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Transform Sch NL Fd (73GD)

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Friday 24 March, 2017

Transform Sch NL Fd

Notice of Bondholder Meeting

RNS Number : 4746A
Transform Schools (N.Lanarks)FdgPLC
24 March 2017
 

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF BONDHOLDERS.  IF BONDHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT IMMEDIATELY THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IF THEY ARE IN THE UNITED KINGDOM, OR OTHER APPROPRIATELY AUTHORISED PROFESSIONAL ADVISERS.

 

NOTICE OF MEETING

£87,796,000, 2.343 per cent. Index-Linked Guaranteed Secured Bonds due 2036 (including £15,000,000 in principal amount of Variation Bonds)
(the Bonds)
(ISIN: XS0221413684)

issued by

TRANSFORM SCHOOLS (NORTH LANARKSHIRE) FUNDING PLC
(the Issuer)

Notice is hereby given that a meeting (the Meeting) of the holders of the Bonds (the Bondholders) is convened for the purpose of considering and, if thought fit, passing the extraordinary resolution (the Extraordinary Resolution) described in detail below, which will be proposed as an Extraordinary Resolution in accordance with the Bond Trust Deed dated 8 June 2005 (the Bond Trust Deed) between the Issuer, XL Capital Assurance (U.K.) Limited (now Syncora Guarantee Inc. following a transfer by operation of law pursuant to a court order dated 1 July 2015 under Part VII (Control of Business Transfers) of the Financial Services and Markets Act 2000 implemented on 2 July 2015 (Syncora US)) and Prudential Trustee Company Limited (as the Bond Trustee). 

The Meeting will be held at the offices of Freshfields Bruckhaus Deringer LLP, 65 Fleet Street, London EC4Y 1HS, at 10.30 a.m. (London time) on 25 April, 2017. 

Unless defined in this Notice, words and expressions in this Notice shall have the same meanings as given to them in the Bond Trust Deed, the Collateral Deed dated 8 June 2005 (the Collateral Deed) between, inter alios, the Issuer, Syncora US and the Bond Trustee and the Master Definitions Schedule dated 8 June 2005 (the Master Definitions Schedule) signed for the purposes of identification by, inter alios, the Issuer, Syncora US and the Bond Trustee.

In accordance with normal practice, the Bond Trustee (which has not been involved in the formulation of the business to be considered at the Meeting) makes no recommendation in connection with this Notice and expresses no opinion on the merits (or otherwise) of the Extraordinary Resolution, but has authorised it to be stated that it has no objection to the Extraordinary Resolution being submitted to the Bondholders for their consideration.

The Issuer accepts responsibility for the information contained in this Notice and confirms that, to the best of its knowledge (having taken all reasonable care to ensure that such is the case), the information contained in this Notice is in accordance with the facts and does not omit anything likely to affect the import of such information.



BACKGROUND TO, AND REASONS FOR, THE MEETING

Background

 

The Issuer is proposing that Assured Guaranty (Europe) Ltd. (AGE) and Assured Guaranty Municipal Corp. (AGM and, together with AGE, Assured Guaranty) provide financial guarantees in respect of the Issuer's obligations under the Bonds, in substitution for Syncora US's current rights and obligations, and that Syncora US be released from its rights and obligations under the XLCA Financial Guarantees and the other Finance Documents. 

 

Neither S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC (S&P), nor Moody's Investors Service, Inc. (Moody's) currently rates Syncora US.  The underlying ratings of the Bonds are currently rated BBB by S&P.  At the date of this Notice, the financial strength of (i) AGE is rated AA (stable outlook) by S&P and A2 (stable outlook) by Moody's and (ii) AGM is rated AA (stable outlook) by S&P, A2 (stable outlook) by Moody's and AA+ (stable outlook) by Kroll Bond Rating Agency, Inc. (KBRA).  Thus, it is anticipated that the rating assigned to the Bonds would be AA from S&P if the Proposed Amendments (as defined below) are implemented.  Accordingly, the Issuer and ProjectCo are of the view that the credit quality of the Bonds would be enhanced by the substitution of Assured Guaranty for Syncora US and that Syncora US should be released from its rights and obligations in respect of the Bonds and be replaced by Assured Guaranty.

Assured Guaranty's Bond Guarantees

 

If the Extraordinary Resolution were approved and the Proposed Amendments were implemented, Bondholders would receive a financial guarantee from AGM (the AGM Bond Guarantee) and a financial guarantee from AGE (the AGE Bond Guarantee, and together with the AGM Financial Guarantee, the AG Bond Guarantees).

 

The AGE Bond Guarantee would cover 7% of the Bonds, with the remaining 93% being covered by the AGM Bond Guarantee.  Bondholders would also benefit from a second to pay guarantee, providing that in the event of AGE failing to pay any amount due pursuant to the AGE Bond Guarantee, such amount would be paid by AGM under the AGM Bond Guarantee (the Second Loss Guarantee).

 

Syncora US

 

Syncora US has confirmed to the Issuer that it is willing to be replaced in its role on the transaction and does not object to the Proposed Amendments. 

 

European Investment Bank

 

The European Investment Bank (EIB) has not yet approved the Proposed Amendments. The Proposed Amendments remain subject to EIB's consent.

 

Conclusion

 

The release of Syncora US, the accession of Assured Guaranty as the replacement Credit Provider, the anticipated increase in S&P's ratings of the Bonds, and the implementation of the Proposed Amendments summarised below are expected to provide valuable credit enhancement to the Bonds for Bondholders. 

 



RATINGS OF AGE AND AGM

 

At the date of this Notice, the financial strength of each of (i) AGE is rated AA (stable outlook) by S&P and A2 (stable outlook) by Moody's and (ii) AGM is rated AA (stable outlook) by S&P, A2 (stable outlook) by Moody's and AA+ (stable outlook) by KBRA.  Each rating of AGE and AGM should be evaluated independently.  An explanation of the significance of the above ratings may be obtained from the applicable rating agency.  The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of AGE or AGM in their sole discretion or by Assured Guaranty Ltd., their ultimate parent (together with its subsidiaries, AGL).  In addition, the rating agencies may at any time change AGE's or AGM's long-term ratings outlook or place AGE's or AGM's ratings on a watch list for possible downgrade in the near term.  Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by AGE or AGM. 

AGE and AGM only guarantee scheduled principal and scheduled interest payments payable by the issuer of bonds guaranteed by AGE and AGM on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant financial guarantee), and do not guarantee the market price or liquidity of the securities that they guarantee, nor do they guarantee that the ratings on such securities will not be revised or withdrawn.

Current Financial Strength Ratings

On 27 July, 2016, S&P issued a credit rating report in which it affirmed AGM's and AGE's financial strength rating of AA (stable outlook).  Neither AGM nor AGE can give any assurance as to any further ratings action that S&P may take.

On 8 August, 2016, Moody's published a credit opinion affirming its existing insurance financial strength rating of A2 (stable outlook) on AGM and AGE.  Neither AGM nor AGE can give any assurance as to any further ratings action that Moody's may take.

On 14 December, 2016, KBRA issued a financial guaranty surveillance report in which it affirmed AGM's insurance financial strength rating of AA+ (stable outlook). AGM can give no assurance as to any further ratings action that KBRA may take. 

For more information regarding AGM's and AGE's financial strength ratings and the risks relating thereto, see the Annual Report of Assured Guaranty Ltd. on Form 10‑K for the fiscal year ended 31 December, 2016, which was filed with the Securities and Exchange Commission (the SEC) on 24 February, 2017.



SUMMARY OF PROPOSED AMENDMENTS AND FORM OF EXTRAORDINARY RESOLUTION

Proposed Amendments

The proposed amendments to the Bonds (the Proposed Amendments) are as follows:

1.         to release Syncora US as Credit Provider and replace it with Assured Guaranty, as a result of which:

(a)          AGE through the AGE Bond Guarantee will cover 7% of the Bonds and AGM through the AGM Bond Guarantee will cover the remaining 93% of the Bonds;

(b)          AGM through the AGM Bond Guarantee will provide a Second Loss Guarantee whereby AGM will pay any amounts due from but not paid by AGE;

2.         to confer Syncora US's rights and obligations as Credit Provider on Assured Guaranty;

3.         to transfer Syncora US's rights and obligations under the XLCA Guarantee and Reimbursement Agreement to Assured Guaranty pursuant to which, inter alia, the Issuer and Transform Schools (North Lanarkshire) Holdings Limited (HoldCo) will undertake to reimburse Assured Guaranty for any amounts paid under the AG Bond Guarantees (the AG Guarantee and Reimbursement Agreement); and

4.         to transfer Syncora US's rights and obligations under the XLCA Fee Letter to Assured Guaranty, with AGE and AGM assuming 7% and 93% respectively of the rights and obligations contained therein (the AG Fee Letter),

all as more particularly set out in the Amendment Documents (as defined below). 

In summary, therefore, the Issuer is seeking the consent of Bondholders by way of Extraordinary Resolution for the Proposed Amendments to be made to certain Senior Finance Documents as set out in more detail below:

The Proposed Amendments shall be effected by way of:

(a)        a supplemental bond trust deed modifying the provisions of the Bond Trust Deed and incorporating amended and restated Conditions of the Bonds;

(b)        a Deed of Release, Transfer and Amendment by which the XLCA Financial Guarantees, the XLCA Guarantee and Reimbursement Agreement and the XLCA Fee Letter will be transferred to Assured Guaranty and Syncora US will be released from all of its rights and obligations under the Senior Finance Documents and such rights and obligations will be assumed by Assured Guaranty;

(c)        the assumption by Assured Guaranty of the rights and obligations of Syncora US under the following documents with such documents being amended to incorporate the Proposed Amendments (as more particularly set out in the Extraordinary Resolution below):

(i)            the Master Definitions Schedule;

(ii)            the XLCA Guarantee and Reimbursement Agreement;

(iii)           the XLCA Financial Guarantees;

(iv)           the Collateral Deed;

(v)           the Accounts Mandate Agreement;

(vi)           the Security Trust and Intercreditor Deed;

(vii)          the Shareholders' Undertaking; and

(viii)         the XLCA Fee Letter,

together the Amendment Documents, which amendments are proposed to be executed following the passing of the Extraordinary Resolution set out below (and subject to the consent of EIB). 

