Exhibit 10.06
25 OCTOBER 1995
EASTERN GROUP plc
EAST MIDLANDS ELECTRICITY plc
LONDON ELECTRICITY plc
MANWEB plc
MIDLANDS ELECTRICITY plc
NORTHERN ELECTRIC plc
NORWEB plc
SEEBOARD plc
SOUTHERN ELECTRIC plc
SOUTH WALES ELECTRICITY plc
SOUTH WESTERN ELECTRICITY plc
YORKSHIRE ELECTRICITY GROUP plc
THE NATIONAL GRID HOLDING plc
THE NATIONAL GRID COMPANY plc
_____________________________________________
MASTER AGREEMENT
______________________________________________
Xxxxxxx Xxxxx
Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
Ref: 223/C267/30438764
CONTENTS
CLAUSE
1. Definitions and Interpretation 4
2. Conditions 6
3. NGH EGM 6
4. NGC Written Resolutions 7
5. The Memorandum of Understanding 7
6. PSB Demerger 7
7. The Special Dividends 7
8. The Rights Issue 8
9. Application for Listing 9
10. The REC Review Committee 10
11. Publication of REC Circulars 10
12. The Specie Dividends 11
13. Flotation not effective 11
14. Customer Discount 12
15. Other Undertakings by the RECs 12
16. Cost Sharing 13
17. Waiver 13
18. Announcements 13
19. NGC Option Schemes 14
20. Variations 14
21. Good Faith 15
22. Force Majeure 15
23. Notices 16
24. RTPA 18
25. Governing Lad and jurisdiction 18
SCHEDULES
I. The Memorandum of Understanding
II. The Timetable
III. The NGG Memorandum and Articles
IV. The NGH EGM Circular and The NGH EGM Notice
V. The NGC Written Resolutions
VI. The Listing Particulars
VII. The Summary Particulars
VIII. The Rights Issue Circular
IX. The NGH announcement and the pro forma REC announcement
X. The Customer Discount
XI. Pro-forma notice of extraordinary general meeting for REC
circulars
XII. Procedure and formula for option adjustments
XIII. Distributing RECs
XIV. NGC contribution to advisers' fees
XV. Pumped storage asset acquisition agreement
THIS MASTER AGREEMENT is made on 25 October 1995
BETWEEN
A. Each of:
EASTERN GROUP plc whose registered office is Wherstead Park. P O
Xxx 00, Xxxxxxxxx, Xxxxxxx, Xxxxxxx XX0 0XX
EAST MIDLANDS ELECTRICITY plc whose registered office is 398
Coppice Road, Xxxxxx, Nottingham NG5 7HX
LONDON ELECTRICITY plc whose registered office is Xxxxxxx Xxxxx,
00-00 Xxxx Xxxxxx, Xxxxxx XX0X 0XX
MANWEB plc whose registered office is Xxxxxxx Xxxx, Xxxxxxx, XX0
0XX
MIDLANDS ELECTRICITY plc whose registered office is Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxx Xxxxxxxx, X00 0XX
NORTHERN ELECTRIC plc whose registered office is Xxxxxxx Xxxxx,
Xxxxxx Xxxxxx, Xxxxxxxxx Xxxx Xxxx XX0 0XX
NORWEB plc whose registered office is Xxxxxx Xxxx, Xxxxxxxxxx, X00
OHQ
SEEBOARD plc whose registered office is Xxxxxx Xxxx, Xxxxxxxx Xxxx,
Xxxxxxx, Xxxx Xxxxxx, XX0x 0XX
SOUTHERN ELECTRIC plc whose registered office is Southern Electric
House, Xxxxxxxxx Way, Littlewick Green. Xxxxxxxxxx, Xxxxxxxxx XX0
0XX
XXXXX XXXXX ELECTRICITY plc whose registered office is Xxxxxxx
Xxxx, Xx. Xxxxxxx, Xxxxxxx XX0 0XX
SOUTH WESTERN ELECTRICITY plc whose registered office is 000 Xxxx
Xxxxxx, Xxxxx West, Almondsbury, Xxxxxxx XX00 0XX
XXXXXXXXX ELECTRICITY GROUP plc whose registered office is Xxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxx XX00 0XX
collectively the "RECS" and each a "REC")
AND
B. THE NATIONAL GRID HOLDING plc whose registered office is 000
Xxxx Xxxxxx, Xxxxxx XX0 0XX ("NGH")
AND
C. THE NATIONAL GRID COMPANY plc whose registered office is Xxxxx
Xxxxxx Xxxx, Xxxxxxxx XX0 0XX ("NGC")
WHEREAS
A. The parties have agreed the terms on which a listing of NGH on
the London Stock Exchange will be sought.
B. Prior to such listing, certain changes to the capital
structure of NGH will be effected.
C. Prior to such listing the PSB Demerger (as defined below) will
be effected.
THE PARTIES HEREBY AGREE as follows:
1. Definitions and Interpretation
1.1 In this Agreement, unless the context otherwise requires, the
following words and expressions bear the meanings respectively set
out below:
the "Act" the Companies Xxx 0000 (as
amended prior to the date
hereof).
the "Announcement" means the public announcement to
be made by NGH and NGC in the
form set out in Schedule IX.
the "Customer Discount" means the reduction in future
electricity charges by the RECs
to Eligible Customers (as
defined in Schedule X) on the
basis set out in Schedule X.
