VARIABLE COUPON CONVERTIBLE NOTES DUE 2012

E XHIBIT 10.11

VARIABLE COUPON CONVERTIBLE NOTES DUE 2012

 

NEITHER THESE NOTES NOR THE ORDINARY SHARES ISSUABLE ON CONVERSION OF THESE NOTES (THE “SHARES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THESE NOTES, AGREES FOR THE BENEFIT OF THE COMPANY THAT THESE NOTES AND THE SHARES MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF IN THE UNITED STATES OR TO US PERSONS UNLESS THE NOTES OR THE SHARES AS THE CASE MAY BE, HAS BEEN REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS OR EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS ARE AVAILABLE.

IF THE HOLDER OF A NOTE WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF ANY SUCH TRANSFER, THE FOREGOING CONDITIONS MUST BE COMPLIED WITH REGARDLESS OF WHEN SUCH TRANSFER IS MADE.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE U.S. INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED.

THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY ANY AGENCY OF THE UNITED STATES GOVERNMENT.

GLOBAL ENERGY DEVELOPMENT PLC

VARIABLE COUPON CONVERTIBLE NOTES DUE 2012

GLOBAL NOTE

Global Energy Development PLC, a company registered in England and Wales (hereinafter, the “Company,” which term includes any successor to the Company), for value received, hereby promises to pay to The Bank of New York Depository (Nominees) Limited, upon presentation and surrender of this Global Note (the “Global Note”) the principal sum of TWELVE MILLION FIVE HUNDRED THOUSAND DOLLARS (U.S. $12,500,000) (the “Principal Amount”) on October 30, 2012, and to pay interest thereon from and including 3 November 2005, quarterly (save in the case of the first interest period) in arrear on January 30, April 30, July 30, and October 30, in each year, commencing January 30, 2006 (each an “Interest Payment Date”), at the rate of 5% per annum, from (and including) 3 November 2005 to (and including) October 30, 2008, 6% per annum from (and including) October 31, 2008 to (and including) October 30, 2010 and 7% per annum thereafter, each calculated on the basis of a 360-day year consisting of twelve 30-day months, until the principal hereof is paid or payment thereof is duly provided for; provided, however, that the Principal Amount payable upon presentation and surrender may be reduced from time to time in connection with conversions, redemptions, purchases, cancellations and similar events described in the Terms and Conditions hereof, and

such reductions shall be duly noted on Schedule A hereto (which is incorporated herein by this reference as if set out in full); and provided further that interest accruing after the date of a reduction in Principal Amount shall be calculated with reference to the new Principal Amount. Payments of interest on each Note shall be paid by the Paying Agent on each Interest Payment Date, commencing January 30, 2006, to the bearer of such Note, such payment to be made in accordance with the rules and procedures of Euroclear or Clearstream, as the case may be.

Upon failure of the Company to make any payment of interest or principal on the date when due and payable, the outstanding principal balance of the Notes and, to the extent permitted by law, interest thereon will bear interest at the Default Rate beginning on the date such payment was due until the default is cured.

Notwithstanding any other provision of the Notes to the contrary, in no event shall the interest contracted for, charged or received in connection with the Notes (including any other costs or considerations that constitute interest under applicable law which are contracted for, charged or received pursuant to the Notes) exceed the maximum rate of non-usurious interest allowed under applicable law as presently in effect and to the extent an increase is allowable by such laws, but in no event shall any amount ever be paid or payable greater than the amount contracted for in the Notes, and all amounts paid by the Company which constitute usurious interest under the applicable law shall be applied in the manner described herein.

To the extent permitted by law, interest contracted for, charged or received on the Notes shall be allocated over the entire term of the Notes, to the end that interest paid on the Notes does not exceed the maximum amount permitted to be paid thereon by law.

The principal and interest on the definitive Notes shall be payable at the office or agency of the Company maintained for such purpose in the City of London and the City of New York, New York, or at such other office or agency of the Company as may be maintained for such purpose.

This Global Note has been issued pursuant to resolutions adopted by the Board of Directors of the Company on October 27, 2005. This Global Note is a permanent security and is exchangeable in whole for definitive Notes in bearer form, with interest coupons attached, upon the event specified in the Terms and Conditions herein.

Until transferred in full for the definitive Notes in certificated form, this Global Note shall in all respects be ratably entitled to the same benefits under, and subject to the same Terms and Conditions of the definitive Notes authenticated and delivered hereunder.

This Global Note, the definitive Notes, and the Terms and Conditions shall be governed by and construed in accordance with the laws of the State of New York.

Unless the certificate of authentication hereon has been executed by the Authenticating Agent by manual signature of one of its authorized signatories, this Global Note shall not be entitled to any benefit under the Terms and Conditions and shall not be valid or obligatory for any purpose.

 

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IN WITNESS WHEREOF, the Company has caused this Global Note to be duly executed in its corporate name by the manual or facsimile signatures of the undersigned duly authorized officers of the Company.

