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File No. 70-6971
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
CERTIFICATE OF NOTIFICATION
Pursuant to Rule 24(a) under the Public
Utility Holding Company Act of 1935
Filed by
New England Energy Incorporated
It is hereby certified that the following transaction described in Form
U-1 and the amendments thereto, File No. 70-6971, and the Orders of the
Commission with respect thereto dated August 16, 1984, (HCAR NO. 23397), March
7, 1986, (HCAR No. 24046), December 17, 1987, (HCAR No. 24531), December 29,
1989, (HCAR No. 25015), September 19, 1991 (HCAR No. 25378) and December 1,
1993 (HCAR No. 25935) has been carried out in accordance with the terms and
conditions of and for the purposes represented in Form U-1 and the Orders of
the Commission:
New England Energy Incorporated and Citibank, N.A. executed a
three-year Master Agreement (the Agreement) on June 22, 1995, to
exchange interest payments. The Agreement, dated as of June 7,
1995, covers a notional amount of $25,000,000. A copy of the
Agreement is attached hereto as Exhibit A.
The required "Past Tense" Opinion of Counsel is attached hereto as
Exhibit B.
SIGNATURE
---------
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned Company has duly caused this Certificate of
Notification to be signed on its behalf by the undersigned officer thereunto
duly authorized.
NEW ENGLAND ENERGY INCORPORATED
s/John G. Cochrane
June 22, 1995 By
John G. Cochrane
Treasurer
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EXHIBIT INDEX
Exhibit No. Description Page
___________ ___________ ____
A Master Agreement Filed herewith
B "Past Tense" Filed herewith
Opinion of Counsel
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Exhibit A
(Multicurrency - Cross Border)
ISDA
INTERNATIONAL SWAP DEALERS ASSOCIATION, INC.
MASTER AGREEMENT
dated as of June 7, 1995
Citibank, N.A., New York and New England Energy Incorporated
have entered and/or anticipate entering into one or more
transactions (each a "Transaction") that are or will be governed by
this Master Agreement, which includes the schedule (the
"Schedule"), and the documents and other confirming evidence (each
a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:-
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the
Schedule will have the meanings therein specified for the purpose
of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between
the provisions of the Schedule and the other provisions of this
Master Agreement, the Schedule will prevail. In the event of any
inconsistency between the provisions of any Confirmation and this
Master Agreement (including the Schedule), such Confirmation will
prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in
reliance on the fact that this Master Agreement and all
Confirmations form a single agreement between the parties
(collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
Copyright 1992 by International Swap Dealers Association, Inc.
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2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery
specified in each Confirmation to be made by it, subject to
the other provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due
date for value on that date in the place of the account
specified in the relevant Confirmation or otherwise pursuant
to this Agreement, in freely transferable funds and in the
manner customary for payments in the required currency.
Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation
unless otherwise specified in the relevant Confirmation or
elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is
subject to (1) the condition precedent that no Event of
Default or Potential Event of Default with respect to the
other party has occurred and is continuing, (2) the
condition precedent that no Early Termination Date in
respect of the relevant Transaction has occurred or been
effectively designated and (3) each other applicable
condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for
receiving a payment or delivery by giving notice to the other
party at least five Local Business Days prior to the scheduled
date for the payment or delivery to which such change applies
unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be
payable:-
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's
obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been
payable by the other party, replaced by an obligation upon the
party by whom the larger aggregate amount would have been payable
to pay to the other party the excess of the larger aggregate
amount over the smaller aggregate amount.
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The parties may elect in respect of two or more Transactions that
a net amount will be determined in respect of all amounts payable
on the same date in the same currency in respect of such
Transactions, regardless of whether such amounts are payable in
respect of the same Transaction. The election may be made in the
Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being
subject to the election, together with the starting date (in
which case subparagraph (ii) above will not, or will cease to,
apply to such Transactions from such date). This election may be
made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the
parties make and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be
made without any deduction or withholding for or on account
of any Tax unless such deduction or withholding is required
by any applicable law, as modified by the practice of any
relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that
party ("X") will:-
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full
amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section
2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice
that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably
acceptable to Y, evidencing such payment to such
authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise entitled
under this Agreement, such additional amount as is
necessary to ensure that the net amount actually
received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full
amount Y would have received had no such deduction or
withholding been required. However, X will not be
required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:-
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(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(I) any action taken by a taxing authority, or brought
in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into
(regardless of whether such action is taken or brought
with respect to a party to this Agreement) or (II) a
Change in Tax Law.
(ii) Liability. If:-
(1) X is required by any applicable law; as modified
by the practice of any relevant governmental revenue
authority, to make any deduction or withholding in
respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies
the liability resulting from such Tax, Y will promptly pay
to X the amount of such liability (including any related
liability for interest, but including any related liability
for penalties only if Y has failed to comply with or perform
any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence
or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party that defaults in the
performance of any payment obligation will, to the extent
permitted by law and subject to Section 6(c), be required to pay
interest (before as well as after judgment) on the overdue amount
to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date
for payment to (but excluding) the date of actual payment, at the
Default Rate. Such interest will be calculated on the basis of
daily compounding and the actual number of days elapsed. If,
prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be
settled by delivery, it will compensate the other party on demand
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if and to the extent provided for in the relevant Confirmation or
elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations
will be deemed to be repeated by each party on each date on which
a Transaction is entered into and, in the case of the
representations in Section 3(f), at all times until the
termination of this Agreement) that:-
(a) Basic Representations.
(i) Status. It is duly organized and validly existing
under the laws of the jurisdiction of its organization or
incorporation and, if relevant under such laws, in good
standing;
(ii) Powers. It has the power to execute this Agreement
and any other documentation relating to this Agreement to
which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required
by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken
all necessary action to authorize such execution, delivery
and performance;
(iii) No Violation or Conflict. Such execution, delivery
and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional
documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets
or any contractual restriction binding on or affecting it or
any of its assets;
(iv) Consents. All governmental and other consents that
are required to have been obtained by it with respect to
this Agreement or any Credit Support Document to which it is
a party have been obtained and are in full force and effect
and all conditions of any such consents have been complied
with; and
(v) Obligations Binding. Its obligations under this
Agreement and any Credit Support Document to which it is a
party constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors'
rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of
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whether enforcement is sought in a proceeding in equity or
at law)).