EXTRAORDINARY RESOLUTION
of the holders of the Bonds

"THAT this Meeting (the Meeting) of the holders of those of the £87,796,000 2.343 per cent. Guaranteed Secured Index‑Linked Bonds due 2036 of Transform Schools (North Lanarkshire) Funding PLC (the Bonds and the Issuer respectively) presently outstanding constituted by the Bond Trust Deed dated 8 June 2005 (the Bond Trust Deed) made between the Issuer, XL Capital Assurance (U.K.) Limited (now Syncora Guarantee Inc. following a transfer by operation of law pursuant to a court order dated 1 July 2015 under Part VII (Control of Business Transfers) of the Financial Services and Markets Act 2000 implemented on 2 July 2015 (Syncora US)) and Prudential Trustee Company Limited (as the Bond Trustee) as trustee for the holders of the Bonds (the Bondholders) hereby:

(a)        approves and assents to the following amendments set out in this paragraph (a) (being referred to as the Proposed Amendments):

(i)            the release of Syncora US from its rights and obligations in, to and under the XLCA Guarantee and Reimbursement Agreement, the XLCA Bond Guarantee, the XLCA EIB Guarantee, the XLCA-NY EIB Guarantee, the Master Definitions Schedule, the Collateral Deed, the Accounts Mandate Agreement, the Security Trust and Intercreditor Deed, the Shareholders' Undertaking and the XLCA Fee Letter (the Amendment Documents) and the transfer to Assured Guaranty (Europe) Ltd. (AGE) and Assured Guaranty Municipal Corp. (AGM, together with AGE, Assured Guaranty) of all of Syncora US's rights and obligations thereunder pursuant to a deed of release, transfer and amendment to be entered into between inter alios, the Issuer, Syncora US, AGE and AGM and the Bond Trustee following the Meeting, if the Extraordinary Resolution is passed (the Deed of Release, Transfer and Amendment), as a result of which, the Bonds would have the benefit of a financial guarantee from AGM (the AGM Bond Guarantee) and a financial guarantee from AGE (the AGE Bond Guarantee and together with the AGM Financial Guarantee, the AG Bond Guarantees) with the AGE Bond Guarantee covering 7% of the Bonds, with the remaining 93% being covered by the AGM Bond Guarantee.  Bondholders would also benefit from a second to pay guarantee, providing that in the event of AGE failing to pay any amount due pursuant to the AGE Bond Guarantee, such amount would be paid by AGM under the AGM Bond Guarantee (the Second Loss Guarantee);

(ii)            consequential amendments to the Amendment Documents pursuant to the Deed of Release, Transfer and Amendment to reflect the assumption by AGE and AGM of Syncora US's rights and obligations under the Amendment Documents;

(iii)           the accession of AGE and AGM to the Bond Trust Deed pursuant to a Supplemental Bond Trust Deed to be entered into between AGE, AGM, Syncora US, the Issuer and the Bond Trustee following the Meeting if the Extraordinary Resolution is passed (the Supplemental Bond Trust Deed) pursuant to which AGE and AGM are to become bound by the provisions of the Bond Trust Deed (as modified by the Supplemental Bond Trust Deed as defined below) relating to Syncora US's rights and obligations;

(iv)           the modification of the Bond Trust Deed (including the Conditions of the Bonds set out in Schedule 4 of the Bond Trust Deed) by way the Supplemental Bond Trust Deed;

(v)           all of the modifications to Schedule 4 of the Bond Trust Deed (which sets out the Conditions of the Bonds) pursuant to the Supplemental Trust Deed (to be appended to the Supplemental Bond Trust Deed), such amendments including, inter alia:

(A)         the first paragraph of the Conditions of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"The issue of the £87,796,000 2.343% Guaranteed Secured Index-Linked Bonds due 2036 (including up to £15,000,000 in principal amount of Variation Bonds (as defined in Condition 1(d)) (the "Bonds", which expression includes any further bonds issued pursuant to Condition 21 (Further Issues) and forming a single series therewith) was authorised by a resolution of the Board of Directors of Transform Schools (North Lanarkshire) Funding plc (the "Issuer") passed on 1 June 2005. The Bonds are subject to, and have the benefit of, a bond trust deed dated on or around 8 June 2005 (the "Issue Date") (as amended or supplemented from time to time, the "Bond Trust Deed") between the Issuer, XL Capital Assurance (U.K.) Limited ("XLCA"Assured Guaranty (Europe) Ltd. ("AGE"), Assured Guaranty Municipal Corp. ("AGM", and together with AGE, "Assured Guaranty") and Prudential Trustee Company Limited as Bond Trustee (the "Bond Trustee", which expression includes all persons for the time being bond trustee or bond trustees appointed under the Bond Trust Deed). These terms and conditions include summaries of and are subject to the detailed provisions of the Bond Trust Deed, which includes the form of the Bonds, the Receipts and the Coupons (as defined below) relating to them and the Security Trust and Intercreditor Deed (as hereinafter defined) to be dated 8 June 2005 (the "Issue Date").";

(B)         the second paragraph of the Conditions of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"The Bonds are unconditionally and irrevocably guaranteed as to scheduled payments of principal and interest (but excluding Default Interest (as defined in Condition 5(a)) and any excess above the outstanding principal amount payable in accordance with these Conditions in certain cases of early redemption and acceleration) in respect of the Bonds, pursuant to a financial guarantee provided by AGE (originally dated 8 June 2005 and amended and restated on [•] 2017) (the "XLCA"AGE Bond Guarantee") issued by XLCA") and a financial guarantee provided by AGM (originally dated 8 June 2005 and amended and restated on [•] 2017) (the "AGM Bond Guarantee" and, together with the AGE Bond Guarantee, the "AG Bond Guarantees").";

(C)              the third paragraph of the Conditions of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"Payments in respect of the Bonds will be made pursuant to a paying agency agreement the Issue Date dated 8 June 2005 (the "Issue Date") (as amended or supplemented from time to time, the "Paying Agency Agreement") between the Issuer, the Bond Trustee, The Bank of New York Mellon, London Branch as principal paying agent (the "Principal Paying Agent", which expression includes any successor principal paying agent appointed under the Paying Agency Agreement and together with any additional or successor paying agent appointed in accordance with the Paying Agency Agreement, the "Paying Agents").";

(D)              the fourth paragraph of the Conditions of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"The holders of the Bonds (the "Bondholders"), the holders of the related principal receipts (the "Receiptholders" and the "Receipts", respectively) and the holders of the related interest coupons (the "Couponholders" and the "Coupons", respectively) will be entitled to the benefit of, will be bound by and are deemed to have notice of, all the provisions of the Bond Trust Deed, the XLCAAG Bond GuaranteeGuarantees, the Collateral Deed (as defined in Condition 2(e)), the Security Documents (as defined in Condition 2(d)) and the Paying Agency Agreement applicable to them and the master definitions schedule dated on or before the Issue Date and for the purpose of identification signed by or on behalf of the parties to the transaction and the other Finance Documents to which the Bond Trustee or Security Trustee are party (the "Master Definitions Schedule"). Capitalised terms used but not defined herein shall have the meanings given to them in the Master Definitions Schedule.";

(E)              the fifth paragraph of the Conditions of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"Copies of the Bond Trust Deed, the XLCAAG Bond GuaranteeGuarantees, the Collateral Deed, the Security Documents, the Paying Agency Agreement and the Master Definitions Schedule are available for inspection by Bondholders, Receiptholders and Couponholders during normal business hours at the principal office for the time being of the Bond Trustee being at the date hereof Laurence Pountney Hill, London EC4R 0HH and at the specified offices of each of the Paying Agents for the time being.";

(F)              Condition 2(b) (XLCA Bond Guarantee) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(b)    XLCAAG Bond GuaranteeGuarantees

The Bonds (except any Bonds to the extent that they are then held by or on behalf of a member of the Issuer Group (as defined below)) have the benefit of the XLCAAG Bond Guarantee, to be dated on or about the Issue DateGuarantees. Pursuant to the XLCAAG Bond Guarantee, XLCAGuarantees, under which (i) AGE has unconditionally and irrevocably guaranteedagreed to pay to the Bond Trustee 7% of all sums due (other than Default Interest (as defined in Condition 5(a)) or any additional amounts relating to an early redemption or acceleration) and payable but unpaid by the Issuer in respect of scheduled principal and interest (in each case adjusted for indexation in accordance with these Conditions) on the Bonds (excluding those held by any Obligor or any of their Subsidiaries) and (ii) AGM has unconditionally and irrevocably agreed to pay to the Bond Trustee the remaining 93% of the aforementioned sums, together with a guarantee from AGM to pay any sums due and payable but unpaid by AGE, all as more particularly described in the XLCAAG Bond GuaranteeGuarantees.

The terms of the XLCAAG Bond GuaranteeGuarantees provide that amounts which become due under the Bonds on an accelerated basis (whether by virtue of any default by the Issuer, any mandatory or optional redemption or any other cause) will not be guaranteed by XLCAAssured Guaranty other than on the relevant Scheduled Payment Date (as defined in Condition 4) unless XLCAAssured Guaranty in its sole discretion elects so to do. If no such election is made, XLCAAssured Guaranty will continue to be liable to make payments in respect of the Bonds pursuant to the XLCAAG Bond GuaranteeGuarantees in such amounts and at such times as payments would have been due had there not been any such acceleration.";

(G)              Condition 2(c) (Status of XLCA Bond Guarantee) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(c)    Status of XLCAAG Bond GuaranteeGuarantees

The XLCAAG Bond GuaranteeGuarantees constitute a direct, unsecured obligation of XLCAobligations of Assured Guaranty which will rank at least pari passu with all other unsecured obligations of XLCAAssured Guaranty, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application.";

(H)              Condition 2(d)(i) (Security) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(i)       a security trust and intercreditor deed dated on or before the Issue Date (as amended and restated on [•] 2017 and as amended, supplemented or replaced from time to time,) (the "Security Trust and Intercreditor Deed") between, inter alios, Balfour Beatty Infrastructure InvestmentsEquitix Education 2 Limited and Innisfree Nominees Limited as nominee for Innisfree PFI Secondary Fund LP and Innisfree PFI Secondary Fund III2 LP (together, the ("Shareholders"), the Issuer Transform Schools (North Lanarkshire) Limited ("ProjectCo") and Transform Schools (North Lanarkshire) Holdings Limited ("HoldCo" and, together with the Issuer and ProjectCo, the "Obligors"), Prudential Trustee Company Limited as security trustee (the "Security Trustee", which expression includes all persons for the time being security trustee or security trustees appointed under the Security Trust and Intercreditor Deed), the Bond Trustee (for itself and on behalf of the Bondholders), European Investment Bank ("EIB") and XL Capital Assurance Inc. ("XLCA-NY")Assured Guaranty.;

(I)               Condition 2(e) (Collateral Deed and Shareholders' Undertaking) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(e)    (Collateral Deed and Shareholders' Undertaking)

The Bond Trustee on behalf of the Bondholders has the benefit of certain representations and covenants set out in a collateral deed (the "Collateral Deed"), dated on or about the Issue Date8 June 2005, as amended on [•] 2017 between, inter alios, the Obligors, XLCAAssured Guaranty, the Security Trustee, the Bond Trustee and EIB.

