EX-99.4
9
exh99-4.htm
REIMBURSEMENT AND INDEMNITY AGREEMENT YED
|
EXHIBIT
99.4
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|
| | EXECUTION
COPY |
| | |
|
DATED
5 MAY 2005
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|
YORKSHIRE
ELECTRICITY DISTRIBUTION plc
and
AMBAC
ASSURANCE UK LIMITED
|
| |
| | | |
| | | |
| | | |
| | REIMBURSEMENT
AND INDEMNITY AGREEMENT | |
| | | |
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CONTENTS
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| Clause | | Page |
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1.
|
Definitions
and Interpretation
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3
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|
2.
|
Representations,
Warranties and Covenants
|
7
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|
3.
|
Issue
of The Financial Guarantee
|
9
|
|
4.
|
Subrogation
|
9
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|
5.
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Reimbursement
Obligation
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10
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|
6.
|
Indemnity
|
10
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7.
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Value
Added Tax
|
13
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|
8.
|
Term
of This Agreement
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13
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|
9.
|
Further
Assurances
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13
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|
10.
|
Obligations
Absolute
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14
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|
11.
|
Assignment
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14
|
|
12.
|
Liability
of Xxxxx
|
00
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|
00.
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Payment
Procedure
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15
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|
14.
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Remedies
and Waivers
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16
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|
15.
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Amendment,
Partial Invalidity and Counterparts
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16
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16.
|
Notices
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18
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|
17.
|
Contracts
(Rights Of Third Parties) Xxx 0000
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19
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18.
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Economic
and Monetary Union
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19
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19.
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Confidentiality
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19
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20.
|
Law
and Jurisdiction
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20
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| | | |
-2-
THIS
REIMBURSEMENT AND INDEMNITY AGREEMENT is made
by way of deed and dated 5 May 2005
BETWEEN:
| (1) |
YORKSHIRE
ELECTRICITY DISTRIBUTION PLC, a
company incorporated under the laws of England and Wales (registered
number 02906593) (the "Issuer")
and;
|
| (2) |
AMBAC
ASSURANCE UK LIMITED, a
company incorporated under the laws of England and Wales (registered
number 3248674) ("Ambac").
|
WHEREAS:
| (A) |
Pursuant
to the Trust Deed, the Issuer will issue the Bonds.
|
| (B) |
The
Issuer has requested that Ambac issue the Financial Guarantee in respect
of all of the Bonds, pursuant to the terms of the Financial Guarantee (the
"Guaranteed
Obligations").
|
| (C) |
The
Issuer will use the proceeds of the Bond issue for, inter
alia,
the Issuer's general corporate purposes, to repay a portion of the
Issuer's indebtedness as it falls due and to meet certain transaction fees
and expenses.
|
| (D) |
The
Parties hereto agree that the issue of the Financial Guarantee is
conditional upon the satisfaction of certain conditions precedent as set
out in the Subscription Agreement.
|
IT
IS AGREED AS FOLLOWS:
| 1.
|
DEFINITIONS
AND INTERPRETATION
|
| 1.1.1 |
Except
as otherwise defined herein, all terms defined in the Financial Guarantee
(including definitions incorporated therein by reference to another
document) shall have the same respective meanings when used in this
Agreement (including the Recitals).
|
| 1.1.2 |
In
this Agreement, the following words and expressions shall, except where
the context otherwise requires have the following respective
meanings:
|
"Agreement" means
this Reimbursement and Indemnity Agreement, together with all Recitals
thereto.
"Applicable Requirements" means
applicable law, the rules of any regulatory authority within a competent
jurisdiction, the rules of any applicable stock exchange and any applicable
confidentiality requirements.
"Bondholder" has the
meaning given to that term in the Trust Deed.
"Closing
Date" means 5
May 2005 or
such other date as is agreed between the Issuer and Ambac.
"Default
Rate" means
two per cent. (2%) per annum over the applicable base rate of Citibank N.A.,
London Branch (or in the absence of such base rate, such base rate as Ambac may
determine) from time to time.
"Electricity
Act" means
the Electricity Xxx 0000 as amended or re-enacted from time to time and all
subordinate legislation made pursuant thereto.
-3-
"Electricity
Distribution Licence" means
the electricity distribution licence granted or treated as granted to NEDL under
section 6(1)(c) of the Electricity Act.
"Existing
Negative Pledge" means
the obligations contained in Condition 5 of the terms and conditions of
Yorkshire Electricity Distribution plc's £200,000,000 9.25 per cent. Guaranteed
Bonds due 2020.
"Finance
Documents" means
the Trust Deed, the Guarantee Fee Letter and this Agreement.
"Financial
Guarantee" means
the financial guarantee dated the date of this Agreement and issued by Ambac in
favour of the Trustee in respect of all of the Bonds.
"Guarantee
Fee Letter" means
the fee letter dated 5 May 2005 in respect of the Financial
Guarantee.
