UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
In the Matter of
CERTIFICATE PURSUANT
SYSTEM ENERGY RESOURCES, INC. TO RULE 24
File No. 70-7604
Public Utility Holding Company
Act of 1935
This is to certify, pursuant to Rule 24 under the
Public Utility Holding Company Act of 1935, as amended, that
certain of the transactions proposed by System Energy
Resources, Inc. ("SERI") in the Application-Declaration on
Form U-1 in the above file, as amended, have been carried
out in accordance with the terms and conditions of, and for
the purposes represented by, the Application-Declaration and
pursuant to the order of the Securities and Exchange
Commission ("Commission") with respect thereto dated
February 21, 1989, and the supplemental orders of the
Commission dated February 23, 1989 and July 7, 1989.
On January 31, 1995, SERI executed a Letter
Consent Agreement with River Fuel Funding Company #3, Inc.
(the "Corporation") consenting to the issuance by the
Corporation of $15,000,000 Intermediate Term Secured Notes,
8.5% Series B Due February 15, 1998 (the "Series B Notes").
SERI also executed Supplemental Instructions to United
States Trust Company of New York, as Trustee ("Trustee")
under the Trust Agreement dated as of February 22, 1989,
among Morgan Guaranty Trust Company of New York, as Trustor,
the Trustee and SERI, authorizing the Trustee to cause the
Corporation to enter into a Secured Note Agreement with the
Purchasers named therein for the sale of the Series B Notes.
Attached hereto, and incorporated herein by
reference, are the constituent documents to the transaction
in definitive form.
B-1(c) SERI's Consent pursuant to Fuel
Lease.
B-2(c) Supplemental Instructions
pursuant to Trust Agreement.
B-4(c) Secured Note Agreement entered
into between the Corporation and
certain Noteholders.
B-6(c) Letter Agreement executed by
SERI.
Defined terms used herein and not otherwise
defined herein have the meanings ascribed to such terms in
the Application, as amended.
IN WITNESS WHEREOF, SERI has caused this
certificate to be executed this 13th day of February, 1995.
System Energy Resources,
Inc.
By: /s/ Lee W. Randall
Lee W. Randall
Vice President and
Chief Accounting Officer
Exhibit B-1(c)
1.2.1
LESSEE'S CONSENT
Pursuant to Section 33(b) of the Fuel Lease, dated as of
February 24, 1989, between River Fuel Funding Company #3, Inc.
("Lessor") and System Energy Resources, Inc. ("Lessee"), Lessee
hereby consents to Lessor's execution and delivery of a Note
Agreement, dated as of January 31, 1995, with John Hancock Mutual
Life Insurance Company, as Purchaser, relating to the issue and
sale of $15,000,000 aggregate principal amount of Lessor's
Intermediate Term Secured Notes, Series B 8.56% due February 15,
1998.
Dated: January 31, 1995 SYSTEM ENERGY RESOURCES, INC.
By: /s/ Lee W. Randall
Lee W. Randall
Vice President, Chief
Accounting Officer
Exhibit B-2(c)
1.1.1
SUPPLEMENTAL INSTRUCTIONS
PURSUANT TO TRUST AGREEMENT
OF RIVER FUEL TRUST #3
DATED FEBRUARY 22, 1989
No. _____________
These Supplemental Instructions, dated January 31, 1995, are
given pursuant to the Trust Agreement dated as of February 22,
1989, among Morgan Guaranty Trust Company of New York, as
Trustor, United States Trust Company of New York, as Trustee and
System Energy Resources, Inc., as Beneficiary under which River
Fuel Trust #3 (the "Trust ") was formed.
WHEREAS, the Trust Agreement contemplates the delivery by
the Beneficiary to and acceptance by the Trustee of Supplemental
Instructions with respect to the execution and delivery of
agreements, acceptance of assignments of agreements or rights,
acquisition of properties and entering into of certain
transactions by River Fuel Funding Company #3, Inc., a Delaware
corporation, all of the capital stock of which is owned by the
Trust (the "Corporation"), in accordance with lawful requests of
the Beneficiary; and
WHEREAS, the Beneficiary now desires to give Supplemental
Instructions to the Trustee as herein set forth;
NOW, THEREFORE, the Beneficiary hereby gives, and the
Trustee by its signature hereto hereby accepts, the following
Supplemental Instructions: That the Trustee use its best efforts
to cause the Corporation (a) to borrow $15,000,000 pursuant to a
Note Purchase Agreement relating to Intermediate Term Secured
Notes, 8.56% Series B Due February 15, 1998 (the "Series B IT
Notes"), and (b) to perform all the Corporation's obligations and
duties and to exercise all its rights under said Note Purchase
Agreements.
Section 1. Definitions. For the purpose of these
Supplemental Instructions, the capitalized terms used herein and
not otherwise defined herein shall have the meanings set forth in
the Trust Agreement.
Section 2. Authorization and Direction to Use Best Efforts
to Cause the Corporation to Accept and/or Execute Documents or
Rights. The Trustee is hereby directed to cause the Corporation
to:
(i) execute and deliver a Note Purchase Agreement with
the Purchaser named therein, relating to $15,000,000
aggregate principal amount of Series B IT Notes,
substantially in the form delivered herewith;
(ii) execute and deliver to said Purchaser Series B IT
Notes, substantially in the form and in the principal
amounts provided in said Note Purchase Agreement; and
(iii) perform all other acts and execute all other
documents and certificates necessary to consummate the
Closing under said Note Purchase Agreement.
Section 3. Use of Proceeds. The proceeds of the Series B
IT Notes are to be deposited in the Collateral Account from which
the Series A IT Notes maturing on February 15, 1995, will be paid
upon maturity.
Section 4. Confirmation of Trust. The Trustee hereby
confirms by its execution hereof that the declaration of trust
embodied in Section 3 of the Trust Agreement shall apply fully to
all rights, estates, properties, assets, payments or proceeds
received or obtained by the Corporation pursuant to these
Supplemental Instructions, all of which constitute part of the
Trust Estate.
Section 5. Other Provisions. Except as herein expressly
provided, all of the terms and provisions of the Trust Agreement
shall as nearly as may be practicable apply to all rights and
obligations obtained or incurred by the Trustee or the
Corporation pursuant to these Supplemental Instructions.
IN WITNESS WHEREOF, the parties hereto have executed these
Supplemental Instructions the day and year first above written.
SYSTEM ENERGY RESOURCES, INC.
By: /s/ Lee W. Randall
Lee W. Randall
Vice President, Chief
Accounting Officer
ACCEPTED:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:_____________________________
Exhibit B-4(c)
RIVER FUEL FUNDING COMPANY #3, INC.
__________
NOTE AGREEMENT
__________
Dated as of January 31, 1995
$15,000,000
INTERMEDIATE TERM SECURED NOTES,
8.56% Series B Due February 15, 1998
TABLE OF CONTENTS
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Section Page
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RIVER FUEL FUNDING COMPANY #3, INC.
c/o UNITED STATES TRUST COMPANY OF
NEW YORK, as trustee
114 WEST 47TH STREET, 15th Floor
NEW YORK, NEW YORK 10036-1532
As of January 31, 1995
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Bond and Corporate
Finance Department T-57
Intermediate Term Secured Notes,
Re: 8.56% Series B due February 15, 1998
Dear Sirs:
River Fuel Funding Company #3, Inc., a Delaware corporation
(the "Company"), hereby agrees with you as follows:
DEFINITIONS.
Certain terms are used in this Agreement as specifically
defined herein. Those definitions are contained or referred to
in Section 11.1 hereof.
PURCHASE AND SALE OF THE NOTES.
The Notes. The Company has authorized the issuance of IT
Notes and the Company proposes to issue and sell to you at the
Closing the Company's Intermediate Term Secured Notes, 8.56%
Series B due February 15, 1998, in the original aggregate
principal amount of $15,000,000 pursuant to the provisions of
this Agreement. The term the "Notes" shall mean said $15,000,000
of Intermediate Term Secured Notes, 8.56% Series B due February
15, 1998, and shall include any of the notes delivered in
exchange therefor or upon the transfer or replacement thereof as
provided herein; and the term "Note" shall mean any one of the
Notes. Each Note shall be issued substantially in the form set
forth in Exhibit B hereto in a minimum denomination of $100,000
or any larger amount that is an integral multiple of $1,000,
shall be dated the date of its issuance, and shall bear interest
on the unpaid principal amount thereof from the date of issuance
at the rate of 8.56% per annum (computed on the basis of a
360-day year and a 30-day month). Interest shall be payable
semiannually in arrears on the 15th day of February and August in
each year, the first payment to include interest from the date
hereof and to be due on August 15, 1995. If any payment of
principal of or Yield Maintenance Premium, if any, or interest on
the Note is required to be made on a date that is not a Business
Day, such payment shall be made on the next preceding Business
Day. The Notes shall mature on February 15, 1998, and shall be
executed in the name and on behalf of the Company by the
Company's Vice President or one of its Assistant Vice Presidents
thereunto duly authorized.
The Closing. The Company agrees to issue and sell to you,
in reliance upon your representations and warranties in Section
2.4 hereof, and, subject to the terms and conditions and in
reliance upon the representations and warranties of the Company
set forth in this Agreement and of the Lessee set forth in the
certificate referred to in Section 4.2(b)(ii) hereof, you agree
to purchase from the Company at the Closing $15,000,000 principal
amount of Notes, at a price equal to 100% of such principal
amount. The Closing shall be held on January 31, 1995 (or such
later date, not in any case later than February 15, 1995, as you
and the Company may agree upon). The Closing shall take place at
10:30 a.m., New York time, at the offices of Ropes & Gray, 885
Third Avenue, New York, New York. Unless otherwise requested by
you, the Notes to be delivered to you at the Closing shall
consist of a single Note payable to you or your nominee or
registered assigns in the principal amount of $15,000,000.
Unless otherwise instructed by the Company prior to the Closing,
you will pay for the Note or Notes delivered to you as aforesaid
by causing payment, in immediately available funds, to be wire
transferred to Account No. 27223827 (entitled the "River Fuel
Funding Company #3, Inc. Collateral Account") at Morgan Guaranty
Trust Company of New York. If at the Closing the Company shall
fail to tender the Notes to you as provided herein or if any of
the conditions set forth in Section 4.2 hereof shall not have
been fulfilled to your satisfaction, you shall, at your election,
be relieved of all obligations under this Agreement, without
thereby waiving any other rights you may have by reason of such
failure or such non-satisfaction.