"Distributing RECs" means the RECs listed in
Schedule XIII.
the "Flotation" means the admission of the
ordinary shares of NGH (issued
and to be issued) to the
official list of the London
Stock Exchange and, where the
context so allows, shall mean
such admission becoming
effective in accordance with the
Listing Rules of the London
Stock Exchange.
"Kleinwort Xxxxxx" means Kleinwort Xxxxxx Limited,
sponsor to the Flotation.
the "Listing Particulars" means the document of record to
be issued in connection with the
Flotation pursuant to the
Listing Rules of the London
Stock Exchange, proof 15: 17
l0.95 of which is set out in
Schedule VI.
"The London Stock Exchange" means the International Stock
Exchange of the United Kingdom
and the Republic of Ireland
Limited.
the "Long Stop Date" means 31 January 1996.
"Memorandum of Understanding" means the document to be entered
into following the NGH EGM . in
the form set out in Schedule I
(or such other form as shall be
agreed between the parties).
"NGC Board" means the board of directors of
NGC from time to time.
"NGC Interim Dividend" means an interim dividend of
pounds 70 million to be paid by
NGC to NGH on 4 December 1995.
"NGC Special Dividend" means an interim dividend of
pounds 1,111 million to be paid
by NGC to NGH on 4 December
1995.
"NGC Written Resolutions" means the resolutions in writing
of NGC, in the form set out in
Schedule V.
the "NGG Memorandum and NGG means the Memorandum of
Articles" Association and Articles of
Association of NGH respectively,
which will be adopted upon
Flotation, in the form set out
in Schedule III.
"NGH Board" means the board of directors of
NGH from time to time or. where
the context so permits, a duly
authorised committee thereof.
"NGH EGM" means the extraordinary general
meeting of NGH to be convened by
the NGH EGM Notice.
"NGH EGM Circular" means the document to be
circulated to NGH shareholders
in the form set out in Schedule
IV.
"NGH EGM Notice" means the notice to convene the
NGH EGM which is to form part of
the NGH EGM Circular.
"NGH Interim Dividend" means an interim dividend of
pounds 70 million to be paid by
NGH to its ordinary shareholders
on the register on 21 November
1995.
"NGH Rights Dividend" means an interim dividend of
pounds 66 million (assuming that
the rights offer of the NGH
Rights Shares is fully takenup)
to be paid by NGH to the persons
who are issued the NGH Rights
Shares
"NGH Rights Shares" means new ordinary shares of 10p
each in NGH carrying the
exclusive right to receive the
NGH Rights Dividend to be
offered by way of rights on the
basis set out in the Rights
Issue Circular.
"NGH Second Dividend" means a second interim dividend
of pounds 172.5 million to be
paid by NGH to the persons who
are issued the Special Bonus
Shares immediately following
payment of the NGH Special
Dividend.
"NGH Special Dividend" means an interim dividend of
pounds 872.5 million to be paid
by NGH to the persons who are
issued the Special Bonus Shares.
"PSB Demerger" has the meaning ascribed to it
in the proof of the NGH EGM
Circular set out in Schedule IV.
"REC Circular" means the circular which will be
posted by each of the
Distributing RECs to its own
shareholders on 22, November
1995 containing a notice of
extraordinary general meeting.
the "REC Oversight Comndttee" means the committee to be
established pursuant to Clause 3
of the Memorandum of
Understanding.
the "REC Review Committee" means the committee described in
Clause 10.
the "Rights Issue Circular" means the document (including an
application form) which,
together with the Listing
Particulars, will be posted to
NGH shareholders on 22 November
1995, proof 2 of which is set
out in Schedule VIII.
the "Special Bonus Issue" has the meaning ascribed to it
in the proof of the NGH EGM
Circular set out in Schedule IV.
the "Special Bonus Shares" have the meaning ascribed to
them in the proof of the NGH EGM
Circular set out in Schedule IV.
the "Special Shareholder" means the holder of the special
rights redeemable preference
share of pounds 1 in each of NGH
and NGC.
the "Summary Particulars" means the document to be
published by NGH, proof 10 of
which is set out in Schedule
VII.
the "Timetable" means the timetable set out in
Schedule II.
1.2 Unless the context otherwise requires:
(A) any reference in this Agreement to a Clause, Sub-clause or
Schedule is to a clause, sub-clause or schedule, as the case may
be, of or to this Agreement;
(B) this Agreement includes the Schedules; and
(C) the singular shall be deemed to include the plural and vice
versa.
1.3 The headings in this Agreement are for ease of reference only
and shall not affect the construction of this Agreement.
2. Conditions
This Agreement is conditional upon, and shall not be effective
until
(a) the Special Shareholder gives (or, subject to each of the
parties to this Agreement being satisfied with the forth thereof,
indicates that he will give) his unconditional prior written
consent to the passing of the NGC Written Resolutions and the
resolutions set out in the NGH EGM Notice;
(b) the Special Shareholder issues, (or subject to each of the
parties to this Agreement being satisfied with the form thereof,
indicates that he will issue) a notice to NGC requiring NGC to
redeem the special rights redeemable preference share of pounds 1
in NGC conditionally upon Flotation.