"Indemnified
Parties" means
Ambac and its officers, directors, shareholders, employees, agents and each
person (and their officers, directors, shareholders, employees and agents), if
any, who controls Ambac within the meaning of either Section 15 of the United
States Securities Act of 1933, as amended, or Section 20 of the United States
Securities Exchange Act of 1934, as amended.
"Issuer
Event of Default" has the
meaning given to that term in the Conditions.
"Offering
Circular" means
the offering circular in respect of the Bonds dated 5 May 2005.
"OFGEM" means
the Gas and Electricity Markets Authority and/or the Office of Gas and
Electricity Markets, including their successor office or body, as
appropriate.
"Participating
State" means
any member state which has adopted the euro as its lawful currency at the
relevant time.
"Potential
Issuer Event of Default" has the
meaning given to that term in the Trust Deed.
"Put
Option" has the
meaning given to that term in Condition 13 of the Bonds.
"Rating
Agencies" means,
collectively, Xxxxx'x Investor Services Inc. ("Moody's") and
Standard & Poor's Rating Services, a division of The McGraw Hill Companies
Inc. ("S&P") or the
successors of such entities as are identified by Ambac.
"Relevant
Indebtedness" means
any indebtedness (whether being principal, premium, interest or other amounts)
in the form of or represented by notes, bonds, debentures, debenture stock, loan
stock or other securities, whether issued for cash or in whole or in part for a
consideration other than cash, and which, with the agreement of the person
issuing the same, are quoted, listed or ordinarily dealt in on any stock
exchange or recognised over-the-counter or other securities market.
-4-
"Security
Interest" means a
mortgage, charge, lien, pledge or other security interest.
"Subscription
Agreement" means
the subscription agreement dated 29 April 2005 between inter
alios the
Issuer, Ambac and the Royal Bank of Scotland plc (in its capacity as manager of
the Bonds).
"Subsidiary" means a
subsidiary or subsidiary undertaking within the meaning of the Companies
Act.
"Tax" means
any tax, levy, duty or other charge or withholding of a similar nature
(including any penalty or interest payable thereon in connection with any
failure to pay or any delay in paying the same).
"Tax
Credit" means a
credit against, relief or remission for, or repayment of any Tax.
"Tax
Deduction" means a
deduction or withholding for or on account of Tax from a payment under a Finance
Document.
"Treaty
on European Union" means
the Treaty of Rome of 25 March 1957, as amended by the Single Xxxxxxxx Xxx 0000
and the Maastricht Treaty (which was signed at Maastricht on 7 February 1992 and
came into force on 1 November 1993).
"Trustee" means
HSBC Trustee (C.I.) Limited or any successor thereto or replacement thereof in
accordance with the Trust Deed.
"Trust
Deed" means
the Trust Deed dated on or about the date of this Agreement between the Issuer,
Ambac and the Trustee.
Any
reference in this Agreement to:
"continuing", in
relation to a Potential Issuer Event of Default, and/or an Issuer Event of
Default, shall be construed as a reference to a Potential Issuer Event of
Default, and/or an Issuer Event of Default which has not been remedied within
any relevant grace period or waived in accordance with the terms
hereof;
"indebtedness" shall
be construed so as to include any obligation (whether incurred as principal or
as surety) for the payment or repayment of money, whether present or future,
actual or contingent;
a
"law" shall be
construed as any law (including common or customary law), statute, constitution,
decree, judgment, treaty, regulation, directive, bye-law, order or any other
legislative measure of any government, supranational, local government,
statutory or regulatory body or court;
a
"member
state" shall be
construed as a reference to a member state of the European Union;
a
"person" shall
be construed as a reference to any person, firm, company, corporation,
government, state or agency of a state or any association or partnership
(whether or not having separate legal personality) of two or more of the
foregoing;
a
"successor" shall be
construed so as to include an assignee or successor in title of such party and
any person who under the laws of its jurisdiction of incorporation or domicile
has assumed the rights and obligations of such party under this Agreement or to
which, under such laws, such rights and obligations have been
transferred;
"VAT" shall
be construed as a reference to value added tax including any similar tax which
may be imposed in place thereof from time to time; and
the
"winding-up",
"dissolution" or
"administration" of a
company or corporation shall be construed so as to include any equivalent or
analogous proceedings under the law of the jurisdiction in which such company or
corporation is incorporated or any jurisdiction in which such company or
corporation carries on business including the seeking of liquidation,
winding-up, reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors.