Use of Proceeds. The Company will apply the proceeds of the
sale of the Notes solely in accordance with the terms and
limitations of the Basic Agreements. The proceeds of the sale of
the Notes sold at the Closing shall be paid into the Collateral
Account. The Company will not, directly or indirectly, use any
of the proceeds of the sale of the Notes for the purpose of
purchasing or carrying any "margin security" within the meaning
of Regulation G of the Board of Governors of the Federal Reserve
System or otherwise take or permit any action that would cause
the making of the Agreements or the sale of the Notes to violate
such Regulation G, Regulation T, Regulation U, Regulation X or
any other regulation of the Board of Governors of the Federal
Reserve System (12 C.F.R. Part II, as from time to time in
effect) applicable to the Company.
Purchase for Investment. You represent and warrant to the
Company as follows: You will acquire the Notes to be purchased
by you for your own account (or for a separate account under your
sole control and discretion), for investment and not with a view
to the distribution or any disposition thereof or any beneficial
interest therein, and that you have no present intention of
making any such distribution or disposition; provided, however,
that the disposition of your property shall at all times be and
remain within your control. You have received a copy of the
Private Placement Memorandum. Your acquisition of the Notes at
the Closing shall constitute your confirmation of the
representations and warranties contained in this Section 2.4.
REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants that:
Organization, Authorization of the Company. The Company is
duly created and validly existing under the laws of the State of
Delaware and has all requisite power and authority
to own its assets, to carry on its business as now conducted and
proposed to be conducted, to enter into this Agreement, to issue
and sell the Notes and to carry out the terms of this Agreement
and the Notes and of the Credit Agreement, the Depositary
Agreement and each of the Basic Agreements. The Company has all
necessary power and has taken all action required to make all of
the provisions of this Agreement, the Notes, the Credit
Agreement, the Depositary Agreement, each of the Basic Agreements
and any other agreements and instruments executed in connection
herewith and therewith by which the Company is bound, the valid
and binding obligations of the Company that they purport to be.
The Company is duly documented, licensed or qualified
and in good standing and authorized to do business in New York.
All of the Company's outstanding capital stock has been
duly authorized and issued, is fully paid and nonassessable and
is owned, beneficially and of record, by the Trust free and clear
of any Lien or restriction on transfer, except for restrictions
on transfer imposed by (i) federal, state and foreign securities
laws and (ii) this Agreement.
Certified copies of the charter documents and by-laws
of the Company as they will be in effect at the time of the
Closing have previously been delivered to you and are true,
accurate and complete.
Due Execution and Delivery. This Agreement, the Notes, the
Credit Agreement, the Depositary Agreement and each of the Basic
Agreements to which the Company is a party and the other
certificates and documents signed or to be signed on behalf of
the Company have been or will be duly executed and delivered by
an officer of the Company who is, or at the time of the execution
and delivery thereof on behalf of the Company was or will be,
duly authorized to effect such execution and delivery, and all
such agreements, certificates and documents (collectively
"Documents"), if previously executed and delivered, are, or, when
executed and delivered, will be legal, valid and binding
obligations of the Company, enforceable in accordance with their
terms, except that enforcement of the rights and remedies created
by the Documents, is subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and (ii) to general
equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
Financial Statements; Business. The Company has furnished
you a copy of a pro forma balance sheet as of the Closing Date
which reflects the sale of the Series B Notes and the application
of the proceeds, and a statement of receipts and disbursements
for the fiscal year ended December 31, 1994. Such balance sheet
and statement of receipts and disbursements have been prepared in
accordance with generally accepted accounting principles and
present fairly the financial position of the Company as of
December 31, 1994. The Company has no known, contingent or other
liabilities, not disclosed in such statements or the notes
thereto.
The Company is not a party to any instrument providing
for the incurrence by the Company of indebtedness for borrowed
money other than the Credit Agreement, the Basic Agreements and
the Depositary Agreement. The chief place of business of the
Company and the place where it keeps its records concerning its
accounts, contract rights, chattel paper and general intangibles
is in New York County. The Company's only place of business is
in New York State.
Title to Properties. The Company has title to all of the
Company's assets owned or purported to be owned by the Company as
of the date hereof as shown on the financial statements delivered
pursuant to Section 3.3 hereof, including without limitation the
Nuclear Fuel referred to in Schedule A to the Lease Agreement
which has heretofore been delivered to you, and all such assets
are free of any Liens, except those which are of a character
permitted by Section 8.12 hereof; provided, however, that, with
respect to any title to assets acquired from the Lessee or any
other vendor as provided in the Lease Agreement, the Company
(except with respect to its own actions) is making this
representation and warranty only to the extent of and entirely in
reliance on representations and warranties made by the Lessee or
such other vendor in the Agreement of Sale or in the vendors'
bills of sale delivered from time to time pursuant to the Lease
Agreement or in other instruments and has made no independent
investigation with respect thereto.
Litigation. Except as disclosed in the Disclosure
Documents, there is no litigation at law or in equity, nor any
proceeding or investigation before any court, board or other
governmental or administrative agency or arbitrator, pending or
to the knowledge of the Company threatened, which may be expected
to result in any material judgment or liability against the
Company not fully covered by insurance or which reasonably could
be expected to otherwise result in any material adverse change in
the business, assets or condition, financial or other, of the
Company, or which questions the validity or enforceability of
this Agreement, the Notes, the Credit Agreement, the Depositary
Agreement or any of the Basic Agreements or of any action taken
or to be taken by the Company pursuant to or in connection with
this Agreement, the Credit Agreement, the Depositary Agreement or
the Basic Agreements; and no judgment, decree or order has been
issued against the Company which has, or may be expected to have,
any material adverse effect on the business, assets or condition,
financial or other, of the Company.
Conformity with Other Agreements. This Agreement does not
contain any provision, term or condition that is inconsistent
with, or contrary to, the Security Agreement, or that would
violate, or cause the Company to be in violation of, the Credit
Agreement, the Depositary Agreement or any Basic Agreement.
Neither the execution and delivery of this Agreement or the Notes
nor the consummation of any transaction contemplated hereby or
thereby has constituted or resulted in or will constitute or
result in a breach of the provisions of any other agreement or
instrument by which the Company is bound or result in the
creation under any agreement or instrument of any Lien upon any
of the assets of the Company, except as permitted by Section 8.12
hereof.
No Legal Obstacle to Agreement. The execution, delivery and
performance, or the acceptance, as the case may be, by the
Company of this Agreement, the Credit Agreement, the Basic
Agreements, the Nuclear Fuel Contracts and the Notes did not, do
not and will not violate any provision of any law or regulation
or of any writ or decree of any court or governmental
instrumentality applicable to the Company, and no consent,
license, approval, order or authorization of, or filing,
registration or declaration with, any governmental authority,
bureau or agency or any court or other Person is required in
connection with the execution, delivery, performance, acceptance,
validity or enforceability of any of the above mentioned
documents and instruments (provided that no representation is
given with respect to the Nuclear Fuel Contracts insofar as the
respective Manufacturers are concerned), except for (i) a general
license for the Company to own Nuclear Fuel from the Nuclear
Regulatory Commission (currently granted under 10 C.F.R. Sections
40.21 and 70.20), (ii) a license to possess and use special
nuclear material granted by the Nuclear Regulatory Commission to
the Company, and (iii) a certificate on Form U-7d filed by the
Company with the SEC pursuant to the SEC's Rule 7(d), all of
which licenses, orders, approvals and filings have been duly
obtained or made and are final and are in full force and effect,
and none of such licenses, orders, approvals and filings is the
subject of any pending or, to the best of the Company's
knowledge, any threatened attachment by direct proceedings or
otherwise; and except for a special license to possess Nuclear
Fuel from the Nuclear Regulatory Commission that the Company or
the Collateral Agent may require to take possession of the
Nuclear Fuel in event of default; provided that no representation
is given herein with respect to Federal, New York or Mississippi
banking or trust laws or regulations or the securities.
Investment Company Status. The Company is not an "investment
company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as
amended. The Company is not a "public utility company," or a
"holding company," or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
The Security Agreement is not required to be qualified under the
Trust Indenture Act of 1939, as amended, and the creation of the
security interest in the Collateral in favor of the Secured
Parties under the Security Agreement does not require an
indenture to be qualified under said Act.
Absence of Foreign Status; etc.
(a) Absence of Foreign Status. The Company is not (i)
a Person included within the definition of "designated
foreign country" or "national" of a "designated foreign
country" in Executive Order No. 9193, as amended, or in the
Foreign Assets Control Regulations (31 C.F.R., Chapter V,
Part 500, as amended), in the Cuban Assets Control
Regulations (31 C.F.R., Chapter V, Part 515, as amended) or
within the meaning of any of such orders or regulations, or
of any regulations, interpretations or rulings issued
thereunder, or in violation of such orders or regulations or
of any regulations, interpretations or rulings issued
thereunder or (ii) an entity listed in Sections 520.101,
545.306 or 550.304 of the Foreign Funds Control Regulations
(31 C.F.R., Chapter V, Parts 520,545 and 550, as amended).
(b) Pension Plan. The Company has no pension plans
that are subject to the provisions of Title IV of the
Federal Employee Retirement Income Security Act of 1974, as
amended, and the applicable rules and regulations issued
thereunder.
(c) Margin Stock. The Company does not presently own
any shares of "margin stock" within the meaning of
Regulation G of the Board of Governors of the Federal
Reserve System or any regulations, interpretations or
rulings thereunder.
Private Offering. Neither the Company, nor to the knowledge
of the Company, the Lessee nor any Person authorized or employed
by any of them as agent, broker, dealer or otherwise (the only
such agent being Merrill Lynch & Co.) in connection with the
offering or sale of the Notes has directly or indirectly offered
any of the Notes or any similar Securities (other than commercial
paper) for sale to, or solicited offers to buy any thereof from,
or otherwise approached or negotiated with respect thereto with,
any prospective purchaser other than you, the other Purchasers,
and not more than 25 other prospective purchasers. To the
knowledge of the Company, based on the representation of Merrill
Lynch & Co., each offeree was an "accredited investor" as defined
in Rule 501 under the Securities Act of 1933, as amended (the
"1933 Act"). The Company agrees that it has not offered and will
not offer, either directly or indirectly, the Notes or any part
thereof or any similar Securities (other than commercial paper)
for issue or sale to, or solicit any offer to acquire any of the
same from, anyone, or take any other action which would subject
the issuance and sale of the Notes to the provisions of Section 5
of the 1933 Act.
Disclosure. None of the representations in this Agreement,
the financial statements referred to in Section 3.3 hereof, the
Schedule A referred to in Section 3.4 hereof, or in any other
document, certificate, or statement furnished to you by or on
behalf of the Company in connection with the transactions
contemplated hereby contained as of its date any untrue statement
of a material fact or omitted to state a material fact necessary
in order to make the representations contained herein or the
statements contained therein not misleading in light of the
circumstances under which they were made. There is no fact
within the knowledge of the Company which has not been disclosed
herein or therein and which materially adversely affects, or in
the future, so far as the Company can now foresee, may so affect,
the business, assets or condition, financial or otherwise, of the
Company.