3. NGH EGM
3.1 NGH shall convene the NGH EGM for 11 a.m. on 17 November 1995
by means of despatching the NGH EGM Circular.
3.2 Each REC undertakes to each of the other RECs and to NGC and
NGH to vote in favour of each of the resolutions to be set out in
the NGH EGM Notice. The NGG Memorandum and NGG Articles referred to
in resolution 9 thereof shall be in the form set out in Schedule
III.
3.3 Each REC and NGH agrees that it will not seek to amend any of
the resolutions to be set out in the NGH EGM Notice without the
prior written consent of NGC and of the Special Shareholder.
4. NGC Written
Each of NGH and Midlands Electricity plc undertake to the other
RECs and to NGC to sign the NGC Written Resolutions prior to the
NGH EGM.
5. The Memorandum of Understanding
5.1 NGH will, conditionally upon the resolutions set out in.the
NGH EGM Notice and the NGC Written Resolutions having been passed
(without amendment). execute the Memorandum of Understanding as
soon as practicable following the NGH EGM and prior to the
publication of the Listing Particulars.
5.2 Each of the RECs will execute the Memorandum of Understanding
as soon as practicable following the NGH EGM and prior to the
publication of the Listing Particulars.
5.3 On or prior to the execution of the Memorandum of
Understanding, NGC will procure that each member of the NGC Board
who is to join the NGH Board will confirm in writing that, if the
Flotation does not become effective before the Long Stop Date, he
will resign without compensation from the NGH Board on request by
the REC Oversight Committee.
6. PSB Demerger
6.1 Each of the parties undertakes to each of the other parties,
conditionally upon the resolutions set out in the NGH EGM Notice
and the NGC Written Resolutions having been passed (without
amendment) and subject to Sub-clauses 6.4 and 22.3, to take all
steps within its power to ensure that the PSB Demerger is effected
prior to Flotation in accordance with the procedure set out in
Appendix I of the NGH EGM Circular.
6.2 The RECs' share of the NGH dividend forming part of the PSB
Demerger shall be paid inside the existing consortium elections
made by NGH and each of the RECs.
6.3 Without limitation to the generality of its obligations under
Sub-clause 6.1 and conditionally as set out in that Sub-clause, NGC
undertakes to NGH and to the RECs to enter into an agreement for
the sale of its pumped storage business to First Hydro Limited in
the form set out in Schedule XV, subject only to such amendments as
are made pursuant to Sub-clause 6.4 and to such other filial
amendments as may be agreed between NGC and each of the RECs.
6.4 It is acknowledged and agreed by all the parties that the PSB
Demerger is to be effected so as to ensure that NGC shall continue
to be able to fulfil its duties under the North Wales Hydro-
Electric Power Acts of 1955 and 1973 and that First Hydro will
contract to perform these on NGC's behalf and that NGC and NGH will
agree the necessary documentation and/or amendments to the
agreement referred to in Subclause 6.3 by 7 November 1995 to give
effect to the above acknowledgment and agreement.
7. The Special Dividends
7.1 NGC undertakes to each of the RECs and to NGH, conditionally
upon the resolutions set out in the NGH EGM Notice and the NGC
Written Resolutions having been passed (without amendment) and
subject to Subclause 22.3:
(a) to file interim accounts complying with section 272 of the Act
which interim accounts shall show profits available for
distribution of not less than pound 1759 million (including special
reserves) or, if such accounts provide for payment of one or more
of the dividend forming part of the PSB Demerger. the NGC Interim
Dividend and the NGC Special Dividend, shall show profits available
for distribution of not less than pound 1759 million (including
special reserves) less the amounts provided in respect of such
dividends; and
(b) to pay the NGG interim Dividend and the NGC Special Dividend
7.2 NGH undertakes to each of the RECs, conditionally upon the
passing (without amendment) at the NGH EGM of all of the
resolutions set out in the NGH EGM Notice and subject to Sub-clause
22.3:
(a) to effect the Special Bonus Issue;
(b) to file interim accounts complying with section 272 of the Act
which interim accounts shall provide for one or more of the
dividend forming part of the PSB Demerger, the NGH Interim
Dividend, the NGH Special Dividend, :he NGH Second Dividend and the
NGH Rights Dividend or, to the extent not so provided, show that
NGH has profits available for distribution at least equal to the
amount of the dividends to be paid prior to payment thereof;
(c) to give notice to the Inland Revenue (pursuant to section 247
(3) of the Income and Corporation Taxes Act 1988), following
payment of the relevant dividends. that all but the RECs' share of
the dividend forming part of the PSB Demerger. the NGH Rights
Dividend and of the NGH Second Dividend will be paid outside the
existing consortium elections made by NGH and each of the RECs;
(d) to pay the NGH Interim Dividend on 4 December 1995;
(e) to pay the NGH Special Dividend on 4 December 1995;
(f) to pay the NGH Second Dividend immediately following payment
of the NGH Special Dividend on 4 December 1995; and
(g) to pay the NGH Rights Dividend on 7 December 1995.