-5-
| 1.3.1 |
"£"
and "sterling"
denote lawful currency of the United Kingdom.
|
| 1.3.2 |
"euro"
and "EUR"
means the single currency of the European Union as constituted by the
Treaty on European Union and "euro
unit"
means the currency unit of the euro.
|
| 1.4
|
Agreements
and Statutes
|
Any
reference in this Agreement to:
| 1.4.1 |
this
Agreement or any other agreement or document shall be construed as a
reference to this Agreement or, as the case may be, such other agreement
or document as the same may have been, or may from time to time be,
amended, varied, novated or supplemented; and
|
| 1.4.2 |
a
statute or treaty shall be construed as a reference to such statute or
treaty as the same may have been, or may from time to time be, amended or,
in the case of a statute, re-enacted.
|
Any
reference in this Agreement to a time of day shall, unless a contrary indication
appears, be a reference to London time.
For the
purposes of this Agreement, the Trustee shall be regarded always as acting for
itself and on behalf of the Bondholders only.
The
headings contained in this Agreement are provided for convenience only and shall
not affect its construction or interpretation.
-6-
| 2.
|
REPRESENTATIONS,
WARRANTIES AND COVENANTS
|
| 2.1
|
Representations
and warranties
of the Issuer
|
| (a) |
The
Issuer represents to Ambac that the representations and warranties made by
the Issuer, on its own behalf and contained in Clause 3 of the
Subscription Agreement and in any other Finance Documents are true and
correct in all respects on the date made.
|
| (b) |
The
Issuer makes each of the representations and warranties made by it under
Clause 3 of the Subscription Agreement and in any other Finance Documents
to Ambac on the date of this Agreement and on the Closing Date and on any
other date on which such representations and warranties are deemed to be
repeated in the relevant Finance Document as if those representations and
warranties were set out in this Agreement mutatis
mutandis.
|
| (c) |
The
Issuer represents to Ambac that, except for the Put Option described in
Condition 13 of the Bonds, there are no put options, or any other rights
in either case having substantially the same effect as the Put Option, in
relation to any indebtedness of the Issuer, other than the obligations
contained in Condition 8 (Redemption
at the Option of Bondholders)
of Yorkshire Electricity Distribution plc's £200,000,000 9.25 per cent
Guaranteed Bonds due 2020.
|
| (d) |
The
Issuer represents to Ambac that there are no negative pledges, or any
other restrictions over the granting of any Security Interest upon, or
with respect to, any Relevant Indebtedness of the Issuer, other than the
Existing Negative Pledge, the Negative Pledge described in Condition 4 of
the Bonds, (at any time that the Issuer is a "Significant Subsidiary" as
defined in the CE UK Indenture) the obligations contained in Section 1014
(Limitation
on Liens)
of the Indenture dated as of December 15, 1997 (the "CE UK Indenture")
between, inter alios, CE Electric UK Funding Company and The Bank of New
York as Trustee and relating to, inter alia, CE Electric UK Funding
Company's US$237,000,000 6.995% Senior Notes due 2007, the obligations
contained in Condition 5 (Negative
Pledge)
of CE Electric UK Funding Company's £200,000,000 7.25% Guaranteed Bonds
due 2022, the obligations contained in Condition 3 of the Yorkshire Power
Finance Limited £200,000,000 7.25% Guaranteed Bonds due 2028 and (at any
time that the Issuer is a "Significant Subsidiary" as defined in the
Yorkshire Power Indenture) the obligations contained in Section 1004
(Limitation
on Liens)
of the Indenture dated as of February 1, 1998 (the "Yorkshire Power
Indenture") between, inter alios, Yorkshire Power Finance Limited,
Yorkshire Power Group Limited and The Bank of New York and relating to,
inter alia, Yorkshire Power Finance Limited's U.S.$300,000,000 6.496%
Senior Notes due 2008.