The Security Trustee, as trustee for, amongst others, the Bondholders has the benefit of certain warranties and undertakings set out in the shareholders' undertaking amongst the Security Trustee, the Shareholders and XLCAAssured Guaranty (the "Shareholders' Undertaking").";

(J)               The definitions of "Bond Creditor", "Credit Provider", "Senior Creditors", "XLCA Event of Default" and "XLCA Non-Payment Event of Default" in Condition 2(g) (Definitions) of the Bonds being deleted and replaced with the following definitions (the modifications are shown in blackline below):

""Bond Creditor" means, at any time, XLCAAssured Guaranty, unless and until such time as the Security Trustee has received notice from:

(A) the Bond Trustee that an XLCAAG Event of Default has occurred; and/or

(B) EIB that an EIB XLCAAG Event of Default has occurred,

in which case the Bond Trustee shall be the Bond Creditor (unless such XLCAAG Event of Default has been remedied to the satisfaction of or waived by the Bond Trustee and/or such XLCA EIB AG Event of Default has been cured to the satisfaction of or waived by EIB)."

""Credit Provider" means, at any time, XLCAAssured Guaranty, unless and until such time as the Security Trustee has received a notice (a copy of which shall be served on XLCAAssured Guaranty) from:

(A) the Bond Trustee that an XLCAAG Event of Default has occurred; and/or

(B) EIB that an EIB XLCAAG Event of Default has occurred,

in which case, unless such XLCAAG Event of Default has been remedied to the reasonable satisfaction of the Bond Trustee or waived by the Bond Trustee and/or such EIB XLCAAG Event of Default has been cured to the satisfaction of EIB or waived by EIB, it means the Bond Trustee."

""XLCAAG Event of Default" means any of the following events:

(A)     XLCAAGM Non-Payment Event of Default;

(B)        XLCAAGM disclaims, disaffirms, repudiates and/or challenges the validity of any of its obligations under the XLCAAGM Bond Guarantee or seeks to do so (in writing);

(C)       (i) a court of competent jurisdiction, the New York Department of Insurance or other competent regulatory authority enters a final and non-appealable order, judgment or decree for the winding-up, or (ii) the appointment of an administrator(i) appointing a custodian, trustee, agent, or receiver (including an administrative receiver or manager), of XLCA (or, as the case may be, of afor AGM or for all or any material partportion of its property or assets);(ii) authorising the taking or possession by a custodian, trustee, agent or receiver of AGM or of all or any material portion of its property; or;

(D)         AGM (i) files a petition or commences a case or proceeding under any provision or chapter of the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, liquidation or reorganisation, or (ii) makes a general assignment for the benefit of its creditors, or (iii) has a final and non‑appealable order for relief entered against it under the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, liquidation or reorganisation."

(D)     XLCA:

(i)         presents any petition or takes any formal steps or proceedings for the winding-up, or the appointment of an administrator or receiver (including an administrative receiver or manager), of XLCA (or, as the case may be, of a material part of its property or assets);

(ii)        makes or enters into any general assignment, composition, arrangement (including, a voluntary arrangement under Part I of the Insolvency Act 1986) or compromise with or for the benefit of any of its creditors;

(iii)       becomes unable to pay its debts within the meaning of section 123(2) or section 123(1)(e) of such Insolvency Act or admits in writing its inability, or fails generally, to pay its debts as they become due; or

(E)       at any time it is or becomes unlawful for XLCA to perform or comply with any part or all of its obligations under the XLCA EIB Guarantee or the XLCA Bond Guarantee or any of its obligations thereunder are not or cease to be legal, valid or binding.

""XLCAAGM Non-Payment Event of Default" means any guaranteed amount which is due for payment andby AGM in accordance with the terms of the AGM Bond Guarantee is not paid by XLCAAGM on the date stipulated in the XLCAAGM Bond Guarantee.";

"Senior Creditors" means each of XLCAAssured Guaranty, EIB, the Bond Trustee, the Bondholders, the Hedging Provider and the Security Trustee and "Senior Creditor" means each of them.";"

"XLCA EIB AG Event of Default" has the meaning given to that term in the Security Trust andintercreditor Intercreditor Deed."

(K)             Condition 6(b) (Issuer Optional Redemption) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(b)    Issuer Optional Redemption

The Issuer may at any time, subject to the approval of XLCAAssured Guaranty if it is the Bond Creditor, having given not less than 30 nor more than 60 days' notice of redemption to the Bondholders in accordance with Condition 17 (which notice shall be irrevocable and shall oblige the Issuer to redeem the Bonds), redeem all (but not some only) of the Bonds in whole, but not in part, at an amount (the "Early Redemption Price") equal to the higher of the following:

(i)         the Outstanding Principal Amount of that Bond multiplied by the Limited Index Ratio (as defined in Condition 7(a)) applicable to the month in which the redemption takes place (the "Indexed Outstanding Balance"); and

(ii)        the Outstanding Principal Amount of that Bond on the date of redemption multiplied by the price (as reported to the Bond Trustee and the Issuer by the Indexation Adviser (as defined in Condition 7(a))) expressed as a percentage and rounded up to four decimal places at which the Gross Real Redemption Yield (as defined below) of such Bond on the Reference Date would be equal to the Gross Real Redemption Yield at 3.00 p.m. on such day of the Reference Gilt;

together with:

(iii)       any payment of principal and interest due but unpaid on or prior to the Reference Date (as defined above); and

(iv)       any interest (other than under (a) above) accrued up to, but excluding the date of redemption, all adjusted for indexation in accordance with Condition 7,

provided, however, that no such notice of redemption shall be given pursuant to this paragraph unless the Issuer has delivered to the Bond Trustee and XLCAAssured Guaranty, if it is then the Credit Provider, a certificate signed by two directors of the Issuer stating that the Issuer will have sufficient funds, not subject to the interest of any other person, to pay the Early Redemption Price and meet all other payment obligations outstanding on the proposed date of redemption of the Bonds.

Such method requires the adoption of an assumed inflation rate which shall be the rate equal to the inflation assumption specified by the DMO Notice or, such rate as the Indexation Adviser after taking the advice of those persons operating as index-linked gilt market makers may determine appropriate. For the avoidance of doubt, the assumed inflation rate shall be a long term inflation rate for the life of the Bonds.

For the purposes of these Conditions:

"Gross Real Redemption Yield" means a yield calculated on the basis set out by the United Kingdom Debt Management Office in the paper "Formulae for calculating Gilt Prices from Yields" page 5, Section One: Price/Yield Formulae "Index-linked Gilts"(published 8/6/1998 with effect from 1/11/98 and updated on 15/1/02) (as supplemented, amended or replaced from time to time) (the "DMO Notice"). In this paragraph "business day" means any day on which commercial banks and foreign exchange markets are open for business in London; and

"Reference Date" means the date which is two business days prior to the dispatch of the notice of redemption under this Condition 6(b).";

(L)              Condition 6(e) (Unscheduled Redemption for Index Reasons) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(c)     Unscheduled Redemption for Index Reasons

If either:

(i)         the Index Figure (as defined in Condition 7) for three consecutive months fails to be determined on the basis of an Index Figure previously published as provided in Condition 8(b)(ii) and the Bond Trustee has been notified by the Principal Paying Agent that publication of the Index (as defined in Condition 7) has ceased; or

(ii)        notice is published by Her Majesty's Treasury, or on its behalf, following a change in relation to the Index, offering a right of redemption to holders of the Reference Gilt,

and (in either case) no amendment or substitution of the Index shall have been agreed or determined pursuant to Condition 8(c) and such circumstances are continuing, having given not more than 60 nor less than 30 days' notice to Bondholders in accordance with Condition 17, the Issuer may, subject to the consent of XLCAAssured Guaranty so long as XCLAAssured Guaranty is the Bond Creditor, redeem all, but not some only, of the Bonds at their Outstanding Principal Amount so long as XLCAAssured Guaranty is the Bond Creditor together with interest accrued up to and including the date of redemption, the Limited Index Ratio for this purpose being that applicable to the month in which redemption takes place.".

The Conditions numbered 6(f) (No other Redemption) and (6(h) (Cancellation) shall be renumbered 6(d) and 6(f) respectively;

(M)             Condition 6(g) (Purchase) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(e)     Purchase

The Issuer may at any time purchase Bonds in the open market or otherwise and at any price in individually negotiated transactions, provided that all unmatured Receipts, Coupons and unexchanged Talons appertaining thereto are purchased therewith. Any purchase by tender by the Issuer shall be made available to all Bondholders alike (other than any purchase by the Issuer within five Business Days of the Issue Date). Any Bonds so purchased will not be treated as outstanding for the purpose of, inter alia, determining quorum or voting of meetings of Bondholders, save as provided otherwise in the Bond Trust Deed and will not have the benefit of the XLCAAG Bond GuaranteeGuarantees. In this Condition, "business day" means a day on which commercial banks and foreign exchange markets are open for business in London.";

(N)             the definition of "Indexation Adviser" in Condition 7(a) (Definitions) of the Bonds being deleted and replaced with the following definition (the modifications are shown in blackline below):

"Indexation Adviser" means a leading broker, primary dealer or other expert operating in the index-linked gilt market selected by the Issuer and XLCAAssured Guaranty (so long as XLCAAssured Guaranty is the Bond Creditor) and approved by the Bond Trustee (such approval not to be unreasonably withheld or delayed).";

(O)             Condition 8(b) (Delay in Publication of Index) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(b)    Delay in Publication of Index

If the Index Figure which is normally published in the Monthly Digest of Statistics in the seventh month and which relates to the eighth month (the "relevant month") before the month in which a payment is due to be made is not published on or before the fourteenth business day before the date (the "date for payment") on which such payment is due, the Index Figure applicable to the month for which the date of payment falls shall be:

(i)       such substitute index figure (if any) as the Bond Trustee, with the agreement of XLCAAssured Guaranty (so long as XLCAAssured Guaranty is the Bond Creditor), determines to have been published by the Bank of England or such other body designated by the UK Government for such purpose for the purposes of indexation of payments on the Reference Gilt or, failing such publication, on any one or more issues of index-linked Treasury stock selected by the Indexation Adviser (and approved by XLCAAssured Guaranty (so long as XLCAAssured Guaranty is the Bond Creditor)); or

(ii)      if no such determination or selection is made by the Bond Trustee or (as the case may be) the Indexation Adviser within seven days, the Index Figure last published (or, if later, the substitute Index Figure last determined pursuant to Condition 8(a)(i)) before the date for payment.