No Default. No Default or Event of Default has occurred
under the Credit Agreement and, to the knowledge of the Company,
no event of termination has occurred under Section 20 of the
Lease Agreement or under any of the other Basic Documents on the
date hereof.
Security. The Security Agreement is effective to create in
favor of the Collateral Agent as agent for the Secured Parties a
legal, valid and enforceable first priority security interest in
all of the Collateral, and a legal, valid and enforceable
purchase money security interest in all of the Company's right,
title and interest in the Nuclear Fuel Contracts, and all
filings, recordings and other actions that are necessary in order
to establish, preserve and perfect the Collateral Agent's lien on
and security interest in the Collateral as a legal, valid and
enforceable first lien and security interest, or purchase money
security interest, as the case may be, have been duly effected,
except that the foregoing representation shall not be deemed to
be violated as a result of the existence or priority of any lien
permitted by Section 15 of the Lease Agreement.
Permitted Indebtedness. As of the date hereof and after
giving effect to the sale of Notes pursuant to this Agreement,
the aggregate SLV of the Nuclear Fuel plus the cash and
investments of the Company in the Collateral Account equals or
exceeds the sum of the Outstandings under the Credit Agreement
plus the aggregate outstanding principal amount of all IT Notes.
CLOSING CONDITIONS.
Condition Precedent to Company's Obligations. The Company's
obligation to issue and deliver the Notes to be delivered to you
at the Closing shall be subject to the receipt by the Company at
or prior to the time of the Closing of a written consent of the
Lessee authorizing the Company to execute and deliver the
Agreements and to issue and sell the Notes.
Conditions Precedent to Purchaser's Obligations. Your
obligation to purchase and pay for the Notes to be delivered to
you at the Closing shall be subject to the satisfaction of the
following conditions precedent prior to or contemporaneously with
the delivery of the Notes to you at the Closing:
Opinions of Counsel. You shall have received at
the Closing from Carter Ledyard & Milburn, counsel for the
Company and the Trustee, Wise, Carter, Child & Caraway,
counsel for the Lessee and special local counsel for the
Trustee as to perfection of the security interests and
conformity with local law, Reid & Priest LLP, New York
counsel for the Lessee and the Guarantor, and Ropes & Gray,
your special counsel, their favorable opinions, dated the
date of the Closing, each in form satisfactory to you.
Representations True.
The representations and warranties contained
in Section 3 hereof and otherwise made by or on behalf
of the Company in writing in connection with the
transactions contemplated hereby (which shall not be
deemed to include any of the documents specifically
referred to in Section 4.2(b)(ii) hereof) are true and
correct in all material respects at and as of the time
of the Closing; and no condition or event which would
constitute a Default as defined in Section 11 hereof
has occurred and is continuing at the time of Closing.
The representations and warranties of the
Lessee contained in Section 2 of the Lease Agreement
shall be true, correct and complete in all material
respects at and as of the time of the Closing with the
same force and effect as though made at and as of the
time of the Closing. On the date hereof the Private
Placement Memorandum, when read together with the other
Disclosure Documents, as supplemented by the
information contained in Schedule 1 hereto, if any,
does not include any untrue statement of a material
fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not
misleading. You shall have received at the Closing a
certificate dated the date thereof and signed by the
Treasurer or an Assistant Treasurer of the Lessee
substantially in the form of Exhibit C to this
Agreement.
Compliance with this Agreement. The Company shall
have performed and complied with all agreements and
conditions contained herein which are required to be
performed or complied with by the Company before or at the
Closing.
Company's Certificates. You shall have received
at the Closing (1) a certificate of the Secretary of the
Company dated the Closing Date certifying: (i) that the By-
laws of the Company attached thereto are true and complete
and in full force and effect, (ii) that the resolutions
attached thereto have been duly adopted by the Board of
Directors of the Company, (iii) that there has been no
amendment to the Company's charter, and (iv) the incumbency
and specimen signatures of each officer of the Company
executing this Agreement and the Notes, and (2) a
certificate dated the date of the Closing and signed by or
on behalf of the Company, certifying that the conditions
specified in Sections 4.2(b)(i) and 4.2(c) have been
fulfilled.
Lessee's Consent and Letter Agreement. You shall
have received at the Closing a copy of the Lessee's Consent
pursuant to Section 33(b) of the Fuel Lease and a letter
agreement substantially in the form of Exhibit D to this
Agreement (the "Lessee's Letter Agreement"), both signed by
the Lessee.
Legality. The purchase of and payment for the
Notes shall not be prohibited by any applicable law or
governmental regulations and shall not subject you to any
penalty or other onerous condition under or pursuant to any
applicable law or governmental regulation. The Notes shall
at the time of the Closing qualify as a legal investment for
insurance companies under New York Insurance Law and you
shall have received such evidence as you may reasonably
request to establish compliance with this condition.
Proceedings Satisfactory; Basic Agreements. All
proceedings taken in connection with the sale of the Notes
and all documents and papers relating thereto shall be
satisfactory to you. You and your special counsel shall
have received copies of such documents and papers as you or
they may reasonably request in connection therewith or as a
basis for your special counsel's closing opinion, all in
form and substance satisfactory to you.
Information. The Company shall have delivered to
you such information as you shall have reasonably requested
for use as a basis for any filings which you may be required
to make with certain regulatory bodies and with the National
Association of Insurance Commissioners.
Private Placement Number. A Private Placement
Number issued by Standard & Poor's CUSIP Service Bureau (in
cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have
been obtained for the Notes.
PAYMENT, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF
THE NOTES.
Payment Address. The Company shall make or shall cause the
Registrar to make all payments on account of interest and
principal to be paid in respect of the Notes held by you or your
assignee by wire transfer in immediately available funds on the
scheduled payment date at your payment address specified in
Exhibit A hereto, or in such other manner and at such other
address as shall be designated by notice to the Company and the
Registrar in respect of Notes held by you or by any other
Noteholder. Payments on account of each Note shall be made
without the necessity of any presentment or notation of payment,
and the amount of principal so paid on any Note shall be regarded
as having been retired and cancelled at the time of payment. Any
Note with respect to which interest and principal shall have been
fully paid shall be surrendered to the Company (or, at the
Company's direction, to the Registrar) and shall be retired and
cancelled. The holder of any Note, before any transfer thereof,
shall make a notation thereon of the date to which interest has
been paid and of all principal payments theretofore made thereon
and shall in writing notify the Company of the name and address
of the transferee.
Registration, Transfer or Exchange. So long as any of the
Notes remains unpaid, the Company shall cause the Registrar to
keep at its principal office referred to in Section 12.1 hereof
(or at such other office of the Registrar within the State of New
York as the Company or the Registrar shall have identified by
written notice to each of the Noteholders) a register in which
shall be entered the names and addresses of all Noteholders and
the particulars of those Notes held by them and of all transfers
of such Notes. The holder in whose name any Note shall be so
registered shall be deemed and treated as the owner thereof for
all purposes of this Agreement and neither the Company nor the
Registrar shall be affected by any notice to the contrary. For
the purpose of any request, direction or consent hereunder, the
Company and the Registrar may deem and treat the holder of any
Note as the owner thereof without production of such Note. Any
Noteholder may at any time and from time to time prior to
maturity or redemption thereof surrender any Note held by it for
transfer or exchange at said office of the Registrar; provided,
however, that the proposed transfer or exchange does not violate
the 1933 Act, or any other applicable law relating to the sale of
securities and the Company may require, as a condition to the
registration of any transfer, an opinion of counsel for the
transferring Noteholder (which may be in-house counsel) to the
effect that such transfer is exempt from the registration
requirements of the 1933 Act, and, if applicable, any state
securities law. If such opinion is not provided by in-house
counsel and if the transfer shall be to an "accredited investor"
as defined in Rule 501(a) under the 1933 Act, the reasonable cost
of such opinion shall be borne by the Company. Within a
reasonable time thereafter and without expense (other than
transfer taxes, if any) to such holder, the Company shall cause
the Registrar to issue in exchange therefor another Note or
Notes, dated the date to which interest has been paid on each
Note surrendered or dated the date of such surrendered Note if no
interest has theretofore been paid thereon, for the same
aggregate principal amount as the unpaid principal amount of the
Note or Notes so surrendered, containing the same provisions and
subject to the same terms and conditions as the Note or Notes so
surrendered. Each such new Note shall be registered in the name
of such Person or Persons as the holder of such surrendered Note
or Notes may designate in writing, and such exchange shall be
made in a manner such that no additional or lesser amount of
principal or interest shall result. The Company will pay or will
cause the Registrar to pay shipping and insurance charges, from
and to each Noteholder's main office, involved in the exchange or
transfer of any Note.
Replacement. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of any Note and, if requested in the case of any such
loss, theft or destruction, upon delivery of an indemnity
agreement or security reasonably satisfactory to the Company, or,
in the case of any such mutilation, upon surrender and
cancellation of such Note, the Company will cause the Registrar
to issue a new Note, of like tenor and amount and dated the date
to which interest has been paid, or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest has
theretofore been paid thereon, in lieu of such lost, stolen,
destroyed or mutilated Note.
Notwithstanding the foregoing provisions of this Section
5.3, if any Note of which you or your nominee is the holder is
lost, stolen or destroyed, the affidavit of your Treasurer or any
officer setting forth the circumstances with respect to such
loss, theft or destruction shall be accepted as satisfactory
evidence thereof, and no indemnity or security shall be required
as a condition to the execution and delivery by the Company and
the Registrar of a new Note in replacement of such lost, stolen
or destroyed Note other than your written agreement to indemnify
the Company and the Registrar.
REDEMPTION PROVISIONS. The Company covenants and agrees
that so long as any of the Notes are outstanding it will redeem
the Notes as follows:
Mandatory Redemption upon Termination of Lease Agreement.
The Company shall, upon the occurrence of any "Event of
Termination" described in Section 20(a)(ii) through 20(a)(x) of
the Lease Agreement, redeem or shall cause the Registrar to
redeem the entire outstanding principal amount of the Notes
without premium on the Termination Settlement Date. Except as
provided in this Section 6.1 or in Section 6.2 hereof, neither
the Company nor the Registrar may redeem the Notes, in whole or
in part, prior to the stated maturity thereof.
Optional Redemption of Notes. The Company shall have the
right, at its option, at any time and from time to time, to
prepay all or any portion of the principal amount of Notes
outstanding and shall, at the request of the Lessee or upon the
occurrence of an "Event of Termination" as described in Section
20(a)(i) of the Lease Agreement, redeem or shall cause the
Registrar to redeem the entire principal amount of the Notes
outstanding (the amount so prepaid or redeemed being hereinafter
referred to as the "Called Principal") at a price equal to the
sum of (i) the Called Principal, (ii) interest accrued on the
Called Principal through the Redemption Date (as defined below)
and (iii) the Yield Maintenance Premium.
