ALBA 2007 – 1 plc - Irish Stock Exchange

company which is a party to an arrangement which involves at least £10 million of debt, the granting of
security to a trustee, and the issue of a rated, listed or traded debt instrument, is excluded from being
eligible for a moratorium. The Secretary of State may modify the criteria by reference to which a
company otherwise eligible for a moratorium is excluded from being so eligible.
Accordingly, the provisions described above will serve to limit the Trustee's ability to enforce the
Issuer Security to the extent that: firstly, if the Issuer falls within the criteria for eligibility for a
moratorium at the time a moratorium is sought; secondly, if the directors of the Issuer seek a
moratorium in advance of a company voluntary arrangement; and, thirdly, if the Issuer is considered
not to fall within the capital market exception (as expressed or modified at the relevant time) or any
other applicable exception at the relevant time; in those circumstances, the enforcement of any security
by the Trustee will be for a period prohibited by the imposition of the moratorium. In addition, the
other effects resulting from the imposition of a moratorium described above may impact the transaction
in a manner detrimental to the Noteholders or Instrumentholders.
The Enterprise Act 2002
On 15 September 2003, the corporate insolvency provisions of the Enterprise Act 2002 (the
"Enterprise Act" came into force, amending certain provisions of the Insolvency Act 1986 (as
amended, the "Insolvency Act"). These provisions introduced significant reforms to corporate
insolvency law. In particular, the reforms restrict the right of the holder of a floating charge to appoint
an administrative receiver (unless the security was created prior to 15 September 2003 or an exception
applies) and instead give primacy to collective insolvency procedures (in particular, administration).
Previously, the holder of a floating charge over the whole or substantially the whole of the assets of a
company had the ability to block the appointment of an administrator by appointing an administrative
receiver, who would act primarily in the interests of the floating chargeholder.
The Insolvency Act contains provisions which continue to allow for the appointment of an
administrative receiver in relation to certain transactions in the capital markets. The relevant exception
provides that the right to appoint an administrative receiver is retained for certain types of security
which form part of a capital market arrangement (as defined in the Insolvency Act) and which involve
indebtedness of at least £50,000,000 (or, when the relevant security document (being, in respect of the
transactions described in this Prospectus, the Issuer Security Deed) was entered into, a party to the
relevant transaction (such as the Issuer) was expected to incur a debt of at least £50,000,000) and the
issue of a capital market investment (also defined but generally a rated, listed or traded bond). It is
expected that the security which the Issuer will grant to the Trustee will fall within the capital markets
exception. However, it should be noted that the Secretary of State may, by secondary legislation,
modify the capital market exception and/or provide that the exception shall cease to have effect. No
assurance can be given that any such modification or provision in respect of the capital market
exception, or its ceasing to be applicable to the transactions described in this document, will not be
detrimental to the interests of the Noteholders or Instrumentholders.
The Insolvency Act also contains a new out-of-court route into administration for a qualifying floating
chargeholder, the directors or the relevant company itself. The relevant provisions provide for a notice
period during which the holder of the floating charge can either agree to the appointment of the
administrator proposed by the directors or the company or appoint an alternative administrator,
although a moratorium on enforcement of the relevant security will take effect immediately after notice
is given. If the qualifying floating chargeholder does not respond to the directors' or company's notice
of intention to appoint, the directors' or, as the case may be, the company's appointee will
automatically take office after the notice period has elapsed. Where the holder of a qualifying floating
charge within the context of a capital market transaction retains the power to appoint an administrative