(b) Absence of Certain Events. No Event of Default or Potential
Event of Default or, to its knowledge, Termination Event with
respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or
performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its
knowledge, threatened against it or any of its Affiliates any
action, suit or proceeding at law or in equity or before any
court, tribunal, governmental body, agency or official or any
arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support
Document to which it is a party or its ability to perform its
obligations under this Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable
information that is furnished in writing by or on behalf of it to
the other party and is identified for the purpose of this Section
3(d) in the Schedule is, as of the date of the information, true,
accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in
the Schedule as being made by it for the purpose of this Section
3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in
the Schedule as being made by it for the purpose of this Section
3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party
has or may have any obligation under this Agreement or under any
Credit Support Document to which it is a party:-
(a) Furnish Specified Information. It will deliver to the other
party or, in certain cases under subparagraph (iii) below, to
such government or taxing authority as the other party reasonably
directs:-
(i) any forms, documents or certificates relating to
taxation specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
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(iii) upon reasonable demand by such other party, any form
or document that may be required or reasonably requested in
writing in order to allow such other party or its Credit
Support Provider to make a payment under this Agreement or
any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the
completion, execution or submission of such form or document
would not materially prejudice the legal or commercial
position of the party in receipt of such demand), with any
such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such
Confirmation or, if none is specified, as soon as reasonably
practicable.
(b) Maintain Authorizations. It will use all reasonable efforts
to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained
by it with respect to this Agreement or any Credit Support
Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects
with all applicable laws and orders to which it may be subject if
failure so to comply would materially impair its ability to
perform its obligations under this Agreement or any Credit
Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and
true promptly upon learning of such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay
any Stamp Tax levied or imposed upon it or in respect of its
execution or performance of this Agreement by a jurisdiction in
which it is incorporated, organized, managed and controlled, or
considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other
party or in respect of the other party's execution or performance
of this Agreement by any such Stamp Tax Jurisdiction which is not
also a Stamp Tax Jurisdiction with respect to the other party.
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5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect
to a party or, if applicable, any Credit Support Provider of such
party or any Specified Entity of such party of any of the
following events constitutes an event of default (an "Event of
Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to
make, when due, any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) required to be made by it if
such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply
with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or
delivery under Section 2(a)(i) or 2(e) or to give notice of
a Termination Event or any agreement or obligation under
Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day
after notice of such failure is given to the party;
(iii) Credit Support Default
(1) Failure by the party or any Credit Support
Provider of such party to comply with or perform any
agreement or obligation to be complied with or
performed by it in accordance with any Credit Support
Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit
Support Document or the failing or ceasing of such
Credit Support Document to be in full force and effect
for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under
each Transaction to which such Credit Support Document
relates without the written consent of the other
party; or
(3) the party or such Credit Support Provider
disaffirms, disclaims, repudiates or rejects, in whole
or in part, or challenges the validity of, such Credit
Support Document;
(iv) Misrepresentation. A representation (other than a
representation under Section 3(e) or (f)) made or repeated
<PAGE>
or deemed to have been made or repeated by the party or any
Credit Support Provider of such party in this Agreement or
any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any
Credit Support Provider of such party or any applicable
Specified Entity of such party (1) defaults under a
Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs
a liquidation of, an acceleration of obligations under, or
an early termination of, that Specified Transaction, (2)
defaults, after giving effect to any applicable notice
requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date
of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three
Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims,
repudiates or rejects, in whole or in part, a Specified
Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in
the Schedule as applying to the party, the occurrence or
existence of (1) a default, event of default or other
similar condition or event (however described) in respect of
such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness
of any of them (individually or collectively) in an
aggregate amount of not less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in
such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such
Credit Support Provider or such Specified Entity
(individually or collectively) in making one or more
payments on the due date thereof in an aggregate amount of
not less than the applicable Threshold Amount under such
agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support
Provider of such party or any applicable Specified Entity of
such party:-
(1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes
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insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its
debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment
of insolvency or bankruptcy or any other relief under
any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition presented
for its winding-up or liquidation, and in the case of
any such proceeding or petition is instituted or
presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or
the entry of an order for relief or the making of an
order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each
case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the
appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or
substantially all its assets; (7) has a secured party
take possession of all or substantially all its assets
or has a distress, execution, attachment,
sequestration or other legal process levied, enforced
or sued on or against all or substantially all its
assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to
it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the
events specified in clauses (1) to (7) (inclusive); or
(9) takes any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any
of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit
Support Provider of such party consolidates or amalgamates
with, or merges with or into, or transfers all or
substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or
transfer:-
(1) the resulting, surviving or transferee entity fails
to assume all the obligations of such party or such
Credit Support Provider under this Agreement or any
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Credit Support Document to which it or its predecessor
was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to
this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect
to a party or, if applicable, any Credit Support Provider of such
party or any Specified Entity of such party of any event
specified below constitutes an Illegality if the event is
specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified
in (iii) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to (iv)
below or an Additional Termination Event if the event is
specified pursuant to (v) below:-
(i) Illegality. Due to the adoption of, or any change in,
any applicable law after the date on which a Transaction is
entered into, or due to the promulgation of, or any change
in, the interpretation by any court, tribunal or regulatory
authority with competent jurisdiction of any applicable law
after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):-
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply
with any other material provision of this Agreement
relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other
obligation which the party (or such Credit Support
Provider) has under any Credit Support Document relating
to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction,
on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (y) a Change in Tax
Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next
succeeding Scheduled Payment Date (1) be required to pay to
the other party an additional amount in respect of an
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Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or
(2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e))