Notice of Redemption. Notice of each prepayment or
redemption of Notes pursuant to Section 6.1 or 6.2 hereof shall
be given by the Company not less than 30 nor more than 60 days
before the redemption date (the "Redemption Date") by mailing to
each Noteholder an irrevocable notice of intention to redeem
specifying the date of redemption, identifying the "Event of
Termination" under the Lease Agreement giving rise to such
redemption (in the case of redemption pursuant to Section 6.1),
stating the aggregate principal amount of Notes to be redeemed on
such date and the principal amount of the Notes to be redeemed on
such date held by the Noteholder to whom such notice is sent and
accrued interest applicable to such redemption. In the case of a
redemption pursuant to Section 6.2 hereof, a written calculation
of the redemption price shall be sent to each holder of Notes to
be redeemed not later than 12 noon on the Business Day prior to
the Redemption Date.
Payment and Interest Cut-Off. Upon each redemption of
Notes, in whole or in part, the Company shall pay or shall cause
the Registrar to pay to each holder thereof the amount of its
Notes to be redeemed together with the unpaid interest in respect
thereof accrued to the Redemption Date. Notice of redemption
having been given in compliance with Section 6.3 hereof, the
aggregate principal amount of the Notes to be redeemed shall
become due and payable on the Redemption Date, and from and after
said date (unless the Company or the Registrar shall default in
paying the amounts then due) interest on such principal amount of
the Notes shall cease to accrue.
Permanent Retirement of Notes. Notes redeemed in full or
otherwise acquired by the Company or the Registrar shall be
permanently retired and cancelled and shall not under any
circumstances be reissued or resold.
Selection of Notes for Redemption. Each redemption required
by the Agreements shall be made so that the Notes then held by
each Noteholder shall be redeemed in a principal amount in
integral multiples of $1,000 which shall bear the same ratio, as
nearly as possible, to the total principal amount being redeemed
as the principal amount of Notes then held by each Noteholder
shall bear to the aggregate principal amount of the Notes then
outstanding.
TERMINATION OF LEASE AGREEMENT; AMENDMENT OF BASIC
AGREEMENTS AND NUCLEAR FUEL CONTRACTS; ADDITIONAL COVENANTS. So
long as any IT Notes are outstanding:
Termination of Lease Agreement. The Company shall not
terminate the Lease Agreement pursuant to Section 3(b) of said
Agreement without receiving the prior written consent of the
holders of at least 66 2/3% in aggregate principal amount of all
IT Notes at the time outstanding.
Basic Agreements and Nuclear Fuel Contracts. The Company
shall not enter into any amendment to or supplement of any Basic
Agreement or any written waiver or modification of the terms of
any Basic Agreement or enter into any amendment to or supplement
of any Nuclear Fuel Contract or any written waiver or
modification of the terms of any Nuclear Fuel Contract (unless,
in the case of Nuclear Fuel Contracts, such actions shall be
permitted under the Lease Agreement) without in each case
receiving the prior written consent of the holders of at least 66
2/3% in aggregate principal amount of all IT Notes at the time
outstanding.
Additional Covenants. The Company shall not agree to any
affirmative or negative covenant with respect to the business,
operations, properties or condition, financial or otherwise, of
the Company with any Person who shall extend or propose to extend
credit to the Company unless either (x) such covenant is in
existence on the date hereof and a copy of the document
containing such covenant has been provided to you or (y) subject
to Section 12.5(a), such covenant is contained in an amendment of
or supplement to the Agreements, in an agreement with respect to
the purchase of other IT Notes or in one of the Basic Agreements.
COVENANTS. Without limiting any other covenants and
provisions hereof, the Company covenants and agrees that, so long
as any of the Notes is outstanding, it will perform and observe
the following covenants and provisions:
General Obligations. The Company will (i) duly observe and
conform to all valid requirements of any governmental authorities
relative to the conduct of its business or to the ownership of
its assets, (ii) preserve and keep in full force and effect the
existence of the Company and the rights, privileges and
franchises of the Company and (iii) obtain, maintain and keep in
full force and effect all consents, permits, licenses, approvals,
orders and authorizations which are necessary to properly carry
out the transactions contemplated to be performed by it by this
Agreement, the Notes and the Basic Agreements to which it is a
party.
Books of Company. The Company will keep books of record and
account acceptable to you in relation to its business and
activities.
Notices. Upon obtaining knowledge thereof, the Company will
promptly give written notice to you of (i) the occurrence of any
Default or Event of Default hereunder or any of the events set
forth in Sections 18, 19 or 20(a) of the Lease Agreement or any
"Default" or "Event of Default" under the Credit Agreement; (ii)
any litigation or proceedings with respect to the Company, or
affecting the Company or any of its assets; and (iii) such other
information concerning the business, assets, or condition,
financial or otherwise, of the Company as you may from time to
time reasonably request.
Payment of Taxes. The Company will cause to be computed,
paid and discharged (subject to the provisions of Section 10.1
hereof) when due all taxes, assessments and other governmental
charges or levies imposed upon the Company, or upon any income or
assets of the Company, prior to the day on which penalties are
attached thereto, unless and except to the extent that the same
shall be contested in good faith by appropriate proceedings
diligently prosecuted and no foreclosure, distraint, sale or
other similar proceedings shall have commenced or been
threatened.
Governmental Permits. The Company will, to the extent
obtained or received by it, furnish or cause to be furnished to
you a copy of any authorization, license, permit, consent, order
or approval of any governmental authority obtained or required to
be obtained in connection with the transactions contemplated by
the Agreements, the Notes or any of the Basic Agreements.
Inspection. The Company will permit any Person designated
by you to inspect any of the Company's Property (subject to the
provisions of Section 12 of the Lease Agreement) or any of the
books or financial records of the Company and to discuss the
affairs, finances and accounts of the Company with the officers
of the Company or the Company's independent Certified Public
Accountants, all at such reasonable times and as you may
reasonably request.
Financial Statements. The Company will furnish to you,
within 30 days after the close of each Calendar Quarter, a
quarterly statement of changes in cash flow relating to the
Company.
Copies of Documents. The Company will promptly deliver to
you copies of all (i) amendments, modifications and waivers, (ii)
all requests for any such amendment, modification or waiver, and
(iii) any notice of an "Event of Default" received or delivered
by the Company under or with respect to the Credit Agreement, the
Lease Agreement, any of the Basic Agreements or any of the IT
Note Agreements (or, to the extent requested by you, the
Depositary Agreement or Dealer Agreement), to the extent that the
same shall not have been delivered to you pursuant thereto.
Activities of Company. The Company will not engage in any
business or activity of any kind or enter into any transaction
which is not directly related to the purchase and sale and
leasing of Nuclear Fuel pursuant to the Lease Agreement and the
financing thereof in the manner contemplated by the Credit
Agreement, this Agreement, the Depositary Agreement and the Basic
Agreements.
Indebtedness. The Company will not, directly or indirectly,
create, incur, assume or suffer to exist any indebtedness of any
kind for borrowed money, extensions of credit or the deferred
purchase price of property, except
the indebtedness evidenced by the IT Notes, each
of which complies with all of the following requirements:
(i) such IT Note shall not be secured by any collateral
other than the Collateral described in the Security
Agreement in accordance with the terms thereof, unless the
Notes, the CP Notes and the Loan Notes and any other
indebtedness incurred in connection with bank credit
facilities permitted under Section 8.10(b) hereof are
secured equally and ratably by such additional collateral,
(ii) such IT Note shall not be guaranteed directly or
indirectly by any Person nor shall the holder thereof be
assured against loss or nonpayment unless the Notes, the CP
Notes and the Loan Notes and any other indebtedness incurred
in connection with bank credit facilities permitted under
Section 8.10(b) hereof shall have the benefit of such
guaranty or assurance on a pro rata basis with such IT Note,
(iii) there shall not exist a Default or an Event of Default
hereunder or a "Default" or "Event of Default" under the
Credit Agreement on the date of issuance of such IT Note,
and (iv) immediately following the issuance of such IT Note,
the aggregate SLV of the Nuclear Fuel plus any accrued Daily
Lease Charges shall equal or exceed the sum of the
Outstandings under the Credit Agreement and any other
indebtedness incurred in connection with bank credit
facilities permitted under Section 8.10(b) hereof plus the
aggregate outstanding principal amount of all IT Notes
(including the Notes); and
indebtedness evidenced by the Credit Agreement,
the CP Notes and the Loan Notes or any of their successors.
No such bank indebtedness shall constitute permitted
indebtedness of the Company unless (i) the banks providing
such credit facilities, other than the Credit Agreement,
shall have acknowledged and agreed to the terms of the Basic
Agreements, (ii) the banks providing such credit facilities,
including the banks participating in the Credit Agreement,
shall not be secured by any collateral other than the
Collateral described in the Security Agreement in accordance
with the terms thereof unless all IT Notes at the time
outstanding are secured equally and ratably by such
additional Collateral, (iii) indebtedness incurred in
connection with such bank credit facilities shall not be
guaranteed directly or indirectly by any Person nor shall
any bank providing such credit facilities be assured against
loss or nonpayment unless all IT Notes shall have the
benefit of such guaranty or assurance on a pro rata basis
with the banks providing such credit facilities, (iv) there
shall not exist a Default or an Event of Default hereunder
at the time of execution of any credit agreement with a bank
other than the Credit Agreement, and (v) immediately
following the incurrence of any indebtedness with respect to
such bank credit facilities, the aggregate SLV of the
Nuclear Fuel plus any accrued Daily Lease Charges shall
equal or exceed the sum of Outstandings under the Credit
Agreement and all other outstanding bank indebtedness plus
the aggregate outstanding principal amount of all IT Notes
(including the Notes),
provided, however, that all indebtedness for borrowed money
(other than indebtedness evidenced by the IT Notes), in aggregate
principal amount (before discount) at any one time outstanding
shall not exceed $250,000,000 less the aggregate principal amount
of the Notes outstanding at such time.
Guarantees. The Company will not become or remain liable,
directly or contingently, in connection with any obligation of
any Person, whether by guaranty, endorsement (other than
endorsements of negotiable instruments for deposit or collection
in the ordinary course of business), agreement to purchase or
repurchase, agreement to supply or advance funds or otherwise.
Liens. The Company will not create, incur, assume or suffer
to exist any Lien upon or with respect to any of the Company's
Property, whether now owned or hereafter acquired, or assign or
otherwise convey any right to receive income except (i) Liens
created in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, under the Security Agreement and (ii)
Liens which Section 15 of the Lease Agreement allows the Lessee
to permit on the Nuclear Fuel.