Dated as of 31 October 2005,

 

 

ATTEST:
By:		/s/ Catherine Miles
		Catherine Miles, Secretary

CERTIFICATE OF AUTHENTICATION

This Global Note constitutes the Note referred to in the within mentioned Terms and Conditions.

 

		THE BANK OF NEW YORK, Authenticating Agent
Date:                      2005		By:
		Name:
		Title:

 

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TERMS AND CONDITIONS OF THE NOTES

The U.S. $12,500,000 of Variable Coupon Convertible Notes Due 2012 (the “Notes”) of Global Energy Development PLC, a company registered in England and Wales (the “Company”) are constituted by, and authorized to be issued pursuant to these Terms and Conditions and resolutions of the Board of Directors of the Company adopted on October 27, 2005.

Copies of a paying and conversion agency agreement dated as of October 31, 2005 (the “Agency Agreement”), made between the Company and The Bank of New York, as paying and conversion agent (the “Paying Agent” and “Conversion Agent,” respectively, which expressions shall include any successors and assigns) are available for inspection during normal business hours by the holders of the Notes (“Noteholders”) and the Couponholders at the specified office of the Paying Agent. The Noteholders are entitled to the benefit of, are bound by, and are deemed to have notice of all the provisions of the Agency Agreement.

Certain terms not otherwise defined in the text hereof are defined in Condition 19 herein.

1. Form, Denominations, and Title, and Certain Administrative Provisions

(A) The Notes if issued in definitive bearer form will be serially numbered, in denominations of U.S. $1,000 or multiples thereof (the “Authorized Denomination”), each with Coupons attached on issue, and with such numerical and other identification designation as the Company shall deem desirable.

(B) Title to the Notes and to the Coupons in certificated form will pass by delivery. The Company and the Paying Agent and Conversion Agent may (to the fullest extent permitted by applicable laws) deem and treat the Holder of any Note and the Holder of any Coupon as the absolute owner thereof for all purposes (whether or not the Note or Coupon shall be overdue and notwithstanding any notice to the contrary).

Beneficial interests in the Notes will be represented by a global note (the “Global Note”), without interest coupons, which will be deposited with a common depository (the “Common Depository”) and held on behalf of Morgan Guaranty Trust Company of New York, as operator of the Euroclear System (“Euroclear”), and Clearstream, société anonyme (“Clearstream”), for credit to the accounts designated by the Noteholders at Euroclear and Clearstream. Except as provided herein, certificates will not be issued in exchange for beneficial interests in this Global Note.

(C) The Notes shall be executed on behalf of the Company by its Managing Director and attested by its Secretary. The signature of any of these officers on the Notes may be manual or facsimile signatures of the present or any future such authorized officer and may be imprinted or otherwise reproduced on the Notes.

Notes bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes.

At any time and from time to time hereafter, the Company may deliver Notes executed by the Company to the Authenticating Agent for authentication, together with a Company order for the authentication and delivery of such Notes, and the Authenticating Agent in accordance with such Company order shall authenticate and deliver such Notes. Such Company order shall specify the amount of Notes to be authenticated and the date on which the original issue of Notes is to be authenticated.

The Global Note shall be dated as of the date of authentication.

No Note shall be entitled to any benefit hereunder or be valid or obligatory for any purpose until the certificate of authentication substantially in the form hereto is duly executed by the Authenticating Agent by the manual signature of

 

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an authorized signatory of such Authentication Agent, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder and is entitled to the benefits of these Terms and Conditions.

In case the Company, pursuant to Conditions 3(B) and 3(C), shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its Properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have entered into an amendment hereto, any of the Notes authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other notes executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of like principal amount; and the Authenticating Agent, upon order of the successor Person, shall authenticate and deliver notes as specified in such request for the purpose of such exchange.

(D) If the Common Depository referred to in Condition 1(F) notifies the Company that it is unwilling or unable to continue as Common Depository for this Global Note, the Company shall use its best efforts to identify and appoint a successor depository within 90 days of such notice. Pending the preparation of definitive Notes, if required herein, the Company may execute, and upon Company order the Authenticating Agent shall authenticate and deliver, temporary definitive Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced and in the Authorized Denomination, substantially of the tenor of the definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such temporary definitive Notes may determine, as conclusively evidenced by their execution of such temporary definitive Notes.

If temporary definitive Notes are required to be issued pursuant to these Conditions, the Company will cause definitive Notes to be prepared thereafter without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for such purpose without charge to the Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Authenticating Agent shall authenticate and deliver in exchange therefor a like principal amount of definitive Notes of the Authorized Denomination or multiples thereof. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under these Terms and Conditions as the definitive Notes.

(E) Upon surrender for exchange of any Note at the office or agency of the Company designated pursuant to these Conditions, the Company shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of the Authorized Denomination or denominations of a like aggregate principal amount.

