being no
earlier than the fourth anniversary of the date if drawdown of
such Tranche and being a payment date specified in Article
5.03(2) or the relevant Disbursement Notice and being no later
than such date falling in the tenth year after such drawdown; and
(ii) each subsequent Revisable Reference Period shall expire on
the date specified in the relevant notice of acceptance given by
THE BORROWER pursuant to Article 3.01B(3)(ii)(b) below, being a
date falling at least four years after the date of expiry of the
first Revisable Reference Period and being a date falling at
least four years after the expiry of the preceding Revisable
Reference Period and being a date falling no later than the most
recent date specified in Article 5.03(2) or the relevant
Disbursement Notice prior to the twentieth anniversary of the
date of drawdown of such Tranche (such date being hereinafter
referred as the "MATURITY DATE" for such Tranche).
(3) (i) Interest on the relevant Tranche shall be payable at a fixed
rate determined by THE BANK for each successive Revisable
Reference Period to be the rate applicable to its customers in
the EU in respect of loans denominated in the currency of the
Tranche, having the same maturity and the same interest payment
basis as the relevant Tranche. The rate of interest for the first
Revisable Reference Period shall be specified in the relevant
Disbursement Notice.
(ii) For each subsequent Revisable Reference Period the interest
rate applicable to the relevant Tranche shall be determined as
follows:
(a) before 12 noon (Luxembourg time) on any Business Day (the
"NOTICE DAY") falling in the interval between 60 and 30 days
(the "NOTICE PERIOD") prior to the commencement of each
subsequent Revisable Reference Period (the "REVISION DATE")
and, where reasonably practicable, after prior consultation
with THE BORROWER, THE BANK shall, subject to Article 4.01B,
indicate by irrevocable notice (the "REVISION NOTICE") the
interest rate which shall apply to the Tranche for each
choice of duration of the Revisable Reference Period as
permitted by Article 3.01B(2)(ii), to the extent that
funding is available to THE BANK for each duration;
(b) by not later than 17:00 Luxembourg time on the Notice Day
THE BORROWER shall indicate to THE BANK by irrevocable
notice its acceptance or rejection of the rate indicated by
THE BANK for one of the permitted durations; upon delivery
of such notice of acceptance, THE BORROWER shall be obliged
to pay interest at the specified rate for a revisable
reference period of the specified duration, failing delivery
of an acceptance by THE BORROWER in due time; if THE
BORROWER rejects the indicated rate, THE BORROWER shall be
obliged to prepay the Tranche on the Revision Date in
question.
-10-
(4) If so requested by THE BORROWER prior to the Notice Day, and provided
relevant funding in the currency of the relevant Tranche is available
to THE BANK, THE BANK may propose a modification of the duration of
the relevant Revisable Reference Period in accordance with THE
BORROWER's request provided that the modified Revisable Reference
Period has (a) a minimum duration of four years, and (b) has an
expiry date falling on a date mentioned in Article 5.03(2) or the
relevant Disbursement Notice falling no later than the relevant
Maturity Date. THE BANK shall notify the modified Revisable Reference
Period in the relevant Revision Notice and THE BORROWER may accept
the proposal by the notice mentioned in Article 3.01B(3)(ii)(b).
(5) THE BORROWER shall pay interest in Revisable Fixed-Rate Tranches
semi-annually in arrears on the payment dates specified in Article
5.03(2) or in the relevant Disbursement Notice commencing on the
first such date following the date of disbursement of the Tranche.
3.01C FIXED-MARGIN CONVERTIBLE TRANCHES
(1) The daily outstanding balance of each Tranche which is a
Fixed-Margin Convertible Tranche shall bear interest at the Fixed-Margin
Interest Rate.
"FIXED-MARGIN INTEREST RATE" means an annual percentage rate of interest
equal to LIBOR (as defined in Schedule C) adjusted by Y, calculated by THE
BANK for each successive Reference Period. The Fixed-Margin Interest Rate
for each Reference Period shall be the rate so notified by THE BANK to THE
BORROWER within 10 days of commencement of the Reference Period to which
such rate applies;
where
"Y" means such fixed margin to LIBOR (being either plus or minus)
determined by THE BANK and notified to THE BORROWER in the relevant
Disbursement Notice in respect of the period from the date of drawdown up
to 15th December of the year of conversion specified in the relevant
Disbursement Notice and thereafter such fixed margin shall be plus 15
basis points;
"QUARTER DATE" means each 5th February, 5th May, 5th August and 5th
November (or if any such day is not a Business Day, the next following day
which is a Business Day); and
"REFERENCE PERIOD" means each period from, and including, one Quarter
Date to, but excluding, the next following Quarter Date, except that the
initial Reference Period shall commence on the date of disbursement of the
Tranche and the final Reference Period shall end on, but exclude, the
final repayment date of the Tranche.
THE BORROWER shall pay interest on Fixed-Margin Convertible-Rate Tranches
quarterly in arrears on each date specified in Article 5.03(1), commencing
on the first such date following the date of disbursement of the Tranche.
-11-
(2) The Fixed-Margin Interest Rate basis as specified in Article
3.01C(1) shall be modified at the request of THE BORROWER on the
following conditions:
(i) upon receipt by THE BANK of a Conversion Request from THE BORROWER
on any Business Day falling between 60 and 30 days prior to the a
Conversion Option Date and after prior consultation with THE
BORROWER, and on condition that the necessary funds are available to
THE BANK for this purpose. THE BANK shall, upon giving THE BORROWER
notice at least 2 Business Days prior to making such proposal,
propose to THE BORROWER the fixed rate of interest to be applicable
to the specified Fixed-Margin Convertible-Rate Tranche for its
remaining term and shall propose that this rate shall apply as from
the Conversion Option Date, with interest to be payable
semi-annually in arrears on the date(s) specified in Article 5.03(2)
or in the relevant Disbursement Notice (such change of interest rate
basis being referred to as "CONVERSION"); and such rate shall be the
rate of interest applicable to loans denominated in the respective
currencies of the Tranches concerned and granted by THE BANK to
borrowers in the EU on the same repayment terms and on the same
terms for the payment of interest as the Tranche in question;
provided that THE BANK shall not be obliged to make more than one
such proposal per Tranche.
For the purposes of this Article 3.01C, "CONVERSION OPTION DATE"
means each Quarter Date in the year (the "CONVERSION YEAR")
specified by THE BANK in the relevant Disbursement Notice being a
year falling not earlier than two years from the date of
disbursement of the relevant Tranche and not later than four years
before the relevant Maturity Date; and "CONVERSION REQUEST" means a
written notice from THE BORROWER requesting THE BANK to submit to
them a proposal for converting the basis of the whole but not part
only of a specified Fixed-Margin Convertible Tranche to a fixed-rate
basis.
Any such proposal (the "PROPOSAL") shall include any proposal for
modifications to this Contract which THE BANK in its discretion
considers reasonably necessary for the purpose of amending the
applicable interest rate basis or causing the financial terms of the
Contract to conform to THE BANK's standard terms of lending for
fixed-rate loans at the date of the Proposal;
(ii) any notice by THE BORROWER accepting the Proposal in respect of any
Fixed-Margin Convertible-Rate Tranche shall be served in writing on
THE BANK by 5 p.m. (Luxembourg time) on the same day as THE
BORROWER's receipt of the Proposal; provided that, if the Proposal
is delivered after 12 noon Luxembourg time on any Business Day, and
THE BORROWER does not accept the Proposal by the time specified, THE
BANK, at the written request of THE BORROWER made on the day of
receipt of the Proposal, shall on the next following Business Day
submit to THE BORROWER a further Proposal that is open for
acceptance on the same basis as the first Proposal; the Conversion
Option Date in respect of which a Proposal is accepted is
hereinafter referred to as the "CONVERSION DATE" and a Fixed-Margin
Convertible-Rate Tranche subject to Conversion hereunder is
hereinafter referred to as a "CONVERTED FIXED-RATE TRANCHE"; the
notice shall specify the Tranches to which it applies;
(iii) in the event of THE BORROWER's acceptance of the Proposal, (a) any
modifications to this Contract shall be effected by an agreement
between THE BANK and THE BORROWER and the Guarantor; (b) any accrued
interest shall be payable on the Conversion Date; and (c) interest
on the Converted Fixed-Rate Tranches shall thereafter be payable
annually on the payment date(s) mentioned in Article 5.03(2) or in
the relevant Disbursement Notice;
-12-
(iv) in the event of THE BORROWER's refusal or non-acceptance of a
Proposal or of THE BORROWER failing to make a written request
under paragraph (i) above or of a failure by the relevant parties
to reach the agreement mentioned in item (a) of subparagraph
(iii) above, the Fixed-Margin Interest Rate basis as specified in
Article 3.01C(1) shall remain in full force and effect in respect
of the balance of the Tranche outstanding.
3.01D FIXED-MARGIN NON-CONVERTIBLE TRANCHES
Interest shall accrue on the daily outstanding balance of each
Fixed-Margin Non-Convertible Tranche at the Fixed-Margin
Non-Convertible Interest Rate. For the purpose of this Article 3.01D:
"FIXED-MARGIN NON-CONVERTIBLE INTEREST RATE" means an annual
percentage rate equal to LIBOR (as defined in Schedule C) adjusted by
X, calculated by THE BANK for each successive Reference Period (as
defined in 3.01C). The rate of interest for each Reference Period
shall be the rate so notified by THE BANK to THE BORROWER within 10
days of commencement of the Reference Period to which such rate
applies; provided that in the event of a Tranche being drawn down on a
date other than on a Quarter Date the Fixed-Margin Non-Convertible
Interest Rate for the initial Reference Period shall be LIBOR;
where
"X" means such fixed margin to LIBOR (being either plus or minus)
determined by THE BANK and notified to THE BORROWER in the relevant
Disbursement Notice; provided that, if THE BANK is unable to offer a
Fixed-Margin Non-Convertible Interest Rate for the full duration of
the Tranche but is able to do so for a lesser period, THE BANK shall
make an offer in respect of such lesser period and, provided THE
BORROWER shall have promptly in writing accepted, the Fixed-Margin
Non-Convertible Interest Rate shall thereafter be LIBOR plus 15 basis
points from the date of termination of such period until the final
repayment date of the Tranche.
THE BORROWER shall pay interest on Fixed-Margin Non-Convertible
Tranches quarterly in arrears on each date specified in Article
5.03(1), commencing on the first such date following the date of
disbursement.
3.02 INTEREST ON OVERDUE SUMS
Without prejudice to Article 11 and by exception to Article 3.01,
interest shall accrue on any overdue sum from the due date to the
actual date of payment at an annual rate calculated as follows:
(a) for an amount due under any Tranche, at a rate equal to the sum
of (i) 2.5% and (ii) the relevant rate from time to time
applicable thereto pursuant to Article 3.01; and
(b) for any other amount, at a rate equal to the sum of (i) 2.5% and
(ii) the rate of interest charged by THE BANK on the due date for
loans made in the currency in question for a term of up to 20
years.
Such interest is payable in the same currency as the overdue sum on
which it accrues.
-13-
ARTICLE 4
REPAYMENT
4.01 NORMAL REPAYMENT
A. Scheduled Repayment
THE BORROWER shall repay each Tranche by semi-annual instalments on
the dates specified in Article 5.03(2) (or, if different, in the
relevant Disbursement Notice) in accordance with the terms of the
amortisation table specified in the relevant notice mentioned in
Article 2.04 and providing (1) in the case of Fixed-Rate Tranches
only, for repayment on a constant annuity basis so that the aggregate
of principal and interest payable in respect of the Tranche shall be
nearly as possible the same on each repayment date or for repayment by
equal instalments of principal or (2) in the case of Revisable
Fixed-Rate Tranches, Fixed-Margin Non-Convertible Tranches and
Fixed-Margin Convertible Tranches for repayment by equal instalments
of principal.