Where the provisions of this Condition 8(b) apply, the determination of the Bond Trustee or (as the case may be) Indexation Adviser as to the Index Figure applicable to the month in which the date for payment falls shall be conclusive and binding. If, an Index Figure having been applied pursuant to Condition 8(b)(ii), the Index Figure relating to the relevant month is subsequently published while a Bond is still outstanding, then:

(A)     in relation to a payment of principal or interest in respect of such Bond other than upon final redemption of such Bond, the principal or interest (as the case may be) next payable after the date of such subsequent publication shall be increased or reduced by an amount equal to (respectively) the shortfall or excess of the amount of the relevant payment made on the basis of the Index Figure applicable by virtue of Condition 8(b)(ii), below or above the amount of the relevant payment that would have been due if the Index Figure subsequently published had been published on or before the fourteenth business day before the date for payment; and

(B)     in relation to a payment of principal or interest upon final redemption, no subsequent adjustment to amounts paid will be made.";

(P)              Condition 8(c) (Cessation of or fundamental changes to the Index) of the Bonds being deleted and replaced with the following provision:

"(c)     Cessation of or fundamental changes to the Index

(i)       If (a) the Bond Trustee has been notified by the Principal Paying Agent that the Index has ceased to be published; or (b) any change is made to the coverage or the basic calculation of the Index which constitutes a fundamental change which would, in the opinion of the Bond Trustee acting solely on the advice of the Indexation Adviser, be materially prejudicial to the interests of the Bondholders, the Bond Trustee will give written notice of such occurrence to the Issuer and XLCAAssured Guaranty (so long as XLCAAssured Guaranty is the Bond Creditor) (the "Parties"), and the Parties and the Bond Trustee together shall seek to agree for the purpose of the Bonds one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Parties and the Bondholders in no better and no worse a position than they would have been had the Index not ceased to be published or the relevant fundamental change not been made;

(ii)      If the Parties and the Bond Trustee fail to reach agreement as mentioned above within 20 business days following the giving of notice as mentioned in Condition 8(c)(i) a bank or other person in London shall be appointed by the Parties and the Bond Trustee, or, failing agreement on and the making of such appointment within 20 business days following the expiry of the 20 business day period referred to above, by the Bond Trustee (in either case, such bank or other person so appointed being referred to as the "Expert"), to determine for the purpose of the Bonds one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Parties and the Bondholders in no better and no worse a position than they would have been had the Index not ceased to be published or the relevant fundamental change not been made. Any Expert so appointed shall act as an expert and not as an arbitrator and all fees, costs and expenses of the Expert and of the Indexation Adviser and of either of the Parties and the Bond Trustee in connection with such appointment shall be borne by the Issuer. In this Condition "business day" means any day on which commercial banks and foreign exchange markets are open for business in London.

(iii)      The Index shall be adjusted or replaced by a substitute index as agreed by the Parties and the Bond Trustee or as determined by the Expert pursuant to the foregoing paragraphs, as the case may be, and references in these Conditions to the Index and to any Index Figure shall be deemed to be amended in such manner as the Issuer, the Bond Trustee and XLCAAssured Guaranty (so long as XLCAAssured Guaranty is the Bond Creditor) agree, and the Issuer notifies to the Parties, as appropriate, and to the Bondholders in accordance with Condition 17 to give effect to such adjustment or replacement. Such amendments shall be effective from the date of such notification and shall be binding upon the Parties, the Bond Trustee and the Bondholders.";

(Q)             Condition 10 (Taxation) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"10     (Taxation)

All payments of principal and interest in respect of the Bonds by or on behalf of the Issuer shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event, the Issuer shall account to the relevant authorities for the amount to be withheld or deducted and shall make such payment of principal or interest, as the case may be, after such withholding or deduction has been made.

The Issuer shall notify the Bond Trustee and XLCAAssured Guaranty (for so long as it is the Bond Creditor) of any such withholding or deduction and shall take reasonable measures available to it to avoid such obligation including the replacement of the Principal Paying Agent, the addition, replacement or removal of a Paying Agent or changing the specified office of any Paying Agent. Should the Issuer still be obliged to make the withholding or deduction, it will, on written request from any Bondholder, provide to the Bondholder copies of any documentation or correspondence with the tax authority regarding the deduction or withholding as the Bondholder may reasonably require to assist it to reclaim such deduction or withholding.

The Issuer will not be obliged to make any additional payments to Bondholders, Receiptholders or Couponholders in respect of any such withholding or deduction.

(R)              Condition 11 (Events of Default) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"11.    Events of Default

(a)      Except in the circumstances described in Condition 11(b) and subject to Condition 11(e) below, if any event of default pursuant to the terms of the Collateral Deed (an "Event of Default") occurs and has not been waived by, or remedied to the satisfaction of, the Credit Provider in accordance with the Collateral Deed, then:

(i)       if and for so long as XLCAAssured Guaranty is the Bond Creditor, the Bond Trustee shall, upon being (a) so directed by XLCAAssured Guaranty (except in certain circumstances in which both XLCAAssured Guaranty and EIB shall make such direction) in accordance with the Security Trust and Intercreditor Deed and (b) indemnified or furnished with security to its satisfaction, declare by written notice to the Issuer that the Bonds are immediately due and payable; and

(ii)      if and for so long as XLCAAssured Guaranty is not the Bond Creditor, the Bond Trustee may at any time and shall, upon being (a) so requested in writing by the holders of at least 25 per cent. In outstanding principal amount of the outstanding bonds or so directed by a resolution passed at any meeting of the Bondholders by a majority of not less than three quarters of the votes cast (an "Extraordinary Resolution") and (b) indemnified or furnished with security to its satisfaction, declare by written notice to the Issuer that the Bonds are immediately due and payable,

whereupon each Bond shall become due and payable at the Default Amount (as defined below) together with accrued interest up to and including the date of redemption adjusted for indexation (the Index Ratio for this purpose being that applicable to the month in which the date on which the notice is given that the Bonds are immediately due and payable falls), without further formality or action.

(b)      If:

(i)       the project agreement (the "Project Agreement") dated on or before the Issue Date between ProjectCo and North Lanarkshire Council (the "Authority") is terminated as a result of any of the Spens Acceleration Events (and the Authority does not exercise the Instalment Option (as defined below);

(ii)      an amount equal to the sum of (A) the Default Amount together with accrued interest thereon and (B) the full termination amount payable to EIB under the EIB Loan Agreement (as defined in the Master Definitions Schedule) following such termination, is paid into an account designated by the Issuer and/or the Security Trustee which is secured in favour of the Security Trustee pursuant to the Issuer Debenture;

(iii)      the Bond Trustee receives a Sufficiency Certificate from the Security Trustee confirming receipt of proceeds (in liquid form, including in the form of Authorised Investments) from an Enforcement of the Security equal to or in excess of the aggregate of the Senior Beneficiary's Claim Certificates (each as defined in the Master Definitions Schedule or the Security Trust and Intercreditor Deed (as applicable)) in accordance with the terms of the Security Trust and Intercreditor Deed; and

(iv)     the Bonds have not previously been declared due and payable pursuant to Condition 11 (a)(i) or (ii) above,

then each Bond shall become immediately due and payable by the Issuer at the Default Amount together with accrued interest thereon adjusted for indexation (the Limited Index Ratio being as referred to in Condition 11(c)).

(c)      For the purposes of this Condition 11, "Default Amount" means, in respect of each Bond:

(i)         in the event of an Event of Default triggered by:

(A)       ProjectCo terminating the Project Agreement, as a result of a default by the Authority under the terms of the Project Agreement pursuant to clause 35.3 (Authority Default Termination) of the Project Agreement ("Authority Default"); or

(B)       the Authority voluntarily terminating the Project Agreement pursuant to clause 35.2.2 (Termination by the Authority) of the Project Agreement ("Authority Voluntary Termination"); or

(C)       ProjectCo or the Authority terminating the Project Agreement pursuant to any of clauses 39 (Force Majeure), 79.2 (Termination for Corrupt Gifts and Fraud) or 86 (Termination for Breach of the Refinancing Provisions) and the Authority electing to pay the termination sum payable under the Project Agreement by instalments (the "Instalment Option") and initially satisfying the conditions applicable to the exercise of the Instalment Option set out in the Project Agreement and the Authority subsequently either failing to satisfy the conditions specified in the Project Agreement in relation to the Instalment Option or defaulting in the payment of any such instalments or electing to discontinue paying the termination sum by instalments,

(each, a "Spens Acceleration Event"), the Outstanding Principal Amount of the relevant Bond multiplied by the higher of:

(1)        the Limited Index Ratio applicable to the month in which the date on which the notice is given that the Bonds are immediately due and payable falls; and

(2)        the price (as reported to the Bond Trustee and the Issuer by a leading broker and, or primary dealer operating in the gilt-edged market selected by the Indexation Adviser expressed as a percentage and rounded up to four decimal places at which the Gross Real Yield (as defined below) of such Bonds (if the Bonds were to remain outstanding to their original maturity) on the Reference Date (as defined below) would be equal to the Gross Real Redemption Yield (determined by the middle-market price) at 3.00 p.m. on the Reference Date of the Reference Gilt (as defined in Condition 1(c) above).