Furthermore, any Holder of this Global Note, by acceptance of this Global Note, agrees that transfers of a beneficial interest in such Global Note may be effected only through a book-entry system maintained by the Holder of the Global Note (or its agent) or as otherwise provided in these Conditions, and that ownership of a beneficial interest in this Global Note shall be required to be reflected by way of book entry.

All Notes issued upon any exchange of Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits hereunder, as the Notes surrendered upon such exchange.

Every Note presented or surrendered for exchange shall (if so required by the Company) be duly endorsed, or be accompanied by a written instrument of transfer, in form satisfactory to the Company, duly executed by the Noteholder thereof or such Noteholder’s attorney duly authorized in writing.

 

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Except as otherwise provided herein, no service charge shall be made for any exchange, conversion or redemption of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange of Notes.

The Company shall not be required (i) to exchange any Note during a period beginning at the opening of business 15 days before the selection of Notes to be redeemed hereunder and ending at the close of business on the day of such mailing of the relevant notice of redemption, (ii) to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, or (iii) to exchange any Note during a period beginning five days before the date of Maturity and ending on such date of Maturity.

(F) (1) This Global Note shall be delivered to the Common Depository. Members of, or participants in, Euroclear and Clearstream (“Agent Members”) shall have no direct rights hereunder with respect to any Global Note held on their behalf by the Common Depository, or under such Global Note. The Common Depository may be treated by the Company, and any agent of the Company, as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company or any agent of the Company from giving effect to any written certification, proxy or other authorization furnished by the Common Depository or shall impair, as between the Common Depository and the Agent Members, the operation of customary practices governing the exercise of the rights of a Noteholder.

(2) Transfers of the Global Note shall be limited to transfers of the Global Note in whole, but not in part, to the Common Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Note may be transferred in accordance with the rules and procedures of the Common Depository, Euroclear, Clearstream, and the provisions hereof. Definitive Notes in bearer form shall be transferred to all beneficial holders in exchange for their beneficial interests in the Global Note in accordance with the Common Depository’s procedures only if the Common Depository notifies the Company that it is unwilling or unable to continue as Common Depository for the Global Note and a successor depository is not appointed by the Company within 90 days of such notice, or an Event of Default has occurred and is continuing and the Company has received a request from any owner of a beneficial interest in the Global Note for such a transfer.

(3) In connection with any transfer of beneficial interests in this Global Note to beneficial owners pursuant to subsection (2) of this Condition, the Common Depository shall reflect on its books and records the date and a decrease in the Principal Amount of this Global Note in an amount equal to the principal amount of the beneficial interests in this Global Note to be transferred, and the Company shall execute, and the Authenticating Agent shall authenticate and deliver, one or more definitive Notes in bearer form of like tenor and amount.

(4) In connection with the transfer of the beneficial interests in the entire Global Note to beneficial owners pursuant to subsection (2) of this Condition, this Global Note shall be deemed to be surrendered to the Conversion and Paying Agent for cancellation, and the Company shall execute, and the Authenticating Agent shall authenticate and deliver, to each beneficial owner identified by the Common Depository, in exchange for its beneficial interest in this Global Note, an equal aggregate principal amount of definitive Notes in bearer form.

(5) Any definitive Note in bearer form delivered in exchange for an interest in this Global Note pursuant to subsection (2) or subsection (3) of this Condition shall bear the applicable legend regarding transfer restrictions applicable to the bearer Note as counsel to the Company shall advise the Company.

(6) The Holder of this Global Note may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Noteholder is entitled to take under these Terms and Conditions.

(7) Any definitive Note in bearer form delivered in exchange for an interest in this Global Note pursuant to subsection (2) or (3) of this Condition will prior to delivery to the Noteholder have all matured Coupons as of such delivery date, which are attached to such bearer Note, cancelled and voided by the Authenticating Agent.

 

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(8) Nothing contained herein shall be deemed to authorize any transfers (by book-entry or otherwise) of this Global Note otherwise than in accordance with the Securities Act and all other applicable legislation. Unless otherwise required by applicable law, neither the Company nor the Common Depository shall recognize or give effect to any attempt to transfer (by book entry or otherwise) or convert any Note or any interest therein in violation of the Securities Act or all other applicable legislation.

(G) The Noteholders by acceptance of the Notes hereby covenant and agree that neither the Notes nor the Conversion Shares will be offered, sold, transferred, pledged, converted or otherwise disposed of unless (i) the Notes and/ or the Conversion Shares have been registered under the Securities Act or any applicable state securities or blue sky laws or exemptions from the registration requirements of such laws are available, and (ii) such action is in compliance with all applicable legislation.

(H) If (i) any mutilated Note or Coupon is surrendered to the Authenticating Agent, or (ii) the Company and the Authentication Agent receive evidence to their satisfaction of the destruction, loss or theft of any Note or Coupon, and there is delivered to the Company and the Authenticating Agent such security and/or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Authenticating Agent that such Note or Coupon has been acquired by a bona fide purchaser, the Company shall execute and upon Company order the Authenticating Agent shall authenticate and deliver, in exchange for any such mutilated Note or Coupon or in lieu of any such destroyed, lost or stolen Note or Coupon, a new Note or Coupon of like tenor and principal amount, bearing a number not contemporaneously Outstanding.