Each amortisation table shall be drawn up on the basis that repayment
of each Tranche shall begin not later than the first semi-annual
payment date mentioned in Article 5.03(2) (or, if different, in the
relevant Disbursement Notice) falling after the fourth anniversary of
disbursement and shall end on a semi-annual payment date mentioned in
Article 5.03(2) (or, if different, in the relevant Disbursement
Notice) falling after the elapse of not less than four years and not
more than twenty years from the date of disbursement; provided that,
if so requested by THE BORROWER, THE BANK may agree that a Tranche
shall be repayable in a single instalment on a date mentioned in
Article 5.03(2) or a date specified in the Disbursement Notice falling
not more than ten years from the date of disbursement.
B. Exceptional Circumstances
(1) If on or before a date (hereinafter a "REVISABLE TEST DATE")
falling three months prior to any Revision Date THE BANK shall
determine that appropriate counterpart funds are not available to it
in national or international finance markets by reason of exceptional
circumstances which adversely affect such markets or its access to
such markets, THE BANK may on or before the Revisable Test Date give
notice to THE BORROWER to repay on such Revision Date the full
outstanding amount of the relevant Revisable Fixed-Rate Tranche, and
THE BORROWER shall comply with such notice.
If THE BANK shall exercise its right under this Article 4.01B, it may
at its discretion offer to fund the outstanding amount of the
Revisable Fixed-Rate Tranche, in any other currency available to THE
BANK, for the outstanding period of the Tranche or, if shorter, for
the longest maturity at which counterpart funds are available to THE
BANK, subject to acceptance by THE BORROWER and to the execution, at
least 45 days before the Revision Date concerned, of such further
contract and guarantee, conforming so far as practicable to the terms
of the present Contract and the Guarantee, as THE BANK shall require.
(2) If on or before the date (hereinafter a "TEST DATE") falling
three months prior to the date (the "REVIEW DATE") mentioned in
Article 5.03(1) next preceding the tenth anniversary of the date of
disbursement of any Fixed-Margin Non-Convertible Tranches or
Fixed-Margin Convertible Tranche THE BANK shall determine that
appropriate counterpart funds are not available to it in national or
international finance markets by reason of exceptional circumstances
which materially and adversely affect its access to such markets. THE
BANK may on or before the Test Date give notice to THE BORROWER to
prepay on such Review Date the full outstanding amount of each such
Fixed-Margin Non-Convertible Tranches and Fixed-Margin Convertible
Tranche and THE BORROWER shall comply with such notice.
-14-
If THE BANK shall exercise its right under this Article 4.01B(2), it
may at its discretion offer to fund the outstanding amount of the
Fixed-Margin Non-Convertible or Fixed-Margin Convertible Tranche, in
any other currency available to THE BANK, or on another interest rate
basis, for the outstanding period of the Fixed-Margin Non-Convertible
or Fixed-Margin Convertible Tranche or, if shorter, for the longest
maturity at which counterpart funds are available to THE BANK, subject
to acceptance by THE BORROWER and to the execution, at least 45 days
before the Review Date concerned, of such further contract and
guarantee, conforming so far as practicable to the terms of the
present Contract and the Guarantee, as THE BANK shall require. The
procedure for the determination of the rate of interest shall conform
to the practice of THE BANK prevailing at the time of the Test Date.
4.02 VOLUNTARY PREPAYMENT
1. FIXED- AND REVISABLE-RATE TRANCHES
A. THE BORROWER may prepay all or part of any Fixed-Rate Tranche,
Revisable Fixed-Rate Tranche, or Converted Fixed-Rate Tranche upon
giving written notice (hereinafter a "PREPAYMENT NOTICE") specifying
the Tranche and the amount (the "PREPAYMENT AMOUNT") to be prepaid and
the proposed date of prepayment (the "PREPAYMENT DATE"), which shall
be a payment date specified in Article 5.03(2) or in the relevant
Disbursement Notice (each a "PAYMENT DATE"). The Prepayment Notice
shall be delivered to THE BANK at least one month prior to the
Prepayment Date. Save in the case of prepayment of a Revisable-Rate
Tranche on the last day of a Revisable Reference Period, prepayment
shall be subject to the payment by the BORROWER of the compensation,
if any, due to THE BANK in accordance with the provisions of
paragraphs B and C below.
B. The amount of compensation due on the Tranche prepaid shall be the
amount of the shortfall in interest incurred by THE BANK in respect of
each half-year ending on successive Payment Dates falling after the
Prepayment Date (but, in the case of a Revisable-Rate Tranche, falling
on or before the date of expiry of the current Revisable Reference
Period) calculated in the manner stated in the following subparagraph
and discounted in accordance with last sentence of this paragraph B.
The amount of the shortfall shall be calculated as the amount by
which:
(x) the interest that would have been payable during that half-year
on the prepaid part of the Tranche
exceeds
(y) the interest which would have been so payable during that
half-year if calculated at the Reference Rate; for which purpose
the "REFERENCE RATE" means the rate (reduced in each case by 15
(fifteen) basis points) which THE BANK determines on the date
falling one month prior to the Prepayment Date to be either (i)
the rate for a loan quoted by THE BANK in the relevant currency,
having the same financial characteristics as the Tranche, in
particular the same period for the payment of interest, the same
remaining life to maturity and the same type of repayment profile
or in the case of a Revisable-Rate Tranche, if less, the remaining
duration of the current Revisable Reference Period, or (ii) if the
Bank does not quote such a rate, the rate for a loan or available
money market placement for the period most closely corresponding
to that maturity or to that remaining duration of the
Revisable-Rate Tranche as aforesaid.
The interest rate which THE BANK, following the procedures laid down
by the Board of Directors of THE BANK, quotes for a loan is, in
accordance with the Statute of THE BANK, determined on the basis of
conditions prevailing on the capital markets.
-15-
Each amount so calculated shall be discounted to the Prepayment Date
by applying a discount rate equal to the rate determined pursuant to
indent (y) of this paragraph B.
C. On the date falling on or before 30 days prior to the proposed
Prepayment Notice THE BANK shall give notice to THE BORROWER of the
amount of compensation due or, as the case may be, the absence of
compensation. If by 5 PM Luxembourg time on the same date THE BORROWER
fails to confirm its intention to effect prepayment on the terms
notified by THE BANK, the proposed prepayment shall not take place.
Save as aforesaid, THE BORROWER shall be obliged to effect payment in
accordance with the Prepayment Notice, together with accrued interest
on the Prepayment Amount as well as any sum due under this Article
4.02.
2. FIXED-MARGIN NON-CONVERTIBLE TRANCHES AND FIXED-MARGIN CONVERTIBLE
TRANCHES
THE BORROWER may prepay any Non-Convertible Tranche or
Convertible-Rate Tranche (prior to Conversion), together with accrued
interest, on the date of expiry of any Reference Period. Prepayment
may be effected without penalty and subject to thirty days' prior
written notice. The notice shall be irrevocable.
Sums prepaid under Article 4.02.1 or 4.02.2 shall not be available to
be re-borrowed.
4.03 COMPULSORY PREPAYMENT
A. If the total cost of THE PROJECT should fall significantly short of
the figure stated in the Recitals, THE BORROWER shall upon demand of
THE BANK prepay the required amount of the Loan, together with
interest and related sums accrued thereon, on the date indicated by
THE BANK. For this purpose, the required amount of the Loan shall be
the minimum amount such as to ensure that the outstanding principal
amount of the Loan shall not exceed 50% of the total cost of THE
PROJECT.
B. If, without the prior written contact of THE BANK, the BORROWER
ceases to be a Subsidiary which is wholly-owned by the Guarantor, THE
BANK may require that THE BORROWER consult with it. Such consultation
shall take place within 30 days from the date of THE BANK's request.
If after 30 days from the date of such a request THE BANK is of the
opinion that such event has, or is likely to have, a material adverse
effect on the future servicing of the Loan or on the solvency of THE
BORROWER then THE BANK may require THE BORROWER to prepay the Loan,
together with accrued interest and a premium calculated on the amount
to be prepaid in accordance with Article 4.02. THE BORROWER shall
effect payment of the amount demanded on the date specified by THE
BANK, such date being a date falling not less than 30 days from the
date of the demand.
C. If at any time while the Loan is outstanding a Loss-of-Rating Event
shall occur, THE BORROWER shall so inform THE BANK and THE BANK may
demand that THE BORROWER consult with it with regard to the
implications of the Loss-of-Rating Event on THE BORROWER's obligations
and on the possible provision of additional security in support
thereof. Such consultation shall take place within 30 days from the
date of THE BANK's request. If, after the elapse of 30 days from the
date of such request, THE BANK is of the reasonable opinion that the
Loss-of-Rating Event has, or is likely to have, a material adverse
effect on the future servicing of the Loan or on the financial
stability of THE BORROWER, it may request THE BORROWER to provide
additional security for the Loan in the form of a guarantee in terms
and from a bank acceptable to THE BANK or of other security acceptable
to THE BANK.
If within a further period of 30 days the additional security has not
been executed in manner, form and substance satisfactory to THE BANK,
THE BANK may forthwith request THE BORROWER to prepay the Loan,
together with accrued interest and a premium calculated on the amount
to be prepaid in accordance with Article 4.02B. THE BORROWER shall
effect payment of the amount demanded on the date specified by THE
BANK, such date being a date falling not less than 30 days from the
date of the demand. If
-16-
such date should not coincide with an interest payment date, for the
purposes of calculation of premium under Article 4.02B, the broken
period until the ensuing interest payment date shall itself be treated
in like manner as per Article 4.02B.
Provided that for the purposes of this Contract a "LOSS-OF-RATING
EVENT" means any change in the rating awarded to any unsecured
unsubordinated long or medium debt of THE BORROWER by any
internationally recognised credit rating agency, such that:
a. if the rating is given by Xxxxx'x, it falls below A3; or
b. if the rating is given by Standard & Poor's, it falls below
A-.
For the purposes of this Article THE BORROWER undertakes to procure
that at all times it shall maintain a rating with each of the agencies
referred to at a. and b. above.
D. (1) If the transmission of electricity ceases to be the
principal business of THE BORROWER whether as a result of the cessation
of any business or activity or of the disposal or transfer of any
business or activity, THE BORROWER shall consult with THE BANK within
thirty days after such cessation. For the purposes of this paragraph
(1) the "principal business of THE BORROWER" shall mean a business that
from time to time exploits at least 90% of net tangible fixed assets or
generates at least 90% of operating profit of THE BORROWER as reported
in THE BORROWER's most recent consolidated accounts.
(2) In the event that any licence of THE BORROWER
associated with the transmission of electricity is or revoked, modified
or surrendered then, THE BORROWER shall consult with THE BANK within
thirty days after such or revocation, modification or surrender.
(3) If, in the circumstances referred to in paragraph (1)
above, THE BANK is of the reasonable opinion that such cessation taken
as a whole has a material adverse effect on the future servicing of the
Loan, or if, in the circumstances referred to in paragraph (2) above,
THE BANK is of the reasonable opinion that such revocation,
modification or surrender taken as a whole has a material adverse
effect on the future servicing of the Loan, the following shall take
place:
(i) THE BANK shall notify THE BORROWER if it requires a bank or
other financial institution acceptable to THE BANK to be
appointed (at the expense of THE BORROWER) as a guarantor of
THE BORROWER's financial obligations hereunder on terms and
conditions reasonably acceptable to THE BANK; and
(ii) if THE BORROWER fails to implement any such requirement under
(i) above or declare its unwillingness or inability to comply
with THE BANK's requirement, it shall, within 30 days from
notification to it of THE BANK's requirement, give notice of
prepayment of the whole outstanding balance of the Loan on a
date falling not later than sixty days after such
notification, (together with accrued interest thereon and a
premium calculated in accordance with Article 4.02), and shall
prepay in accordance with such notice.
E. In case of any partial prepayment due under this Article 4.03,
THE BORROWER may select which Tranche or Tranches are to be prepaid.
4.04 GENERAL PROVISIONS REGARDING PREPAYMENT UNDER ARTICLE 4
Prepayment shall be made in all currencies of the Tranche in question
in proportion to the respective amounts outstanding, save that THE
BORROWER may elect instead to prepay under Article 4.02 the whole
amount outstanding in one or more currencies under the Tranche.