Distributions. The Company will not declare or pay any
distribution (whether in cash or in Property) with respect to the
profits, assets or capital of the Company.
Investments; Loans. The Company will not make or suffer to
exist any loans or advances to, or make any investments (by way
of transfer of Property, contributions to capital, purchase of
stock or securities or evidences of indebtedness, acquisition of
the business or assets, or otherwise) in, any Person except for
the purchase of Nuclear Fuel as contemplated by the Lease
Agreement and the investments permitted by Section 3.4 of the
Security Agreement.
Salaries. The Company will not pay any salaries or wages.
Merger; Sales. The Company will not enter into any
transaction of merger or consolidation, or terminate, liquidate
or dissolve itself (or suffer any termination, liquidation or
dissolution), or acquire or be acquired by any Person, or
otherwise change the form or organization of its business, or
convey, sell, lease or otherwise dispose of any of its Property
or business, except (i) for transactions contemplated by the
Lease Agreement, (ii) Liens permitted by Section 8.12 hereof.
Payments. The Company will not make any payment or advance
any amounts to any Person unless it shall be expressly permitted
to make such payment by this Agreement, the Credit Agreement,
other bank credit facilities permitted under Section 8.10(b)
hereof, the Lease Agreement, the Dealer Agreement or an IT Note
Agreement.
Compliance with Agreements. The Company will not fail to
(i) duly perform all obligations to be performed by it under each
of the Basic Agreements and (ii) upon instructions from the
Collateral Agent on behalf of the Secured Parties pursuant to
Section 6.2 of the Security Agreement, promptly take any and all
actions as may be necessary to enforce its rights under the Lease
Agreement and to enforce or secure the performance by the Lessee
of its obligations thereunder. Without limiting the generality
of the foregoing, the Company shall, upon the written
instructions of the Lessee, file or cause to be filed all
continuation statements required under the Uniform Commercial
Code or other applicable law, as from time to time in effect in
each applicable jurisdiction, with respect to the Liens and
security interests granted under the Security Agreement in order
to maintain a prior perfected security interest in the
Collateral.
Acceptance of Additional Nuclear Fuel Contracts. The
Company shall not accept the assignment by the Lessee of all or
any part of the Lessee's rights in and to any additional Nuclear
Fuel Contracts except in accordance with the terms and provisions
of Section 4 of the Lease Agreement.
Investment Company. The Company will not be an "investment
company" or a company "controlled" by an investment company
within the meaning of the Investment Company Act of 1940, as
amended.
Public Utility Holding Company. The Company will not be a
"public utility company," or a "holding company," or an
"affiliate" of a "holding company" or a "subsidiary" of a
"holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Accounts and Deposits. The Company will not open, create or
maintain any bank account, or make any deposit with or in any
financial institution, except for the Commercial Paper Account
and the Collateral Account.
Expenses and Indemnity. Whether or not the transactions
contemplated hereby shall be consummated, the Company will pay
all reasonable expenses (including the reasonable fees and
expenses of its counsel and your special counsel) in connection
with the preparation and reproduction of the Agreements and the
Notes, and also in connection with any amendments of or waivers
under the Agreements or the Notes, will indemnify you and hold
you harmless against all broker's and finder's fees, and will pay
all your out-of-pocket expenses reasonably incurred in connection
with the matters contemplated thereby, and, at your election,
will reimburse you for any such expenses paid by you.
In the event that it subsequently is determined that any tax
is due on the issue of the Notes or on your acquisition thereof,
or on any modification of the Notes or of the Agreements, the
Company will pay or cause to be paid all such taxes and interest
and penalties, if any (excluding, however, any transfer taxes),
and will indemnify and save you and all holders of the Notes
harmless from any loss or damage of any kind whatsoever resulting
from or arising out of the nonpayment or delay in the payment of
such taxes. The obligations of the Company under this Section
8.23 shall survive the payment of the Notes. In no event shall
the Company be required to pay any taxes based upon your net
income or profits or upon interest income arising out of the
Notes.
EVENTS OF DEFAULT; CONSEQUENCES.
Events of Default. The occurrence of one or more of the
following events shall constitute an "Event of Default" under the
Agreements:
Principal Payments. The Company fails to make any
payment of any part of the principal of any of the Notes
when and as the same shall become due and payable, whether
at the stated maturity of the Notes or at a date fixed for
redemption or by acceleration or otherwise; or
Interest Payments. The Company fails to make any
payment of interest on any of the Notes when and as the same
shall become due and payable and any such default shall
continue for a period of ten days; or
Covenant Defaults. The Company (i) fails to perform or
observe any covenant contained in Section 7 or Sections 8.9,
8.10, 8.11, 8.12 (with respect to Liens created by it), 8.13
through 8.17, 8.18(ii) (with respect to specific
instructions from the Collateral Agent), 8.19 and 8.22 of
this Agreement or (ii) fails to provide the notice required
by Section 8.3(i) of this Agreement and such failure shall
continue for a period of fifteen days from the date of which
an officer of the Company first acquired knowledge of the
event requiring such notice; or
Other Defaults. The Company fails to comply with any
other provision of the Notes or of the Agreements, and such
failure shall continue for more than thirty days after
written notice thereof shall have been given to the Company
by any Noteholder; or
Representations or Warranties. Any representation or
warranty made by or on behalf of the Company or the Lessee
contained in the Agreements or in any instrument furnished
in compliance with or in reference to the Agreements, or in
connection with any amendment thereof, shall prove to have
been false or misleading in any material respect as of the
date made; or
Default on Indebtedness. Any IT Note, or any other
indebtedness for borrowed money of the Company is declared
to be, or otherwise becomes, due and payable (other than at
the option of the Company) prior to its stated maturity or
regularly scheduled dates of payment, or any scheduled dates
of payment, or any event shall occur or any condition shall
exist in respect of any such indebtedness or under any
agreement securing or relating to such indebtedness, the
effect of which is to require (or permit any holder of such
indebtedness or a Company to require) such indebtedness, or
any portion thereof, to be paid prior to its stated maturity
or prior to its regularly scheduled dates of payment; or
(g) Event of Default under Lease Agreement or Credit
Agreement. Any "Event of Default" shall occur under the
Lease Agreement or any "Event of Default" shall occur under
the Credit Agreement or any event of default shall occur
with respect to any other indebtedness incurred in
connection with bank credit facilities permitted under
Section 8.10(b) hereof; or
(h) Lessee's Letter Agreement. The Lessee fails to
observe any covenant contained in the Lessee's Letter
Agreement; or
(i) Bankruptcy; Insolvency. The Company shall be
involved in financial difficulties as evidenced:
(1) by its commencement of a voluntary case under
Title 11 of the United States Code as from time to time in
effect, or by its authorizing the commencement of such a
voluntary case;
(2) by its filing an answer or other pleading
admitting or failing to deny the material allegations of a
petition filed against it commencing an involuntary case
under said Title 11, or seeking, consenting to or
acquiescing in the relief therein provided, or by its
failing to controvert timely the material allegations of any
such petition;
(3) by the entry of an order for relief in any
involuntary case commenced under said Title 11;
(4) by its seeking relief as a debtor under any
applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization
of debtors or to the modification or alteration of the
rights of creditors, or by its consenting to or acquiescing
in such relief;
(5) by the entry of an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent,
(ii) ordering or approving its liquidation, reorganization
or any modification or alteration of the rights of its
creditors, or (iii) assuming custody of, or appointing a
receiver or other custodian for all or a substantial part of
its property; or
(6) by its making an assignment for the benefit, of,
or entering into a composition with, its creditors, or
appointing or consenting to the appointment of a receiver or
other custodian for all or a substantial part of its
property.
Default Remedies.
Acceleration. If an Event of Default described in
clause (a) or (b) of Section 9.1 hereof shall occur and be
continuing with respect to any Note, the holder of such
Note, may by notice in writing to the Company declare the
entire unpaid balance of such Note and all interest accrued
and unpaid thereon to be, and such amount shall thereupon
become, forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of which
are hereby expressly waived, and, to the extent permitted by
law, such holder may proceed to institute suit for the
enforcement of the payment of principal and interest on such
Note. If an Event of Default, including without limitation,
an Event of Default described in clause (a) or (b) of
Section 9.1 hereof, shall occur and be continuing (unless
there shall have occurred an Event of Default under Section
9.1(i) hereof, in which case the unpaid balance of all Notes
shall automatically become due and payable), the holders of
at least 33-1/3% of the principal amount of the Notes at the
time outstanding may, by notice in writing to the Company,
declare the entire unpaid balance of the Notes and all
interest accrued and unpaid thereon to be, and such Notes
shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived. The Company
will forthwith pay to the holder or holders of all the Notes
at the time outstanding the entire unpaid balance of and
interest accrued on the Notes. In addition, subject to the
provisions of the Security Agreement, following an Event of
Default each Noteholder may proceed to protect and enforce
such holder's rights by suit in equity, action at law and/or
other appropriate proceeding of or for specific performance
of, or for any injunction against violation of, any covenant
or provision contained in the Notes or herein or in aid of
the exercise of any power granted in the Notes. Each of the
Noteholders shall following an Event of Default have all of
the rights of a Secured Party; provided, however, that no
Noteholder shall have any right to enforce directly any of
the rights or the security interests granted by the Security
Agreement or to require the Collateral Agent to take or
refrain from taking any action under the Security Agreement.
Nonwaiver and Expenses. No course of dealing between
the Company or the Lessee and any Noteholder nor any delay
or failure on the part of any Noteholder to exercise any
right shall operate as a waiver of such right. A waiver of
the rights of any Noteholder may be made only in accordance
with Section 12.5 hereof. If the Company fails to pay when
due the principal of or interest on any Note, or fails to
comply with any other provision of the Agreements, the
Company will pay to the holder thereof, to the extent
permitted by law, any applicable late charge, as provided in
the Notes, and such further amounts as shall be sufficient
to cover the cost and expenses, including but not limited to
reasonable attorneys' fees, incurred by such holder in
collecting any sums due on the Note or in otherwise
enforcing any of such holder's rights under this Agreement.
Annulment of Acceleration. If a declaration is made
pursuant to Section 9.2(a) by any holder or holders of the Notes,
then and in every such case, the holders of more than 66-2/3% in
aggregate principal amount of the Notes then outstanding may, by
written instrument filed with the Company, rescind and annul such
declaration, and the consequences thereof, provided that at the
time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or the
Agreements;
(b) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement
(except any principal or interest on the Notes which has
become due and payable by reason of such declaration under
Section 9.2(a)) shall have been duly paid; and
(c) each and every other Default and Event of Default
shall have been waived pursuant to Section 12.5 hereof or
otherwise made good or cured;
and provided, further that no such rescission and annulment shall
extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereon.