|
-7-
| 2.2
|
Covenants
of the Issuer
|
The
Issuer agrees for the benefit of Ambac as follows:
| (a) |
it
will comply with the undertakings and covenants set out in the Finance
Documents to which it is a party including without limitation in Clause 4
of the Subscription Agreement as if such covenants were incorporated
mutatis
mutandis
into this Agreement;
|
| (b) |
it
will forthwith notify Ambac of anything which has or may reasonably be
expected to have rendered untrue or incorrect in any respect any of the
representations and warranties in Clause 2.1 of
this Agreement and which is material in the context of the issue and
offering of the Bonds and of the transactions contemplated by the Finance
Documents or the issue of the Financial Guarantee;
|
| (c) |
it
will provide Ambac with any information, notices, including, inter
alia,
management accounts (in such form as they are produced by the Issuer),
audited financial statements and other financial information promptly on
request after the same become available;
|
| (d) |
subject
to Applicable Requirements, that the duties and obligations of the Issuer
herein shall continue in full force and effect until all of its
obligations under the Finance Documents have been fully and irrevocably
discharged, notwithstanding payment by the Issuer of all amounts due in
respect of the Bonds;
|
| (e) |
that,
prior to the Trustee presenting a Notice of Demand to Ambac, the Issuer
will have utilised all other financial resources available to it for the
purposes of paying interest and/or principal and/or any other sums due to
the Bondholders of the relevant Bonds;
|
| (f) |
subject
to Applicable Requirements, it will, upon reasonable prior notice by Ambac
make appropriate management personnel available for a meeting (whether
conducted over the telephone or otherwise) with Ambac at a mutually
acceptable time and place to discuss the Issuer's operational and
financial performance over the preceding financial year and its financial
plans for the next three years;
|
| (g) |
subject
to Applicable Requirements, it will, as soon as reasonably practicable
after request by Ambac, provide appropriate personnel for a meeting
(whether conducted over the telephone or otherwise) with Ambac at a
mutually acceptable time and place if there occurs a significant change in
the financial position of the Issuer or any Subsidiary which is material
to the Issuer as shown in its most recent financial statements or in any
report produced by OFGEM concerning the Issuer or any of its Subsidiaries;
|
| (h) |
in
consideration for Ambac's issuance of the Financial Guarantee, it will, on
the terms and subject to the conditions of this Agreement:
|
-8-
| (i) |
pay
or procure the payment, from time to time, of any Guarantee Fees due and
payable to Ambac in accordance with the Guarantee Fee Letter and this
Agreement;
|
| (j) |
promptly
pay to Ambac, all and any sums and fees due and payable to Ambac under the
Finance Documents including, for the avoidance of doubt, (if applicable)
the amount equal to the loss, liability or cost which Ambac determines
will be or has been (directly or indirectly) suffered for or on account of
any Tax by Ambac (except any Tax by reference to the net income received
or receivable by Ambac) or in respect of, or applicable to, the payment of
such sums and fees, as provided for in the Finance Documents;
and
|
| (k) |
indemnify
and reimburse Ambac on the terms of this Agreement.
|
| 3.
|
ISSUE
OF THE FINANCIAL GUARANTEE
|
The
obligation of Ambac to issue the Financial Guarantee on the Closing Date is
subject to:
| 3.1 |
satisfaction
or waiver by Ambac (at its sole discretion) of all the conditions
precedent set out in the Subscription Agreement;
|
| 3.2 |
confirmation
from the Lead Manager on behalf of the Managers (as defined in the
Subscription Agreement) that the conditions precedent set out in Clause
8.3 of the Subscription Agreement have been satisfied, without taking into
account any waiver by the Lead Manager of any such condition unless such
waiver has been approved by Ambac prior to such waiver being
given;
|
| 3.3 |
no
Potential Issuer Event of Default or Issuer Event of Default shall have
occurred;
|
| 3.4 |
there
having been no material adverse change (or event which is likely to result
in a material adverse change) in the international or domestic, syndicated
debt, bank or capital markets which may prejudice the offering or
distribution of any of the Bonds since 29 April 2005; and
|
| 3.5 |
no
statute, rule, regulation or order having been executed, entered or deemed
applicable by any government or governmental or administrative agency or
court having any relevant jurisdiction that would make the transactions
contemplated by any of the Finance Documents and the Financial Guarantee
illegal or otherwise prevent the consummation thereof.
|
| 4.1 |
The
Issuer agrees that Ambac shall be subrogated to the rights of the
Bondholders to the extent of any payment made by Ambac under the Financial
Guarantee.
|
| 4.2 |
The
Issuer agrees that it shall not, by reason of any payment by Ambac under
the Financial
Guarantee be discharged from its obligations under this
Agreement.
|
| 4.3 |
The
Issuer must take such actions as, in the sole judgment of Ambac, are
necessary to evidence such subrogation and to ensure that Ambac receives
any moneys paid or payable in respect of the Bonds under the Finance
Documents.
|
-9-
| 5.
|
REIMBURSEMENT
OBLIGATION
|
| 5.1.1 |
The
Issuer must reimburse Ambac for any payment made by Ambac under the
Financial Guarantee on the day on which Ambac makes a payment under the
Financial Guarantee.
|
| 5.1.2 |
If
the Issuer is required to reimburse Ambac pursuant to Clause 5.1.1, the
Issuer must reimburse Ambac:
|
| (a) |
in
accordance with Clause 13.2
(Payments
under this Agreement);
|
| (b) |
in
an amount equal to the aggregate of:
|
| (i) |
the
amount paid by Ambac pursuant to the Financial Guarantee on that
date;
|
| (ii) |
all
amounts previously paid by Ambac in connection with the Bonds which remain
outstanding from the Issuer to Ambac; and
|
| (iii) |
interest
on any and all amounts which remain outstanding from the Issuer to Ambac
(to the extent permitted by law, if in respect of any unreimbursed amounts
representing interest) from the date the amounts became due until the date
on which the amounts are paid in full, at a rate of interest equal to the
Default Rate.