and no additional amount is required to be paid in respect
of such Tax under Section 2(d)(i)(4) (other than by reason
of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened
Party") on the next succeeding Scheduled Payment Date will
either (1) be required to pay an additional amount in
respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any
Indemnifiable Tax in respect of which the other party is not
required to pay an additional amount (other than by reason
of Section 2(d)(i)(4)(A) or (B)), in either case as a result
of a party consolidating or amalgamating with, or merging
with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party)
where such action does not constitute an event described in
Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon
Merger" is specified in the Schedule as applying to the
party, such party ("X"), any Credit Support Provider of X or
any applicable Specified Entity of X consolidates or
amalgamates with, or merges with or into, or transfers all
or substantially all its assets to, another entity and such
action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting,
surviving or transferee entity is materially weaker than
that of X, such Credit Support Provider or such Specified
Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as
appropriate, will be the Affected Party); or
(v) Additional Termination Event. If any "Additional
Termination Event" is specified in the Schedule or any
Confirmation as applying, the occurrence of such event (and,
in such event, the Affected Party or Affected Parties shall
be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or
circumstance which would otherwise constitute or give rise to an
Event of Default also constitutes an Illegality, it will be
treated as an Illegality and will not constitute an Event of
Default.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If at
any time an Event of Default with respect to a party (the
"Defaulting Party") has occurred and is then continuing, the
other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the
relevant Event of Default, designate a day not earlier than
the day such notice is effective as an Early Termination
Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the
Schedule as applying to a party, then an Early Termination
Date in respect of all outstanding Transactions will occur
immediately upon the occurrence with respect to such party
of an Event of Default specified in Section 5(a)(vii)(1),
(3), (5), (6) or, to the extent analogous thereto, (8), and
as of the time immediately preceding the institution of the
relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of
an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected
Party will, promptly upon becoming aware of it, notify
the other party, specifying the nature of that
Termination Event and each Affected Transaction and will
also give such other information about that Termination
Event as the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an
Illegality under Section 5(b)(i)(1) or a Tax Event
occurs and there is only one Affected Party, or if a Tax
Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition
to its right to designate an Early Termination Date
under Section 6(b)(iv), use all reasonable efforts
(which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section
6(b)(i) all its rights and obligations under this
Agreement in respect of the Affected Transactions to
another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a
transfer it will give notice to the other party to that
effect within such 20 day period, whereupon the other
party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
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Any such transfer by a party under this Section 6(b)(ii)
will be subject to and conditional upon the prior
written consent of the other party, which consent will
not be withheld if such other party's policies in effect
at such time would permit it to enter into transactions
with the transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there are
two Affected Parties, each party will use all reasonable
efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.
(iv) Right to Terminate. If:-
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not
been effected with respect to all Affected
Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit
Event Upon Merger or an Additional Termination Event
occurs, or a Tax Event Upon Merger occurs and the
Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened
Party in the case of a Tax Event Upon Merger, any
Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected
Party in the case of a Credit Event Upon Merger or an
Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant
Termination Event is then continuing, designate a day
not earlier than the day such notice is effective as an
Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is
given under Section 6(a) or (b), the Early Termination Date
will occur on the date so designated, whether or not the
relevant Event of Default or Termination Event is then
continuing.
(ii) Upon the occurrence or effective designation of an
Early Termination Date, no further payments or deliveries
<PAGE>
under Section 2(a)(i) or 2(e) in respect of the Terminated
Transactions will be required to be made, but without
prejudice to the other provisions of this Agreement. The
amount, if any, payable in respect of an Early Termination
Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each
party will make the calculations on its part, if any,
contemplated by Section 6(e) and will provide to the other
party a statement (1) showing, in reasonable detail, such
calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2)
giving details of the relevant account to which any amount
payable to it is to be paid. In the absence of written
confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in
respect of any Early Termination Date under Section 6(e)
will be payable on the day that notice of the amount payable
is effective (in the case of an Early Termination Date which
is designated or occurs as a result of an Event of Default)
and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in
the case of an Early Termination Date which is designated as
a result of a Termination Event). Such amount will be paid
together with (to the extent permitted under applicable law)
interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant
Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will
be calculated on the basis of daily compounding and the
actual number of days elapsed.
(e) Payments on Early Termination. If an Early
Termination Date occurs, the following provisions shall
apply based on the parties' election in the Schedule of a
payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second
Method". If the parties fail to designate a payment measure
or payment method in the Schedule, it will be deemed that
"Market Quotation" or the "Second Method", as the case may
be, shall apply. The amount, if any, payable in respect of
an Early Termination Date and determined pursuant to this
Section will be subject to any Set-Off.
<PAGE>
(i) Events of Default. If the Early Termination Date results
from an Event of Default:-
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party
will pay to the Non-defaulting Party the excess, if a
positive number, of (A) the sum of the Settlement Amount
(determined by the Non-defaulting Party) in respect of
the Terminated Transactions and Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-
defaulting Party over (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting
Party.
(2) First Method and Loss. If the First Method and
Loss apply, the Defaulting Party will pay to the Non-
defaulting Party, if a positive number, the Non-
defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be
payable equal to (A) the sum of the Settlement Amount
(determined by the Non-defaulting Party) in respect of
the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-
defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the
Defaulting Party.
(4) Second Method and Loss. If the Second Method and
Loss apply, an amount will be payable equal to the Non-
defaulting Party's Loss in respect of this Agreement.
If that amount is a positive number, the Defaulting
Party will pay it to the Non-defaulting Party; if it is
a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results
from a Termination Event:-
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance with
Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
<PAGE>
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:-
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be payable
equal to (I) the sum of (a) one-half of the difference
between the Settlement Amount of the party with the
higher Settlement ("X") and the Settlement Amount of the
party with the lower Settlement Amount ("Y") and (b) the
Termination Currency Equivalent of the Unpaid Amounts
owing to X less (II) the Termination Currency Equivalent
of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss
in respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of
the party with the higher Loss ("X") and the Loss of the
party with the lower Loss("Y").
If the amount payable is a positive number, Y will pay it to
X; if it is a negative number, X will pay the absolute value
of that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where
an Early Termination Date occurs because "Automatic Early
Termination" applies in respect of a party, the amount
determined under this Section 6(e) will be subject to such
adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other
party) during the period from the relevant Early Termination
Date to the Date for payment determined under Section
6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market
Quotation applies an amount recoverable under this Section
6(e) is a reasonable pre-estimate of loss and not a penalty.