In case any such mutilated, destroyed, lost or stolen Note or Coupon has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note or Coupon, pay such Note or Coupon, as the case may be.

Upon the issuance of any new Note or Coupon under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Authenticating Agent) connected therewith.

Every new Note or Coupon issued pursuant to this Section in lieu of any destroyed, lost or stolen Note or Coupon shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note or Coupon shall be at any time enforceable by anyone, and shall be entitled to all benefits hereunder equally and proportionately with any and all other Notes or Coupons duly issued hereunder.

The provisions of this Condition are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Note or Coupon.

Any new Note issued under this Condition 1(H) in lieu of any destroyed, lost or stolen Note shall be issued by the Authenticating Agent with all matured Coupons as of such date of issuance cancelled or voided.

2. Status

The Notes and any Coupons are direct, unconditional and unsecured obligations of the Company and will rank pari passu, without any preference among themselves. The Notes and any Coupons will rank senior to all Subordinated Obligations of the Company, present and future, but, in the event of bankruptcy or insolvency of the Company, only to the extent permitted by the applicable laws relating to creditors’ rights. The Notes will not be secured by any assets or property of the Company. The Notes and any Coupons will rank pari passu with all other present and future unsecured Indebtedness of the Company other than Subordinated Obligations.

 

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3. Covenants

(A) The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) of the Company; provided, however, that the Company shall not be required to preserve any such rights if the Board of Directors shall determine that the preservation thereof is no longer in the best interests of the Company and the conduct of its business, and that the loss thereof is not disadvantageous in any material respect to the Noteholders; and provided, further, that nothing contained in this Condition 3(A) shall prohibit any transaction permitted by Condition 3(B) or Condition 3(C) herein.

(B) The Company will not merge or consolidate with or sell, convey, transfer or lease or otherwise dispose of all, or substantially all of its Properties and assets substantially as an entirety to any Person, unless either (i) the Company shall be the surviving Person or (ii) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquired by conveyance or transfer, or which leases, the Properties and assets of the Company substantially as an entirety (1) shall be a Person organized and validly existing under the laws of the United Kingdom, or the United States of America, any state thereof or the District of Columbia and (2) shall expressly assume, by a written instrument, the Company’s obligation for the due and punctual payment of the principal of and interest on all the Notes and the performance and observance of every Term and Condition contained herein and in the Agency Agreement.

(C) Upon any consolidation of the Company with or merger of the Company with or into any other Person or any conveyance, transfer or lease of the Properties and assets of the Company substantially as an entirety to any person, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Terms and Conditions contained herein with the same effect as if such successor Person had been named as the Company herein, and in the event of any such conveyance or transfer, the Company, except in the case of a lease, shall be discharged of all obligations and covenants under the Notes and may be dissolved and liquidated.

(D) The Company will maintain in at least one European city an office or agency where Notes may be presented or surrendered for payment, where Notes may be surrendered for conversion or exchange and where notices and demands to or upon the Company in respect of the Notes may be served. The corporate trust office of the Paying Agent at One Canada Square, 48 ^th Floor, London, E14 5AL, England shall be such office or agency of the Company, unless the Company shall designate and maintain some other offices or agencies for one or more of such purposes pursuant to the terms of the Agency Agreement. The Company will give prompt written notice to the Noteholders of any change in the location of any such offices or agencies.

The Company may also from time to time designate one or more other offices or agencies (in or outside of Europe) where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in Europe for such purposes. The Company will give prompt written notice to the Noteholders of any such designation or rescission and any change in the location of any such other office or agency.

(E) The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all taxes, assessments and governmental charges levied or imposed upon the Company or upon the income, profits or Property of the Company and (b) all lawful claims for labour, materials and supplies which, if unpaid, might by law become a Lien upon the Property of the Company; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

(F) The Company will not amend its Certificate of Incorporation or constitutional documents except as required by law, except in respect to such amendments that the Board of Directors reasonably determines do not materially adversely affect the rights of the Noteholders, or except to the extent that such amendment would not have a

 

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material adverse effect on (a) the ability of the Company to perform its obligations under the Notes or (b) the rights of the Noteholders, except that neither (i) increases in the number of Shares and issuance thereof with related securities, nor (ii) designations of preferred shares of the Company, modifications of the terms of such designations and issuance thereof with related securities, nor (iii) modification or expansion of the indemnity provisions provided by the Company to its directors and officers, nor (iv) change of the Company’s registered office shall be deemed an amendment hereunder.

(G) To the extent permitted by law, the Company will provide to the Paying Agent or to any Noteholder such statements, certificates or other documentation concerning the organization or operations of the Company as may be reasonably necessary to establish any exceptions or exemptions from United Kingdom income tax withholding and reporting requirements.