|
The
Issuer must pay to Ambac the amount of all reasonable out-of-pocket costs and
expenses properly incurred by it (including, but not limited to, legal fees and
expenses, accountants' fees and expenses, and all amounts which Ambac may
reasonably require from time to time to compensate it for its internal
management and administrative costs and expenses) and applicable VAT thereon in
connection with:
| 5.2.1 |
any
accounts established to facilitate payments under the Financial
Guarantee;
|
| 5.2.2 |
the
enforcement or exercise of, or preservation of any rights under, any
Finance Document; and
|
| 5.2.3 |
any
amendment, waiver, consent or other action with respect to, under or
pursuant to the Finance Documents, whether or not such amendment, waiver,
consent or other action is executed or completed.
|
| 6.1 |
Right
of Indemnification
|
Subject
as provided in Clause 6.5, the
Issuer undertakes to indemnify on demand each of the Indemnified Parties against
any loss, liability, costs, claims, damages, expenses or demands (or actions in
respect thereof) which any of them may reasonably incur or which may be made
against any of them and all amounts which Ambac may require from time to time to
compensate it for its internal management and administrative costs and expenses
as a consequence of:
-10-
| 6.1.1
|
any
representation or warranty of the Issuer under Clause 2.1 (Representations
and Warranties)
not being true or correct when given;
|
| 6.1.2
|
a
breach by the Issuer of the covenants set out in Clause 2.2 (Covenants);
|
| 6.1.3
|
the
occurrence of any Potential Issuer Event of Default or Issuer Event of
Default;
|
| 6.1.4
|
any
actual or alleged omission or action (other than of or by Ambac) in
connection with the offering, issue, sale, remarketing or delivery of the
Bonds;
|
| 6.1.5
|
any
actual or alleged untrue statement in the Offering Circular or any
omission to state a material fact required to be stated in the Offering
Circular which is the responsibility of the Issuer;
|
| 6.1.6
|
any
such Indemnified Party being obliged to indemnify, for whatever reason,
the Trustee or any agent, delegate or contractor of the Trustee pursuant
to and in accordance with the terms of the Finance Documents;
or
|
| 6.1.7
|
investigating
any event or circumstance which Ambac in good faith believes might be or
become one of those matters referred to in paragraphs 6.1.1 to
6.1.6 or
in disputing or defending any claim in relation thereto.
|
| 6.2
|
Conduct
of Proceedings
|
| 6.2.1
|
If
any action or proceeding is brought against any of the Indemnified Parties
in respect of which indemnity may be sought under Clause 6.1
(Right
of Indemnification)
of this Agreement from the Issuer, the Indemnified Party must promptly
notify the Issuer of the claim in writing.
|
| 6.2.2
|
Subject
to Clause 6.2.4 below and no Potential Issuer Event of Default, or Issuer
Event of Default having occurred, the Issuer will have the option to
assume the defence of any action or proceeding brought against an
Indemnified Party, with legal advisers satisfactory to the Indemnified
Party (acting reasonably) so long as such Indemnified Party is satisfied
(acting reasonably) that any such action by the Issuer shall not be
prejudicial to such Indemnified Party.
|
| 6.2.3
|
The
Issuer shall not, without the prior written consent of the Indemnified
Party, settle or compromise, or consent to the entry of judgment with
respect to, any action or proceeding to which this Clause 6.2 relates
unless such settlement, compromise or consent includes an unconditional
release of each Indemnified Party from all liability arising out of the
matters which are the subject to such action or proceeding.
|
| 6.2.4
|
If
the named parties to any action or proceeding include both the Indemnified
Party and the Issuer (or either of them) and the Indemnified Party has
been advised by counsel that there may be one or more legal defences
available to it which are different from or additional to those available
to the Issuer, the Issuer shall not have the right to assume the defence
of that action or proceeding on behalf of such Indemnified Party and the
Indemnified Party shall have the right to employ separate counsel at the
cost of the Issuer and to participate in the defence of any action or
proceeding brought against it.
|
| 6.2.5
|
The
Issuer undertakes to indemnify the Indemnified Parties against any loss or
liability which any of them incur as a consequence of the settlement of
any action or proceeding effected:
|
| (a) |
with
the prior written consent of the Issuer (which consent must not be
unreasonably withheld);
|
| (b) |
in
circumstances where the Issuer has been given notice of the action or
proceeding and has declined the option to defend such action or proceeding
under Clause 6.2.2 above; or
|
| (c) |
if
the circumstances set out in Clause 6.2.4 above exist and the Issuer has
been given notice of the proceedings and of the advice of counsel
regarding the availability of separate defences (as described at Clause
6.2.4 above).
|
-11-
| 6.3
|
Other
Indemnifications
|
Ambac
shall not be obliged to first pursue any recovery under any other indemnity or
reimbursement obligation before seeking recovery under the indemnification and
reimbursement obligation of the Issuer under this Agreement.