Such amount is payable for the loss of bargain and the loss
of protection against future risks and except as otherwise
<PAGE>
provided in this Agreement neither party will be entitled to
recover any additional damages as a consequence of such
losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any
interest or obligation in or under this Agreement may be
transferred (whether by way of security or otherwise) by either
party without the prior written consent of the other party,
except that:-
(a) a party may make such a transfer of this Agreement pursuant
to a consolidation or amalgamation with, or merger with or into,
or transfer of all or substantially all its assets to, another
entity (but without prejudice to any other right or remedy under
this Agreement); and
(b) a party may make such a transfer of all or any part of its
interest in any amount payable to it from a Defaulting Party
under Section 6(e).
Any purported transfer that is not in compliance with this
Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under
this Agreement will be made in the relevant currency specified in
this Agreement for that payment (the "Contractual Currency"). To
the extent permitted by applicable law, any obligation to make
payments under this Agreement in the Contractual Currency will
not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such
tender results in the actual receipt by the party to which
payment is owed, acting in a reasonable manner and in good faith
in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason
the amount in the Contractual Currency so received falls short of
the amount in the Contractual Currency payable in respect of this
Agreement, the party required to make the payment will, to the
extent permitted by applicable law, immediately pay such
additional amount in the Contractual Currency as may be necessary
to compensate for the shortfall. If for any reason the amount in
the Contractual Currency so received exceeds the amount in the
Contractual Currency payable in respect of this Agreement, the
party receiving the payment will refund promptly the amount of
such excess.
<PAGE>
(b) Judgments. To the extent permitted by applicable law, if
any judgment or order expressed in a currency other than the
Contractual Currency is rendered (i) for the payment of any
amount owing in respect of this Agreement, (ii) for the payment
of any amount relating to any early termination in respect of
this Agreement or (iii) in respect of a judgment or order of
another court for the payment of any amount described in (i) or
(ii) above, the party seeking recovery, after recovery in full of
the aggregate amount to which such party is entitled pursuant to
the judgment or order, will be entitled to receive immediately
from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of
sums paid in such other currency and will refund promptly to the
other party any excess of the Contractual Currency received by
such party as a consequence of sums paid in such other currency
if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual
Currency is converted into the currency of the judgment or order
for the purposes of such judgment or order and the rate of
exchange at which such party is able, acting in a reasonable
manner and in good faith in converting the currency received into
the Contractual Currency, to purchase the Contractual Currency
with the amount of the currency of the judgment or order actually
received by such party. The term "rate of exchange" includes,
without limitation, any premiums and costs of exchange payable in
connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable
law, these indemnities constitute separate and independent
obligations from the other obligations in this Agreement, will be
enforceable as separate and independent causes of action, will
apply notwithstanding any indulgence granted by the party to
which any payment is owed and will not be affected by judgment
being obtained or claim or proof being made for any other sums
payable in respect of this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it
will be sufficient for a party to demonstrate that it would have
suffered a loss had an actual exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to its
subject matter and supersedes all oral communication and prior
writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect
of this Agreement will be effective unless in writing (including
a writing evidenced by a facsimile transmission) and executed
<PAGE>
by each of the parties or confirmed by an exchange of telexes or
electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections
2(a)(iii) and 6(c)(ii), the obligations of the parties under this
Agreement will survive the termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement,
the rights, powers, remedies and privileges provided in this
Agreement are cumulative and not exclusive of any rights, powers,
remedies, and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and
waiver in respect of it) may be executed and delivered in
counterparts (including by facsimile transmission), each of
which will be deemed an original.
(ii) The parties intend that they are legally bound by the
terms of each Transaction from the moment they agree to
those terms (whether orally or otherwise). A Confirmation
shall be entered into as soon as practicable and may be
executed and delivered in counter parts (including by
facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an
electronic messaging system, which in each case will be
sufficient for all purposes to evidence a binding supplement
to this Agreement. The parties will specify therein or
through another effective means that any such counterpart,
telex, or electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any
right, power or privilege in respect of this Agreement will not
be presumed to operate as a waiver, and a single or partial
exercise of any right, power or privilege will not be presumed to
preclude any subsequent or further exercise, of that right, power
or privilege or the exercise of any other right, power or
privilege.
(g) Headings. The headings used in this Agreement are for
convenience of reference only and are not to affect the
construction of or to be taken into consideration in interpreting
this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying,
each party that enters into a Transaction through an Office other
than its head or home office represents to the other party that,
notwithstanding the place of booking office or jurisdiction of
<PAGE>
incorporation or organization of such party, the obligations of
such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a
Transaction is entered into.
(b) Neither party may change the Office through which it makes
and receives payments or deliveries for the purpose of a
Transaction without the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the
Schedule, such Multibranch Party may make and receive payments or
deliveries under any Transaction through any Office listed in the
Schedule, and the Office through which it makes and receives
payments or deliveries with respect to a Transaction will be
specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless
the other party for and against all reasonable out-of-pocket
expenses, including legal fees and Stamp Tax, incurred by such
other party by reason of the enforcement and protection of its
rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to,
costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect
of this Agreement may be given in any manner set forth below
(except that a notice or other communication under Section 5 or 6
may not be given by facsimile transmission or electronic
messaging system) to the address or number or in accordance with
the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier,
on the date it is delivered
(ii) if sent by telex, on the date the recipient's
answerback is received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden
of proving receipt will be on the sender and will not be met
by a transmission report generated by the sender's facsimile
machine);
<PAGE>
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on
the date that mail is delivered or its delivery is
attempted; or
(v) if sent by electronic messaging system, on the date
that electronic message is received,
unless the date of that delivery (or attempted delivery) or that
receipt, as applicable, is not a Local Business Day or that
communication is delivered (or attempted) or received, as
applicable, after the close of business on a Local Business Day,
in which case that communication shall be deemed given and
effective on the first following day that is a Local Business
Day.