For the purposes of this Condition 11, "Reference Date" means the date which is two business days prior to dispatch of the notice of redemption under Condition 6(b) and "Gross Real Yield" means a yield expressed as a percentage and calculated on a basis consistent with the basis indicated by the United Kingdom Debt Management Office publication "Formulae for Calculating Gilt Prices from Fields" published on 8 June 1998 with effect from 1 November 1998 and updated on 15 January 2002, page 5 or any replacement thereof. Such method requires the adoption of an assumed inflation rate which shall be such rate as the Indexation Adviser may determine to be appropriate. For the avoidance of doubt, the assumed inflation rate shall be a long term inflation rate for the life of the Bonds; and

(ii)        in all other circumstances, the Outstanding Principal Amount of the relevant Bond multiplied by the Limited Index Ratio applicable to the month in which the date on the notice is given that the Bonds are immediately due and payable falls (the "Indexed Par Amount").

(d)      Following the determination of the amount payable pursuant to this Condition 11, the Issuer shall forthwith notify or procure the notification of the Bondholders in accordance with Condition 17, the Principal Paying Agent, the Bond Trustee, the Security Trustee, XLCAAssured Guaranty and the Authority of such amount.

(e)      In the event that the Project Agreement has been terminated in circumstances where the Authority has exercised the Instalment Option, then for so long as the Authority continues to make the payments in an amount equal to scheduled principal and interest under the Bonds pursuant to the Instalment Option and satisfies the conditions applicable to the exercise of the Instalment Option as set out in the Project Agreement, XLCAAssured Guaranty may only exercise the rights under Condition 11(a) with the consent of the Bond Trustee.";

(S)              Condition 14(a) (Bond Trustee entitled to be indemnified) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(a)    Bond Trustee entitled to be indemnified

Under the Bond Trust Deed, the Bond Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its remuneration, costs and expenses in priority to the claims of the Bondholders. In addition, the Bond Trustee is entitled to enter into business transactions with the Issuer, ProjectCo, HoldCo, XLCAAssured Guaranty, the Bondholders, the Couponholders and any entity related to the Issuer, ProjectCo, HoldCo, XLCAAssured Guaranty, any Bondholder or Couponholder or any such other person without accounting for any profit.";

(T)              Condition 14(b) (Bond Trustee to have regard to Bondholders as a Class) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(b)    Bond Trustee to have regard to Bondholders as a Class

In the exercise of its powers and discretions including, without limitation, any modification, waiver, authorisation or determination under these Conditions and any other Finance Documents, the Bond Trustee when acting as the Credit Provider will have regard to the interests of the Bondholders as a class and will not have regard to the consequences of such exercise for individual Bondholders or Couponholders (whatever their number) whether resulting from their being resident or domiciled in, or otherwise connected with, or subject to, any particular jurisdiction or otherwise and the Bond Trustee shall not be entitled to require from the Issuer, ProjectCo, HoldCo, XLCAAssured Guaranty, or the Security Trustee, nor shall any Bondholder, Receiptholder or Couponholder be entitled to claim from the Issuer, ProjectCo, HoldCo, XLCAAssured Guaranty, the Bond Trustee or the Security Trustee, any indemnification or other payment in respect of any consequence (including without limitation, any tax consequence) for individual Bondholders or Couponholders of any such exercise.

In connection with the exercise by the Credit Provider of any of its rights, powers, authorities or discretions under the Finance Documents, where the Bond Trustee is the Credit Provider, it may at any time take such advice as it shall deem appropriate from any person selected by it or seek instructions from the Bondholders, whether before or after taking any action under the Finance Documents and shall not be liable for any losses incurred by reason of any delay in taking or refraining from taking any action under any Finance Document by reason thereof. Any costs, expenses or liabilities incurred in taking any such advice or seeking such instructions or taking any other action in connection with the Finance Documents shall be deemed to be Liabilities (as defined in the Bond Trust Deed) incurred by the Bond Trustee for the purposes of the Bond Trustee's rights under the Finance Documents to be indemnified.

For so long as the Bond Trustee is the Credit Provider, it shall not be obliged to take any such advice or seek any such instructions or take any other action under the Finance Documents unless and until it has been so directed by an Extraordinary Resolution of the Bondholders and indemnified and/or secured to its satisfaction.

Subject to the provisions of the Security Trust and Intercreditor Deed relating to the Bond Trustee's Reserved Rights (the "Reserved Rights"), the Bond Trustee shall not exercise any of its powers, authorities, rights or discretions under any of the Finance Documents and/or these Conditions unless and until it has been directed in writing to do so by the Credit Provider and shall only be obliged to do so upon being so directed and having been indemnified and/or secured to its satisfaction, and shall not be liable for any losses incurred by reason thereof.

Where XLCAAssured Guaranty is the Credit Provider, any such direction by XLCAAssured Guaranty may be contrary to the interests of the Bondholders and the other secured parties and the Bond Trustee will bear no responsibility or liability by reason thereof.

In the event that in contemplating the exercise of any of its trusts, powers, authorities, right or discretions under these Conditions or any Finance Document the Bond Trustee, when acting as the Credit Provider, is of the opinion that there is a conflict between the interests of the Bondholders on the one hand and the interests of any other secured party on the other hand, the Bond Trustee, insofar as it exercises any of such trusts, powers, authorities, rights or discretions, shall have regard solely to the interests of the Bondholders and the other secured parties shall have no claim against the Bond Trustee for so acting.

The Bond Trustee shall not act at the direction of the Credit Provider in relation to any matter which affects the Bond Trustee's Entrenched Rights unless it has also been directed to do so by the Bondholders by Extraordinary Resolution or requested in writing to do so by the Bondholders holding at least 25 per cent. of the Outstanding Balance of the Bonds and vice versa and in any case the Bond Trustee has been indemnified and/or secured to its satisfaction.

The Bond Trustee's Reserved Matters may be exercised by the Bond Trustee without the consent or direction or control of the Bondholders and the Bond Trustee shall not be obliged to exercise them in any circumstances.";

(U)              Condition 14(c) (Security Trustee entitled to be indemnified) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(c)     Security Trustee entitled to be indemnified

Under the Security Trust and Intercreditor Deed, the Security Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its remuneration, costs and expenses in priority to the claims of the Bondholders. In addition, the Security Trustee is entitled to enter into business transactions with the Issuer, ProjectCo, HoldCo, XLCAAssured Guaranty, the Bondholders, the Receiptholders, the Couponholders and any entity related to the Issuer, ProjectCo, HoldCo, XLCAAssured Guaranty, any Bondholder, Receiptholder or Couponholder or any other such person without accounting for any profit.";

(V)              Condition 14(d) (No obligation to investigate) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(d)    No obligation to investigate

Neither the Bond Trustee nor the Security Trustee has investigated, nor are either of them responsible or liable for any loss arising as a result of any failure to investigate, the validity, value, sufficiency or enforceability of the security created by the Security Documents or the validity or enforceability of any contracts over which such security is created and both the Bond Trustee and the Security Trustee shall accept without investigation, requisition or objection and without any responsibility or liability for doing so such right and title as the Issuer ProjectCo and HoldCo have to the property assets and rights over which security is created pursuant to the Security Documents.

Neither the Bond Trustee nor the Security Trustee has responsibility for the validity, enforceability or sufficiency of the XLCAAG Bond GuaranteeGuarantees against XLCAAssured Guaranty or any permitted assignee of XLCAAssured Guaranty under the XLCAAG Bond GuaranteeGuarantees. Nor will they be liable to Bondholders for any loss they may suffer as a result of any vitiation of the XLCAAG Bond GuaranteeGuarantees resulting from any act or omission on the part of the Bond Trustee or the Security Trustee unless the consequences of such act or omission were actually known to the Bond Trustee prior to such act or omission occurring and the Bond Trustee so acted or omitted to act negligently or in wilful default.

Neither the Bond Trustee nor the Security Trustee will be responsible for or liable for loss which results should any deficiency arise between the amount realised in respect of the property assets and rights over which security is given by the Security Documents and sums due in respect of the Bonds, the Receipts or the Coupons and, under the Bond Trust Deed including, without limitation, because either the Security Trustee or the Bond Trustee is liable to tax in respect of the property assets and rights over which such security is created.

Neither the Security Trustee nor the Bond Trustee shall be responsible for monitoring the obligations of any person owing to the Issuer, ProjectCo, HoldCo, or any other Senior Creditor or Junior Creditor and each of them shall, until they have actual knowledge to the contrary, assume that all persons are duly performing the same.

Neither the Security Trustee nor the Bond Trustee will be obliged to take any action under the Finance Documents unless either or each is indemnified and/or secured to its satisfaction in respect of any personal liability or expense which it may in its opinion thereby incur. Enforcement action and/or protection and realisation of the security may be prevented or delayed as a result thereof and neither the Security Trustee nor the Bond Trustee shall be liable therefor.";

(W)             Condition 14(f) (Variation or termination of appointment of Paying Agents) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(f)     Variation or termination of appointment of Paying Agents

The initial Paying Agents and their initial specified offices are listed below. The Issuer reserves the right (with the prior approval of the Bond Trustee), at any time to vary or terminate the appointment of any Paying Agent and to appoint a successor principal paying agent and additional or successor paying agents; provided, however, that the Issuer shall at all times maintain (i) a Principal Paying Agent, (ii) so long as the Bonds are admitted to listing on the official list of the UK Listing Authority and to trading on the London Stock Exchange's market for listed securities, at least one Paying Agent with a specified office in London, (iii) if required by the Bond Trustee, at least one Paying Agent with a specified office outside the European Union and (iv) if the conclusions of the ECOFIN Council meeting of 21 January 2003 are implemented, a paying agent in a member state of the European Union that will not be obliged to withhold or deduct tax pursuant to any European Union Directive on the taxation of savings implementing such conclusions or any law implementing or complying with or introduced to conform to Such Directive. Notice of any change in any of the Paying Agents or in their specified offices shall promptly be given by the Issuer to the Bondholders in accordance with Condition 17.