Any
amount that becomes payable by the Issuer under Clause 6.1
(Right
of Indemnification) shall be
immediately due and payable on demand.
| 6.5
|
Limitation
on Indemnification
|
The
Issuer shall not be under any obligation to indemnify any Indemnified Party for
any liability, damages, demands, claims, cost, loss, or expense (or action in
respect thereof) which arises as a result of the Indemnified Party's own fraud,
negligence or wilful default. No amount shall be payable by the Issuer in
respect of the indemnity in Clause 6.1 in
respect of any loss, liability, costs, claims, damages, expenses or demands (or
actions in respect thereof) in respect of which the Issuer has indemnified the
relevant Indemnified Party pursuant to any other Finance Document and has
satisfied its obligations in respect of such indemnity.
This
shall be a continuing indemnity and shall:
| 6.6.1
|
extend
to the ultimate balance of the sums and liabilities which are or may
become owing to an Indemnified Party under this Agreement;
and
|
| 6.6.2
|
continue
in force notwithstanding any intermediate payment in whole or in part of
the sums and liabilities which are or may become owing to Ambac under this
Agreement.
|
-12-
All
amounts expressed to be payable under a Finance Document by the Issuer to Ambac
shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply
made by the Issuer to Ambac in connection with a Finance Document, the Issuer
shall pay to Ambac (in addition to and at the same time as paying the
consideration), an amount equal to the amount of the VAT.
Where a
Finance Document requires the Issuer to reimburse and/or indemnify Ambac for any
losses, costs or expenses (including legal fees), the Issuer shall also, on
demand, pay and indemnify Ambac against any irrecoverable VAT incurred by Ambac
in respect of such losses, costs or expenses.
| 8.
|
TERM
OF THIS AGREEMENT
|
| 8.1
|
Subject
to Clause 8.2 below, this Agreement shall take effect on the Closing Date
and shall terminate on the date which is the later of:
|
| 8.1.1
|
the
date on which Ambac is no longer subject to a claim (including any claim
arising from a payment made by the Issuer being declared a preference)
under the Financial Guarantee ; and
|
| 8.1.2
|
the
date on which all amounts payable to Ambac by the Issuer under this
Agreement and all amounts (actually or contingently) payable under the
Bonds have been paid in full.
|
| 8.2
|
The
provisions of Clauses 1
(Definitions
and Interpretation),
4
(Subrogation),
5
(Reimbursement
Obligation),
6
(Indemnity),
7
(Value
Added Tax)
and this Clause 8
shall survive any termination of this Agreement.
|
The
Issuer shall, so far as permitted by applicable law and regulatory requirements,
execute within a reasonable time of a request by Ambac all such further
documents and do all such further acts and things as may, in the reasonable
opinion of Ambac, be necessary at any time to give effect to the provisions or
to facilitate the performance of this Agreement and any other Finance Document
to which the Issuer is a party.
-13-
Neither
the obligations of the Issuer under this Agreement nor the rights, powers and
remedies conferred on Ambac in respect of the Issuer by this Agreement or by law
shall be discharged, impaired or otherwise affected by:
| 10.1
|
the
winding-up, dissolution, administration or re-organisation of the
Issuer or any other person or any change in its status, control or
ownership;
|
| 10.2
|
any
of the obligations of the Issuer under any of the Finance Documents being
or becoming illegal, invalid, unenforceable or ineffective in any
respect;
|
| 10.3
|
any
time or other indulgence being granted to the Issuer in respect of its
respective obligations under any of the Finance Documents;
|
| 10.4
|
any
amendment to, or any variation, waiver, exchange or release of, any
obligation of the Issuer under any of the Finance Documents;
|
| 10.5
|
the
existence of any claim, set-off or any other right that the Issuer may
have against Ambac;
|
| 10.6
|
any
other circumstances, other than payment in full, that might otherwise
constitute a defence available to, or discharge of, the Issuer in respect
of the Finance Documents;
|
| 10.7
|
any
document presented in connection with the Financial Guarantee proving to
be forged or fraudulent (other than forgery or fraud caused by Ambac),
invalid or insufficient in any respect or any statement in any document
being untrue or inaccurate in any respect; and
|
| 10.8
|
any
payment by Ambac under the Financial Guarantee against presentation of a
certificate or other document that does not strictly comply with the terms
of the Financial Guarantee.
|
The
Issuer may not assign any of their rights or transfer any of their rights or
obligations under this Agreement without the prior written consent of
Ambac.