7.3 On request by a REC, NGH will pay that REC's share of the NGH
Interim Dividend, the NGH Special Dividend, the NGH Second Dividend
and the NGH Rights Dividend by CHAPS automated transfer to such REC
bank account as may be notified by the REC in such request.
8. The Rights Issue
8.1 NGH undertakes to each of the RECs conditionally upon all of
the resolutions set out in the NGH EGM Notice having been passed
(without amendment) at the NGH EGM and subject to Sub-clause 22.3:
(a) to effect a rights issue on the basis of one new ordinary
share of NGH for every I 9 existing ordinary shares held on
November [995 at pound 2.()4 per new share and that of such new
ordinary shares to be offered to any shareholder, 44.6 per cent.
will be NGH Rights Shares and 55.4 per cent. will be new ordinary
shares which do not carry an entitlement to the NGH Rights Dividend
t-Ordinary Shares") (save that the allocation of Ordinary Shares
and NGH Rights Shares amongst the RECs shall be as set out in the
NGH EGM Notice), in the manner set out in the Rights Issue
Circular;
(b) to post the Rights Issue Circular and the Listing Particulars
to each of the shareholders of NGH one 1995;
(c) to procure that each REC which complies with its obligations
under clause 8.3 shall have the interest for which it shoal have
subscribed pursuant to the Rights Issue entered on the register of
members of NGH on or before 7 December 1995.
8.2 Any changes to the proof of the Rights Issue Circular set out
in Schedule VIII which are material to the RECs (or any thereof)
shall require the prior approval of each of the RECs. Any other
changes shall require the prior approval (not to be unreasonably
withheld or delayed) of each of the RECs or of Xxxxxxx Xxxxx acting
on behalf of all the RECs. Subject thereto, the final version of
the Rights Issue Circular shall be in the form approved by the NGH
Board.
8.3 Each REC undertakes to NGH and to NGC, conditionally upon
receipt by it of its entitlement under the NGH Interim Dividend,
the NGH Special Dividend and the NGH Second Dividend, that it will
take up its full entitlement to the rights for which it may
subscribe under the terms of the Rights Issue Circular and will
make payment, in cleared funds. to NGH in accordance with the
procedure set out in the application form attached to the Rights
Issue Circular on or before 5 December 1995.
8.4 NGH undertakes to NGC to subscribe for new ordinary shares in
NGC for a subscription price equal to the proceeds of the rights
issue contemplated in this Clause 8 as soon as practicable
following receipt by NGH of the proceeds of the rights issue.
8.5 Each REC shall accept for its own tax purposes that Section 29
of the Taxation of Chargeable Gains Xxx 0000 shall apply on a basis
consistent with that assumed for the calculation of the NGH Rights
Dividend payable to each REC.
9. Application for Listing
9.1 NGH undertakes to each of the RECs, conditionally upon all of
the resolutions set out in the NGH EGM Notice having been passed
(without amendment) at the NGH EGM and subject to Sub-clause ".3:
(a) to use all reasonable endeavours to effect the Flotation in
accordance with the Timetable;
(b) to use all reasonable endeavours to publish the Listing
Particulars and the Summary Particulars on 22 November 1995;
(c) that the Listing Particulars will continua declaration that
the directors of NGH accept responsibility for the information
contained in the Listing Particulars and that to the best of their
knowledge and belief (having taken all reasonable care to ensure
that such is the case) the information contained in the Listing
Particulars is in accordance with the facts and does not omit
anything likely to affect the import of such information;
(d) that the Summary Particulars will contain a statement that the
directors of NGH are satisfied that the Summary Particulars contain
a fair summary of the key information set out in the Listing
Particulars; and not, without the prior approval of each of the
RECs (which, in the case of the description referred to in (ii)
below, shall not be unreasonably withheld or delayed) to make any
material alteration or addition to (i) those sections of the
Listing Particulars or Summary Particulars which repeat or restate
information relating to the RECs or to the dividend policy or
dividend forecasts of NGH which is contained in the Announcement or
(ii) the description of the prospects of NGH and its subsidiaries
set out in the proof of the Listing Particulars forming Schedule
VI.
9.9 NGH additionally undertakes to each of the RECs that it will:
(a) notify the REC Review Committee at any other proposed
alteration to the Listing Particulars or the Summary Particulars
which may materially affect the content or import of any part of
either document (other than any such alteration which has been
approved under Sub-clause 9.l(e));
(b) consider any comments made by the REC Review Committee or any
REC relating to any such proposed alteration; and
(c) in the event that NGH is required to publish supplementary
listing particulars, so far as practicable consult with the REC
Review Committee regarding their contents and consider any comments
made by it.
9.3 NGC undertakes to provide all reasonable co-operation and
assistance to NGH in relation to its obligations under Sub-clauses
9.1 and 9.2.
10. The REC Review Committee.
10.1 The REC Review Committee shall consist of not less than three
members, each appointed by the unanimous agreement of the RECs. The
first members of the REC Review Committee shall be X. Xxxxxxxx
(Midlands), X. Xxxxxx (Eastern), X. Xxxxxxx (Yorkshire) and X.
Xxxxx (East Midlands).