(H) While any Conversion Right remains exercisable, the Company will use its best efforts to list and maintain a listing of all Shares issued upon conversion of the Notes on a Stock Exchange. If the Company is unable to obtain or maintain such listing of Shares, it will forthwith give not less than 30 calendar days notice to the Noteholder of the listing, de-listing or quotation or lack of quotation of the Shares (as a class) by any such Stock Exchange.

(I) If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of or interest on any of the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Paying Agent of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for the Notes, it will, on or before 3:00 p.m. (London time) on the Business Day immediately preceding each due date of the principal of or interest on any Notes, deposit with a Paying Agent a sum sufficient to pay the principal or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal or interest.

Pursuant to the terms of the Agency Agreement, the Paying Agent shall agree with the Company, subject to the provisions of this Condition, that such Paying Agent will:

(1) hold all sums held by it for the payment of the principal of or interest on Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; and

(2) notify the Company by facsimile transmission or by telex if the Paying Agent has not, by the due date for the payment of any principal and/or interest in respect of the Notes or Coupons received unconditionally the full amount of such principal and interest due or if it receives unconditionally the full amount of such principal and interest due after the due date for the payment.

Any money deposited with the Paying Agent, or then held by the Company, in trust for the payment of the principal of or interest on any Note and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Company on the Company order, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease..

4. Interest

The Notes bear interest from (and including) 3 November 2005 to (and including) October 30, 2008, at the rate of five percent (5%) per annum, from (and including) October 31 2008, to (and including) October 30, 2010 at the rate of six percent (6%) per annum, and thereafter at the rate of seven percent (7%) per annum. Interest is payable quarterly in arrear on January 30, April 30, July 30, and October 30, in each year (each an “Interest Payment Date”), the first such

 

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payment to be made on January 30, 2006, in respect of the period from (and including) 3 November 2005 to (and including) January 30, 2006. The interest payable will equal from (and including) 3 November 2005 to (and including) October 30 2008) U.S. $125.00 (save in respect of the first interest period), from (and including) October 31 2008 to (and including) October 30 2010, U.S. $150.00 and thereafter U.S. $175.00, in each case per U.S. $10,000 principal amount of the Notes for each complete quarterly interest period.

Each Note will cease to bear interest (i) from its due date for redemption unless the Company shall default in the payment of the Redemption Price, in which event interest shall continue to accrue as provided herein, or (ii) where the Conversion Right shall have been voluntarily exercised by the Noteholder, from the Conversion Date, or (iii) in the case of a Call For Shares, from the Conversion Date.

Interest is calculated on the basis of a 360 day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed.

5. Payments

For so long as the Notes are represented by a Global Note, beneficial interests in this Global Note will be shown on, and transfers thereof will be effected only through, records maintained by, and in accordance with the rules and procedures of, Euroclear or Clearstream, as the case may be.

Payments of interest on each Note shall be paid by the Paying Agent on each Interest Payment Date, commencing January 30, 2006, to the Holder of such Note as shown on the Note Register at the close of business on the applicable Record Date, such payment to be made in accordance with the rules and procedures of such Common Depository and in accordance with the rules and procedures of Euroclear or Clearstream, as the case may be.

In case of definitive Notes, payments of principal in respect of each Note and any net proceeds payable under Condition 6(D) will only be made, against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant Note at the specified office of the Paying Agent. Payments of interest due on the Notes on an Interest Payment Date will be made against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant Coupons at the specified office of the Paying Agent. All payments of principal and interest shall be made in U.S. dollars. Each such payment and any payment of the net proceeds of the sale of Shares pursuant to Condition 6(D) will be made at the specified office of any Paying Agent, or at the option of the Holder, by U.S. dollar cheque mailed to an address, or delivered in accordance with the Holder’s instructions, or by transfer to a U.S. dollar account maintained by the Holder in accordance with the Holder’s instructions, subject in all cases to any applicable fiscal or other laws and regulations, but without prejudice to the provisions of Condition 8.

If, at any time, in the opinion of the Company or of the Paying Agent, payments in U.S. dollars cannot be so made, payments will be made in U.S. dollars in such other manner as may be approved by the Company and the Paying Agent and notice of the alternative manner of payment will be given to the Noteholders in accordance with Condition 15.

Each Note must be presented for redemption together with all unmatured Coupons relating to such Note, failing which the full amount of any missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the full amount of the missing unmatured Coupons which the amount so paid bears to the total amount due) will be deducted from the amount due for payment. Each amount so deducted will be paid in the manner mentioned above against presentation and surrender (or, in the case of part payment only, endorsement) of such missing Coupon at any time before the expiry of six (6) years after the Relevant Date in respect of the relevant Note (whether or not such Coupon would otherwise have become void pursuant to Condition 10), or, if later, five (5) years after the date on which such Coupon would have become due, but not thereafter.