Notice of Default. If any Noteholder shall demand payment
because of, or take any other action of which the Company shall
have actual knowledge in respect of, an alleged Default, or if
the Company acquires knowledge of any Default, the Company shall
forthwith give written notice, specifying the nature of such
Default and any such action, to each holder of the Notes at the
time outstanding, and the Company shall also give written notice
to each such holder if any written instrument of rescission or
annulment as aforesaid shall be filed with it under the
provisions of Section 9.3 hereof.
NO RECOURSE.
This Agreement, the Depositary Agreement, the Notes, the
Security Agreement, the Lease Agreement and any other document
executed and delivered by the Company in connection herewith or
therewith is intended to be a corporate obligation of the Company
only, and all of the statements, representations, covenants and
agreements made by the Company contained herein or therein are
made and intended only for the purpose of binding the Company and
establishing the existence of rights and remedies provided for
herein or therein which can be exercised and enforced against the
Company. Therefore, anything contained in this Agreement, the
Depositary Agreement, the Notes, the Security Agreement, the
Lease Agreement and any other document to the contrary
notwithstanding, no recourse may be made by any Noteholder
against River Fuel Trust #3, United States Trust Company of New
York, as trustee or in its individual capacity or any
incorporator, shareholder (direct or indirect), affiliate,
director, officer, employee or agent of the Company, River Fuel
Trust #3 or United States Trust Company of New York as such with
respect to claims against the Company arising under or relating
to this Agreement; provided, however, that nothing in this
Section 10 shall relieve the Company from its corporate
obligations under this Agreement.
INTERPRETATION OF THIS AGREEMENT.
Terms Defined. Unless the context otherwise specifies or
requires, each term defined in this Section 11.1 shall, when used
in this Agreement, have the meaning indicated. To the extent
that certain of the terms defined in this Agreement are defined
by cross-reference to documents which may not be in full force
and effect during the entire term of this Agreement, and subject
to the provisions of Section 7.2 hereof, the definitions
contained in such documents shall be and remain effective for
purposes of implementing this Agreement during the term of this
Agreement.
Agreement - See Section 2.2 hereof. The term "Agreements"
shall include, in addition to the original agreements pursuant to
which the Notes are issued, every other instrument which the
Company and the holders of the Notes execute at any time which
shall amend the original agreement, and the words "hereof",
"hereunder", "herein" and other like expressions refer to the
original agreements as so amended as a whole and not to any
particular Section or subsection thereof.
Assignment - shall mean the assignment of a Nuclear Fuel
Contract pursuant to Section 4 of the Lease Agreement.
Bank - shall mean Union Bank of Switzerland, Houston Agency.
Basic Agreements - collectively, the Assignments, the
Lessee's Letter Agreement, the Lessee's Consent, the Lease
Agreement, the Security Agreement, and the Trust Agreement, and
shall include the exhibits, schedules and annexes attached to
each of the foregoing.
Business Day - any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or
authorized to be closed.
Calendar Quarter - a calendar quarter ending on the last day
of any March, June, September or December.
Called Principal - See Section 6.2 hereof.
Closing - See Section 2.3 hereof.
Collateral - all property or rights referred to in Section 2
of the Security Agreement in which a security interest is granted
to the Bank, as pledgee for the ratable benefit of the Secured
Parties, pursuant to the Security Agreement.
Collateral Account - shall have the meaning specified in
Section 3.1 of the Security Agreement.
Collateral Agent - shall have the meaning specified in the
Security Agreement.
Commercial Paper Account - shall have the meaning specified
in Section 1.01 of the Credit Agreement as in effect on the date
hereof.
CP Notes - Promissory notes of the Company sold or to be
sold in the commercial paper market and described as "A Notes" in
Section 1.01 of the Credit Agreement as in effect on the date
hereof.
Credit Agreement - the Credit Agreement dated as of February
24, 1989 between the Company and the Bank, and as the same may be
further modified, supplemented or amended from time to time.
Daily Lease Charge - shall have the meaning set forth in
Section 1 of the Lease Agreement.
Dealer Agreement - the Placement Agency Agreement dated as
of February 24, 1989 between the Company and Merrill Lynch Money
Markets Inc., as the same may be modified, supplemented or
amended from time to time.
Default - an event or condition the occurrence of which
would, with the lapse of time or the giving of notice or both,
become an Event of Default.
Depositary Agreement - the Depositary Agreement dated as of
February 24, 1989 between the Company and Morgan Guaranty Company
of New York, as the same may be modified, supplemented or amended
from time to time.
Disclosure Documents - means the Private Placement
Memorandum and the Annual Report on Form 10-K for the year ended
December 31, 1993 of Entergy Corporation and the Lessee, its
Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994, June 30, 1994 and September 30, 1994, the Lessee's Current
Report on Form 8-K dated March 21, 1994, and Entergy
Corporation's Current Reports on Form 8-K, dated January 3, 1994,
March 21, 1994, June 1, 1994, October 21, 1994, December 9, 1994,
December 16, 1994, December 21, 1994 and December 29, 1994 (the
"Disclosure Documents").
Discounted Value - shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Redemption Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the Reinvestment
Yield with respect to such Called Principal.
Event of Default - See Section 9.1 hereof.
IT Notes - all intermediate term secured promissory notes of
the Company (including the Notes) which comply with the
provisions of Section 8.10 hereof.
IT Note Agreements - collectively, the agreements between
the Company and one or more lenders pursuant to which such
lenders have purchased or agreed to purchase any of the IT Notes.
Lease Agreement - the Nuclear Fuel Lease Agreement dated as
of February 24, 1989 between the Company and System Energy
Resources, Inc., as the same may be modified, supplemented or
amended from time to time in accordance with Section 7.2 hereof.
Lessee - shall mean System Energy Resources, Inc. and its
successors, as lessee under the Lease Agreement.
Lessee's Consent - shall have the meaning specified in
Section 33 of the Lease Agreement.
Lessee's Letter Agreement - See Section 4.2(e) hereof.
Letter of Credit - any letter of credit issued by the Bank
for the account of the Depositary and described in Section 1.01
of the Credit Agreement as in effect on the date hereof.
Lien - any mortgage, pledge, lien, security interest, title
retention, charge or other encumbrance of any nature whatsoever
(including any conditional sale or other title retention
agreement, any lease in the nature thereof and the filing of or
agreement to execute and deliver any financing statement under
the Uniform Commercial Code of any jurisdiction).
Loan - shall have the meaning specified in Section 1.01 of
the Credit Agreement as in effect on the date hereof.
Loan Notes - the promissory notes issued by the Company to
evidence loans made by the Bank under the Credit Agreement and
described as "B Notes" in Section 1.01 of the Credit Agreement as
in effect on the date hereof.
Noteholder or holder of any Note - the Person in whose name
a Note is registered.
Notes - See Section 2.1 hereof.
Nuclear Fuel - shall have the meaning specified in Section 1
of the Lease Agreement.
Nuclear Fuel Contract - shall have the meaning specified in
Section 1 of the Lease Agreement.
Outstandings - shall have the meaning specified in Section
1.01 of the Credit Agreement as in effect on the date hereof.
Person - An individual, partnership, corporation, Company or
unincorporated organization, and a government or agency or
political subdivision thereof.
Private Placement Memorandum - means the Private Placement
Memorandum for River Fuel Funding Company #3, Inc., dated January
1995, from Merrill Lynch, Pierce, Fenner & Smith, Incorporated.
Property - Any interest in any kind of property or asset
whether real, personal or mixed, or tangible or intangible.
Purchaser - See Section 2.1 hereof.
Redemption Date - See Section 6.3 hereof.
Registrar - Morgan Guaranty Trust Company of New York or
such other registrar and paying agent (being a commercial bank or
company authorized to conduct business in the State of New York
and having combined capital and surplus of not less than
$25,000,000) as the Company may appoint to act as registrar and
paying agent in respect of the Notes. The Company shall give
written notice to each Noteholder of the appointment of any
successor Registrar.
Reinvestment Yield - shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time) on the
Business Day next preceding the Redemption Date with respect to
such Called Principal, on the display designated as "Page 678" on
the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Redemption Date, or (ii) if
such yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, the Treasury
Constant Maturity Series yields reported, for the latest day for
which such yields shall have been so reported as of the Business
Day next preceding the Redemption Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively
traded U.S. Treasury securities having a constant maturity equal
to the Remaining Average Life of such Called Principal as of such
Redemption Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between reported yields.
Remaining Average Life - shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will
elapse between the Redemption Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
Remaining Scheduled Payments - shall mean, with respect to
the Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due on or after the
Redemption Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled
due date.
Secured Parties - shall have the meaning specified in
Recitals to the Security Agreement.
Security - shall have the same meaning as in Section 2(1) of
the 1933 Act.
Security Agreement - the Security and Collateral Agency
Agreement dated as of February 24, 1989, executed and delivered
by the Company in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, as the same may be modified,
supplemented or amended from time to time in accordance with
Section 7.2 hereof.
SLV - shall have the meaning specified in Section 1 of the
Lease Agreement.
Termination Settlement Date - shall have the meaning
specified in Section 20(b) of the Lease Agreement.
Trust - shall mean River Fuel Trust #3, a trust formed
pursuant to the Trust Agreement.
Trust Agreement - shall mean the Trust Agreement dated as of
February 22, 1989, among United States Trust Company of New York,
as trustee, Morgan Guaranty Trust Company of New York, as
trustor, and System Energy Resources, Inc., as beneficiary.
Trustee - shall mean United States Trust Company of New
York, as Trustee of the Trust.
Yield-Maintenance Premium - shall mean, with respect to any
Note, a premium equal to the excess, if any, of the Discounted
Value of the Called Principal of such Note over the sum of (i)
such Called Principal plus (ii) interest accrued thereon as of
(including interest due on) the Redemption Date with respect to
such Called Principal. The Yield-Maintenance Premium shall in no
event be less than zero.
Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, this
shall be done in accordance with generally accepted accounting
principles in effect on the date that this Agreement was
executed, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by
such Person including actions taken by or on behalf of any
partnership in which such Person is a general partner.
Governing Law. This Agreement and the Notes shall be
governed by and construed in accordance with New York law.
MISCELLANEOUS.