In case of partial prepayment in all currencies, each amount prepaid
shall be applied in reduction of outstanding instalments in inverse
order of maturity.
-17-
This Article 4 shall not prejudice Article 11.
ARTICLE 5
PAYMENTS
5.01 PLACE OF PAYMENT
Each sum payable by THE BORROWER under this Contract shall be paid to
the respective account notified by THE BANK to THE BORROWER. THE BANK
shall indicate the account not less than fifteen days before the due
date for the first payment by THE BORROWER and shall notify any change
of account not less than fifteen days before the date of the first
payment to which the change applies, save that this period of notice
does not apply in the case of payment under Article 11 but THE BANK
shall indicate the account in its demand for payment thereunder.
5.02 CALCULATION OF PAYMENTS RELATING TO A FRACTION OF A YEAR
Any amount due in respect of any Tranche by way of interest, commission
or otherwise hereunder, and calculated in respect of a fraction of a
year, shall be calculated on the basis of:
(a) in respect of Fixed-Rate Tranches, Revisable Fixed-Rate
Tranches, or Converted Fixed-Rate Tranches a year of three
hundred and sixty days and a month of thirty days; and
(b) in respect of Fixed-Margin Non-Convertible Tranches and
Fixed-Margin Convertible Tranches a year of three hundred and
sixty-five days (or, in case of a currency other than GBP,
three hundred and sixty days) and the number of days elapsed.
5.03 DATES OF PAYMENT
(1) Sums due quarterly hereunder are payable to THE BANK on 5th
February, 5th May, 5th August, and 5th November in each year.
(2) Sums due semi-annually hereunder are payable to THE BANK on
5th February and 5th August.
(3) If any payment date specified in Article 5.03(1) or (2) or in
the relevant Disbursement Notice falls on a day which is not a Business
Day the payment shall be effected on the next following day which is a
Business Day or on the immediately preceding day which is a Business
Day in the case of payments due in respect of a Fixed-Margin
Non-Convertible Tranche or a Fixed-Margin Convertible Tranche. A
Business Day means a day (other than a Saturday or Sunday) on which
banks are open for business in Luxembourg and London (or, if the
currency of disbursement is a currency other than GBP, the relevant
principal banking centre for such currency) (herein called a "BUSINESS
DAY").
(4) Other sums due hereunder are payable within seven days of
receipt by THE BORROWER of the demand made by THE BANK.
(5) A sum due from THE BORROWER shall be deemed paid when it is
received by THE BANK.
-18-
ARTICLE 6
REPRESENTATION AND WARRANTIES
6.01 THE BORROWER REPRESENTS AND WARRANTS TO THE BANK THAT:
(a) it is duly incorporated and validly existing as a public company with
limited liability under the laws of
England and it has power to carry
on its business as it is now being conducted and to own its property
and other assets;
(b) it has the power to execute, deliver and perform its obligations under
this Contract and all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and
performance of the same by it;
(c) this Contract constitutes its valid and legally binding obligations;
(d) the execution and delivery of, the performance of its obligations
under, and compliance with the provisions of, this Contract do not and
will not:
(i) contravene any existing applicable law, statute, rule or
regulation, or any judgement, decree or permit to which it is
subject;
(ii) conflict with, or result in any material breach of any of the
terms of, or constitute a material default under, any other
agreement or other instrument to which it is a party or is
subject or by which either of them or its property is bound
which might reasonably be expected to have a material adverse
effect on its ability to perform its material obligations under
this Contract; or
(iii) contravene or conflict with any provision of its Memorandum and
Articles of Association;
(e) every material consent, authorisation, licence or approval of, or
registration with, or declaration to, governmental or public bodies or
authorities or courts required by it to authorise, or required by it
in connection with the execution, delivery, validity, enforceability
or admissibility in evidence of this Contract or the performance by it
of its material obligations under this Contract has been obtained or
made and is in full force and effect, and there has been no material
default in the observance of the conditions or restrictions (if any)
imposed in, or in connection with, any of the same;
(f) the consolidated audited accounts of THE BORROWER for the year ended
31st March 2001 (the "ACCOUNTING DATE") have been prepared on a basis
consistent with previous years and have been approved by its auditors
as representing a true and fair view of the results of its operations
for that year and accurately disclose or reserve against all the
liabilities (actual or contingent) of THE BORROWER;
(g) there has been no Material Adverse Change in relation to THE BORROWER
since the Accounting Date and no event or circumstance which
constitutes or would with the passage of time constitute an event of
default under Article 10.01 has occurred and is continuing;
(h) no litigation, arbitration or regulatory proceedings or investigations
for which process has been served on it or any of its relevant
subsidiaries are current and which, if adversely determined, should
result in a material adverse change in relation to THE BORROWER; and
(i) THE BORROWER has obtained all necessary consents, authorisations,
licences or approvals of governmental or public bodies or authorities
in connection with THE PROJECT and all such consents, authorisations,
licences or approvals are in full force and effect.
-19-
The representations and warranties contained in this Article 6.01
shall be treated as being made on the date on which this Contract is
amended and restated.
ARTICLE 7
PARTICULAR UNDERTAKINGS
7.01 USE OF LOAN AND OTHER FUNDS
THE BORROWER shall use the proceeds of the Loan for the execution of
THE PROJECT.
7.02 COMPLETION OF THE PROJECT
THE BORROWER undertakes to carry out THE PROJECT in accordance with
the Technical Description (as amended from time to time with the
agreement of THE BANK) and use its best efforts to complete it by the
final date specified in the Technical Description or by such later
date as THE BANK may agree.
7.03 INCREASED COST OF THE PROJECT
If the cost of THE PROJECT exceeds the estimated figure set out in the
second Recital, THE BORROWER shall obtain the finance to fund the
excess cost without recourse to THE BANK, so as to enable THE BORROWER
to complete THE PROJECT in accordance with the Technical Description.
7.04 TENDERING PROCEDURE
THE BORROWER shall, so far as appropriate and possible and in manner
satisfactory to THE BANK, purchase goods, secure services and order
works for THE PROJECT by international tender open at least to
nationals of all countries which are signatories of the Agreement on
the European Economic Area and in accordance with each Directive of
the European Union applicable to THE PROJECT.
7.05 INSURANCE
So long as the Loan is outstanding, THE BORROWER shall ensure that all
works and property forming part of THE PROJECT are insured (whether by
third parties or by self insurance) in conformity with good industry
practice.
7.06 MAINTENANCE
So long as the Loan is outstanding, THE BORROWER shall maintain,
repair, overhaul and renew all property (excluding obsolete property
and/or property which has reached the end of its useful life) forming
part of THE PROJECT as required to keep it in repair and in good
working order.
7.07 OPERATIONAL AND ENVIRONMENTAL COVENANTS
(1) So long as the Loan is outstanding, THE BORROWER shall:
A. unless, save as contemplated by Article 4.03D, THE BANK shall
have consented otherwise in writing, retain title to and possession of
the assets which comprise THE
-20-
PROJECT or, as appropriate, replace and renew such assets (excluding
obsolete assets and/or assets which have reached the end of their useful
life) and shall operate THE PROJECT in accordance with its original
purpose. THE BANK may withhold its consent only where the proposed action
would prejudice THE BANK's interests as lender to THE BORROWER or would
render THE PROJECT ineligible for financing by THE BANK under Article 198e
of the Treaty of Rome; and
B. comply, or shall ensure compliance, in all material respects with the
conditions and restrictions (if any) imposed in, or in connection with,
every consent, authorisation, licence or approval of governmental or public
bodies or authorities or courts or the Gas and Electricity Markets
Authority (the "AUTHORITY") from time to time appointed under Section 1 of
the Electricity Act 1989 and any replacement legislation including, to the
extend applicable, the Utilities Act 2000 (the "ELECTRICITY ACT")
(including the transmission licence (the "TRANSMISSION LICENCE") granted to
it under Section 6 of the Electricity Act required in connection with THE
PROJECT and do, or cause to be done, all other acts and things which may
from time to time be necessary under applicable law (including
Environmental Laws), the Grid Code, the Distribution Code and the Fuel
Security Code (each as defined in the Transmission Licence) for the
continued due compliance therewith.
(2) For the purposes of this Article 7.07:
"ENVIRONMENTAL LAWS" means, in relation to environmental matters, all
or any relevant statutes, rules, regulations, statutory instruments,
treaties, directives, directions, by-laws, codes of practice,
circulars, guidance notes, orders, notices, demands, injunctions,
statute law or common law, statutory or common law duty of care, of
any governmental authority or agency or any regulatory body in any
jurisdiction or the European Union which in any such case is directly
binding on and enforceable against THE BORROWER (or, where relevant
to another person, that other person).
7.08 PARI PASSU UNDERTAKING
THE BORROWER undertakes that its obligations under this Contract are
direct and unconditional obligations of THE BORROWER and rank and will
rank at least pari passu with all other unsecured and unsubordinated
obligations (including contingent obligations) of THE BORROWER other than
those obligations of THE BORROWER to its unsecured creditors which would,
on a winding-up of THE BORROWER, be preferred by operation of law.
ARTICLE 8
SECURITY
8.01 GUARANTEE
The obligations of THE BANK under this Contract are conditional upon the
execution and delivery to it of the duly executed Guarantee in form and
substance approved by THE BANK, whereby the Guarantor unconditionally
guarantees the due performance of THE BORROWER's financial obligations
under this Contract. THE BORROWER hereby acknowledges and consents to the
terms of the Guarantee.
-21-
8.02 NEGATIVE PLEDGE
Subject to Article 8.03, so long as any part of the Loan remains
outstanding, THE BORROWER shall not, and it shall procure that no other
member of the Group will, create or permit to subsist any Security
Interest on, or with respect to, any of its present or future business,
undertaking, assets or revenues (including any uncalled capital).
8.03 Subject to Article 8.04, Article 8.02 does not apply to:-
(A) any Security Interest created with the prior written consent of THE
BANK;
(B) Security Interests granted prior to the date of this Agreement and
disclosed to THE BANK in writing but only if the maximum principal amount
secured thereby is not subsequently increased;
(C) any Security Interest by way of title retention entered into in the
ordinary course of business;
(D) any lien arising by operation of law in ordinary course of business;
(E) any banker's lien or right of set-off arising by operation of law in
the ordinary course of commercial banking transactions or any contractual
set-off arrangements in the ordinary course of commercial banking
transactions;
(F) any Security Interest existing over assets acquired after the date of
this Agreement and existing on the date of acquisition, provided that:-
(1) the Security Interest is not created in contemplation of the
acquisition of the same; and
(2) the maximum principal amount secured thereby or the maturity of those
obligations is not thereafter increased;
(G) any Security Interest over the assets of any company which becomes a
Subsidiary of THE BORROWER after the date of this Agreement and which
exist at the date on which it becomes a Subsidiary of THE BORROWER, but
only if:-
(1) the principal amount secured by the Security Interest is not
increased after the date it becomes a Subsidiary of THE BORROWER; and
(2) the Security Interest is not created in contemplation of it becoming
a Subsidiary of THE BORROWER;
(H) any Security Interest over goods and/or documents of title, or
insurance policies and sale contracts in relation to such goods, arising
in the ordinary course of trading in connection with letters of credit and
similar transactions where such Security Interest secures only so much of
the acquisition cost of such goods which is required to be paid within 180
days after the date upon which the same was first incurred;
(I) any Security Interest created in substitution for any Security
Interest permitted pursuant to this Article (other than Security Interests
initially permitted pursuant to paragraph (H) above), provided that the
substituted Security Interest is over the same asset and the principal
amount secured does not exceed the principal amount secured on such asset
prior to the substitution;
(J) any other Security Interest so long as the aggregate outstanding
principal amount of indebtedness secured by all the Security Interests
permitted under this Article (with the exception of amounts secured by
Security Interests referred to in paragraphs (A) to (E) and
-22-
(M) below) does not exceed, when combined with all Security Interests of
the NG Group, GBP 80 million;
(K) any Security Interest created or granted from time to time in respect
of any Project Finance Borrowing including, for the avoidance of doubt, any
Security Interest created or granted by a member of the Group in its
capacity as a shareholder of a company making a Project Finance Borrowing
over its shareholding in that company (including, in the case of a member
of the Group whose only material assets are shares in the company incurring
the Project Finance Borrowing, a supporting floating charge over all or
substantially all of that member's assets) as security for such Project
Finance Borrowing, provided that the right of recourse against such
shareholder is limited to the realisation of the shareholding in that
company;
(L) any Security Interest created by a Project Finance Company; and
(M) any Security Interest created or granted from time to time by a member
of the Group in its capacity as a shareholder of a Project Finance Company
over its shareholding in that Project Finance Company as security for the
obligations of such Project Finance Company.