All monies paid by the Company to the Paying Agent for the payment of principal or interest on any Note which remain unclaimed at the end of two (2) years after the principal on such Note will have become due and payable will be

 

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repaid to the Company and the Holder of such Note or any Coupon appertaining thereto will thereafter have only the rights of a creditor of the Company as described in these Terms and Conditions or such rights as may be otherwise provided by applicable law.

A Holder shall be entitled to present a Note or Coupon for payment only on a Presentation Date and shall not be entitled to any further interest or other payment if a Presentation Date is after the due date.

When making payments to Noteholders or Couponholders, fractions of one cent will be rounded down to the nearest whole cent.

The name of the initial Paying Agent and Conversion Agent and its initial specified office is set out at the end of these Terms and Conditions. The Company reserves the right at any time to vary or terminate the appointment of the Paying Agent or Conversion Agent and to appoint additional or other Paying Agents or Conversion Agents. Notice of any termination or appointment and of any changes in specified offices will be given to the Noteholders promptly by the Company in accordance with Condition 15.

6. Conversion

(A) Optional Conversion by the Noteholders; Conversion Period and Price

(i) Noteholders have the right, subject as provided herein and to any applicable laws and regulations, to require the Company to convert all or any of their Notes at their principal amount into Shares at any time during the Conversion Period (“Conversion Right”). The Conversion Period begins on the Issue Date and ends upon the earliest to occur of (A) the second Business Day prior to the later of October 30, 2012, or the date on which all principal and interest on the Notes is repaid in full, (B) if such Notes shall have been called for redemption pursuant to Condition 7, the close of the second Business Day prior to the Redemption Date, or (C) if such Notes have been the subject of a Call For Shares, the second Business Day prior to the Call For Shares Conversion Date. Upon conversion, the right of the converting Noteholder to repayment of the principal amount of the Note to be converted (and, subject as provided in Condition 6(B)(iv), accrued and unpaid interest thereon) shall be extinguished and released, and in consideration and in exchange therefor the Company shall allot and issue Shares credited as paid up in full as provided in this Condition 6.

The number of Shares to be issued on conversion of a Note will be determined by dividing the principal amount of the Note to be converted, plus accrued and unpaid interest thereon, translated into pounds sterling at a fixed exchange rate of GBP 1/US$1.78, by the Conversion Price, (as defined below) in effect on the Conversion Date, with the result being rounded down to the nearest whole number. In no circumstances shall the Conversion Price be such as to cause any Shares to be issued at a discount to their par value.

(ii) A Conversion Right may only be exercised in respect of the Authorized Denomination or multiples thereof of Notes. If more than one Note is converted at any one time by the same Holder, the number of Shares to be issued upon such conversion will be calculated on the basis of the aggregate principal amount of the Notes to be converted. Fractions of Shares will not be issued on conversion and no cash adjustments will be made in respect thereof.

(iii) The price at which Shares will be issued upon the exercise of a Conversion Right initially will be 305.8 pence. The Conversion Price will be subject to adjustment in accordance with the manner provided in Condition 6(C). The Company shall give notice of any adjustment of the Conversion Price in accordance with Condition 15 within ten (10) Business Days of the effective date of such adjustment.

(iv) Notwithstanding the provisions of paragraph (i) of this Condition 6(A), if the Company shall default in making payment in full in respect of any Note which shall have been called for redemption or shall fail to issue Shares in respect of any Conversion, then, from the Relevant Date, interest shall continue to accrue on such Note and the Conversion Right attaching to such Note will continue to be exercisable (unless already exercised by the Company pursuant to Condition 6(D)) up to, and including the close of business (at the place where the Note is deposited in connection with the exercise of the Conversion Right) on the date upon which the full amount of the monies payable in respect of such Note has been duly received by the Paying Agent or, the date of the issuance of the Conversion Shares.

 

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(B) Procedure for Conversion

(i) To exercise the Conversion Right attaching to any Note, the Holder thereof must complete, execute and deposit at his own expense during normal business hours at the specified office of the Conversion Agent, a notice of conversion (a “Conversion Notice”) in the form for the time being currently obtainable from the specified office of such Conversion Agent, together with the relevant Note and any amount to be paid by the Noteholder pursuant to this Condition 6(B)(i). The current form of Conversion Notice is attached hereto as Exhibit A .

The Conversion Date must fall at a time when the Conversion Right attaching to that Note is expressed in these Conditions to be exercisable and will be deemed to be the date of the surrender of the Note and delivery of such Conversion Notice and, if applicable, any payment to be made or indemnity given under these Conditions in connection with the exercise of such Conversion Right.

A Noteholder delivering a Note for conversion must pay any taxes and capital, stamp, issue and registration duties arising on conversion (other than any taxes or capital, or stamp duties payable in the United Kingdom or required by any Stock Exchange, by the Company in respect of the allotment and issue of Shares and listing of the Shares on conversion). A Conversion Notice delivered shall be irrevocable.