Neither
Ambac nor any of its officers, directors or employees shall be liable or
responsible for:
| 12.1 |
the
use of the Financial Guarantee by the Trustee;
|
| 12.2
|
any
acts or omissions of the Trustee in connection with the use of the
Financial Guarantee by the Trustee; or
|
| 12.3
|
the
validity of documents delivered to Ambac in connection with any claim
under the Financial
Guarantee, or of any signatures thereon, even if such documents or
signatures should in fact prove to be in any or all respects invalid,
insufficient or (unless relevant officers of Ambac shall have actual
knowledge thereof) fraudulent or forged.
|
-14-
Ambac may
rely on any documents delivered to it in connection with any claim under the
Financial Guarantee which appear on their face to be in order, without
responsibility for further investigation.
| 13.2
|
Payments
under this Agreement
|
The
Issuer must make all payments to be made under this Agreement:
| 13.2.1
|
without
set-off or counterclaim;
|
| 13.2.2
|
on
the date on which such payment becomes due and payable (and in respect of
any payment made by Ambac under the Financial Guarantee, the date on which
Ambac makes such payment);
|
| 13.2.3
|
in
the currency in which the relevant Bonds are denominated (in relation to
any payments relating to such Bonds) or in the currency in which the
amounts are incurred by Ambac (in relation to costs, fees, liabilities and
other indemnities);
|
| 13.2.4
|
in
immediately available funds to the account number specified in the
Guarantee Fee Letter (or to such other account as Ambac may direct by
written notice to the Issuer); and
|
| 13.2.5
|
without
any Tax Deduction, unless a Tax Deduction is required by law (in which
case, the amount of the payment due from the Issuer must be increased to
an amount which (after making the Tax Deduction) leaves an amount equal to
the payment which would have been due if no Tax Deduction had been
required).
|
| 13.3
|
Interest
on late payments
|
All
payments to be made by the Issuer under this Agreement shall bear interest at
the Default Rate from the date due to (and including) the date paid (both before
and after any judgment or other order of a court of competent
jurisdiction).
| 13.4
|
Determination
of amount due
|
Any
certification or determination by Ambac of a rate or amount made pursuant to the
terms of this Agreement will be, in the absence of manifest error, conclusive
evidence of the matters to which it relates.
If the
Issuer makes a Tax Deduction pursuant to and in accordance with Clause 13.2.5
and Ambac determines (in its absolute discretion) that:
| 13.5.1
|
a
Tax Credit is attributable to that tax payment; and
|
| 13.5.2
|
Ambac
has obtained, utilised and retained that Tax Credit,
|
Ambac
shall pay an amount to the Issuer which Ambac determines (acting reasonably and
in good faith) will leave it (after that payment) in the same after-tax position
as it would have been in had such Tax Deduction not been made by the
Issuer.
-15-
Nothing
in this Agreement shall interfere with the right of Ambac to arrange its tax
affairs in whatever manner it thinks fit and, in particular, Ambac shall be
under no obligation to claim credit, relief, remission, repayment or other
benefit from or against its tax liability in respect of the amount of such
deduction in priority to any other similar claims, reliefs, credits or
deductions available to it, nor shall Ambac be under any obligation to disclose
to the Issuer any information in relation to Ambac's tax affairs.
| 14.1
|
The
rights of Ambac under this Agreement:
|
| 14.1.1
|
may
be exercised as often as is necessary;
|
| 14.1.2
|
are
cumulative and not exclusive of its rights under the general law;
and
|
| 14.1.3
|
are
in addition to any rights and remedies provided for in the Finance
Documents; and
|
| 14.1.4
|
may
be waived only in writing.
|
| 14.2
|
Any
delay in exercising or non-exercise by Ambac of any right of Ambac under
this Agreement is not a waiver of that right.
|
| 14.3
|
Ambac
shall have the right to exercise in its complete discretion the waiver of
any default under this Agreement by written notice setting forth the
terms, conditions and extent of such waiver. Unless such notice expressly
provides to the contrary, any waiver so granted shall extend only to the
specific event or occurrence which gave rise to the Default so waived and
not to any other similar event or occurrence which occurs subsequent to
the date of such waiver.
|
| 15.
|
AMENDMENT,
PARTIAL INVALIDITY AND COUNTERPARTS
|
This
Agreement may be amended, modified or terminated only by written instrument or
written instruments signed by the parties hereto.
-16-
If, at
any time, any provision hereof is or becomes illegal, invalid or unenforceable
in any respect under the law of any jurisdiction, neither the legality, validity
or enforceability of the remaining provisions hereof nor the legality, validity
or enforceability of such provision under the law of any other jurisdiction
shall in any way be affected or impaired thereby. The parties further agree that
the holding by any court of competent jurisdiction that any remedy pursued by
any party hereto is unavailable or unenforceable shall not affect in any way the
ability of such party to pursue any other remedy available to it.
This
Agreement may be executed in any number of counterparts and all such
counterparts shall constitute one and the same instrument.