8.04 Notwithstanding anything in Article 8.03 above, none of THE BORROWER or any
of its Subsidiaries will create or permit to subsist any Security Interest
over:
(A) Relevant Assets used in the Transmission Business carried out pursuant
to any Transmission Licence; or
(B) any shareholding in any Subsidiary of THE BORROWER which is the legal
and/or beneficial owner of Relevant Assets used in the Transmission
Business carried out pursuant to any Transmission Licence.
8.05 The following terms used in this Article 8 and, where relevant, in Article
11 shall bear the following meaning:
"COMPANIES ACT SUBSIDIARY" means a subsidiary within the meaning of Section
736 of the Companies Act 1985, as amended by Section 144 of the Companies
Act 1989.
"FINANCIAL INDEBTEDNESS" means (without double-counting) any indebtedness
of the Group in respect of (a) moneys borrowed or debit balances at banks
and other financial institutions; (b) any debenture, bond, note, commercial
paper, loan stock or other debt instrument; (c) any acceptance or
documentary credit facilities, bill discounting or factoring facilities;
(d) receivables sold or discounted (otherwise than on a non-recourse
basis); (e) the acquisition cost of any asset to the extent payable before
or after the time of acquisition or possession by the party liable where
the advance or deferred payment is arranged primarily as a method of
raising finance or financing the acquisition of that asset; (f) leases
(whether in respect of land, machinery, equipment or otherwise) entered
into primarily as a method of raising finance or financing the acquisition
of that asset; (g) currency or interest swap, cap or collar arrangements or
any other derivative instrument; (h) amounts raised under any other
transaction having the commercial effect of a borrowing or raising of
money; (i) any guarantee, indemnity or similar assurance in respect of
indebtedness of any person falling within any of paragraphs (a) to (h)
(both inclusive) above.
"GROUP" means THE BORROWER and its Subsidiaries from time to time but if
at any time a Project Finance Company, is a Subsidiary Undertaking but not
a Companies Act Subsidiary then, for so long as it shall be a Subsidiary
Undertaking but not a Companies Act Subsidiary, it shall be deemed (unless
the contrary is specified) not to be a member of the Group.
"MOODY'S" means Xxxxx'x Investors Services Inc.
-23-
"NG GROUP" means for the purposes of this Article 8 the Guarantor and its
Subsidiaries from time to time but for the purposes of Articles 8.02, 9.02
and 11 if at any time a Project Finance Company is a Subsidiary Undertaking
but not a Companies Act Subsidiary, then, for so long as it shall be a
Subsidiary Undertaking but not a Companies Act Subsidiary, it shall be
deemed (unless the contrary is specified) not to be a member of the NG
GROUP.
"PROJECT FINANCE BORROWING" means any Financial Indebtedness to finance a
project: --
(a) which is made by a single purpose company, partnership or other legal
person (whether or not a member of the NG Group) whose principal
assets and business are constituted by that project and whose
liabilities in respect of the Financial Indebtedness concerned are not
directly or indirectly the subject of a guarantee, indemnity or other
form of assurance, undertaking or support from any member of the NG
Group (except as expressly referred to in paragraph (b)(iii) below or
as a result of the making of acceptances or endorsements of bills in
the ordinary course of trading or payment netting arrangements and
other usual course of business banking arrangements); or
(b) in respect of which the person or persons making that Financial
Indebtedness available to the relevant borrower (whether or not a
member of the NG Group) have no recourse whatsoever to any member of
the NG Group for the repayment of or payment of any sum relating to
that Financial Indebtedness other than:--
(i) recourse to the borrower or one or more of its subsidiaries, for
amounts limited to the aggregate cash flow or net cash flow
(other than historic cash flow or historic net cash flow) from
the project; and/or
(ii) recourse to the borrower or one or more of its subsidiaries or
any shareholder of the borrower for the purpose only of enabling
amounts to be claimed in respect of that Financial Indebtedness
in any enforcement of any Security Interest permitted pursuant
to Article 8.02 given by the borrower or one or more of its
subsidiaries over the assets comprised in the project (or given
by any shareholder of the borrower over its shares in the
borrower together with, in the case of a UK-incorporated
shareholder whose only material assets are those shares in the
borrower, a supporting floating charge over all or substantially
all of its assets to secure that Financial Indebtedness or any
recourse referred to in (iii) below or as a result of the making
of acceptances or endorsements of bills in the ordinary course
of trading or payment netting arrangements and other usual
course of business banking arrangements, provided that (A) the
extent of the recourse to the borrower or one or more of its
subsidiaries or shareholder is limited solely to the amount of
any recoveries made on any such enforcement, and (B) the person
or persons are not entitled, by virtue of any right to claim
arising out of or in connection with the Financial Indebtedness,
to commence proceedings for the winding up or dissolution of the
borrower, the subsidiary or shareholder or to appoint or procure
the appointment of any receiver, trustee or similar person or
official in respect of the borrower, the subsidiary or
shareholder or any of its assets (save for the assets the
subject of the relevant Security Interest); and/or
(iii) recourse to such borrower generally, or directly or indirectly
to a member of the NG Group under any form of assurance or
undertaking, which recourse is limited to a claim for damages
(other than liquidated damages and damages required to be
calculated in a specified way) for breach of an obligation (not
being a payment obligation or an obligation to procure payment
by another or an obligation to comply or to procure compliance
by another with any financial ratios or other tests of financial
condition) by the person against whom such recourse is
available; or
(c) which THE BANK shall have agreed in writing to treat as Project
Finance Borrowing for the purposes of this Article 8.
-24-
If at any time any Financial Indebtedness is made to finance a project and
that Financial Indebtedness does not qualify as a "Project Finance
Borrowing" pursuant to the above subparagraphs (b)(i), (ii) or (iii) but
would so qualify if there were not recourse to a member of the NG Group
which is either (i) limited as to the period during which it is in force
(for example, during the period up to completion of the project) or (ii)
limited as to the obligations of the borrower to which it applies, then, in
any such case, the Financial Indebtedness shall be regarded as a "Project
Finance Borrowing" for the purposes of this definition to the extent that,
and during the period that, there is no such recourse to a member of the NG
Group.
"PROJECT FINANCE COMPANY" means any company, partnership or other legal
person falling within the scope of paragraph (a) of the definition of
Project Finance Borrowing or which THE BANK has agreed shall be treated as
a Project Finance Company for the purposes of this Article 8.
"RELEVANT ASSETS" has the meaning given to it in the relevant Transmission
Licence.
"SECURITY INTEREST" means any mortgage, pledge, lien, charge, assignment,
hypothecation or security interest or any other agreement or arrangement
having the effect of conferring security.
"STANDARD AND POORS" means Standard & Poor's Corporation.
"SUBSIDIARIES" means Companies Act Subsidiaries and Subsidiary Undertakings
(and "SUBSIDIARY" shall be construed accordingly).
"SUBSIDIARY UNDERTAKING" means a subsidiary undertaking within the meaning
of Section 285 of the Companies Act 1985, as inserted by Section 21 of the
Companies Act 1989.
"TRANSMISSION BUSINESS" has the meaning given to it in the relevant
Transmission Licence.
"TRANSMISSION LICENCE" means a licence granted under Section 6(1)(b) of the
Electricity Act.
ARTICLE 9
INFORMATION AND VISITS
9.01 INFORMATION CONCERNING THE PROJECT
THE BORROWER shall:
(a) deliver to THE BANK, (i) by 30th March 1997 and on each anniversary of
that date until THE PROJECT is completed, a report on the
implementation of THE PROJECT substantially in the form set out in
Schedule D; and (ii) from time to time, any such further document or
information concerning the financing, implementation and operation of
THE PROJECT as THE BANK in its capacity as a lender to THE BORROWER
may reasonably require;
(b) submit for the approval of THE BANK as soon as is reasonably
practicable any material change to the general plans, timetable or
expenditure programme for THE PROJECT, by relation to the disclosures
made to THE BANK prior to the signing of this Contract; and
-25-
(c) generally inform THE BANK of any fact or event known to THE BORROWER
which might substantially prejudice or affect the conditions of
execution or operation of THE PROJECT.
9.02 INFORMATION CONCERNING THE BORROWER
A. THE BORROWER shall:
(a) deliver to THE BANK (i) each year, as soon as the same are available
and in any event within 180 days after the end of each of its
financial years, its audited consolidated financial statements
(including balance sheet, profit and loss account and cash flow
statement); and (ii) from time to time all financial information from
time to time delivered by THE BORROWER to its creditors generally,
such information to be delivered to THE BANK promptly following
delivery of the same to its creditors;
(b) ensure that its accounting records clearly show the operations
relating to the financing and execution of THE PROJECT to the extent
required by law;
(c) immediately inform THE BANK;
(i) of any material change in its Memorandum or Articles of
Association;
(ii) any modification of the provisions in Article 54 of the Articles
of Association of the Guarantor relating to the Special Share;
(iii) of the occurrence of the event referred to in Article 4.03B or
of its belief or, as the case may be, reasonable grounds for
belief that such an event has occurred;
(iv) immediately, of any fact which obliges it, the Guarantor or any
member of the NG Group or of any demand made to it, the
Guarantor or any such member of the NG Group to prepay in
advance of maturity by reason of declared event of default in
relation thereto any Financial Indebtedness (but excluding any
Project Finance Borrowings);
(v) immediately of any intention on its part, the Guarantor or any
other member of the NG Group to grant any Security Interest over
any of its assets in favour of a third party other than any
Security Interest permitted by Article 8.03;
(v) generally of any fact or event known to THE BORROWER which would
reasonably prevent the fulfilment of any material obligation of
THE BORROWER under this Contract; and
(d) immediately inform THE BANK of any modification of the terms of the
Transmission Licence.
9.03 VISITS
THE BORROWER shall use reasonable endeavours to permit upon reasonable
notice and at all reasonable times, or to ensure such permission is granted
to, persons designated by THE BANK to visit the sites, installations and
works comprising THE PROJECT and to conduct such checks as they may wish,
and to provide them, or ensure that they are provided, with all necessary
assistance for this purpose.
-26-
10.01 TAXES, DUTIES AND FEES
THE BORROWER shall pay all taxes, duties, fees and other impositions of
whatsoever nature, including stamp duty and registration fees, arising out
of the execution or implementation of this Contract or any related
document and in the creation of any security for the Loan.
THE BORROWER shall pay all principal, interest, commission and other
amounts due under this Contract gross without deduction of any national or
local impositions whatsoever; Provided that, if THE BORROWER is obliged to
make any such deduction, it will gross up the payment to THE BANK so that
after deduction, the net amount received by THE BANK is equivalent to the
sum due. If THE BORROWER are obliged to deduct any amounts under this
Article and THE BANK subsequently becomes entitled to recover any sum or
to claim a credit against any tax payable by it in respect of the
resulting grossed-up payment which is in excess of the amount originally
due to THE BANK, THE BANK shall promptly upon receiving such sum or credit
pay such excess amounts to THE BORROWER.
If for whatever reason THE BANK's ability to receive interest payments
gross from UK borrowers generally ceases, THE BANK shall notify THE
BORROWER.