(ii) As soon as practicable, and (subject to compliance with any applicable law and/or regulation and/or with the rules of any applicable stock exchange) in any event not later than fourteen (14) calendar days after the Conversion Date, the Company will in the case of Notes converted on exercise of the Conversion Right or a Note being converted in accordance with Condition 6(D) and in respect of which a Conversion Notice has been delivered and the relevant Note, together with all Outstanding Coupons, and amounts payable by the relevant Noteholder deposited as permitted by sub-paragraph (i) above, cause the person or persons designated for the purpose in the Conversion Notice to be registered as holder(s) of the relevant number of Conversion Shares and will make a certificate or certificates for the relevant Shares available for collection at the Company’s principal office in London, England or at the Company’s registrar in London, England, or, if so requested in the relevant Conversion Notice, will deliver such certificate or certificates to the person and at the place specified in the Conversion Notice, at the risk of the Noteholder, together with any other securities, property or cash required to be delivered upon conversion and such assignments and other documents (if any) as may be required by law to effect the transfer thereof.

(iii) The person or persons specified for that purpose will be deemed for all purposes to be the holder of record of the number of Shares issuable upon conversion with effect from the Conversion Date or Call For Shares Conversion Date, as the case may be. The Shares issued upon conversion of the Notes will in all respects rank pari passu with the issued and outstanding Shares in issue on the relevant Conversion Date or Call For Shares Conversion Date, as the case may be, except for any right excluded by mandatory provisions of applicable law a holder of Shares issued on conversion of Notes shall not be entitled to any rights for any record date which precedes the relevant Conversion Date or Call For Shares Conversion Date, as the case may be.

(iv) If any notice requiring the conversion of any Notes is given pursuant to Condition 6(B) or Condition 6(D) on or after the fifteenth (15 ^th ) calendar day prior to the record date in respect of any dividend payable in respect of the Shares and such notice specifies a date for conversion falling on or prior to the next following Interest Payment Date, interest shall (subject as hereinafter provided) accrue on Notes which shall have been delivered for conversion on or after such record date from the preceding Interest Payment Date; provided, that the relevant Noteholder’s entitlement to interest on any Note, in the event that the Shares allotted on conversion thereof shall carry an entitlement to receive such dividend, shall be limited to the amount by which the interest such Noteholder would have received had no conversion taken place exceeds the amount of the dividend received on such Shares. Any such interest shall be paid by the Company not later than fourteen (14) calendar days after the relevant Conversion Date by U.S. dollar cheque drawn on, or by transfer to U.S. dollar account maintained by the payee with, a bank outside the United States in accordance with instructions given by the relevant Noteholder.

 

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(C) Adjustment of Conversion Price

(i) Dividends or Distributions of Shares . In case the Company shall pay or make a dividend or other distribution on its Shares exclusively in Shares or shall pay or make a dividend or other distribution on any other class of capital stock of the Company which dividend or distribution includes Shares, the Conversion Price in effect at the opening of business on the day next following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of Shares outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of Shares and the total number of Shares constituting such dividend or other distribution, such reduction to become effective immediately after the opening of business on the day next following the date fixed for such determination. For the purposes of this Condition 6(C)(i), the number Shares at any time outstanding shall not include Shares held in the treasury of the Company. For the avoidance of doubt, this Condition does not apply to dividends or other distributions in Shares pursuant to the terms of the securities to which such dividend or other distribution may be made.

(ii) Dividends or Distributions of Rights, Warrants or Options to Purchase Shares . In case the Company shall pay or make a dividend or other distribution on its Shares consisting exclusively of, or shall otherwise issue to all holders of its Shares, rights, warrants or options entitling the holders thereof to subscribe for or purchase Shares at a price per share less than the Market Price per share (determined as further defined in certain circumstances in paragraph (vii) of this Condition 6(C)) on the date fixed for the determination of shareholders entitled to receive such rights, warrants or options, the Conversion Price in effect at the opening of business on the day following the date fixed for such determination shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of Shares outstanding at the close of business on the date fixed for such determination plus the number of Shares which the aggregate of the offering price of the total number of Shares so offered for subscription or purchase would purchase at such Market Price and the denominator shall be the number of Shares outstanding at the close of business on the date fixed for such determination plus the number of Shares so offered for subscription or purchase, outstanding at the close of business on the date fixed for such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (ii), the number of Shares at any time outstanding shall not include Shares held in the treasury of the Company. The Company shall not issue any rights, warrants or options in respect of Shares held in the treasury of the Company.