Notices. Any notice, demand or other communication which by
any provision of the Agreements is required or provided to be
given shall be deemed to have been delivered if in writing
addressed as provided below and actually delivered by mail,
courier, telex or facsimile to the following addresses:
if to you, at your address shown in Exhibit A to this
Agreement, marked for attention as there indicated, or at
such other address as you may have furnished the Company in
writing; or
if to any other Noteholder, to such address as may be set
forth in the register referred to in Section 5.2 hereof,
such holder being empowered to change its address on the
register by notice in writing to the Company and the
Registrar; or
if to the Company, at 114 West 47th Street, 15th Floor, New
York, New York 10036, c/o United States Trust Company of New
York, marked for attention of the Corporate Trust and Agency
Division, Department B, or at such other address as it may
have furnished in writing to you and all other holders of
the Notes at the time outstanding;
(iv) if to the Registrar, at Morgan Guaranty Company
of New York, 30 West Broadway, New York, New York 10015,
Attention: Corporate Company Administration, or at such
other address as the Company or the Registrar shall have
furnished in writing to you and all other holders of the
Notes at the time outstanding;
(v) with copies in the case of each such notice,
demand or other communication to the Lessee, at Echelon One,
1340 Echelon Parkway, Jackson, Mississippi 39213, Attention:
Treasurer, or at such other address as the Lessee may have
furnished to you and all other holders of the Notes at the
time outstanding and to the Company.
Counterparts; Reproduction of Documents. This Agreement may
be executed in any number of counterparts, each of which, when
executed and delivered shall be an original, but such
counterparts shall together constitute one and the same
instrument. This Agreement and all documents relating thereto
(except the Notes themselves), including, without limitation, (a)
consents, waivers and modifications which may hereafter be
executed, (b) documents received by you at the closing of your
purchase of the Notes and (c) financial statements, certificates
and other information previously or hereafter furnished to you,
may be reproduced by you by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar
process and you may destroy any original document so reproduced.
The Company agrees and stipulates that any such reproduction
shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was
made by you in the regular course of business) and that any
enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
Survival. All covenants, agreements, representations and
warranties made by the Company or the Lessee herein or on any
certificate or other instrument delivered by it or them or on its
or their behalf under this Agreement shall survive the delivery
to you of the Notes regardless of any investigation made by you
or on your behalf. All statements in any such certificate or
other instrument executed and delivered by the Company or the
Lessee shall constitute warranties and representations by the
Company or the Lessee hereunder.
Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon each of the parties hereto and
their respective successors and assigns. The provisions of this
Agreement are intended to be for the benefit of all holders, from
time to time, of any of the Notes, and shall be enforceable by
any such holder, whether or not an express assignment to such
holder of rights under this Agreement has been made by you or
your successor or assign.
Amendment and Waiver.
Requirements. Any provision in this Agreement or in
the Notes to the contrary notwithstanding, changes in or
additions to this Agreement may be made, and compliance with
any covenant or provision herein set forth may be omitted or
waived, if the Company shall obtain consent thereto in
writing from the holder or holders of not less than 66 2/3%
in principal amount of all Notes at the time outstanding;
provided, however, that no such consent shall (i) reduce the
amount of the principal of any of the Notes or change the
amounts or dates of any payment or redemption of principal
due upon any of the Notes or reduce the rate or extend the
time of payment of interest or premium on any of the Notes,
without the consent of the holder of each Note so affected
or (ii) reduce the percentage of Noteholders required to
approve any such amendment or effectuate any such waiver or
amend the provisions of this Section 12.5 hereof, without
the consent of the holders of all of the Notes at the time
outstanding. Any consent may be given subject to
satisfaction of conditions stated therein. The Company
shall deliver copies of each such consent to any Noteholder
who did not execute the same.
Solicitation of Noteholders. So long as any
outstanding Notes are owned by you, the Company will not
solicit, request or negotiate for or with respect to any
proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each Noteholder
(irrespective of the amount of Notes then owned by it) shall
be informed thereof by the Company and shall be afforded the
opportunity of considering the same and shall be supplied by
the Company with sufficient information to enable it to make
an informed decision with respect thereto. Executed or true
and correct copies of any waiver or consent effected
pursuant to the provisions of this Section 12.5 shall be
delivered by the Company to each Noteholder forthwith
following the date on which the same shall have been
executed and delivered by the holder or holders of the
requisite percentage of outstanding Notes. The Company will
not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any Noteholder as
consideration for or as an inducement to the entering into
by any holder of the Notes of any waiver or amendment of any
of the terms and provisions of this Agreement unless such
remuneration is concurrently paid, on the same terms,
ratably to the holders of all of the Notes then outstanding.
Binding Effect. Any such amendment or waiver shall apply
equally to all the holders of the Notes and shall be binding
upon them and upon each future holder of any Note and upon
the Company whether or not such Note shall have been marked
to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any
obligation not expressly amended or waived or impair any
right consequent thereon.
Authorization of Collateral Agent. The Purchaser hereby
authorizes the Collateral Agent to enter into and to carry out
its duties under and with respect to the Security Agreement and
hereby agrees to accept and be bound by all of the provisions
thereof including without limitation the provisions (a)
prohibiting the enforcement of the Security Agreement without the
direction or consent of the Designated Holders (as that term is
used in the Security Agreement), (b) limiting the duties of the
Collateral Agent thereunder and exonerating it from certain
liabilities, (c) permitting amendments to the Security Agreement
and waivers and releases of Collateral thereunder and (d)
providing that under certain circumstances the Purchaser shall be
responsible for its pro rata share of expenses of the Collateral
Agent as set forth in Section 6.8 of the Security Agreement.
If this Agreement is satisfactory to you, please so indicate
by signing the acceptance at the foot of a counterpart of this
Agreement and return such counterpart to the Company whereupon
this Agreement will become binding between us in accordance with
its terms.
Very truly yours,
RIVER FUEL FUNDING COMPANY #3, INC.
By:/s/ Louis P. Young
Title: Vice President
Accepted:
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:/s/ Marilyn O. Boss
Title: Investment Officer
<PAGE>
EXHIBIT A
SCHEDULE OF PURCHASERS
Principal Amount and
Names and Addresses Number of Notes to be
of Purchaser Purchased
John Hancock Mutual Life BR-001 $10,000,000
Insurance Company BR-002 $ 5,000,000
(1) All payments on account of the Notes in accordance with
the provisions thereof and of this Agreement shall be
transmitted, not later than 12 Noon, New York time, by
bank wire or inter-bank transfer of immediately
available funds for credit to:
The First National Bank of Boston
ABA No. 011000390
Boston, Massachusetts 02110
Account of John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: River Fuel Funding Company #3, Inc.
(2) Contemporaneous with the above wire transfer, advice
setting forth:
(1) the full name, interest rate and
maturity date of the Notes or other
obligations;
(2) allocation of payment between
principal and interest and any special
payment; and
(3) name and address of Bank (or
Trustee) from which wire transfer was sent
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10
(3) All notices with respect to prepayments, both scheduled
and unscheduled, whether partial or in full, and notice
of maturity shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10
(4) All other communications which shall include, but not be
limited to, financial statements and certificates of
compliance with financial covenants, shall be delivered
or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Dept. T-57
<PAGE>
EXHIBIT B
RIVER FUEL FUNDING COMPANY #3, INC.
Intermediate Term Secured Note, 8.56% Series B
Due February 15, 1998
New York, N.Y.
BR-__________
$ __________, 1995
RIVER FUEL FUNDING COMPANY #3, INC. (the "Company"), a
Delaware corporation, FOR VALUE RECEIVED, hereby promises to
pay to ____________________ or registered assigns
(hereinafter referred to as the "Payee") on February 15, 1998
the principal amount of _______________ Dollars ($_____) or
such part thereof as then remains unpaid and to pay interest
on the unpaid balance of such principal amount from the date
of this Note at the rate of 8.56% per annum, payable
semiannually on the 15th day of February and August in each
year, commencing August 15, 1995, and on the maturity date
hereof until such principal amount shall be paid. The
Company further promises to pay to the Payee on demand a late
charge of l% of any principal (including any required
redemption), and interest not paid when due, to cover the
administrative costs of the Payee related to collecting and
accounting for late payments, so far as the same may be
legally enforceable. Interest shall be computed on the basis
of a 360-day year and a 30-day month.
Payments of principal and interest shall be made in
lawful money of the United States of America by wire transfer
or check mailed, as the Payee may direct the Company in
writing, to the office of the Payee, and at such other place
in the United States of America as the Payee shall have
designated to the Company in writing.
This Note is one of an issue of Intermediate Term
Secured Notes, 8.56% Series B due February 15, 1998, of the
Company originally issued in the aggregate principal amount
of $15,000,000 pursuant to the provision of the Note
Agreement dated as of January 31, 1995 between the Company
and the Purchaser named therein (hereinafter referred to as
the "Agreement"). Each holder is entitled to the benefits of
the Agreement and may enforce each of the agreements of the
Company as contained therein and may exercise each of the
remedies provided thereby, or otherwise available in respect
thereof, against the Company, but neither this reference to
the Agreement nor any provision thereof shall affect or
impair the absolute and unconditional obligation of the
Company to pay the principal amount hereof and interest
hereon as herein provided. As provided in the Agreement (i)
this Note is subject to redemption, in whole or in part, and
(ii) in case of an Event of Default, as defined in the
Agreement, the principal of this Note may become or may be
declared due and payable in the manner and with the effect
provided in the Agreement. The Company agrees to make
required redemptions on account of this Note in accordance
with the provisions of the Agreement.
This Note is an IT Note referred to in the Security and
Collateral Agency Agreement dated as of February 24, 1989
between the Company and Morgan Guaranty Trust Company of New
York, as agent for the ratable benefit of the holder of this
Note and the other Secured Parties named therein (the
"Security Agreement"). The holder of this Note is entitled
to the benefits of the Collateral (as defined in the Security
Agreement), and the rights of the holder hereof in the
Collateral are subject to and governed by the provisions of
the Security Agreement, and the holder hereof shall not have
any rights with respect to the Collateral except to the
extent and in the manner provided in the Security Agreement.
As further provided in the Agreement, upon surrender of
this Note for transfer or exchange, a new Note or new Notes
of the same tenor (except for the name of the holder) dated
the date to which interest has been paid, or dated the date
of this Note if no interest has theretofore been paid hereon,
and in an aggregate principal amount equal to the unpaid
principal amount of this Note will be issued to, and in the
name of, the transferee or transferees. The Company and the
Registrar may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not
be affected by any notice to the contrary.
The Company and all endorsers and guarantors of this
Note hereby waive presentment, demand, notice of nonpayment,
protest and, except as provided in Section 9 of the
Agreement, all other demands and notices in connection with
the delivery, acceptance, performance or enforcement of this
Note.
This Note is governed by and shall be construed in
accordance with New York law.
RIVER FUEL FUNDING COMPANY #3, INC.
By:____________________________
Title:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS REGISTERED UNDER SUCH ACT OR PURSUANT TO
THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
<PAGE>
EXHIBIT C
CERTIFICATE
OF
SYSTEM ENERGY RESOURCES, INC.