10.2 A member of the REC Review Committee may be removed from the
REC Review Committee only upon his resignation, by notice from the
REC by which he is (or was) employed in the event of such
employment terminating or notice of termination having been given
or by the unanimous agreement of the RECs. In such event a new
member of the REC Review Committee shall be appointed by the
unanimous agreement of the RECs. Any changes to the members of the
REC Review Committee shall be notified to NGH and NGC as soon as
practicable following such change.
10.3 Comments to be submitted by the REC Review Committee pursuant
to Sub-clause 9.2(b) on any proposed alteration to the Listing
Particulars or Summary Particulars or pursuant to Sub-clause 9.2(c)
on any supplementary listing particulars shall be signed by or on
behalf of a majority of the members of the REC Review Committee and
shall be returned to NGH within 2 business days of notification to
Kleinwort Xxxxxx of the relevant proposals or, if earlier, prior to
the deadline for printing the relevant document. If no comments
have been given within the applicable time limit, NGH can proceed
as though the relevant document was approved by the REC Review
Committee without continent.
11. Publication of REC Circulars
11.1 Each Distributing REC undertakes to each of the other RECs and
to NGH and NGC conditionally upon:
(i) the passing of all the resolutions set out in the NGH EGM
Notice at the NGH EGM;
(ii) the publication by NGH of the Listing Particulars and the
Summary Particulars as contemplated in Clause 9; and
(iii) not having been subject to a public takeover which has become
or been declared wholly unconditional prior to the date on which it
would otherwise have posted its REC Circular in accordance with
this Agreement;
(a) to post its REC Circular to its shareholders on 22 November
1995; and
(b) to convene an extraordinary general meeting for 10 am. on 8
December 1995.
11.2 Each Distributing REC undertakes to NGH and NGC that the
resolution shall be in substantially the form set out in Schedule
XI provided that the proportion of 25 per cent. in paragraph (i)
thereof shall be reduced to such lower percentage as may be agreed
by NGH with the London Stock Exchange as permissible in the context
of the Flotation. The final form of each such resolution shall be
approved by the Board of the relevant Distributing REC.
11.3 Each Distributing REC confirms that its board of directors has
resolved or will resolve (conditionally upon there having been no
relevant material change of circumstances between the date hereof
and the date of publication of the REC Circular) to recommend its
shareholders to vote in favour of the resolution to be proposed at
such extraordinary general meeting and that the REC Circular will
contain a statement to this effect.
11.4 Each Distributing REC shall give NGC the opportunity to review
prior to despatch those sections of its Circular which contain
information relating to NGH, NGC or the Flotation and will consider
any comments made thereon by NGC.
11.5 If a REC which is not a Distributing REC (and which does not
fall within Sub-clause 1l.l(iii) above) determines to declare and
pay a specie dividend of some or all of its holding of shares in
NGH to be effective on Flotation, the provisions of Sub-clauses
11.2 and 11.4 shall apply as it were named in this Agreement as a
Distributing REC. For the avoidance of doubt the foregoing
provisions of this Sub-Clause 11.5 shall not apply to a REC which
has been subject to a public takeover which has become or been
declared wholly unconditional prior to the date of this Agreement.
12. The Specie Dividends
Each Distributing REC undertakes to the other parties,
conditionally upon the resolution-to be proposed at its
extraordinary general meeting having been passed and having become
unconditional in accordance with its terms, that it will declare
and pay a specie dividend with the effect that not less than the
proportion of its holding of shares in NGH on Flotation set
opposite its name in Schedule XIV is distributed to its
shareholders.
13. Flotation not effective
In the event that the Flotation does not become effective before
the Long Stop Date:
(a) NGH undertakes to the RECs to convene an extraordinary general
meeting to take place within 95 days of the Long Stop Date at which
an ordinary resolution will be proposed which will provide that the
directors of NGH shall cease to be its directors and a new NGH
Board shall be appointed, consisting of 12 persons, each of whom
shall have been nominated by a different REC; and
(b) each of the RECs undertakes to notify NGH within 5 days of the
Long Stop Date of the identity of the person nominated by it to be
a director of NGH and to vote in favour of the resolutions referred
to in Sub-clause 1 3(a).
14. Customer Discount
Subject to Flotation becoming effective and to receipt of its share
of the NGH Interim Dividend, the NGH Special Dividend, the NGH
Second Dividend and the NGH Rights Dividend, each of the RECs
undertakes to each of the other RECs that it will grant the
Customer Discount in the manner set out in Schedule X: provided
that nothing in this Clause 14 shall prevent a REC from granting
the Customer Discount to customers who are not Eligible Customers
(as defined in Schedule X) as well as to Eligible Customers. If
Flotation has not become effective by 31st December 1995, the
Record Date for the purposes of Schedule X shall be 4 February
1996.
15. Other undertakings by the RECs
15.1 Each of the RECs undertakes to NGH that, save for any p
ermitted disposal, it has not made any decision to sell all or any
part of its holding of shares in NGH (where the context so allows,
as increased by the matters provided for in the NGH EGM Circular
and the Rights Issue Circular) on or prior to Flotation and that it
will not make any such decision prior to Flotation (or until the
date on which it becomes clear that Flotation cannot occur by the
Long Stop Date). For the avoidance of doubt, there shall be no
breach of this undertaking solely by reason of the provisions in
the NGG Articles to be adopted on Flotation.