(iii) Dividends or Distributions in Cash . In case the Company shall, by dividend or otherwise, make a distribution to all holders of its Shares exclusively in cash in an aggregate amount that, together with (1) the aggregate amount of any other distributions to all holders of its Shares made exclusively in cash within the 12 months preceding the date of payment of such distribution and in respect of which no Conversion Price adjustment pursuant to this 6(C)(iii) has been made and (2) the aggregate of any cash plus the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Company’s Board of Directors), as of the expiration of the tender or exchange offer referred to below, of consideration payable in respect of any tender or exchange offer by the Company or a Subsidiary for all or any portion of the Shares concluded within the 12 months preceding the date of payment of such distribution and in respect of which no Conversion Price adjustment pursuant to paragraph (vi) of this Condition 6(C) has been made, exceeds five percent (5%) of the product of the Market Price per share (determined as further defined in certain circumstances in paragraph (vii) of this Condition 6(C)) of the Shares on the date fixed for shareholders entitled to receive such distribution times the number of Shares outstanding on such date, the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this paragraph (iii) by a fraction of which the numerator shall be the Market Price per share (determined as provided in Section Condition 6(C)(vii)) of the Shares on the date of such effectiveness less the amount of cash so distributed applicable to one share and the denominator shall be such Market Price per share, such reduction to become effective immediately prior to the opening of business on the day following the date fixed for the payment of such distribution.

 

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(iv) All Other Distributions or Dividends . Subject to the last sentence of this paragraph (iv), in case the Company shall, by dividend or otherwise, distribute to all holders of its Shares evidences of its indebtedness, shares of any class of capital stock, securities, cash or Property (excluding any rights, warrants or options referred to in Condition 6(C)(ii), any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in Condition 6(C)(i), the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this paragraph (iv) by a fraction of which the numerator shall be the Market Price per share (determined as further defined in certain circumstances in paragraph (vii) of this Condition 6(C)) of the Shares on the date of such effectiveness less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Company’s Board of Directors and shall, in the case of securities being distributed for which prior thereto there is an actual or when issued trading market, be no less than the value determined by reference to the average of the Market Price over the period specified in the succeeding sentence), on the date of such effectiveness, of the portion of the evidences of indebtedness, shares of capital stock, securities, cash and Property so distributed applicable to one Share and the denominator shall be such Market Price per Share, such reduction to become effective immediately prior to the opening of business on the day next following the date fixed for the payment of such distribution (such date to being referred to as the “Reference Date”). If the Board of Directors determines the fair market value of any distribution for purposes of this paragraph (iv) by reference to the actual or when issued trading market for any securities comprising such distribution, it must in doing so consider the prices in such market over the same period used in computing the Market Price per share pursuant to paragraph (vii) of this Condition 6(C). For purposes of this paragraph (iv), any dividend or distribution that includes Shares or rights, warrants or options to subscribe for or purchase Shares shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, cash, Property, shares of capital stock or securities other than such Shares or such rights, warrants or options (making any Conversion Price reduction required by this paragraph (iv)) immediately followed by (2) a dividend or distribution of such shares or such rights, warrants or options (making any further Conversion Price reduction required by Condition 6(C)(i) or (ii)), except (A) the Reference Date of such dividend or distribution as defined in this Condition 6(C)(iv) shall be substituted as “the date fixed for the determination of shareholders entitled to receive such dividend or other distribution,” “the date fixed for the determination of shareholders entitled to receive such rights, warrants or options,” and “the date fixed for such determination” within the meaning of Condition 6(C)(i) and Condition 6(C)(ii) and (2) any Shares included in such dividend or distribution shall not be deemed “outstanding at the close of business on the date fixed for such determination” within the meaning of Condition 6(C)(i)).

(v) Subdivision of Shares . In case outstanding Shares shall be subdivided into a greater number of Shares, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding Shares shall each be combined into a smaller number of Shares, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.

(vi) Tender or Exchange Offer for Shares . In case a tender or exchange offer made by the Company or any Subsidiary for all or any portion of the Shares shall expire and such tender or exchange offer shall involve an aggregate consideration having a fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Company’s Board of Directors) at the last time (the “Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) that, together with (A) the aggregate of the cash plus the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a resolution of the Company’s Board of Directors), as of the expiration of the other tender or exchange offer referred to below, of consideration payable in respect of any other tender or exchange offer by the Company or a Subsidiary for all or any portion of the Shares concluded within the preceding 12 months and in respect of which no Conversion Price adjustment pursuant to this paragraph (vi) has been made and (B) the aggregate amount of any distributions to all holders of the Shares made exclusively in cash within the preceding 12 months and in respect of which no Conversion Price adjustment pursuant to

 

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Condition 6(C)(v) has been made, exceeds five percent (5%) of the product of the Market Price per share (determined as provided in Condition 6(C)(vii)) of the Shares on the Expiration Time times the number of Shares outstanding (including any tendered Shares) on the Expiration Time, the Conversion Price shall be reduced (but not increased) so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the Expiration Time by a fraction of which the numerator shall be (1)the product of the Market Price per share (determined as provided in Condition 6(C)(vii)) of the Shares at the Expiration Time times the number of Shares outstanding (including any tendered or exchanged Shares) at the Expiration Time minus (2) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the acceptance (up to any maximum