-17-
| 16.1
|
Communications
in Writing
|
Each
communication to be made hereunder shall be made in writing and, unless
otherwise stated, shall be made by facsimile or letter delivered by registered
post or courier as follows:-
Ambac
Assurance UK Limited
Xxxxxxxxx
Xxxxx
00
Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
Fax: x00 00
0000 0000
Tel:
x00 00
0000 0000
Attention:
Surveillance
Yorkshire
Electricity Distribution plc
Lloyd's
Court
00 Xxxx
Xxxxxx
Xxxxxxxxx
xxxx Xxxx
XX0
0XX
Fax: x00 000
000 0000
Attention: Finance
Director
Any
communication or document to be made or delivered by one person to another
pursuant to this Agreement shall (unless the intended recipient has by ten days'
written notice to the sender specified another address) be made or delivered to
that other person at the address identified in this Clause 16
(Notices) and
shall be deemed to have been made or delivered:
| 16.2.1
|
(in
the case of any communication made by letter) when delivered to that
address; or
|
| 16.2.2
|
(in
the case of any communication by fax) when transmission of such fax
communication has been received in legible form and receipt has been
confirmed, and communication verified, by telephone (save for any
communications to Ambac, where such communication shall be deemed to be
received on the day it is actually received and then only if expressly
marked for the attention of the officer identified with the signature of
Ambac below, or such other officer as Ambac shall from time to time
specify for this purpose) provided that in either case if such
communication or document would otherwise be deemed to have been received
or actually received on a day which is not a business day or, for the
avoidance of doubt, falls outside business hours, it shall be deemed to
have been received on the next subsequent business day.
|
-18-
Each
communication and document made or delivered by one party to another pursuant to
this Agreement shall be in the English language.
| 17.
|
CONTRACTS
(RIGHTS OF THIRD PARTIES) ACT 1999
|
A person
who is not a party to this Agreement has no right under the Contracts (Rights of
Third Parties) Xxx 0000 to enforce any term of this Agreement.
| 18.
|
ECONOMIC
AND MONETARY UNION
|
If,
during the duration of this Agreement, the United Kingdom becomes a
Participating Member State and, as a result, the Bank of England recognises the
euro as the lawful currency of the United Kingdom, then:
| 18.1.1
|
unless
prohibited by law, Ambac may designate the currency or currency unit in
which any obligations arising under this Agreement otherwise payable in
Sterling are to be denominated or payable;
|
| 18.1.2
|
unless
prohibited by law, any translation from one currency or currency unit to
another shall be made at the official rate of exchange recognised by the
Bank of England for conversion, rounded up or down by Ambac;
and
|
| 18.1.3
|
this
Agreement shall be subject to such reasonable changes of construction as
Ambac may specify from time to time to be appropriate to reflect (a) the
adoption of the euro in the United Kingdom and (b) any relevant market
practices relating to the euro.
|
| 19.1 |
Confidential
Information
|
Except as
permitted or required under this Agreement, all data and information (including
the terms of this Agreement) obtained or received from any party hereto under
this Agreement shall be treated as confidential for the term of this Agreement
and shall not be disclosed to any third party without the prior written consent
of the other parties.
| 19.2
|
Permitted
Disclosure
|
Any party
hereto may, without the prior approval of the other parties, disclose such data
and information where:
| 19.2.1
|
such
data and information has come into the public domain other than by any
breach of this Agreement;
|
| 19.2.2
|
such
disclosure is made to any third party with whom Ambac has dealings
(including, any affiliate of Ambac); or
|
| 19.2.3
|
such
data and information is made available to professional advisors of Ambac
the Issuer for the purpose of performing their duties;
|
| 19.2.4
|
such
disclosure is required by any applicable law or court order.
|
-19-
This
Agreement shall be governed by, and shall be construed in accordance with, the
laws of
England and Wales.
Each
party irrevocably agrees that any suit, legal action or proceedings (together in
this Clause 20 referred
to as "Proceedings") in
connection with this Agreement may be brought in the courts of
England.
| 20.3 |
Consent
to Enforcement
|
Each of
the parties hereto hereby consents generally in respect of any Proceedings to
the giving of any relief or the issue of any process in connection with such
Proceedings including the making, enforcement or execution against any property
whatsoever (irrespective of its use or intended use) of any order or judgment
which may be made or given in such Proceedings.
To the
extent that the Issuer may in any jurisdiction claim for itself or its assets
immunity from suit, execution, attachment (whether in aid of execution, before
judgment or otherwise) or other legal process and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such immunity
(whether or not claimed), the Issuer hereby irrevocably agrees not to claim and
hereby irrevocably waives such immunity to the full extent permitted by the laws
of such jurisdiction.
IN
WITNESS whereof
this Agreement has been executed as a deed by the parties hereto and is intended
to be and is hereby delivered on the date first above written.
-20-
EXECUTED as a
deed by
YORKSHIRE
ELECTRICITY DISTRIBUTION plc
acting by
/s/
Xxx Xxxxx
Xxx
Xxxxx
/s/
Xxxx Xxxxxxx
Xxxx
Xxxxxxx
EXECUTED as a
deed by
AMBAC
ASSURANCE UK LIMITED
/s/
Xxxxxx Xxxxxxx
Signature
of director
Xxxxxx
Xxxxxxx
Name of
director
-21-