15.2 For the purposes of Subclause 15.1, a permitted disposal shall
be:
(a) a dividend in specie of shares in NGH by a REC to its
shareholders becoming effective on or after Flotation;
(b) disposals forming part of arrangements to compensate holders
of options in the REC for the loss in value consequent upon any
such dividend in specie as is contemplated in Clause 12;
(c) the disposal of any aggregated fractional entitlements
following any such dividend in specie as is contemplated in Clause
12;
(d) intra-group transfers or sales (including, without limitation,
a dividend in specie) on or after Flotation;
(e) a disposal by Manweb plc (or any transferee thereof under (d)
above) pursuant to the undertaking to dispose of such shares given
by Scottish Power plc to the Secretary of State.
15.3 Each of the RECs confirms to NGH, NGC and to the other RECs
that the section headed "Intentions of the RECs" in the
Announcement contains a correct statement of its intentions as at
the date of this Agreement with regard to its shareholding in NGH.
Each of the RECs undertakes to inform Kleinwort Xxxxxx (on behalf
of NGH and NGC) as soon as is reasonably practicable of any change
in this intention prior to the date on which the Flotation becomes
effective.
15.4 Each of the RECs and NGH undertake to each other and to NGC
that they will not withdraw or revoke the existing consortium
elections so long as the same remain relevant to the payment of
dividends by NGH contemplated in this Agreement.
16. Cost Sharing
16.1 Save as otherwise set out in this Agreement (or as otherwise
agreed between the RECs in relation to cost sharing between the
RECs), the RECs and NGC shall each pay their own legal,
accountancy, printing, public relations, registrar's fees, postage
and other charges and expenses of and incidental to all matters
arising in relation to, or in preparation for. or in contemplation
of or incidental to, the Flotation and the matters contemplated by
this Agreement. The RECs and NGC confirm that NGH is not liable to
pay any such charges or expenses other than the charges and
expenses of Barclays Registrars attributable to NGH and, with
effect from their appointment taking effect, Lloyds Bank Registrars
and any costs associated with the NGH share dealing facility.
16.2 NGC undertakes to the RECs to pay to Eastem Group plc (on
behalf of the RECs) or to the adviser concerned the proportion (as
set out in column 2 of Schedule XIV opposite the name of the
relevant adviser set out in column I of that Schedule) of the fees
(including disbursements and value added tax) of each of the
advisers to the RECs whose names are set out in column 1 of
Schedule XIV arising in relation to, or in preparation for. or in
contemplation of or incidental to, the Flotation and the matters
contemplated by this Agreement.
16.3 Eastem Group pie shall provide to NGC copies of the relevant
invoices in relation to the fees to be shared pursuant to
Sub-clause 16.2. NGC's obligation to make payments in respect of
Ernst & Young's fees is subject to having first received evidence
reasonably satisfaction to it that such costs have been properly
incurred.
17. Waiver
Each REC hereby releases and discharges each other REC and the
directors and employees of such RECs from any and all actions,
proceedings, claims, demands or other liabilities whatsoever
relation to liabilities arising in connection with or out of the
preparation and approval of the L~stmg Particulars and Summary
Particulars.
18. Announcements
18.1 NGH undertakes to issue an announcement in the form set out in
Schedule Do as soon as practicable following the signature by all
parties of this Agreement. NGC shall be entitled to issue an
announcement in substantially similar terms to comply with its
obligations under the rules of the London Stock Exchange.
18.2 Each of the Distributing RECs undertakes to NGH and to the
other Distributing RECs that any announcement it makes following
the signature of this Agreement shall, insofar as it relates to the
Flotation or to the other matters provided for in this Agreement,
be based on the pro forma REC announcement set out in Schedule DC.
18.3 If any Distributing REC intends to make an announcement
following the signature of this Agreement which, insofar as it
relates to NGH. NGC, the Flotation or to the other matters
provided for in this Agreement. differs in any significant respect
from such pro forma, or if any REC which is not a Distributing REC
intends to make such an announcement, it shall consult with
Kleinwort Xxxxxx prior to the making of such announcement.
18.4 Each party will use all reasonable endeavours not to issue any
further public announcements or other public statement or
advertisement prior to Flotation which contains information
relating to NGH or NGC which is material to the Flotation or which
may be relevant to effecting Flotation within the Timetable without
first having consulted Kleinwort Xxxxxx.
18.5 In relation to any consultation with Kleinwort Xxxxxx pursuant
to Sub-clauses 18.3 and 18.4, the party obliged to so consult
shall, unless it shall consider that to do so would put it in
breach of any statutory or regulatory requirement binding upon it
or a member of its parent company's group, or in breach of the
requirements of the London Stock Exchange or of the City Code on
Takeovers and Mergers, comply with all reasonable requests from
Kleinwort Xxxxxx in relation to the contents, timing or
distribution of such announcement, statement or advertisement.