(b) Change of Addresses. Either party may by notice to the
other change the address, telex or facsimile number or electronic
messaging system details at which notices or other communications
are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and
construed in accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or
proceedings relating to this Agreement ("Proceedings"), each
party irrevocably:-
(i) submits to the jurisdiction of the English courts, if
this Agreement is expressed to be governed by English law,
or to the non-exclusive jurisdiction of the courts of the
State of New York and the United States District Court
located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of
the State of New York; and
(ii) waives any objection which it may have at any time to
the laying of venue of any Proceedings brought in any such
court, waives any claim that such Proceedings have been
brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing
Proceedings in any other jurisdiction (outside, if this Agreement
is expressed to be governed by English law, the Contracting
States, as defined in Section 1(3) of the Civil Jurisdiction and
Judgments Act 1982 or any modification, extension or re-enactment
thereof for the time being in force) nor will the bringing of
<PAGE>
Proceedings in any one or more jurisdictions preclude the
bringing of Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the
Process Agent (if any) specified opposite its name in the
Schedule to receive, for it and on its behalf, service of process
in any Proceedings. If for any reason any party's Process Agent
is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent
acceptable to the other party. The parties irrevocably consent
to service of process given in the manner provided for notices in
Section 12. Nothing in this Agreement will affect the right of
either party to serve process in any other manner permitted by
law.
(d) Waiver of Immunities. Each party irrevocably waives, to the
fullest extent permitted by applicable law, with respect to
itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or
other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific
performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or
enforcement of any judgment to which it or its revenues or assets
might otherwise be entitled in any Proceedings in the courts of
any jurisdiction and irrevocably agrees, to the extent permitted
by applicable law, that it will not claim any such immunity in
any Proceedings.
14. Definitions
As used in this Agreement:-
"Additional Termination Event" has the meaning specified in
Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination
Event consisting of an Illegality, Tax Event or Tax Event Upon
Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination
Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any
person, any entity controlled, directly or indirectly, by the
person, any entity that controls, directly or indirectly, the
person or any entity directly or indirectly under common control
with the person. For this purpose, "control" of any entity or
person means ownership of a majority of the voting power of the
entity or person.
<PAGE>
"Applicable Rate" means:-
(a) in respect of obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Defaulting Party,
the Default Rate;
(b) in respect of an obligation to pay an amount under Section
6(e) of either party from and after the date (determined in
accordance with Section 6(d)(ii)) on which that amount is
payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable
(or which would have been but for Section 2(a)(iii)) by a Non-
defaulting Party, the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution
or ratification of, or any change in or amendment to, any law (or
in the application or official interpretation of any law) that
occurs on or after the date on which the relevant Transaction is
entered into.
"Consent" includes a consent, approval, action, authorization,
exemption, notice, filing, registration or exchange control
consent.
"Credit Event Upon Merger" has the meaning specified in Section
5(b).
"Credit Support Document" means any agreement or instrument that
is specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the
Schedule.
"Default Rate" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the relevant payee (as
certified by it) if it were to fund or of funding the relevant
amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance
with Section 6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and,
if applicable, in the Schedule.
<PAGE>
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not
be imposed in respect of a payment under this Agreement but for a
present or former connection between the jurisdiction of the
government or taxation authority imposing such Tax and the
recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or
resident of such jurisdiction, or being or having been organized,
present or engaged in a trade or business in such jurisdiction,
or having or having had a permanent establishment or fixed place
of business in such jurisdiction, but excluding a connection
arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a
payment under, or enforced, this Agreement or a Credit Support
Document).
"Law" includes any treaty, law, rule or regulation (as modified,
in the case of tax matters, by the practice of any relevant
governmental revenue authority) and "lawful" and "unlawful" will
be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on
which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) (a) in
relation to any obligation under Section 2(a)(i), in the place(s)
specified in the relevant Confirmation or, if not so specified,
as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference,
in this Agreement, (b) in relation to any other payment, in the
place where the relevant account is located and, if different, in
the principal financial centre, if any, of the currency of such
payment,(c) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), in the city
specified in the address for notice provided by the recipient
and, in the case of a notice contemplated by Section 2(b), in the
place where the relevant new account is to be located and (d) in
relation to Section 5(a)(v)(2), in the relevant locations for
performance with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more
Terminated Transactions, as the case may be, and a party, the
Termination Currency Equivalent of an amount that party
reasonably determines in good faith to be its total losses and
costs (or gain, in which case expressed as a negative number) in
connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including
any loss of bargain, cost of funding or, at the election of such
party but without duplication, loss or cost incurred as a result
of its terminating, liquidating, obtaining or reestablishing any
<PAGE>
hedge or related trading position (or any gain resulting from any
of them). Loss includes losses and costs (or gains) in respect
of any payment or delivery required to have been made (assuming
satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as
to avoid duplication, if Section 6(e)(i)(1) or (3) or 6
(e)(ii)(2)(A) applies. Loss does not include a party's legal
fees and out-of-pocket expenses referred to under Section 11. A
party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to
quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount
determined on the basis of quotations from Reference Market-
makers. Each quotation will be for an amount, if any, that would
be paid to such party (expressed as a negative number) or by such
party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing
Credit Support Document with respect to the obligations of such
party) and the quoting Reference Market-maker to enter into a
transaction (the "Replacement Transaction") that would have the
effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was
absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section
2(a)(i) in respect of such Terminated Transaction or group of
Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that
date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Terminated Transactions are to
be excluded but, without limitation, any payment or delivery that
would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included.
The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may,
in good faith, agree. The party making the determination (or its
agent) will request each Reference Market-maker to provide its
quotation to the extent reasonably practicable as of the same day
and time (without regard to different time zones) on or as soon
as reasonably practicable after the relevant Early Termination
Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to
make a determination under Section 6(e), and, if each party is so
obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the
arithmetic mean of the quotations, without regard to the
<PAGE>
quotations having the highest and lowest values. If exactly
three such quotations are provided, the Market Quotation will be
the quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the
same highest value or lowest value, then one of such quotations
shall be disregarded. If fewer than three quotations are
provided, it will be deemed that the Market Quotation in respect
of such Terminated Transaction or group of Terminated
Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost
(without proof or evidence of any actual cost) to the Non-
defaulting Party (as certified by it) if it were to fund the
relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such
party's head or home office.