10.02 OTHER CHARGES
THE BORROWER shall bear any professional, banking, transfer or exchange
costs reasonably incurred in the execution or implementation of this
Contract or related document, and in the creation of any security for the
Loan.
ARTICLE 11
PREPAYMENT UPON AN EVENT OF DEFAULT
11.01 RIGHT TO DEMAND REPAYMENT
THE BORROWER shall repay the Loan or any part thereof, together with
accrued interest and other accrued sums, forthwith upon demand being made
therefor by THE BANK:
(A) immediately:
(a) if any representation or statement made by or on behalf of THE
BORROWER or the Guarantor upon which THE BANK has relied in
connection with the negotiation of this Contract or during its
lifetime proves to have been incorrect in any material particular
when made:
(b) if THE BORROWER fails on due date to repay any part of the Loan or
to pay interest thereon, or to make any other payment to THE BANK as
herein provided;
(c) if (i) any Financial indebtedness of a member of the Group is not
paid when due or within any originally applicable grace period; or
(ii) an event of default (howsoever described) occurs under any
document relating to Financial Indebtedness of Group; or (iii) any
Financial Indebtedness of a member of the Group becomes prematurely
due and payable or is placed on demand as a result of an event of
default (howsoever described); or (iv) any commitment for, or
underwriting of, any Financial Indebtedness of a member of the Group
is cancelled or suspended as a result of an event of default
howsoever described) under the document relating to that Financial
-27-
Indebtedness; or (v) any Security Interest securing Financial
Indebtedness over an asset of a member of the Group becomes
enforceable by reason of an event of default howsoever described, so
long as the aggregate amount of Financial Indebtedness in
sub-paragraphs (i) to (v) above exceeds an amount equal to GBP 20
million at that time (or its equivalent in any other currency); and
provided that for the purposes of this paragraph (c) the definition of
Financial Indebtedness shall exclude Project Finance Borrowing;
(d) if THE BORROWER or any of its Subsidiaries is deemed unable to pay its
debts within the meaning of Section 123(1)(a), (b), (c) or (e) or
123(2) of the insolvency Act 1985 or any statutory modification or
re-enactment thereof, whether or not a court of justice has so
determined, or shall make or seek to make a composition with its
creditors generally;
(e) if an order is made or an effective resolution is passed for the
winding up of THE BORROWER or if THE BORROWER ceases to carry on the
whole or substantially the whole of its business or activities, save
in the course of a reconstruction, merger, consolidation,
reorganisation or amalgamation or other similar arrangement on terms
previously consented to by THE BANK (such consent not to be
unreasonably withheld or delayed); or
(f) (i) if an encumbrancer takes possession of, or a receiver, liquidator,
administrative receiver or administrator is appointed over, any
substantial part of the business or assets of THE BORROWER or any
substantial part of the property forming part of THE PROJECT, and such
appointment is not discharged within 21 days of being made; (ii) if
THE BORROWER petitions for the appointment of an administrator over
its affairs; or (iii) if any distress, execution, sequestration or
other process is levied or enforced upon the whole or any material
part of the property of THE BORROWER or any substantial part of the
property forming part of THE PROJECT and is not discharged or stayed
within 21 days; or
(g) if any event occurs in relation to THE BORROWER, any Subsidiary of THE
BORROWER, which is likely to have a material adverse effect on the
ability of THE BORROWER to comply with its obligations under this
Contract; and
(B) Upon expiry of a reasonable period of time specified in a notice
served by THE BANK on THE BORROWER, without the matter being remedied to
the reasonable satisfaction of THE BANK:
(a) if THE BORROWER fails in a material respect to comply with any
obligation under this Contract other than one mentioned in Article
11.01(A)(b);
(b) if any material fact stated in the Recitals substantially alters and
if the alteration either materially prejudices the interests of THE
BANK as lender to THE BORROWER or materially and adversely affects the
implementation or operation of THE PROJECT;
(c) THE BORROWER or any Subsidiary of THE BORROWER fails to comply in all
material respects with all applicable provisions of the Electricity
Act or its Transmission Licence (if any) and such failure to comply is
reasonably likely to have a material adverse effect on the ability of
THE BORROWER to perform its obligations under the Contract; or
(d) Any Transmission Licence held by THE BORROWER is:
(i) revoked or surrendered or any notice of revocation is issued by
the Secretary of State and the notice is to take effect prior to
the final repayment date (disregarding any acceleration of such
date pursuant to this Article 11) of any Tranche of the Loan; or
-28-
(ii) modified in any manner which is reasonably likely to have a
material adverse effect on the ability of THE BORROWER to perform
its obligations under this Contract.
11.02 OTHER RIGHTS AT LAW
Article 11.01 shall not restrict any other right of THE BANK at law to
require prepayment of the Loan.
11.03 DAMAGES
Where demand for prepayment is made under Article 11.01 THE BORROWER shall
pay to THE BANK on the amount of each instalment, as set out in any
amortisation table drawn up pursuant to Article 4.01A, a sum calculated at
an annual rate of 0.25% from the date of the demand to the respective
original due date of the instalment, as set out in the applicable
amortisation table.
In case of demand under Article 11.01 for prepayment of a Fixed-Rate
Tranche, Converted Fixed-Rate Tranche or Revisable Fixed-Rate Tranche, THE
BORROWER shall pay to THE BANK an amount calculated as at the date of
demand, as the greater of:
(a) The amount calculated according to the provisions of Articles 4.02
applied to the sum which has become immediately due and payable, and
with effect from the date of declaration to that effect; and
(b) an amount calculated at an annual rate of 0.25% from the date of the
demand to the respective date on which each instalment of the Tranche
demanded would have been repayable but for the making of the demand.
In case of demand under Article 11.01 for prepayment of a Fixed-Margin
Non-Convertible Tranche or unconverted Fixed-Margin Convertible Tranche,
THE BORROWER shall pay to THE BANK a sum calculated as at the date of the
demand at an annual rate of 0.25% from the date of the demand to the
respective date on which each instalment of the amount demanded would have
been repayable but for the making of the demand.
11.04 NON-WAIVER
No failure or delay by THE BANK in exercising any of its rights under this
Article 11 shall be construed as a waiver of such right.
11.05 APPLICATION OF SUMS RECEIVED
Sums received following a demand under Article 11 shall be applied first
in payment of damages, commission and interest in that order and secondly
in reduction of outstanding instalments in inverse order of maturity. They
shall be applied between Tranches at the discretion of THE BANK acting
reasonably.
ARTICLE 12
LAW AND JURISDICTION
12.01 LAW
This Contract and its formation, construction and validity shall be
governed by English Law.
-29-
12.02 JURISDICTION
All disputes concerning this Contract shall be submitted to the
jurisdiction of the Courts of
England: THE BANK appoints The Securities
Management Trust Limited whose present address is 00 Xxx Xxxxx, Xxxxxx XX0
to be its agent for the purpose of accepting service of legal process.
ARTICLE 13
FINAL CLAUSES
13.01 NOTICES
Save as provided in Article 12.02, notices and other communications given
hereunder by one party to this Contract to the other shall be sent to its
respective address set out below, or to such other address as it shall
have previously notified to the former in writing as its new address for
such purpose:
- FOR THE BANK : 000 xxxxxxxxx Xxxxxx Xxxxxxxx
X-0000 Xxxxxxxxxx-Xxxxxxxxx
Attention: Credit Risk Department
Tel: (-352) 43 79-1
Fax: (-352) 43 77 04
- FOR THE BORROWER : 00 Xxxxxxxxxx Xxxx
Xxxxxx XX0 0XX
Attention: Xxxxxx X'Xxxxxxx
/Xxxx Xxxxxxxx
Tel: (00) 00 0000 0000
Fax: (00) 00 0000 0000
13.02 FORM OF NOTICE
Notices and other communications, for which fixed periods are laid down in
this Contract or which themselves fix periods binding on the addressee,
shall be served by hand delivery, registered letter, telegram, telex or
other means of transmission which affords evidence of receipt by the
addressee. The date of registration or, as the case may be, the stated
date of receipt of transmission shall be conclusive for the determination
of a period.
13.03 RECITALS, SCHEDULES AND ANNEXES
The Recitals and following Schedules form part of this Contract:
- Schedule A Technical Description
- Schedule B Definition of ecu
- Schedule C Definition of LIBOR
- Schedule D Project Reporting Form
The following Annexes are attached hereto:
- Annex I Resolution of Board of Directors of
THE BORROWER incorporating Authority
of Signatory
- Annex II Certificate of Borrowing Powers of THE
BORROWER
- Annex III Drawdown Certificate
-30-
IN WITNESS WHEREOF the parties hereto have caused this Contract to be executed
in four originals in the English language, each page having been initialled by
Xx. X.X. Xxxxxxx on behalf of THE BANK.
Signed for and on behalf of Signed for and on behalf of
EUROPEAN INVESTMENT BANK THE NATIONAL GRID COMPANY PLC
this day of 2001, at London
SCHEDULE A
1 of 2
PROJECT: NATIONAL GRID TRANSMISSION (UK)
TECHNICAL DESCRIPTION
---------------------
The project consists of the study, design, implementation, commissioning
(including acceptance tests) and operation of about 32 electricity schemes
dispersed through the Promoter's transmission network (400kV - 275 kV) in
England and Wales. The main data is summarised on the attached schedule.
The project is conceived in such a way that all schemes will comply with the
relevant national legislation and EC Directives in particular, with those
relating to the protection of the environment (79/409/EEC and 85/411/EEC on
wild birds, 85/338/EEC on the XXXXXX Programme). The sub-projects will avoid
sites of particular or special interest.
All equipment will be free of PCB or other toxic agents capable of being
released into the atmosphere.
Procurement of goods and services will comply with the Procurement Directive
(93/38/EEC) and its transposition in English law. This includes advertising
for a range of equipment/materials in the Official Journal of the EU.
These schemes will be commissioned progressively by the end of 1999.
SCHEDULE A
2 of 2
PROJECT: NATIONAL GRID TRANSMISSION (UK)
Project Category Promoter's Project Description
Reference
Number (PIMS)
Operational Control NGB631 Vision 2000 to consolidate Despatch
control to one centre at Wokingham
Reactive Power 5554 7126 Installation of 1745 MVAr of Reactive
Compensation 5744 7352 Compensation throughout England
6045 7353 and Wales
6261 7354
7009 7437
Switchgear Replacement 2481 Replacement of 80 x 400 kV and
2482 73 x 275 kV switchgears in
2483 accordance with Promoters Policy
4321 [Ref: TR1248].
Infrastructure 3861,5595, 5717 Modification to existing networks to
4349,5471, 5864 increase throughout capacities
4341,5558, 7071 in accordance with Promoters
4344,8074, 7072 PIMS Approval codes involving 29
5559,8129, 4754 400kV switchgears, 3840 MVA
8437,8438 transformer capacity and 1km of 400
kV oil-filled cable.
SCHEDULE B
THE ecu
The ecu is the same as the ecu that is used as the unit of account of the
European Communities, and which is at present comprised of the specific amounts
of the currencies of 12 of the Member States of the European Community shown
below.
Pursuant to Council Regulation (EC) No. 3320/94 of 22nd December 1994, the
composition of the ecu basket is as follows:
German mark : 0.6242
pound Sterling : 0.08784
French franc : 1.332
Italian lira : 151.8
Dutch guilder : 0.2198
Belgian franc : 3.301
Luxembourg franc : 0.130
Danish krone : 0.1976
Irish pound : 0.008552
Greek drachma : 1.440
Spanish peseta : 6.885
Portuguese escudo : 1.393
Changes to the ecu may be made by the European Communities, in which event
references to the ecu shall be read accordingly (see Information).
If THE BANK should consider that the ecu (see Payment in Euros and Information,
hereafter) has ceased to be used as the unit of account of the European
Communities and as the single currency of the European Union, it shall so
notify THE BORROWER. As from the date of such notification, the ecu shall be
replaced by the currencies of which it was comprised - or their countervalue in
one or more of those currencies - as at the time of its most recent use as the
unit of account of the European Communities.