19. NGC Option Schemes
NGH undertakes to the RECs that it will seek to agree with the
Inland Revenue that the adjustments to be made to subsisting
options granted under the NGC savings related share option scheme
and the NGC executive share option scheme will be calculated on the
basis set out in Schedule XII. No adjustments will be made on
terms that would be materially more advantageous to the
optionholders than the terms contemplated in Schedule XII without
the prior approval of the NGH Board (if approved prior to the SIGH
EGM ~ or of the REC Oversight Committee (if approved after tit. NGH
EGM).
20. Variations
20.1 Save as set out in Sub-clauses 20.2, 20.3 arid 20.4,
variations to this Agreement shall not be effected save by means of
an instrument executed on behalf of all the parties.
20.2 Alterations to the Timetable may be effected by notice from
Kleinwort Xxxxxx provided that no such alteration has the effect of
altering the process described in Appendix I1 of the NGH EGM
Circular or of causing the Flotation to take place after the Long
Stop Date. In the event of any such alteration to the Timetable
dates specified elsewhere in this Agreement shall be deemed to be
amended to conform to such alteration.
20.3 Each of the RECs and SIGH authorises Xxxxxxx Xxxxx to consent
on their behalf to minor changes or corrections to an' of the
documents of which drafts or proofs are set out in the Schedules.
20.4 The parties recognise that all cash dividends referred to in
this Agreement will be declared as an amount per share which will
be calculated, so far as is practicable, so as to result in the
total dividend paid being equal to the total amount for such
dividend specified in this Agreement. Any minor variation between
the actual total dividend paid and the total specified in this
Agreement as a result of rounding or as a result of calculating
such amount per share shall not constitute a variation of this
Agreement for the purposes of Sub-clause 20.1.
21. Good Faith
Each of the parties undertakes to each of the other parties to act
in good faith and to take all reasonable steps to ensure a
successful Flotation in accordance with the Timetable.
22. Force Majeure
22.1 If at any time prior to the publication of the Listing
Particulars, NGC becomes aware of any event or change in
circumstances (which was not known to the NGC Board at the date
hereof) which is so significant that it would, notwithstanding
compliance by NGC with its obligations pursuant to Clause 21,
prevent it from fulfilling or make it unlawful to fulfil any of its
obligations under this Agreement, it shall forthwith notify the
other parties of such circumstance. If no variation to this
Agreement (having regard to Clause 21 ) is agreed pursuant to
Sub-clause 20.1 within 5 business days of such notification NGC may
terminate this Agreement (subject to Sub-clause 22.5) by notice to
the other parties without further liability whatsoever to those
parties.
22.2 If at any time prior to the date on which the extraordinary
general meetings of the Distributing RECs are to be held (as
contemplated in Sub-clause 11.1(b)) there shall be announced by the
Government, Inland Revenue, Office of Electricity Regulation or
some other competent authority an actual or proposed change in the
legislative, regulatory or taxation treatment of the RECs generally
(an "Adverse Announcement"), which change may result in a
significant adverse financial consequence for the RECs, RECs
together holding a majority in number of the NGH shares may
terminate this Agreement (subject to Sub-clause 22.5) by notice to
the other parties within 10 business days of the Adverse
Announcement without further liability whatsoever to those parties.
Upon an Adverse Announcement NGC and NGH shall be entitled to defer
performance of any of their respective obligations under this
Agreement until they are satisfied that this Agreement will not be
terminated as a result of such Adverse Announcement.
22.3 The obligations of NGC under Sub-clauses 6 and 7.-and the
obligations of NGH under Sub-clauses 6, 7.2, 8.1 and 9.1(a) and (b)
(each such obligation being a "Relevant Obligation") shall be
conditions, upon each of the RECs having complied in all respects
material to the Flotation with the obligations undertaken by it
under this Agreement (insofar as the same fall to be performed
under the terms of this Agreement prior to the time of performance
of the Relevant Obligation). If such condition is not fulfilled at
the time otherwise provided for performance by NGC or NGH of a
Relevant Obligation. NGC or NGH (as the case may be) shall be
entitled without prejudice to any other rights it may have whether
under this Agreement or otherwise to waive the condition or (if
such default is capable of rectification without having a material
adverse effect on the Flotation) to require the REC in default to
rectify such default and. pending such rectification, to defer
performance of the Relevant Obligation. If such default is not
rectified within 3 business days of notification or, if earlier, by
21st January, 1996, or if the default is incapable of rectification
without a material adverse effect on Flotation, NGC or NGH (as the
case may be) may forthwith terminate this Agreement (subject to
Sub-clause 22.5) by notice to the other parties without further
liability whatsoever to those parties.
22.4 In the event that the Agreement is terminated pursuant to
Sub-clauses 22.1, 22.2 or 22.3 the Flotation shall not proceed and
the parties shall use all reasonable endeavours to agree the form
of each announcement to be issued in respect of such termination.
If the Agreement is terminated pursuant to Sub-clause 22.2, NGH
undertakes to the RECs to withdraw forthwith any application for
listing which may have been made.
22.5 The termination of this Agreement under Sub-clauses 22.1 22.2
or ".3 shall be without prejudice to the provisions of Clause 13
(Flotation not effective). Clause 16 (Cost Sharing) and Sub-clause
22.4, which shall continue to have effect and to any liability for
antecedent breaches.