"Potential Event of Default" means any event which, with the
giving of notice or the lapse of time or both, would constitute
an Event of Default.
"Reference Market-makers" means four leading dealers in the
relevant market selected by the party determining a Market
Quotation in good faith (a) from among dealers of the highest
credit standing which satisfy all the criteria that such party
applies generally at the time in deciding whether to offer or to
make an extension of credit and (b) to the extent practicable,
from among such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the
jurisdictions (a) in which the party is incorporated, organized,
managed and controlled or considered to have its seat, (b) where
an Office through which the party is acting for purposes of this
Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or
delivery is to be made under Section 2(a)(i) with respect to a
Transaction.
"Set-off" means set-off, offset, combination of accounts, right
of retention or withholding or similar right or requirement to
which the payer of an amount under Section 6 is entitled or
subject (whether arising under this Agreement, another contract,
applicable law or otherwise) that is exercised by, or imposed on,
such payer.
<PAGE>
"Settlement Amount" means, with respect to a party and any Early
Termination Date, the sum of:
(a) the Termination Currency Equivalent of the Market Quotations
(whether positive or negative) for each Terminated Transaction or
group of Terminated Transactions for which a Market Quotation is
determined; and
(b) such party's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for each Terminated Transaction
or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of
the party making the determination) produce a commercially
reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any
obligation (whether present or future, contingent or otherwise,
as principal or surety or otherwise) in respect of borrowed
money.
"Specified Transaction" means, subject to the Schedule, (a) any
transaction (including an agreement with respect thereto) now
existing or hereafter entered into between one party to this
Agreement (or any Credit Support Provider of such party or any
applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other
party or any applicable Specified Entity of such other party)
which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect to
any of these transactions), (b) any combination of these
transactions and (c) any other transaction identified as a
Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or
similar tax.
"Tax" means any present or future tax, levy, impost, duty,
charge, assessment or fee of any nature (including interest,
penalties and additions thereto) that is imposed by any
government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration,
documentation or similar tax.
<PAGE>
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section
5(b).
"Terminated Transactions" means with respect to any Early
Termination Date (a) if resulting from a Termination Event, all
Affected Transactions and (b) if resulting from an Event of
Default, all Transactions (in either case) in effect immediately
before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount
denominated in the Termination Currency, such Termination
Currency amount and, in respect of any amount denominated in a
currency other than the Termination Currency (the "Other
Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to
purchase such amount of such Other Currency as at the relevant
Early Termination Date, or, if the relevant Market Quotation or
Loss (as the case may be), is determined as of a later date, that
later date, with the Termination Currency at the rate equal to
the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the
Termination Currency at or about 11:00 a.m. (in the city in which
such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase
of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent
will, if only one party is obliged to make a determination under
Section 6(e), be selected in good faith by that party and
otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax
Event Upon Merger or, if specified to be applicable, a Credit
Event Upon Merger or an Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic
mean of the cost (without proof or evidence of any actual cost)
to each party (as certified by such party) if it were to fund or
of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an
Early Termination Date, the aggregate of (a) in respect of all
Terminated Transactions, the amounts that became payable (or that
would have become payable but for Section 2(a)(iii)) to such
party under Section 2(a)(i) on or prior to such Early Termination
Date and which remain unpaid as at such Early Termination Date
<PAGE>
and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been
but for Section 2(a)(iii)) required to be settled by delivery to
such party on or prior to such Early Termination Date and which
has not been so settled as at such Early Termination Date, an
amount equal to the fair market value of that which was (or would
have been) required to be delivered as of the originally
scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency
of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or
performed to (but excluding) such Early Termination Date, at the
Applicable Rate. Such amounts of interest will be calculated on
the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in
clause (b) above shall be reasonably determined by the party
obliged to make the determination under Section 6(e) or, if each
party is so obliged, it shall be the average of the Termination
Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective date specified below with effect from the date
specified on first page of this document.
CITIBANK,N.A., NEW YORK NEW ENGLAND ENERGY INCORPORATED
___________________________ _______________________________
(Name of Party) (Name of Party)
s/ Shaheryar Azhar s/ John G. Cochrane
By: _________________________ ______________________________
Name: Shaheryar Azhar Name: John G. Cochrane
Title: Vice President Title: Treasurer
Date: June 21, 1995 Date: June 22, 1995
<PAGE>
SCHEDULE
to the
MASTER AGREEMENT
________________
Dated as of June 7, 1995
between Citibank, N.A., New York, a national banking association
organized under the laws of the United States ("Party A") and New
England Energy Incorporated ("Party B"), a Massachusetts
corporation.
PART 1
Termination Provisions
______________________
In this Agreement:
(1) "Specified Entity" does not apply.
(2) "Specified Transaction" will have the meaning
specified in Section 14.
(3) The "Cross-Default" provisions of Section 5(a)(vi)
will apply to Party A and Party B.
"Specified Indebtedness" means any obligation (whether
present or future, contingent or otherwise, as principal or
surety or otherwise) in respect of borrowed money, other than
indebtedness in respect of deposits received.
"Threshold Amount" means (i) with respect to Party A, 2% of
the stockholders' equity of Party A and (ii) with respect to
Party B, U.S. $1,000,000.
(4) The "Credit Event Upon Merger" provisions of Section
5(b)(iv) will apply to Party A and Party B.
(5) The "Automatic Early Termination" provision of Section
6(a) will not apply to Party A or Party B; provided, however,
where the Event of Default specified in Section 5(a)(vii)(1),
(3), (4), (5), (6) or to the extent analogous thereto, (8), is
governed by a system of law which does not permit termination to
take place after the occurrence of the relevant Event of Default,
then the Automatic Early Termination provision of Section 6(a)
will apply to Party A and Party B.
<PAGE>
(6) Payments on Early Termination. For the purpose of
Section 6(e):
The Second Method and Market Quotation will apply.
(7) "Termination Currency" means United States Dollars.