PAYMENT IN EUROS
Upon substitution of the ecu by the Euro, all payments due in ecus under this
Contract shall be made in Euros at the rate of one Euro for one ecu. The
substitution of the ecu by the Euro shall not have the effect of bringing about
the payment in component currencies referred to in the preceding paragraph.
INFORMATION
Article 109G of the EC Treaty, as introduced by the Treaty on European Union,
provides that the currency composition of the ecu basket shall not be changed.
From the start of the third stage of European economic and monetary union, the
value of the ecu as against the currencies of the Member States participating
in the third stage will be irrevocably fixed and the ecu will become a currency
in its own right.
The European Council at the Madrid Summit in December 1995 decided that the
name of that new currency will be the Euro. Consequently, references to the ecu
shall apply to the Euro. In the case of contracts denominated by reference to
the official ecu basket of the European Community, in accordance with the
Treaty as confirmed by the European Council at the Madrid Summit in December
1995, substitution of the ecu by the Euro will be made at the rate of one to
one.
SCHEDULE C
DEFINITION OF LIBOR
"LIBOR" means
(i) in respect of any Reference Period of one month or more, the rate for
deposits for a period being the number of whole months most closely
corresponding to the duration of the Reference Period (for which purpose a
fraction of fifteen days or less shall be disregarded), and,
(ii) in respect of a Reference Period of less than a month, the rate for
deposits for a period of one month,
which appears on Telerate p. 3750 against the currency of the Tranche as of
11:00 a.m. London time, in the case of GBP on the day (the "Reset Date") on
which the Reference Period starts or, if that day is not a London Business Day,
on the next following day which is such a Business Day, determined in each case
in the currency of the relevant Tranche (the period for which the rate is taken
being hereinafter called the "Representative Period").
If such rate does not appear on Telerate p. 3750, THE BANK shall request the
principal London offices of four major banks in the London interbank market,
selected by THE BANK (the "Reference Banks"), to quote the rate at which
deposits in the currency and amount of the relevant Tranche are offered by each
of them at approximately 11:00 a.m. London time on the relevant London
Business Day, to prime banks in the London interbank market for a period equal
to the Representative Period. If at least two such quotations are provided, the
rate will be the arithmetic mean of the quotations provided.
If fewer than two quotations are provided as requested, the rate will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m. London time on
the Reset Date by major banks in London (selected by THE BANK) for loans in the
currency and amount of the relevant Tranche to leading European banks for a
period equal to the Representative Period.
All percentages resulting from any arithmetic mean calculations referred to
in this Schedule will be rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point.
THE BANK shall inform THE BORROWER without delay of the quotations received by
THE BANK.
In the case of currencies other than GBP, the Reset Date shall be determined by
reference to the banking convention for such currency on the London market.
SCHEDULE D
----------
PROJECT REPORTING FORM
----------------------
PROJECT: NATIONAL GRID TRANSMISSION (UK)
-------
-------------------------------------------------------------------------------
Project Category Implementation Progress % Cost
---------------------------------- (MGBP)
1996 1997 1998 1999
-------------------------------------------------------------------------------
Operational Control
Reactive Power
Compensation
Switchgear Replacement
Infrastructure
-------------------------------------------------------------------------------
CAPACITY ADDED BY PROJECT YEAR:
-------------------------
-------------------------------------------------------------------------------
Project Components Cost/Unit Units
-------------------------------------------------------------------------------
Reactive Compensation MVAr
400 kV Switchgears Units
275 kV Switchgears Units
Transformer Capacity MVA
400 kV Line Length km
275 kV Line Length km
400 kV Cable Length km
275 kV Cable Length km
-------------------------------------------------------------------------------
XXXXX XXX
---------
CERTIFICATE FROM THE BORROWER AND THE GUARANTOR
-----------------------------------------------
TO: EIB
FROM: THE NATIONAL GRID COMPANY PLC AND THE
NATIONAL GRID GROUP PLC
[Date]
Dear Sirs,
RE:
Finance Contract between the National Grid Company plc and yourselves
dated [ - ] (hereinafter referred to as the "
Finance Contract")
---------------------------------------------------------------------
Terms defined in the Finance Contract have the same meaning when used in
this letter.
For the purposes of Article 1.04(b) we hereby certify to you as follows:
(1) that no event mentioned in Article 11.01, nor any event which, with
the giving of notice and/or the expiry of any grace, remedy or similar
period would constitute any event as mentioned in Article 11.01, has
occurred and is continuing;
(2) the representations and warranties set out in Article 6.01 are true
and fulfilled as at the date of this certificate; and
(3) the terms of Article 8.02 have been complied with as of the date
hereof.
Yours faithfully,
for and on behalf of
THE NATIONAL GRID COMPANY PLC
and
THE
NATIONAL GRID GROUP PLC
[Authorised Signatories]
ANNEX 2
E U R O P E A N I N V E S T M E N T B A N K
FI NO. 0.9200 GB
_______________________________________________________________________________
NATIONAL GRID (UK) PROJECT
_______________________________________________________________________________
GUARANTEE AND INDEMNITY AGREEMENT
between
EUROPEAN INVESTMENT BANK
and
NEW NATIONAL GRID PLC
London, [ ] 2001
MADE BETWEEN:
European Investment Bank having its Head Office at 000, xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx-Xxxxxxxxx, Xxxxx Xxxxx of Luxembourg, represented by
[ ]
hereinafter called: "THE BANK"
of the first part, and
New National Grid plc, a public company incorporated with limited liability in
England and having its registered office at 00 Xxxxxxxxxx Xxxx, Xxxxxx XX0 0XX
Xxxxxxx, represented by [ ]
hereinafter called: "THE GUARANTOR"
of the second part.
-2-
WHEREAS:
- By an agreement, dated 5th December 1996 as amended and supplemented by
letter agreements dated 3 February 1997, 12 November 1998, 29 March 1999
and the date hereof (hereinafter called "THE FINANCE CONTRACT") made
between THE BANK, on the one hand, and The National Grid Company plc on the
other hand (hereinafter called "THE BORROWER"), THE BANK established in
favour of THE BORROWER a credit equivalent to GBP 200,000,000 (two hundred
million pounds sterling) which has been fully drawn;
- The Borrower is a wholly owned subsidiary of
National Grid Group plc which
in turn become a wholly owned subsidiary of THE GUARANTOR;
- The obligations of THE BANK under THE FINANCE CONTRACT are conditional upon
the execution and delivery by THE GUARANTOR of a guarantee of performance
by THE BORROWER of THE BORROWER's financial obligations under THE FINANCE
CONTRACT;
- Execution of this Guarantee and Indemnity Agreement by THE GUARANTOR has
been authorised by the Board of Directors of THE GUARANTOR (Annexure I);
and it has been duly certified in the form set out in Annexure II that the
issue of this Guarantee and Indemnity is within the corporate powers of THE
GUARANTOR.
NOW THEREFORE it is hereby agreed as follows:
ARTICLE 1
FINANCE CONTRACT
1.01 THE GUARANTOR acknowledges notice of the provisions of THE FINANCE
CONTRACT, an original copy of which has been delivered to it. Unless
otherwise defined herein terms defined in THE FINANCE CONTRACT shall have
the same meaning.
ARTICLE 2
GUARANTEE
2.01 In consideration of the credit established by THE BANK under THE FINANCE
CONTRACT, THE GUARANTOR hereby guarantees the payment of all principal
monies, interest, commission, liquidated damages, charges, expenses and
other monies (each such sum being hereinafter referred to as a "Guaranteed
Sum") which may from time to time become payable by THE BORROWER under THE
FINANCE CONTRACT. THE GUARANTOR undertakes that, if THE BORROWER should
default in the payment of any Guaranteed Sum, THE GUARANTOR shall pay the
sum in default to THE BANK on demand, in the currencies specified in THE
FINANCE CONTRACT and to the accounts specified in the demand.
-3-
2.02 The obligations of THE GUARANTOR hereunder are those of a primary obligor
and not merely those of a surety. They shall not be impaired or discharged
by reason of:
(a) illegality, invalidity, or unenforceability in or of the terms of THE
FINANCE CONTRACT or any other guarantee or security for THE BORROWER'S
obligations thereunder;
(b) disability, incapacity or change in status or constitution of THE
BORROWER, THE BANK, any other guarantor or any other person;
(c) liquidation or insolvency of THE BORROWER, any other guarantor or any
other person;
(d) any time or other indulgence granted by THE BANK or any arrangement
entered into or composition accepted by THE BANK, varying the rights
of THE BANK under THE FINANCE CONTRACT or any other guarantee or
security arrangement granted in connection therewith;
(e) any forbearance or delay on the part of THE BANK in asserting any of
its rights against THE BORROWER under THE FINANCE CONTRACT; or
(f) any circumstance, other than performance, which might otherwise
discharge the obligations of THE GUARANTOR.
2.03 This Guarantee and Indemnity is a continuing security and shall endure
until all Guaranteed Sums shall have been fully paid or discharged. No
payment or discharge which may be avoided under any enactment relating to
insolvency, no payment or discharge made or given which is subsequently
avoided and no release, return, cancellation or any such discharge of this
Guarantee and Indemnity given or made on the faith of any such payment or
discharge aforesaid shall constitute discharge of THE GUARANTOR under this
Guarantee and Indemnity or prejudice or affect THE BANK's right to recover
from THE GUARANTOR to the full extent of this Guarantee and Indemnity.
2.04 Any money received in connection with this Guarantee and Indemnity may be
placed by THE BANK to the credit of a suspense account with a view to
preserving the right of THE BANK to prove for the whole of the claims
against THE BORROWER or may be applied by THE BANK in or towards
satisfaction of such of the Guaranteed Sums as THE BANK in its absolute
discretion may from time to time determine; provided, however, THE
GUARANTOR's responsibility in respect of the Guaranteed Sums shall be
discharged to the extent of payment made by THE GUARANTOR under this
Guarantee and Indemnity.
2.05 THE GUARANTOR agrees that until all the Guaranteed Sums have been fully
paid or discharged:
(a) it shall not seek to enforce any obligation owned to THE GUARANTOR by
THE BORROWER which arises by virtue of the discharge by THE GUARANTOR
of its obligations hereunder;
(b) it shall pay to THE BANK all dividends in liquidation or otherwise
received by it from or for the account of THE BORROWER in respect of
any obligation referred to in indent (a) above; THE BANK shall apply
such sums to reduce the outstanding Guaranteed Sums in such sequence
as it may decide; and
-4-
(c) it shall have no right of subrogation to the rights of THE BANK
under THE FINANCE CONTRACT or any security arrangement granted in
connection therewith.
2.06 THE GUARANTOR acknowledges: (i) that it has entered into this
Guarantee and Indemnity Agreement on the basis of its own assessment
of THE BORROWER and any security provided, and (ii) that it has not
been induced to enter into this Guarantee and Indemnity Agreement by
any representation made by THE BANK. THE BANK is not obliged to report
to THE GUARANTOR on the financial position of THE BORROWER or of any
other guarantor or on any security provided. THE BANK shall have no
liability to THE GUARANTOR for granting or disbursing the Loan, for
cancelling or not cancelling the credit or for demanding or not
demanding prepayment under THE FINANCE CONTRACT.
2.07 As a continuing obligation additional to and separate from those set
out in Articles 2.01 and 2.02, and without prejudice to the validity
or enforceability of those obligations, THE GUARANTOR unconditionally
and irrevocably undertakes that, if any Guaranteed Sum should not be
recoverable from THE GUARANTOR under Article 2.01 for whatsoever
reason, and whether or not the reason may have been known to THE BANK
at any material time, THE GUARANTOR shall, upon first written demand
by THE BANK, and as if it were a sole and independent obligor,
compensate THE BANK by way of a full indemnity for all loss resulting
from the failure of THE BORROWER to make payment of any Guaranteed Sum
in the amount and currency provided for by or pursuant to THE FINANCE
CONTRACT, whether upon the normal due date, upon acceleration or
otherwise.