This Certificate is being delivered by System Energy
Resources, Inc., (the "Lessee"), pursuant TO Section
4.2(b)(ii) of the Note Agreement, dated as of January 31,
1995 (the "Note Agreement"), between River Fuel Funding
Company #3, Inc., a Delaware corporation, and, relating to
the issue and sale of $15,000,000 in original aggregate
principal amount of the Series B Notes. Terms defined in the
Note Agreement are used herein with the same meanings
ascribed to them therein, unless otherwise defined herein.
In connection with the purchase of the Notes pursuant to
the Note Agreement, the Lessee DOES HEREBY REPRESENT AND
CERTIFY, that:
1. The Lessee acknowledges receipt of a conformed
counterpart of the Note Agreement and familiarity with
the provisions, terms and conditions thereof.
2. Since September 30, 1994, there has been no
material adverse change in the Lessee's business or
financial condition.
3. The execution, delivery and performance, or the
acceptance, as the case may be, by the Lessee of all
Basic Agreements to be executed by it and the Nuclear
Fuel Contracts did not and will not violate any
provision of any law or regulation or of any writ or
decree of any court or governmental instrumentality
applicable to the Lessee and no consent, license,
approval, order or authorization of, or filing,
registration or declaration with, any governmental
authority, bureau or agency or any court or other Person
is required in connection with the execution, delivery,
performance, acceptance, validity or enforceability of
any of the above mentioned documents and instruments
(provided that no representation is given with respect
to the Nuclear Fuel Contracts insofar as the respective
Manufacturers are concerned), except for (i) a general
license to own Nuclear Fuel from the Nuclear Regulatory
Commission (currently granted under 10 C.F.R. Sections
40.21 and 70.20), (ii) a license to possess and use
special nuclear material granted by the Nuclear
Regulatory Commission, (iii) an order of the Securities
and Exchange Commission ("SEC") under the Public Utility
Holding Company Act of 1935 (the "1935 Act") and (iv)
the filing of a certificate pursuant to Rule 24 under
the 1935 Act, all of which licenses, order, approvals
and filings have been duly obtained or made and are
final and in full force and effect, provided that the
Rule 24 certificate shall be filed no later than
February 10, 1995 and provided, further, that no
representation is given with respect to Federal, New
York or Mississippi banking or Company laws or
regulations or the securities or blue sky laws or
regulations of any State.
4. The representations and warranties of the
Lessee contained in Section 2 of the Lease Agreement are
true, correct and complete in all material respects on
and as of the date hereof. On the date hereof the
information contained in the Disclosure Documents as
supplemented by the information contained in Schedule 1
hereto, if any, do not include any untrue statement of a
material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not
misleading. The Lessee's income before extraordinary
items, as shown on its income statements at the end of
the fiscal year immediately preceding the date hereof,
is a positive number.
5. Each of the Basic Agreements to which the Lessee is
a party and the Nuclear Fuel Contracts listed
in Exhibit A to the Fuel Lease is in full force and
effect without amendment or modification.
6. No Default or Event of Default under the Lease
Agreement or event described in Section 20(a) of the
Lease Agreement has occurred.
7. As of the date hereof and after giving effect
to the sale of Notes to which this Certificate relates,
the aggregate SLV of the Nuclear Fuel plus the cash held
in the Collateral Agreement equals or exceeds the sum of
the Outstandings under the Credit Agreement plus the
aggregate outstanding principal amount of all IT Notes,
as set forth in Annex A hereto.
8. The Lessee has requested that the funds being
made available to the Company pursuant to the Note
Agreement on the date hereof be applied toward the
payment of maturing Series A Notes.
9. To the knowledge of the Lessee, the Notes are
not secured by any collateral other than the Collateral
described in the Security Agreement, and the Notes are
not guaranteed directly or indirectly by any Person nor
are the Noteholders assured against loss or nonpayment
in any manner other than as contemplated by the Security
Agreement and the other Basic Agreements. To the
knowledge of the Lessee, the Note Agreement does not
contain any provision, term or condition which is
inconsistent with, or contrary to, the Security
Agreement, or which would violate, or cause the Company
to be in violation of, the Credit Agreement or any other
Basic Agreement and the Notes purchased and sold
pursuant to the Note Agreement will constitute "IT
Notes", as that term is defined in Section 11.1 of the
Note Agreement.
IN WITNESS WHEREOF, the undersigned, a duly authorized
officer, has signed this Certificate on behalf of the Lessee
this __ day of January, 1995.
SYSTEM ENERGY RESOURCES, INC.
By____________________________
Title:
<PAGE>
EXHIBIT D
January 31, 1995
John Hancock Mutual Life
Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Bond and Corporate Finance Dept. T-57
Re: River Fuel Funding Company #3, Inc.
Intermediate Term Secured Notes,
8.56% Series B, Due February 15, 1998
Gentlemen:
Terms used herein shall have the same meanings ascribed
to them in the Note Agreement dated as of January, 1995
between you and River Fuel Funding Company #3, Inc. (the
"Agreement").
So long as any of the Notes shall remain outstanding,
the Lessee hereby agrees that:
(A) without your prior written consent,
(1) it shall not obtain the release of Nuclear Fuel from
the Lease Agreement pursuant to Section 10(b) thereof in an
amount which, after giving effect to the use of the proceeds
received by the Company for the Nuclear Fuel, shall cause the
sum of (i) the aggregate unpaid principal amount of all
outstanding IT Notes, plus (ii) all Outstandings or any other
outstanding bank indebtedness of the Company to exceed the
aggregate SLV of the Nuclear Fuel plus accrued Daily Lease
Charges (such excess amount being hereinafter referred to as
a "Collateral Deficiency"),
(2) within 24 months following the occurrence of an
event set forth in Sections 18 or 19 of the Lease Agreement,
it shall effect the Restoration (as defined in the Lease
Agreement) of the Nuclear Fuel which is subject to such event
if the occurrence of such event would cause a Collateral
Deficiency to exist,
(3) it shall not agree to any affirmative or negative
covenant with respect to the business, operations, properties
or condition, financial or other, of the Lessee with any
Person in order to induce such Person to extend credit to the
Company, unless (x) such covenant is in existence on the date
hereof and a copy of the document containing such covenant
has been provided to you or (y) such covenant is contained in
the Lease Agreement, and
(4) it shall not provide to any Person in order to
induce such Person to extend credit to the Company, any
collateral other than the Collateral described in the
Security Agreement or any guarantee or other assurance
against loss or non-payment, nor shall either of them cause
the Company to provide such additional collateral, guarantee
or assurance (or consent to the provision thereof by the
Company) unless, in each case, all IT Notes shall have
equally and ratably the benefit of such additional
collateral, guarantee or assurance, and
(B) it shall transmit to each IT Noteholder copies of
the Entergy Corporation's Annual Reports on Form 10-K, its
Annual Reports to shareholders, its Quarterly Reports on Form
10-Q, its Current Reports on Form 8-K and such other
financial information as may be publicly available and as
such IT Noteholder may reasonably request and
(C) pursuant to Sections 13(b) and 33 of the Lease
Agreement, it shall give written instructions to the Company
to file or to cause to be filed all continuation statements
required under the Uniform Commercial Code, as from time to
time in effect in each applicable jurisdiction, or other
applicable law with respect to the liens and security
interests granted under the Security Agreement in order to
maintain, protect, preserve and perfect the Collateral
Agent's lien on and security interest in the Collateral as a
legal, valid and enforceable first priority security interest
therein, and it shall cause the Company to give evidence to
the Collateral Agent of the due recordation of such
continuation statement prior to the date for the timely
recordation of such continuation statements.
Very truly yours,
SYSTEM ENERGY RESOURCES, INC.
By:___________________________
Title:
Exhbit B-6(c)
January 31, 1995
John Hancock Mutual Life
Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Bond and Corporate Finance Dept
Re: River Fuel Funding Company #3, Inc.
Intermediate Term Secured Notes, 8.56%
Series B, Due February 15, 1998
Gentlemen:
Terms used herein shall have the same meanings ascribed
to them in the Note Agreement dated as of January 31, 1995
between you and River Fuel Funding Company #3, Inc. (the
"Agreement").
So long as any of the Notes shall remain outstanding, the
Lessee hereby agrees that:
(A) without your prior written consent,
(1) it shall not obtain the release of Nuclear Fuel from
the Lease Agreement pursuant to Section 10(b) thereof in an
amount which, after giving effect to the use of the proceeds
received by the Company for the Nuclear Fuel, shall cause
the sum of (I) the aggregate unpaid principal amount of all
outstanding IT Notes, plus (ii) all Outstandings or any
other outstanding bank indebtedness of the Company to exceed
the aggregate SLV of the Nuclear Fuel plus accrued Daily
Lease Charges (such excess amount being hereinafter referred
to as a "Collateral Deficiency"),
(2) within 24 months following the occurrence of an event
set forth in Sections 18 or 19 of the Lease Agreement, it
shall effect the Restoration (as defined in the Lease
Agreement) of the Nuclear Fuel which is subject to such
event if the occurrence of such event would cause a
Collateral Deficiency to exist,
(3) it shall not agree to any affirmative or negative
covenant with respect to the business, operations,
properties or condition, financial or other, of the Lessee
with any Person in order to induce such Person to extend
credit to the Company, unless (x) such covenant is in
existence on the date hereof and a copy of the document
containing such covenant has been provided to you or (y)
such covenant is contained in the Lease Agreement, and
(4) it shall not provide to any Person in order to induce
such Person to extend credit to the Company, any collateral
other than the Collateral described in the Security
Agreement or any guarantee or other assurances against loss
or non-payment, nor collateral, guarantee or assurance (or
consent to the provision thereof by the Company) unless, in
each case, all IT Notes shall have equally and ratably the
benefit of such additional collateral, guarantee or
assurance, and
(B) it shall transmit to each IT Noteholder copies of its
Annual Reports on Form 10-K, its Annual Reports to
shareholders, its Quarterly Reports on Form 10-Q, its
Current Reports on Form 8-K and such other financial
information as may be publicly available and as such IT
Noteholders may reasonably request, and
(C) pursuant to Sections 13(b) and 33 of the Lease
Agreement, it shall give written instructions to the Company
to file or to cause to be filed all continuation statements
required under the Uniform Commercial Code, as from time to
time in effect in each applicable jurisdiction, or other
applicable law with respect to the liens and security
interests granted under the Security Agreement in order to
maintain, protect, preserve and perfect the Collateral
Agent's lien on and security interest in the Collateral as a
legal, valid and enforceable first priority security
interest therein, and it shall cause the Company to give
evidence to the Collateral Agent of the due recordation of
such continuation statement prior to the date for the timely
recordation of such continuation statements.
Very truly yours,
SYSTEM ENERGY RESOURCES, INC.
By: /s/ Lee W. Randall
Lee W. Randall
Vice President and Chief
Accounting Officer