(8) Additional Termination Event. (a) Section 5(b) of the
Agreement is modified by adding at the end thereof the following
subsections (vi) and (v):
(vi) Impossibility. Due to the occurrence of a
natural or man-made disaster, armed conflict, act of
terrorism, riot, labor disruption or any other
circumstance beyond its control after the date on which
a Transaction is entered into, it becomes impossible
(other than as a result of its own misconduct) for such
a party (which will be the Affected Party):
(1) to perform any absolute or contingent
obligation, to make a payment or delivery or to
receive a payment or delivery in respect of such
Transaction or to comply with any other material
provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support
Provider of such party to perform, any contingent
or other obligation which the party (or such
Credit Support Provider) has under any Credit
Support Document relating to such Transaction.
(v) The termination of any or all of the following
agreements, as amended from time to time: (i) the Fuel
Purchase Agreement, dated as of July 26, 1979 by and
between Party B and New England Power Company; (ii) the
Capital Funds Agreement, dated as of November 1, 1974
by and between Party B and New England Electric System;
or (iii) the Capital Maintenance Agreement, dated as of
November 15, 1985 by and between Party B and New
England Electric System.
(b) An Impossibility shall be treated as an
Illegality for all purposes of the Agreement.
(9) Netting Provisions. If an Early Termination Date
is designated, amounts determined in respect of all Terminated
Transactions shall, to the fullest extent permitted by law, be
aggregated with and netted against one another in performing the
calculations contemplated by Section 6(e). Any Terminated
Transaction(s) that cannot be so aggregated and netted shall
<PAGE>
instead be (and is hereby agreed always to have been) governed
by, and subject to, the terms and conditions set out in the
relevant Confirmation(s) with respect to such Transaction(s).
PART 2
Tax Representations
_____________________
(1) Payer Representations. For the purposes of Section
3(e), Party A and Party B will make the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of
any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under
this Agreement. In making this representation, it may rely
on (x) the accuracy of any representation made by the other
party pursuant to Section 3(f) of this Agreement; (y) the
satisfaction of the agreement contained in Section 4(a)(i)
or 4 (a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4 (a)(i) or 4 (a)(iii) of this Agreement
and (z) the satisfaction of the Agreement of the other party
contained in Section 4(d) of this Agreement, provided that
it shall not be a breach of this representation where
reliance is placed on clause (y) and the other party does
not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial
position.
(2) Payee Representations. For the purposes of Section
3 (f), Party A and Party B make the representations specified
below, if any:
The following representation will apply to Party A:
It is a national banking association organized under the
laws of the United States and its U.S. taxpayer
identification number is 13-5266470.
The following representation will apply to Party B:
It is a corporation organized under the laws of
Massachusetts and its U.S. taxpayer identification number is
04-2510767.
<PAGE>
PART 3
Documents to be Delivered
________________________
For the purpose of Section 4(a):
(1) Tax forms, documents or certificates to be delivered are:
As required under Section 4(a)(iii)
(2) Other documents to be delivered are:
(a) Certified copies of all documents evidencing necessary
corporate and other authorizations and approvals with
respect to the execution, delivery and performance by the
party of this Agreement.
Party required to deliver: Party A & Party B
Date by which to be delivered: Upon execution of this
Agreement
Covered by Section 3(d) Representation: Yes
(b) A certificate of an authorized officer of the party,
certifying the names, true signatures and authority of the
officers of the party signing this Agreement.
Party required to deliver: Party A & Party B
Date by which to be delivered: Upon execution of this
Agreement
Covered by Section 3(d) Representation: Yes
(c) An opinion of counsel to the party substantially in the form
set forth in Exhibit II or III, as the case may be, and
covering such other matters an reasonably requested by the
receiving party.
Party required to deliver: Party A & Party B
Date by which to be delivered: Upon execution of this
Agreement
Covered by Section 3(d) Representation: No
(d) Such other document as the other party may reasonably
request in connection with each Transaction.
<PAGE>
Party required to deliver: Party A & Party B
Date by which to be delivered: Promptly upon request
Covered by Section 3(d) Representation: Yes
(e) A copy of the annual report of Party A and Party B
containing audited consolidated financial statements for
each fiscal year certified by independent certified public
accountants and prepared in accordance with accounting
principles that are generally accepted in the country in
which Party A and Party B are organized. Failure to provide
such statement will not constitute an Event of Default.
Party required to deliver: Party A & Party B
Date by which to be delivered: Promptly upon request
Covered by Section 3(d) Representation: Yes
(f) A copy of the unaudited consolidated financial statements of
Party A and Party B for each fiscal quarter prepared in
accordance with accounting principles that are generally
accepted in the country in which the party is organized and
on a basis consistent with that of the annual financial
statements of Party A and Party B. Failure to provide such
statement will not constitute an Event of Default.
Party required to deliver: Party A & Party B
Date by which to be delivered: Promptly upon request
Covered by Section 3(d) Representation: Yes
(g) A copy of each regular financial or business reporting
document that is (i) distributed or made generally available
by Party A and Party B to its shareholders or investors or
(ii) filed by Party A and Party B in accordance with the
disclosure requirements of any securities regulations or as
required by bank regulatory authorities and made available
for public inspection. Failure to provide such statement
will not constitute an Event of Default.
Party required to deliver: Party A & Party B
Date by which to be delivered: Promptly upon request
Covered by Section 3(d) Representation: Yes
(h) Such other written information respecting the condition or
operations, financial or otherwise, of Party A and Party B
<PAGE>
as the other party may reasonably request from time to time.
Failure to provide such statement will not constitute an
Event of Default.
Party required to deliver: Party A & Party B
Date by which to be delivered: Promptly upon request
Covered by Section 3(d) Representation: Yes
PART 4
Miscellaneous
_____________
(1) Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York
without reference to choice of law doctrine.
(2) Process Agent. For the Purpose of Section 13(c):
Party B appoints as its Process Agent in the State of New
York: Not applicable
(3) Offices. The provisions of Section 10(a) will not apply
to this Agreement.