ARTICLE 3
ENFORCEMENT OF GUARANTEE
3.01 A certificate of THE BANK as to any default by THE BORROWER in the
payment of any Guaranteed Sum shall, in the absence of manifest error,
be conclusive against THE GUARANTOR.
3.02 THE GUARANTOR undertakes to pay all sums due hereunder in full, free
of set-off or counterclaim. This Guarantee and Indemnity may be
enforced by THE BANK upon provision of a statement of the reason for
the demand. THE BANK shall not be obliged to take any action against
THE BORROWER or to have recourse to any other guarantee.
3.03 Where THE BANK makes any demand hereunder, THE GUARANTOR may pay to
THE BANK all outstanding Guaranteed Sums, including sums arising under
Article 3.02 of THE FINANCE CONTRACT, in settlement of its obligations
hereunder. If THE GUARANTOR makes such payment, THE BANK shall, upon
the request and at the expense of THE GUARANTOR, assign to THE
GUARANTOR the corresponding rights of THE BANK relating thereto under
THE FINANCE CONTRACT and under any security therefor.
ARTICLE 4
UNDERTAKINGS
4.01 THE GUARANTOR shall deliver to THE BANK each year, as soon as the same
are available and in any event within 180 days after the end of each
of its financial years, a
-5-
copy of its annual report, containing its audited, consolidated
financial statements, together with all other such information as THE
BANK may reasonably require of THE GUARANTOR from time to time in
writing as to THE GUARANTOR's financial situation and shall inform THE
BANK as soon as is reasonably practicable of any material change in
its Memorandum or Articles of Association, but in the event of any
modification or formal proposal for the modification of the provisions
in Article 54 of its Articles of Association relating to the Special
Share only at the same time as Shareholders generally are informed of
such modification.
4.02 THE GUARANTOR shall ensure that the obligations of THE BORROWER set
out in Article 8.02 to 8.05 of THE FINANCE CONTRACT are complied with.
4.03 NEGATIVE PLEDGE
Subject to Article 4.04, so long as any part of the Loan remains
outstanding, THE GUARANTOR shall not, and it shall procure that no
other member of the NG Group will create or permit to subsist any
Security Interest on, or with respect to, any of its present or future
business, undertaking, assets or revenues (including any uncalled
capital).
4.04 Subject to Article 4.05, Article 4.03 does not apply to:-
(A) any Security Interest created with the prior written consent of
THE BANK;
(B) Security Interests granted prior to the date of this Agreement
and disclosed to THE BANK in writing but only if the maximum
principal amount secured thereby is not subsequently increased;
(C) any Security Interest by way of title retention entered into the
ordinary course of business;
(D) any lien arising by operation of law in ordinary course of
business;
(E) any banker's lien or right of set-off arising by operation of law
in the ordinary course of commercial banking transactions or any
contractual set-off arrangements in the ordinary course of
commercial banking transactions;
(F) any Security Interest existing over assets acquired after the
date of this Agreement and existing on the date of acquisition,
provided that:-
(1) the Security Interest is not created in contemplation of the
acquisition of the same; and
(2) the maximum principal amount secured thereby or the maturity
of those obligations is not thereafter increased;
(G) any Security Interest over the assets of any company which
becomes a Subsidiary of THE GUARANTOR after the date of this
Agreement and which exist at the date on which it becomes a
Subsidiary of THE GUARANTOR, but only if:-
(1) the principal amount secured by the Security Interest is not
increased after the date it becomes a Subsidiary of THE
GUARANTOR; and
(2) the Security Interest is not created in contemplation of it
becoming a Subsidiary of THE GUARANTOR;
-6-
(H) any Security Interest over goods and/or documents of title, or
insurance policies and sale contracts in relation to such goods,
arising in the ordinary course of trading in connection with letters
of credit and similar transactions where such Security Interest
secures only so much of the acquisition cost of such goods which is
required to be paid within 180 days after the date upon which the
same was first incurred;
(I) any Security Interest created in substitution for any Security
Interest permitted pursuant to this Article, provided that the
substituted Security Interest is over the same asset and the principal
amount secured does not exceed the principal amount secured on such
asset prior to the substitution;
(J) any other Security Interest so long as the aggregate outstanding
principal amount of indebtedness secured by all the Security Interests
permitted under this Clause does not exceed, when combined with all
Security Interests of the NG Group, GBP 80 million;
(K) any Security Interest created or granted from time to time in respect
of any Project Finance Borrowing including, for the avoidance of
doubt, any Security Interest created or granted by a member of the NG
Group in its capacity as a shareholder of a company making a Project
Finance Borrowing over its shareholding in that company (including, in
the case of a member of the NG Group whose only material assets are
shares in the company incurring the Project Finance Borrowing, a
supporting floating charge over all or substantially all of that
member's assets) as security for such Project Finance Borrowing,
provided that the right of recourse against such shareholder is
limited to the realisation of the shareholding in that company;
(L) any Security Interest created by a Project Finance Company;
(M) any Security Interest created or granted from time to time by a member
of the NG Group in its capacity as a shareholder of a Project Finance
Company over its shareholding in that Project Finance Company as
security for the obligations of such Project Finance Company;
(N) any Security Interest whether granted prior to or after the date of
this Agreement which is granted by a Subsidiary of the Guarantor
incorporated in, or which has its principal place of business in, the
United States to secure Financial Indebtedness up to US$4,200,000,000
in aggregate outstanding; and
(O) any Security Interest created by a special purpose securitisation
vehicle over its assets where substantially all of those assets were
acquired by that vehicle from a member of the NG Group as part of or
to facilitate a securitisation and where the disposal of those assets
to the securitisation vehicle constitutes a disposal of assets on
arm's length terms, the consideration for which is substantially all
cash or cash equivalent consideration, after the date hereof, so long
as the aggregate outstanding principal amount of Financial
Indebtedness secured by all the Security Interests permitted under
this paragraph (O) by all members of the NG Group does not exceed
US$1,000,000,000 or its equivalent in other currencies at any time.
4.05 Notwithstanding anything in Article 4.03 above, none of THE GUARANTOR or
any of its Subsidiaries will create or permit to subsist any Security
Interest over;
(A) Relevant Assets used in the Transmission Business carried out pursuant
to any Transmission Licence; or
-7-
(B) any shareholding in any Subsidiary of THE GUARANTOR which is the legal
and/or beneficial owner of Relevant Assets used in the Transmission
Business carried out pursuant to any Transmission Licence.
4.06 The following terms used in this Article 4 shall bear the following
meaning:
"COMPANIES ACT SUBSIDIARY" means a subsidiary within the meaning of
Section 736 of the Companies Act 1985, as amended by Section 144 of
the Companies Act 1989.
"NG GROUP" means THE GUARANTOR and its Subsidiaries from time to time
but for the purposes of this Article 4 if at any time a Project
Finance Company is a Subsidiary Undertaking but not a Companies Act
Subsidiary, then, for so long as it shall be a Subsidiary Undertaking
but not a Companies Act Subsidiary, it shall be deemed (unless the
contrary is specified) not to be a member of the NG Group.
"PROJECT FINANCE BORROWING" means any Financial Indebtedness to
finance a project:-
(a) which is made by a single purpose company, partnership or other
legal person (whether or not a member of the NG Group) whose
principal assets and business are constituted by that project and
whose liabilities in respect of the Financial Indebtedness
concerned are not directly or indirectly the subject of a
guarantee, indemnity or other form of assurance, undertaking or
support from any member of the NG Group (except as expressly
referred to in paragraph (b)(iii) below or as a result of the
making of acceptances or endorsements of bills in the ordinary
course of trading or payment netting arrangements and other usual
course of business banking arrangements); or
(b) in respect of which the person or persons making that Financial
Indebtedness available to the relevant borrower (whether or not a
member of the NG Group) have no recourse whatsoever to any member
of the NG Group for the repayment of or payment of any sum
relating to that Financial Indebtedness other than:-
(i) recourse to the borrower or one or more of its subsidiaries
for amounts limited to the aggregate cash flow or net cash
flow (other than historic cash flow or historic net cash
flow) from the project; and/or
(ii) recourse to the borrower or one or more of its subsidiaries
or any shareholder of the borrower for the purpose only of
enabling amounts to be claimed in respect of that Financial
Indebtedness in an enforcement of any Security Interest
permitted pursuant to Article 8.02 of THE FINANCE CONTRACT
given by the borrower or one or more of its subsidiaries
over the assets comprised in the project (or given by any
shareholder of the borrower over its shares in the borrower
together with, in the case of a UK incorporated shareholder
whose only material assets are those shares in the borrower,
a supporting floating charge over all or substantially all
of its assets) to secure that Financial Indebtedness or any
recourse referred to in (iii) below or as a result of the
making of acceptances or endorsements or bills in the
ordinary course of trading or payment netting arrangements
and other usual course of business banking arrangements,
provided that (A) the extent of the recourse to the borrower
or one or more of its subsidiaries or shareholder is limited
solely to the amount of any recoveries made on any such
enforcement, and (B) the person or persons are not entitled,
by virtue of any right to claim arising out of or in
connection with the Financial Indebtedness, to commence
proceedings for the winding up or dissolution of the
borrower the subsidiary or shareholder or to appoint or
procure the appointment of any receiver, trustee or similar
person or official in respect of the borrower the subsidiary
or shareholder or any of its assets (save for the assets the
subject of the relevant Security Interest); and/or
-8-
(iii) recourse to such borrower generally, or directly or
indirectly to a member of the NG Group under any form of
assurance or undertaking, which recourse is limited to a
claim for damages (other than liquidated damages and damages
required to be calculated in a specified way) for breach of
an obligation (not being a payment obligation or an
obligation to procure payment by another or an obligation to
comply or to procure compliance by another with any
financial ratios or other tests of financial condition) by
the person against whom such recourse is available; or
(c) which THE BANK shall have agreed in writing to treat as Project
Finance Borrowing for the purposes of this Article 4.
If at any time any Financial Indebtedness is made to finance a project
and that Financial Indebtedness does not qualify as a "Project Finance
Borrowing" pursuant to the above sub-paragraphs (b)(i), (ii) or (iii)
but would so qualify if there were not recourse to a member of the NG
Group which is either (i) limited as to the period during which it is
in force (for example, during the period up to completion of the
project) or (ii) limited as to the obligations of the borrower to
which it applies, then, in any such case, the Financial Indebtedness
shall be regarded as a "Project Finance Borrowing" for the purposes of
this definition to the extent that, and during the period that, there
is no such recourse to a member of the NG Group.
"PROJECT FINANCE COMPANY" means any company, partnership or other
legal person falling within the scope of paragraph (a) of the
definition of Project Finance Borrowing or which THE BANK has agreed
shall be treated as a Project Finance Company for the purposes of this
Article 4.
"RELEVANT ASSETS" has the meaning given to it in the relevant
Transmission Licence.
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security.
"SUBSIDIARIES" means Companies Act Subsidiaries and Subsidiary
Undertakings (and "Subsidiary" shall be construed accordingly).
"SUBSIDIARY UNDERTAKING" means a subsidiary undertaking within the
meaning of Section 21 of the Companies Act 1989.
"TRANSMISSION BUSINESS" has the meaning given to it in the relevant
Transmission Licence.
"TRANSMISSION LICENCE" means a licence granted under Section 6(1)(b)
of the Electricity Act.
4.07 PARI PASSU RANKING
THE GUARANTOR undertakes that the obligations under this Guarantee
Agreement are direct and unconditional obligations of THE GUARANTOR
and rank and will rank at least pari passu with all other unsecured
and unsubordinated contingent obligations of THE GUARANTOR other than
those obligations of THE GUARANTOR to its unsecured creditors which
would, on a winding-up of THE GUARANTOR, be preferred by operation of
law.