The Issuer has covenanted in the Bond Trust Deed (i) to make available its annual report at the specified offices of the Paying Agents and (ii) to provide annually a written report to XLCAAssured Guaranty (if it is then the Bond Creditor) and the Bond Trustee (such report to be made available to Bondholders at the specified offices of the Paying Agents and the principal office of the Bond Trustee upon production by any such Bondholders of evidence satisfactory to the Bond Trustee or the relevant Paying Agent, as the case may be, as to its holding of the Bonds and its identity) containing certain information relating to its business.";

(X)              Condition 15(a) (Meetings of Bondholders) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(a)    Meetings of Bondholders

The Bond Trust Deed contains provisions for convening meetings of Bondholders to consider matters affecting their interests, including the modification of these Conditions, the Bond Trust Deed, the XLCAAG Bond GuaranteeGuarantees, the Security Documents, the Collateral Deed and the Master Definitions Schedule. Any such modification may, subject to the prior written consent of XLCAAssured Guaranty if it is the Credit Provider, be made if sanctioned by an Extraordinary Resolution of the Bondholders. A meeting of Bondholders will also have the power (exercisable by Extraordinary Resolution) to advise or instruct the Bond Trustee in connection with the exercise by the Bond Trustee, subject to Condition 16(a), of any of its rights, powers and discretions under the Finance Documents, to remove or approve the appointment of a new Bond Trustee and to appoint any persons (whether Bondholders or not) as a committee to represent the interests of the Bondholders and to confer upon such committee any powers which the Bondholders could themselves exercise by Extraordinary Resolution.

The quorum at any meeting convened to vote on an Extraordinary Resolution will be two or more persons holding or representing 75 per cent. in outstanding principal amount of the Bonds or, at any adjourned meeting, two or more persons being or representing Bondholders whatever the principal amount of the Bonds held or represented; provided, however, that certain proposals including any proposal to:

(i)       change any date fixed for payment of principal or interest in respect of the Bonds, to reduce the amount of principal or interest payable on any date in respect of the Bonds, to alter the method of calculating the amount of any payment in respect of the Bonds, Receipts or Coupons or the date for any such payment;

(ii)      effect any exchange of the Bonds for, or the conversion of the Bonds into shares, bonds or other obligations of the Issuer, XLCAAssured Guaranty or any other person or to approve the substitution of any person for the Issuer as principal obligor under the Bonds or the substitution of any person for XLCAAGE as guarantor under the XLCAAGE Bond Guarantee or AGM as guarantor under the AGM Bond Guarantee;

(iii)      to change the currency of payments under the Bonds, Receipts or Coupons other than any change made pursuant to Condition 18;

(iv)     to modify any provisions of the XLCAAG Bond GuaranteeGuarantees in a way which, in the opinion of the Bond Trustee, is materially prejudicial to the Bondholders;

(v)      to change the quorum required at any meeting of the Bondholders or the majority required to pass an Extraordinary Resolution;

(vi)     to release all or part of the security (unless equivalent replacement security is taken at the same time) unless such release is required in accordance with the Security Documents or alter the rights of priority and enforcement of XLCAAssured Guaranty, the Bond Trustee or the Security Trustee or the Bondholders or the Credit Provider under the Security Trust and Intercreditor Deed or the Collateral Deed or the Accounts Mandate Agreement other than as expressly contemplated in the documents constituting such security in the form in which they are in effect as at the Issue Date; or

(vii)     to amend the definition of "Credit Provider" as defined in the Master Definitions Schedule; or

(viii)    to amend any of the above rights,

(together, the "Entrenched Rights") may only be sanctioned by an Extraordinary Resolution passed at a meeting of Bondholders at which two or more persons holding or representing not less than three-quarters or, at any adjourned meeting, at least 25 per cent. in outstanding principal amount of the Bonds form a quorum. Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the Bondholders and Couponholders whether present or not.

The majority required for an Extraordinary Resolution is at least 75 per cent. of the votes cast. In addition, a resolution in writing signed by or on behalf of all Bondholders who for the time being are entitled to receive notice of a meeting of Bondholders under the Bond Trust Deed will take effect as it were an Extraordinary Resolution. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Bondholders.";

(Y)              Condition 15(b) (Modification and Waiver) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(b)    Modification and Waiver

Subject to the provisions of Condition 14(b) above, the Bond Trustee may, without the consent of the Bondholders, Receiptholders or Couponholders concur with the Issuer, ProjectCo, XLCAAssured Guaranty (so long as it is the Bond Creditor) or any other relevant parties in making:

(i)       any modification to these Conditions or any other Finance Document or Project Document which in the opinion of the Bond Trustee is of a formal, minor or technical nature or is made to correct a manifest error; and

(ii)      except in the case of the Entrenched Rights, any other modification and any waiver or authorisation of any Event of Default, Potential Event of Default, Trigger Event, XLCAAG Event of Default, breach or proposed breach of these Conditions or any other Finance Document or any Project Document which is in the opinion of the Bond Trustee not materially prejudicial to the interests of the Bondholders (as to which the Bond Trustee may rely upon written confirmation from the Rating Agencies that such modification, waiver or authorisation would result in the rating of the Bonds being reduced or withdrawn as conclusive evidence of material prejudice to the interests of the Bondholders).

Any such modification shall be binding on all Bondholders, Receiptholders and Couponholders and, unless the Bond Trustee otherwise agrees, notice thereof shall be given by the Issuer to the Bondholders as soon as practicable thereafter in accordance with Condition 17.

Subject to always to the provisions of Condition 14(b) above, the Bond Trustee may also determine, without the consent of the Bondholders, the Receiptholders or the Couponholders, that any Event of Default, Potential Event of Default, Trigger Event or XLCAAG Event of Default shall not, or shall not subject to specific conditions, be treated as such provided that the Bond Trustee is of the opinion that the interests of the Bondholders will not be materially prejudiced thereby (as to which the Bond Trustee may rely upon written confirmation from the Rating Agencies that such determination would result in the rating of the Bonds being reduced or withdrawn as conclusive evidence of material prejudice to the interests of Bondholders).

Any such determination shall be binding on all Bondholders, Receiptholders and Couponholders and, if the Bond Trustee so requires, notice thereof shall be given by the Issuer to the Bondholders and XLCAAssured Guaranty (so long as it is the Credit Provider), as soon as is practicable under Condition 17.";

(Z)              Condition 16(a) (Exercise and Enforcement) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"As more particularly provided in the Collateral Deed and the Security Trust and Intercreditor Deed, each of the Bond Trustee and the Security Trustee will be obliged to take action to exercise or enforce its rights under the Finance Documents or in respect of the Bonds if required to do so by XLCAAssured Guaranty (so long as XLCAAssured Guaranty is the Credit Provider), except in relation to certain specified rights of the Bond Trustee (provided that the Bond Trustee and/or the Security Trustee has been indemnified and/or furnished with security to its satisfaction), but will not in most circumstances be entitled to take any such action without the prior written consent of XLCAAssured Guaranty if it is the Bond Creditor).

Subject as aforesaid, the Bond Trustee shall not be bound as against the Bondholders to take any such action or any action to enforce the XLCAAG Bond GuaranteeGuarantees unless:

(i)         it has been so requested in writing by the holders of at least 25 per cent. in outstanding principal amount of the outstanding Bonds or has been so directed by an Extraordinary Resolution; and

(ii)        it has been indemnified or provided with security to its satisfaction.

Whether or not XLCAAssured Guaranty is the Bond Creditor, the Bond Trustee is entitled to exercise and take action in respect of certain rights reserved for the Bond Trustee's exercise in its sole discretion.";

(AA)           Condition 16(b) (Action by Bondholders) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(b)    Action by Bondholders

No Bondholder, Receiptholder or Couponholder may take any action against ProjectCo or any other Obligor or XLCAAssured Guaranty to enforce its rights in respect of the Bonds or to enforce all or any of the security constituted by the Security Documents or to enforce the XLCAAG Bond GuaranteeGuarantees unless the Bond Trustee and/or the Security Trustee having become bound so to proceed fails to do so within a reasonable time and such failure is continuing.";

(BB)           Condition 17 (Notices) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"17.    Notices

Notices to the Bondholders shall be valid if published in a leading English language daily newspaper published in the United Kingdom (which is expected to be the Financial Times or, if given by some other method approved by the Bond Trustee (which may include publication on an electronic data display screen) complying with any requirements of any stock exchange (or any other relevant authority) on which the Bonds are for the time being listed or by which they have been admitted to listing). Any such published notice shall be deemed to have been given on the date of first publication. Receiptholders, Couponholders and holders of Talons shall be deemed for all purposes to have notice of the contents of any notice given to the Bondholders pursuant to this Condition 17. A copy of every published notice to Bondholders will be supplied to Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg") for so long as the Bonds are cleared and settled through those clearing systems or to any additional or substitute clearing system from time to time nominated by the Issuer or the Bond Trustee and approved by the Bond Trustee and XLCAAssured Guaranty (so long as it is the Credit Provider) through which the Bonds are cleared and settled.";

(CC)           Condition 18(a) (Notice of Redenomination) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(a)    Notice of Redenomination

ProjectCo may, without the consent of the Bondholders and Couponholders, on giving at least 30 days' prior notice to XLCAAssured Guaranty (so long as it is the Credit Provider), the Bondholders, the Bond Trustee and the Paying Agents, designate a date (the "Redenomination Date"), being a Scheduled Payment Date under the Bonds falling on or after the date on which the United Kingdom becomes a Participating Member State (as defined below).";

(DD)           Condition 19(a) (Governing Law) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(a)    Governing Law

The Conditions, the Bond Trust Deed, the Bonds, Receipts and the Coupons and all matters arising from or connected with these and any non-contractual obligation arising therefrom are governed by, and shall be construed in accordance with, English law. The XLCAAG Bond GuaranteeGuarantees, the Collateral Deed, the Security Trust and Intercreditor Deed and the Paying Agency Agreement and any non-contractual obligation arising therefrom are also governed by, and will be construed in accordance with, English law.";

(EE)            Condition 19(b) (English courts) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(b)    English courts

The courts of England have exclusive jurisdiction to settle any dispute (a "Dispute"), arising from or connected with the Bonds, the Bond Trust Deed and the XLCAAG Bond GuaranteeGuarantees.";

(FF)            Condition 19(c) (Appropriate forum) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"(c)     Appropriate forum

The Issuer agrees and XLCAAssured Guaranty has agreed in the Bond Trust Deed that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that it will not argue to the contrary."; and

(GG)           Condition 21 (Further issues) of the Bonds being deleted and replaced with the following provision (the modifications are shown in blackline below):