22.6 In Sub-clause 22.1-, references to NGC shall include re
ferences to NGH with effect from the date on which the appointment
of the NGC Board to the NGH Board becomes effective.
23. Notices
23.1 Any notice required to be given under this Agreement may be
served personally or by prepaid registered or recorded delivery
letter or by telex or facsimile addressed to the relevant party at
its address stated on the first page of this Agreement and marked
for the attention of the person described alongside that party
below or at the relevant number set out below or at such other
address or number as it may have notified to the other for this
purpose:
Facsimile No.
EASTERN GROUP plc 01473 553002
For the attention of
The Company Secretary
EAST MIDLANDS ELECTRICITY plc 0115 967 0459
For the attention of
The Company Secretary
LONDON ELECTRICITY plc 01713313424
For the attention of
The Company Secretary
MANWEB pie 0!41 6364578
For the attention of
Xxx Xxxxxxx
MIDLANDS ELECTRICITY plc 0121423 1907
For the attention of
The Company Secretary
NORTHERN ELECTRIC pie 0191 210 9409
For the attention of
Xxxxxxx Xxxxx
NORWEB plc 0161 875 7211
For the attention of
Xxxxx Xxxxxxxx
SEEBOARD plc 00000 000 0x0
For the attention of
The Company Secretary
SOUTHERN ELECTRIC plc 01628 584 408
For the attention of
The Company Secretary
SOUTH WALES ELECTRICITY plc 01222 773 880
For the attention of
The Company Secretary
SOUTH WESTERN ELECTRICITY plc 01454 617 702
For the attention of
The Company Secretary
YORKSHIRE ELECTRICITY GROUP plc 0113 289 S926
For the attention of
Xxxxx Xxxxxxxxx
THE NATIONAL GRID HOLDING pie 0121 423 1907
For the attention of
Xxxx Xxxxxxxx
)Notices given before
)Memorandum of Understanding
)takes effect
For the attention of 01203 423026
Xxxxx Xxxxx
)Notices given after
)Memorandum of Understanding
)takes effect
THE NATIONAL GRID COMPANY plc 01903 423096
For the attention of
Xxxxx Xxxxx
23.2 Any notice so given by letter shall be deemed to have been
served 48 hours after the same shall have been posted and any
notice given by facsimile shall be deemed to have been served upon
receipt of a facsimile receipt form indicating satisfactory receipt
by the receiving machine, and in proving such service it shall be
sufficient to prove, in the case of a letter, it was properly
addressed, and in the case of a facsimile by producing the relevant
facsimile receipt form.
23.3 Any notification to the REC Review Committee under Clause 9
shall be sent to Kleinwort Xxxxxx Limited, P O Xxx 000, 00
Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (fax no. 0000 000 0000) for the
attention of Xxxxxx Xxxxx-Xxxxxxx/Xxxx Xxxxx.
24. RTPA
To the extent that any provision of this Agreement, or of any other
arrangement of which it forms part, is a restriction or information
provision for the purposes of the Restrictive Trade Practices Act
1976 ("RTPA") by virtue of which this Agreement or any such
agreement is registrable under the RTPA, no such restriction or
provision shall take effect until the day after particulars of this
Agreement or, as the case may be, that arrangement, have been
furnished to the Director General of Fair Trading in accordance
with the RTPA.
25. Governing Law and Jurisdiction
This Agreement shall be governed by, and construed in accordance
with, English law and the High Court of Justice in England shall
have exclusive jurisdiction in relation to any claim, dispute or
difference concerning this Agreement.
It
THIS AGREEMENT has been signed by the duly authorised
representatives of the parties the day and year first before
written.
Signed by Xxxx Xxxxxxx )
for and on behalf of )
EASTERN GROUP plc )
Signed by XXXXXX XXXXXX )
for and on behalf of )
EAST MIDLANDS ELECTRICITY plc )
Signed by XXXX XXXXXX )
for and on behalf of )
LONDON ELECTRICITY plc )
Signed by XXX XXXXXXX )
for and on behalf of )
MANWEB plc )
Signed by XXXXX XXXXXXX )
for and on behalf of )
MIDLANDS ELECTRICITY plc )
Signed by XXXX XXXXXXX )
for and on behalf of )
NORTHERN ELECTRIC plc )
Signed by XXXXXXX XXXXXX )
for and on behalf of )
NORWEB plc )
Signed by XXXXXXX XXXXX )
for and on behalf of )
SEEBOARD plc )
Signed by XXXXX XXXXXX )
for and on behalf of )
SOUTHERN ELECTRIC plc )
Signed by XXXXXXX XXXXX )
for and on behalf of )
SOUTH WALES ELECTRICITY plc )
Signed by XXXX XXXX )
for and on behalf of )
SOUTH WESTERN ELECTRICITY plc )
Signed by XXXXX XXXXXXXXX )
for and on behalf of )
YORKSHIRE ELECTRICITY GROUP plc )
Signed by K. G. Xxxxxx )
for and on behalf of THE )
NATIONAL GRID HOLDING plc )
Signed by D. H. Bones )
for and on behalf of )
THE NATIONAL GRID COMPANY plc )