-9-
4.08 FINANCIAL UNDERTAKINGS
THE GUARANTOR undertakes:
(A) that for each period of 12 months ending on the last day of each
financial year and each financial half-year of the NG Group (an
"End Date") EBITDA shall exceed Net Interest Payable by not less
than 3.0 times;
(B) that for each period of 12 months ending on the last day of each
financial year and each financial half-year of the NG Group (an
"End Date") Net Debt shall not exceed EBITDA by more than: 5.00
times;
(C) that NG Group members other than itself shall not incur Financial
Indebtedness other than: (1) under the Finance Facility; (2)
Financial Indebtedness which is secured by a Security Interest
which has been created with prior written consent of THE BANK;
(3) any Financial Indebtedness owing by one member of the NG
Group to another member of the NG Group, or any guarantee,
indemnity or similar assurance issued by any Subsidiary in
connection with the Financial Indebtedness of another Subsidiary
that is permitted under this Article 4.08(C); (4) in the case of
Subsidiaries (including THE BORROWER) incorporated or established
outside the United States of America, Financial Indebtedness in
an aggregate amount not exceeding (when aggregated with Financial
Indebtedness of such Subsidiaries which is permitted under (3)
above) GBP 4 000 000 000; (5) in the case of Subsidiaries
incorporated or established within the United States of America,
Financial Indebtedness in an aggregate amount not exceeding (when
aggregated with Financial Indebtedness of such Subsidiaries which
is permitted under (3) above) USD 7 000 000 000;
provided that in the case of (4) and (5) above the monetary limits
referred to shall be reduced to the extent the equivalent limits in
Clause 19.15(a) of the Finance Facility are reduced by the operation
of clause 8.7 of the Finance Facility; and in the case only of (4) and
(5) above the amount of any Cash or Cash Equivalent held by a
Subsidiary may be set off against the amount of its Financial
Indebtedness; and the GBP or USD equivalent of any Financial
Indebtedness in any other currency shall be converted at the spot rate
of exchange determined pursuant to the Finance Facility;
For the purposes of paragraph (c) above, the amount of any Financial
Indebtedness which is constituted by currency or interest swaps, cap
or collar arrangements or any other derivative instruments shall be
calculated by aggregating the mark-to-market values of any such
currency or interest swaps, cap or collar arrangements or other
derivative instruments, and the determination of such amount shall
(within the bounds of ordinary market practice) be in THE BANK'S sole
discretion and shall, in the absence of manifest error, be conclusive
and shall not be open to dispute by THE GUARANTOR or any third party.
(D) that, subject to the exceptions listed in cl.19.9(b),
subparagraphs (i) to (ix), of the Finance Facility, it shall not
and undertakes that no other member of the NG Group shall make
any voluntary or involuntary disposal of any of its assets
whether by a single transaction or a series of them;
(E) that THE BORROWER shall comply with the Negative Pledge contained
in Article 8.02 of the Finance Contract and the financial
covenants contained in Article 7.08 of THE FINANCE CONTRACT and
shall direct or assist companies forming part of the NG Group so
as to enable THE BORROWER to comply with such covenants.
For the purposes of this Guarantee Agreement and of THE FINANCE
CONTRACT, terms defined in the Finance Facility and which are not
otherwise defined in this Agreement shall, unless otherwise agreed by
THE BANK, have the meaning attributed to them in that
-10-
document as at the date hereof and the financial results to which the
definitions below refer shall unless otherwise stated be the consolidated
financial accounts of THE GUARANTOR to be delivered pursuant to Article 4.01
and such results shall be measured twice yearly as indicated in such Article:
"Bonds"
means:
(a) the mandatorily exchangeable bonds due 2003, exchangeable into ordinary
shares of Energis Plc and issued by the
National Grid Group plc ("NGG");
(b) the exchangeable bonds due 2008, exchangeable into ordinary shares of NGG
and issued by XXX; and
(c) other similar debt instruments issued or to be issued by NGG or any company
in the Group and exchangeable into share capital.
"CONSOLIDATED PROFITS BEFORE INTEREST AND TAX" shall mean in respect of any
period, the consolidated net pre-taxation profits on operating activities
(after adding back Net Interest Payable and excluding any Exceptional Items and
after adding back restructuring costs incurred as a result of the Acquisition)
of the NG Group for that period based on the latest accounts supplied pursuant
to Article 9.02A of THE FINANCE CONTRACT.
"EBITDA" shall mean in respect of any period, Consolidated Profits before
Interest and Tax for that period, after adding back depreciation and
amortisation of goodwill.
"EXCEPTIONAL ITEMS" has the meaning given to it in FRS 3 issued by the
Accounting Standards Board.
"FINANCIAL INDEBTEDNESS" means (without double-counting) any indebtedness of
the NG Group in respect of (a) moneys borrowed or debit balances at banks and
other financial institutions; (b) any debenture, bond, note, commercial paper,
loan stock or other debt instrument; (c) any acceptance or documentary credit
facilities, bill discounting or factoring facilities; (d) receivables sold or
discounted (otherwise than on a non-recourse basis); (e) the acquisition cost
of any asset to the extent payable before or after the time of acquisition or
possession by the party liable where the advance or deferred payment is
arranged primarily as a method of raising finance or financing the acquisition
of that asset; (f) leases (whether in respect of land, machinery, equipment or
otherwise) entered into primarily as a method of raising finance or financing
the acquisition of that asset; (g) currency or interest swap, cap or collar
arrangements or any other derivative instrument; (h) amounts raised under any
other transaction having the commercial effect of a borrowing or raising of
money; (i) any guarantee, indemnity or similar assurance in respect of
indebtedness of any person falling within any of paragraphs (a) to (h) (both
inclusive) above.
"FINANCE FACILITY" shall mean a bank facility agreement entered into on or
about the date hereof, in replacement of such a facility dated 5th March 1999,
between THE GUARANTOR, NGG, National Grid Group Finance plc and the parties
named therein as Agent, Banks and Arrangers, providing facilities in an
aggregate value of USD 2,300,000,000.
"NET DEBT" shall mean the aggregate principal amount (or amounts equivalent to
principal, howsoever described) comprised in the Financial Indebtedness of the
NG Group (excluding amounts referred to in paragraph (g) and paragraph (i) (in
so far as those amounts referred to in paragraph (i) relate to amounts referred
to in paragraph (g)) of the definition of Financial Indebtedness) at the time
calculated on a consolidated basis less Cash and Cash Equivalents held by any
member of the NG Group.
-11-
"NET INTEREST PAYABLE" shall mean in respect of any period, all interest
and all other continuing, regular or periodic costs, charges and expenses
in the nature of interest (whether paid, payable or capitalised) incurred
by the NG Group in effecting, servicing or maintaining all Financial
Indebtedness of the NG Group, excluding any premia payable which arise on
or solely as a result of the redemption of any Bonds or the purchase of any
Bonds with a view to cancellation where such premia are defined by formulae
and/or market price mechanisms so that their quanta cannot be determined
prior to the time at which they are to be calculated, less all interest and
similar income receivable by the NG Group during that period (but only to
the extent the same accrue and are receivable by the NG Group in a freely
convertible and transferable currency) in each case as determined from the
financial statements relating to that period delivered under Article
9.02A(a).
4.09 CHANGE OF BUSINESS
THE GUARANTOR undertakes that save with the prior written consent of THE
BANK no substantial change shall be made to the general nature of the
business of the NG Group, taken as a whole, such business to be treated as
including electricity generation, transmission, distribution, or metering
or supply and the provision of telecommunications services and the
acquisition and operation of the National Air Traffic Control System.
ARTICLE 5
AMENDMENT TO THE FINANCE CONTRACT
5.01 Subject to Article 5.02, THE BANK may agree to any amendment to THE FINANCE
CONTRACT which does not increase the amounts payable by THE BORROWER
thereunder or THE GUARANTOR hereunder or permit THE BANK more easily to
make a claim against THE GUARANTOR hereunder. THE BANK shall notify THE
GUARANTOR of each such amendment.
5.02 THE BANK may not amend or vary the terms of THE FINANCE CONTRACT save as
provided in Article 5.01 or save with the prior written consent of THE
GUARANTOR, which consent shall not be unreasonably withheld.
ARTICLE 6
TAXES, CHARGES AND EXPENSES
6.01 Taxes or fiscal charges, legal costs and other expenses incurred in the
execution or implementation of this Guarantee and Indemnity Agreement shall
be borne by THE GUARANTOR. THE GUARANTOR shall make payments hereunder
without withholding or deduction on account of tax or fiscal charges.
-12-
ARTICLE 7
Law and Jurisdiction
7.01 Law
This Guarantee and Indemnity Agreement, its formation, construction and
its validity shall be governed by and construed in all respects in
accordance with the laws of
England.
7.02 Jurisdiction
The parties hereto submit to the exclusive jurisdiction of the Courts of
England and all disputes concerning this Guarantee and Indemnity Agreement
shall be submitted to such court. THE BANK appoints The Securities
Management Trust Limited of 00 Xxx Xxxxx, Xxxxxx EC2 to be its attorney
for the purpose of accepting service on its behalf of any writ, notice,
order, judgement or other legal process. Any such service against THE
GUARANTOR shall be sent by registered mail to the address of THE GUARANTOR
under Article 8.01 hereof.
7.03 Invalidity
If any provision hereof is invalid, such invalidity shall not prejudice
any other provision hereof.
ARTICLE 8
Final Clauses
8.01 Notices
Notices and other communications given hereunder (other than such as arise
out of litigation) to THE GUARANTOR or to THE BANK shall be sent out by
telex, telegram, registered letter or letter with recorded delivery
addressed to it at its address set out below or at such other address as
it shall have previously notified to the other in writing as its new
address for such purpose:
- FOR THE BANK : 000, xxxxxxxxx Xxxxxx Xxxxxxxx
X-0000 Xxxxxxxxxx
Attn: Credit Risk Department
Telex: 3530 BNKEU LU
Fax: 00-000-000000
- FOR THE GUARANTOR : 00 Xxxxxxxxxx Xxxx
Xxxxxx XX0 0XX
Xxxxxxx
Attn. Xxxxxx X'Xxxxxxx/Xxxx Xxxxxxxx
Fax: (0000000) 000 00 00
-13-
8.02 RECITALS AND ANNEXURES
The Recitals form part of this Guarantee and Indemnity Agreement.
The following Annexures are attached hereto:
Annexure I - Resolution of the Board of
Directors of THE GUARANTOR and
Authority of Signatory
Xxxxxxxx XX - Certificate of Guarantee Powers
IN WITNESS WHEREOF the parties hereto have caused this Guarantee and
Indemnity Agreement to be executed in four originals in the English
language, each page having been initialled by Xx. X.X. Xxxxxxx on behalf
of THE BANK.
Signed for and on behalf of Signed for and on behalf of
EUROPEAN INVESTMENT BANK NEW NATIONAL GRID PLC
this [ ] day of [ ] 2001, at London
[THE NATIONAL GRID COMPANY PLC LETTERHEAD]
Luxembourg, 20th November 2001 JU/SES/mts
SUBJECT: Finance Contract between European Investment Bank and The National
Grid Company plc dated 5th December 1996 as amended and supplemented
by letter agreements dated 3 February 1997, 12 November 1998, 29 March
1999 and 2001 (the "Finance Contract")
----------------------------------------------------------------------
Dear Sirs,
We write to you with reference to certain provisions of the Finance Contract.
Terms defined in the Finance Contract have the same meaning where used in this
letter.
ARTICLE 4.03D
With reference to Article 4.03D and for the avoidance of doubt we confirm that
should at any time during the 30 day consultation period referred to therein the
Loss-of-Rating Event cease to be continuing then THE BORROWER shall have no
further obligations under Article 4.03B with respect to that particular
Loss-of-Rating Event.
ARTICLE 11.01A(b)
With regard to Article 11.01A(b), we would inform you that it is not the policy
of THE BANK to exercise its rights under that subparagraph without having regard
to the fact that clerical and administrative errors can occur in any
organisation.
Yours faithfully,
EUROPEAN INVESTMENT BANK
/s/ X.X. Xxxxxxxxxxxx /s/ X. Xxxxxxxx
X.X. Xxxxxxxxxxxx X. Xxxxxxxx
Deputy General Counsel Director