"21.    Further issues

The Issuer may from time to time, without the consent of the Bondholders, Receiptholders or Couponholders but subject to the consent of XLCAAssured Guaranty and in accordance with the Bond Trust Deed, create and issue further bonds having the same terms and conditions as the Bonds in all respects (or in all respects except for the first payment of interest) so as to form a single series with the Bonds and be secured by the same security as that securing the Bonds. The Issuer may from time to time, with the consent of the Bond Trustee and the Credit Provider, create and issue other series of bonds having the benefit of the Bond Trust Deed.";

(vi)           the amendment of the Master Definitions Schedule by way of an amended and restated Master Definitions Schedule, in which:

(A)       references to:

"XLCA" will be deleted and (save with respect to the definition of "XLCA Information") replaced with references to "AGE", "AGM" or "Assured Guaranty" (as the context may require);

"Guarantee and Reimbursement Agreement" will be deleted;

"Guaranteed Obligations" will be deleted;

"XLCA Bond Guarantee" will be deleted;

"XLCA Documents" will be deleted;

"XLCA EIB Guarantee" will be deleted;

"XLCA EIB Financial Guarantees" will be deleted;

"XLCA EIB Initial Guarantee Fee" will be deleted;

"XLCA EIB Ongoing Guarantee Fee" will be deleted;

"XLCA Event of Default" will be deleted;

"XLCA Fee Letter" will be deleted;

"XLCA Financial Guarantees" will be deleted;

"XLCA Initial Guarantee Fee" will be deleted;

"XLCA Initial Variation Bond Guarantee Fee" will be deleted;

"XLCA Variation Bond Ongoing Guarantee Fee" will be deleted;

"XLCA Ongoing Guarantee Fee" will be deleted;

"XLCA‑NY" will be deleted;

"XLCA‑NY EIB Guarantee" will be deleted;

"XLCA‑NY Initial Guarantee Fee" will be deleted;

"XLCA‑NY Ongoing Guarantee Fee" will be deleted; and

(B)       the following new definitions will be inserted:

"AG Bond Guarantees" means the AGE Bond Guarantee and the AGM Bond Guarantee;

"AG Documents" means the AG Bond Guarantees, the AG EIB Guarantees, the AG EIB Financial Guarantees, the AG Guarantee and Reimbursement Agreement and the AG Fee Letter;

"AG EIB Guarantees" means the AGE EIB Guarantee and the AGM EIB Guarantee;

"AGE EIB Initial Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM EIB Initial Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AG Event of Default" shall have the meaning ascribed to it in the Security Trust and Intercreditor Deed;

"AG Fee Letter" means the letter dated on or about the Issue Date between XLCA, XLCA-NY and the Issuer, the rights and obligations under which were transferred to and assumed by AGE and AGM pursuant to a deed of release, transfer and amendment dated [•] 2017;

"AG Fee" means the AGE Initial Guarantee Fee, the AGM Initial Guarantee Fee, the AGE EIB Initial Guarantee Fee, the AGM EIB Initial Guarantee Fee, the AGE Initial Variation Bond Guarantee Fee, the AGM Initial Variation Bond Guarantee Fee, the AGE Ongoing Guarantee Fee, the AGM Ongoing Guarantee Fee, the AGE EIB Ongoing Guarantee Fee, the AGM EIB Ongoing Guarantee Fee, the AGE Variation Bond Ongoing Guarantee Fee and the AGM Variation Bond Ongoing Guarantee Fee payable by the Issuer to Assured Guaranty in accordance with the terms of the AG Fee Letter;

"AG Financial Guarantees" means the AG Bond Guarantees and the AG EIB Guarantees;

"AGE" means Assured Guaranty (Europe) Ltd.;

"AGE Bond Guarantee" means the financial guarantee and endorsement thereto issued by XL Capital Assurance (U.K.) Limited on 8 June 2005 in respect of the Bonds (other than Bonds held by the Issuer Group) pursuant to the Guarantee and Reimbursement Agreement, the obligations under which were amended and as assumed in part by AGE pursuant to a deed of release, transfer and amendment dated on or about [•] 2017;

"AGE EIB Guarantee" means the financial guarantee and endorsement thereto issued by XL Capital Assurance (U.K.) Limited on 8 June 2005 in respect of the EIB Loan pursuant to the Guarantee and Reimbursement Agreement, the obligations under which were amended and as assumed in part by AGE pursuant to a deed of release, transfer and amendment dated on or about [•] 2017;

"AGE EIB Ongoing Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGE Financial Guarantees" means the AGE Bond Guarantee and the AGE EIB Guarantee;

"AGE Initial Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGE Initial Variation Bond Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGE Ongoing Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGE Variation Bond Ongoing Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM" means Assured Guaranty Municipal Corp.;

"AGM Bond Guarantee" means the financial guarantee and endorsement thereto issued by XL Capital Assurance (U.K.) Limited on 8 June 2005 in respect of the Bonds (other than Bonds held by the Issuer Group) pursuant to the Guarantee and Reimbursement Agreement, the obligations under which were amended and as assumed by AGM pursuant to a deed of release, transfer and amendment dated on or about [•] 2017;

"AGM EIB Guarantee" means the financial guarantee and endorsement thereto issued by XL Capital Assurance (U.K.) Limited on 8 June 2005 in respect of the EIB Loan pursuant to the Guarantee and Reimbursement Agreement, the obligations under which were amended in part and as assumed by AGM pursuant to a deed of release, transfer and amendment dated on or about [•] 2017;

"AGM Financial Guarantees" means the AGM Bond Guarantee and the AGM EIB Guarantee;

"AGM EIB Ongoing Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM Initial Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM Initial Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM Initial Variation Bond Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM Non Payment Event of Default" means any guaranteed amount which is due for payment by AGM in accordance with the terms of the AGM Bond Guarantee is not paid by AGM  on the date stipulated in the AGM Bond Guarantee;

"AGM Ongoing Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM Ongoing Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"AGM Variation Bond Ongoing Guarantee Fee" has the meaning given to it in the AG Fee Letter;

"Assured Guaranty" means AGE and AGM;

"Guarantee and Reimbursement Agreement" means the guarantee and reimbursement agreement entered into on 8 June 2005, the obligations under which were amended in part and as assumed by AGE and AGM on or about [•] 2017; and

"Guaranteed Obligations" means the obligations of the Issuer guaranteed by the AG EIB Guarantees and the AG Bond Guarantees,

which amended and restated Master Definitions Schedule reflecting the above amendments shall be in or substantially in the form made available to the Bond Trustee following the passing of this Extraordinary Resolution (the Amended and Restated Master Definitions Schedule);

(vii)          the amendment of the Collateral Deed between, inter alios, the Issuer, Syncora US and the Bond Trustee (the Collateral Deed) to reflect the amendments set out in sub‑paragraph (xiv) of this Extraordinary Resolution and which shall be by way of an amended and restated Collateral Deed in or substantially in the form made available to the Bond Trustee following the passing of this Extraordinary Resolution (the Amended and Restated Collateral Deed);

(viii)         the amendment of the Accounts Mandate Agreement entered into on 8 June 2005 between the Issuer, ProjectCo, HoldCo, HSBC Bank plc, the Security Trustee, European Investment Bank and Syncora US (the Accounts Mandate Agreement) by way of a second amended and restated Accounts Mandate Agreement to reflect the amendments set out in sub‑paragraph (xiv) of this Extraordinary Resolution and which shall be in or substantially in the form made available to the Bond Trustee following the passing of this Extraordinary Resolution (the Amended and Restated Accounts Mandate Agreement);

(ix)           the amendment of the Shareholders' Undertaking entered into on 8 June 2005 between the Shareholders, the Issuer, ProjectCo, HoldCo, the Security Trustee, European Investment Bank and Syncora US (the Shareholders' Undertaking) by way of a second amended and restated Shareholders' Undertaking to reflect the amendments set out in sub‑paragraph (xiv) of this Extraordinary Resolution and which shall be in or substantially in the form made available to the Bond Trustee following the passing of this Extraordinary Resolution (the Amended and Restated Shareholders' Undertaking);

(x)           the amendment of the Security Trust and Intercreditor Deed by way of an amended and restated Security Trust and Intercreditor Deed to reflect the amendments set out in sub‑paragraph (xiv) of this Extraordinary Resolution and which shall be in or substantially in the form made available to the Bond Trustee following the passing of this Extraordinary Resolution (the Amended and Restated Security Trust and Intercreditor Deed);

(xi)           the amendment of the XLCA Guarantee and Reimbursement Agreement by way of an amended and restated Guarantee and Reimbursement Agreement to reflect the amendments set out in sub‑paragraph (xiv) of this Extraordinary Resolution and which shall be in in the form of the draft produced to this Meeting and initialled by the chairman of this Meeting for identification purposes (the Amended and Restated Guarantee and Reimbursement Agreement);

(xii)          the amendment of the XLCA Financial Guarantees by way of amended and restated Financial Guarantees to reflect the amendments set out in sub‑paragraph (xiv) of this Extraordinary Resolution and which shall be in the form of the draft produced to this Meeting and initialled by the chairman of this Meeting for identification purposes (the Amended and Restated Financial Guarantees);

(xiii)         the amendment of the XLCA Fee Letter by way of an amended and restated letter to reflect the amendments set out in sub-paragraph (xiv) of this Extraordinary Resolution and which shall be in the form of the draft produced to this Meeting and initialled by the chairman of this Meeting for identification purposes (the AG Fee Letter); and

(xiv)         in each document referred to in sub‑paragraphs (vi) to (xiii) above and in each Senior Finance Document, references to:

"XLCA" will be replaced with references to "AGE", "AGM" or "Assured Guaranty" (as the context may require);

"XLCA Bond Guarantee" will be replaced with references to the "AGE Bond Guarantee", the "AGM Bond Guarantee" and/or the "AG Bond Guarantees" as the context may require;

"XLCA Documents" will be replaced with references to "AG Documents";

"XLCA Event of Default" will be replaced with references to an "AG Event of Default";

"XLCA Fee Letter" will be replaced with references to the "AG Fee Letter";

"XLCA Non Payment Event of Default" will be replaced with references to an "AGM Non Payment Event of Default"; and

"XLCA-NY" will be replaced with references to "AGE", "AGM" or "Assured Guaranty" (as the context may require),

and in each Amendment Document, references to any of the original documents which will be amended as Amendment Documents pursuant to this Extraordinary Resolution will be updated accordingly;

(b)        authorises, directs, requests and empowers the Bond Trustee as soon as reasonably practicable after the passing of this Extraordinary Resolution:

(i)            to concur in and give effect to all the Proposed Amendments referred to in this Extraordinary Resolution by entering into and executing (x) the Amendment Documents in the form provided to the Bond Trustee following the Meeting if the Extraordinary Resolution is passed and (y) the Deed of Release, Transfer and Amendment and the Supplemental Bond Trust Deed, in each case in the form of the draft produced to this Meeting and initialled by the Chairman of this Meeting for the purposes of identification;

(ii)            to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to this Extraordinary Resolution and the implementation of the Proposed Amendments;

(iii)           to consent to the entry by the Issuer, ProjectCo and HoldCo into the Amending Documents (as defined in the Deed of Release, Transfer and Amendment) to which each is a party; and

(iv)           to consent to assumption by AGE and AGM of the obligations of Syncora US under the XLCA Financial Guarantees and provision of, respectively, the AGE Financial Guarantees and the AGM Financial Guarantees;

(c)        authorises, directs, requests and empowers the Bond Trustee as soon as reasonably practicable after the passing of this Extraordinary Resolution to authorise, direct, request and empower the Security Trustee:

(i)            to concur in and give effect to all the Proposed Amendments referred to in this Extraordinary Resolution by entering into and executing (x) the Amendment Documents in the form provided to the Bond Trustee following the Meeting if the Extraordinary Resolution is passed and (y) the Deed of Release, Transfer and Amendment, in form of the draft produced to this Meeting and initialled by the Chairman of this Meeting for the purposes of identification;

(ii)            to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to this Extraordinary Resolution and the implementation of the Proposed Amendments; and

(iii)           to consent to the entry by the Issuer, ProjectCo and HoldCo into the Amendment Documents to which each is a party;

(d)        discharges and exonerates the Bond Trustee and the Security Trustee from all and any liability for which it may have become or may become responsible or liable under the Bond Trust Deed or any other Finance Document or the Bonds or any Project Document in respect of any act or omission in connection with this Extraordinary Resolution or the implementation of the Proposed Amendments or this Extraordinary Resolution;

(e)        sanctions and assents to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Bondholders against the Issuer or Assured Guaranty or any other person whether such rights shall arise under the Bond Trust Deed or the Senior Finance Documents or otherwise involved in or resulting from or to be effected by, this Extraordinary Resolution, the Proposed Amendments and their implementation; and

(f)         acknowledges that terms used herein but not defined shall bear the meanings ascribed to them in the Collateral Deed and the Master Definitions Schedule."

The attention of Bondholders is particularly drawn to the quorum required for the Meeting and for an adjourned Meeting which is set out in "Voting and Quorum" below.

Copies of the Bond Trust Deed (including the amended and restated Conditions of the Bonds), the Supplemental Bond Trust Deed, the Deed of Release, Transfer and Amendment, the AG Guarantees, the Guarantee and Reimbursement Agreement and the AG Fee Letter referred to in the Extraordinary Resolution set out above will be available for inspection at the specified offices of the Paying Agents set out further below.

In accordance with normal practice, neither the Bond Trustee, nor the Security Trustee expresses any opinion as to the merits of the Proposed Amendments (which it was not involved in negotiating).  It has, however, authorised it to be stated that, on the basis of the information set out in this Notice (which it recommends Bondholders to read carefully), it has no objection to the Extraordinary Resolution referred to above being submitted to the Bondholders for their consideration.  Neither the Bond Trustee, nor the Security Trustee has, however, been involved in formulating the Extraordinary Resolution or the Proposed Amendments and neither the Bond Trustee nor the Security Trustee makes any representation that all relevant information has been disclosed to the Bondholders in this Notice.  Accordingly, each of the Bond Trustee and the Security Trustee urges Bondholders who are in any doubt as to the impact of the implementation of the Extraordinary Resolution or the Proposed Amendments to seek their own independent financial advice.



 

DOCUMENTS AVAILABLE FOR INSPECTION

A Bondholder may, at any time during normal business hours on any weekday from the date hereof up to and including no later than 48 hours before the time fixed for the Meeting, inspect copies of the documents listed below relating to the Bonds at the specified office of the Principal Paying Agent and at the Meeting itself.  The specified office of the Principal Paying Agent is set out at the end of this Notice.

The documents available for inspection are:

·    the Extraordinary Resolution;

·    the Supplemental Bond Trust Deed (including the Conditions of the Bonds showing in "blackline" the amendments to the existing Conditions of the Bonds);

·    the Deed of Release, Transfer and Amendment;

·    the Amended and Restated AG Bond Guarantees (showing in "blackline" the amendments to the Financial Guarantees);

·    the Amended and Restated Guarantee and Reimbursement Agreement (showing in "blackline" the amendments to the XLCA Guarantee and Reimbursement Agreement); and

·    the AG Fee Letter (showing in "blackline" the amendments to the XLCA Fee Letter).



VOTING AND QUORUM

Who is entitled to vote on the proposed Extraordinary Resolution?

1.       The relevant provisions governing the convening and holding of the Meeting are set out in Schedule 5 to the Bond Trust Deed, a copy of which is available for inspection as referred to above.

2.       All of the Bonds are represented by a global note held by a common depositary for Clearstream Banking, société anonyme (Clearstream, Luxembourg) and/or Euroclear Bank S.A./N.V. (Euroclear).  For the purposes of the Meeting, a "Bondholder" shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount outstanding of the Bonds.

Procedures for Voting

3.       A Bondholder wishing to attend the Meeting in person must produce at the Meeting a valid Voting Certificate issued by a Paying Agent relating to the Bonds in respect of which he wishes to vote.

4.       A Bondholder not wishing to attend and vote at the Meeting in person may either deliver his Voting Certificate obtained to the person whom he wishes to attend on his behalf or give a voting instruction by giving his electronic voting instructions (in accordance with the standard procedures of Euroclear and Clearstream, Luxembourg) to Clearstream, Luxembourg and/or Euroclear instructing a Paying Agent to appoint a proxy (a Proxy) to attend and vote at the Meeting in accordance with his instructions (Electronic Voting Instructions).

5.       Following delivery by a Bondholder of Electronic Voting Instructions, not later than 48 hours before the time appointed for holding the Meeting, the relevant clearing system will block the Bonds in such Bondholder's account and hold the same to the order, or under the control, of a Paying Agent.  By so doing such Bondholder may obtain Voting Certificates or instruct the relevant Paying Agent to issue a Block Voting Instruction (as defined in the Trust Deed) in respect of the Meeting.  Bonds so blocked will not be released until the earlier of:

(a)     in respect of Voting Certificate(s):

(i)      the conclusion of the Meeting (or any adjourned meeting, as the case may be); and

(ii)      the surrender of the Voting Certificate(s) to the Paying Agent; and

(b)     in respect of Block Voting Instructions:

(i)      the conclusion of the Meeting (or any adjourned meeting, as the case may be); and

(ii)      the surrender to the relevant Paying Agent not less than 48 hours before the time fixed for the Meeting (or, if the Meeting has been adjourned, the time fixed for its resumption), of the receipt for the deposited Bonds so that such Bonds cease to be blocked as described above) and notification thereof by the relevant Paying Agent to the Issuer and the Bond Trustee.

Quorum

6.         The quorum required at the Meeting is at least two Voters (as defined in the Bond Trust Deed) (which may be satisfied by a single Proxy since the Bonds are represented by the Permanent Global Bond) holding or representing at least 75% of the outstanding principal amount of the Bonds. 

Adjourned Meeting

7.         If within 15 minutes after the time fixed for the Meeting, a quorum is not present at the Meeting, the Meeting will be adjourned for a period of not fewer than 14 days and not more than 42 days and the Extraordinary Resolution will be considered at an adjourned Meeting (notice of which will be given to the Bondholders).  The quorum at such an adjourned Meeting will be two Voters representing at least 25% of the Outstanding Principal Amount of the Bonds.

8.         Voting Certificates and Block Voting Instructions in respect of the Meeting (unless surrendered or, as the case may be, revoked fewer than 48 hours prior to any adjourned meeting) shall remain valid for such adjourned meeting.

Procedures at the Meeting

9.         Every question submitted to the Meeting will be decided in the first instance by a show of hands.   Unless a poll is validly demanded before or at the time that the result is declared, the Chairman's declaration that on a show of hands a resolution has been passed, passed by a particular majority, rejected or rejected by a particular majority shall be conclusive, without proof of the number of votes cast for, or against, the resolution.

10.       A demand for a poll shall be valid if it is made by the Chairman, the Issuer, Assured Guaranty, the Bond Trustee or one or more Voters representing or holding not less than one fiftieth of the aggregate outstanding principal amount of the Bonds.

11.       On a show of hands every person who is either the bearer of a Voting Certificate or being a Proxy shall have:

(a)          on a show of hands, one vote;

(b)          on a poll, one vote in respect of each £10,000 in aggregate outstanding principal amount of the Bond(s) represented or held by him.

To be passed, the Extraordinary Resolution requires a majority in favour consisting of not less than three‑quarters of the votes cast.  If passed, the Extraordinary Resolution will be binding upon all the Bondholders, whether or not present at such Meeting and whether or not voting.

12.       This notice is governed by, and shall be construed in accordance with, English law.

13.       Bondholders will be notified via Euroclear or Clearstream, Luxembourg of the results of voting on the Extraordinary Resolution within 14 days of such results being known.



 

Principal Paying Agent
The Bank of New York Mellon, London Branch

One Canada Square
London E14 5AL

 

Bond Trustee

Prudential Trustee Company Limited

Laurence Pountney Hill

London EC4R 0HH

 

For further information regarding the proposed amendments, please contact:

 

Transform Schools (North Lanarkshire) Funding PLC
Attention:       General Manager
Telephone:        +44 (0)1355 585981
Email:               [email protected]

Assured Guaranty
Attention:       Dominic Nathan
Telephone:        +44 (0)20 7562 1915
Email:               [email protected]

 

For further information regarding voting, please contact:

The Bank of New York Mellon, London Branch

Attention:  Debt Restructuring Services

Telephone:        +44 (0)1202 689644
Fax:                  +44 (0)207 9642728
Email:               [email protected]

Tel:                   +44 (0)1202 689644

 

For and on behalf of
TRANSFORM SCHOOLS (NORTH LANARKSHIRE) FUNDING PLC

Date: 24 March, 2017

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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