(4) Multibranch Party. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(5) Addresses for Notices. For the purpose of Section
12(a) of this Agreement:
Address for notices or communications to Party A:
Address: Citibank, N.A., 399 Park Avenue, 7th Floor,
New York, New York 10043
Attention: Vice President in Charge of Global Derivatives
(For all purposes)
Address for notices or communications to Party B:
Address: 25 Research Drive, Westborough, Massachusetts,
01582
Attention: John G. Cochrane, Treasurer
<PAGE>
Telefax No.: (508) 836-4560 Telephone No.: (508) 389-2174
(For all purposes)
(6) Calculation Agent. The Calculation Agent is Party A,
unless otherwise specified in a Confirmation in relation to the
relevant Transaction.
(7) "Affiliate" will have the meaning specified in
Section 14 of this Agreement.
(8) Credit Support Document. Details of any Credit
Support Document: None
(9) Netting of Payments. Subparagraph (ii) of Section 2(c)
of this Agreement will not apply to Transactions which involve a
"Commodity" as such term is defined in the 1993 ISDA Commodity
Derivatives Definitions (as published by the International Swaps
and Derivatives Association).
PART 5
Other Provisions
__________________
(1) Confirmations. Notwithstanding anything to the
contrary in the Agreement:
(a) The parties hereto agree that with respect to each
Transaction hereunder a legally binding agreement shall exist
from the moment that the parties hereto agree on the essential
terms of such Transaction, which the parties anticipate will
occur by telephone.
(b) For each Transaction Party A and Party B agree to enter
into hereunder, Party A shall promptly send to Party B a
Confirmation, substantially in the form of Exhibit I setting
forth the terms of such Transaction. Party B shall execute and
return the Confirmation to Party A or request correction of any
error within three Business Days of receipt. Failure of Party B
to respond within such period shall not affect the validity or
enforceability of such Transaction and shall be deemed to be an
affirmation of such terms.
(2) Additional Agreements. Each party agrees, upon
learning of the occurrence of any event or commencement of any
condition that constitutes (or that with the giving of notice or
passage of time or both would constitute) an Event of Default or
Termination Event with respect to the party, promptly to give the
other party notice of such event or condition (or, in lieu of
giving notice of such event or condition in the case of an event
<PAGE>
or condition that with the giving of notice or passage of time or
both would constitute an Event of Default or Termination Event
with respect to the party, to cause such event or condition to
cease to exist before becoming an Event of Default or Termination
Event).
(3) Section 3 of the Agreement is hereby amended by adding
at the end thereof the following subsections (g) and (h):
(g) Eligible Swap Participant. It is an "eligible swap
participant" as that term is defined by the Commodity
Futures Trading Commission at 17 C.F.R. Section 35.1(b)(2).
(h) Line of Business. It has entered into this Agreement
(including each Transaction evidenced hereby) in conjunction
with its line of business (including financial
intermediation services) or the financing of its business.
(4) Section 6 of the Agreement is amended by adding the
following new subsection 6(f):
(f) Notwithstanding anything to the contrary contained in
this Agreement, in the event of a designation of an Early
Termination Date as a result of an Event of Default, if the
Defaulting Party would be owed amounts under this Agreement
in respect of the Terminated Transactions as a result of
such designation, the Non-defaulting Party shall be
entitled, at its option, to set off any obligations owed
(whether or not then due, in U.S. Dollars or any other
currency) by the Defaulting Party to the Non-defaulting
Party (including any of its offices or branches) other than
under this Agreement, against the amounts owed under this
Agreement by the Non-defaulting Party to the Defaulting
Party in respect of Terminated Transactions as a result of
such designation of an Early Termination Date. The
obligations of the Non-defaulting Party hereunder in respect
of such Terminated Transactions shall be deemed satisfied
and discharged to the extent of any such setoff. Any
obligation of the Non-defaulting Party to make any payment
to a Defaulting Party hereunder shall in any event be
conditioned upon and shall arise only upon the date of the
payment (by setoff, by cash payment or otherwise) in full by
the Defaulting Party of all obligations then due and owing
by the Defaulting Party to the Non-defaulting Party
(including any of its offices or branches) and/or its
Affiliates.
(5) Escrow Payments. If by reason of the time difference
between the cities in which payments are to be made it is not
possible for simultaneous payments to be made on any date on
which both parties are required to make payments hereunder,
<PAGE>
either party may at its option and in its sole discretion notify
the other party that payments on that date are to be made in
escrow. In this case deposit of the payment due earlier on that
date shall be made by 2:00 p.m. (local time at the place for the
earlier payment) on that date with an escrow agent selected by
the party giving the notice, accompanied by irrevocable payment
instructions (i) to release the deposited payment to the intended
recipient upon receipt by the escrow agent of the required
deposit of the corresponding payment from the other party on the
same date accompanied by irrevocable payment instructions to the
same effect or (ii) if the required deposit of the corresponding
payment is not made on that same date, to return the payment
deposited to the party that paid it into escrow. The party that
elects to have payments made in escrow shall pay the costs of the
escrow arrangements and shall cause those arrangements to provide
that the intended recipient of the payment due to be deposited
first shall be entitled to interest on that deposited payment for
each day in the period of its deposit at the rate offered by the
escrow agent for that day for overnight deposits in the relevant
currency in the office where it holds that deposited payment (at
11:00 a.m. local time on that day) if that payment is not
released by 5:00 p.m. local time on the date it is deposited for
any reason other than the intended recipient's failure to make
the escrow deposit it is required to make hereunder in a timely
fashion.
(6) Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of
the Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. The parties hereto shall
endeavor in good faith negotiations to replace the prohibited or
unenforceable provision with a valid provision, the economic
effect of which comes as close as possible to that of the
prohibited or unenforceable provision.
(7) Waiver of Jury Trial. Each party hereby irrevocably
waives any and all right to trial by jury in any Proceedings.
<PAGE>
IN WITNESS WHEREOF the parties have executed this document
on the respective dates specified below with effect from the date
specified on the first page of this document.
CITIBANK, N.A., NEW YORK
s/ Shaheryar Azhar
By: ____________________________________
Print Name: Shaheryar Azhar
Title: Vice President
DATE: June 21, 1995
________________________________________
NEW ENGLAND ENERGY INCORPORATED
s/ John G. Cochrane
By: ____________________________________
Print Name: John G. Cochrane
Title: Treasurer
DATE: June 22, 1995
________________________________________
<PAGE>
EXHIBIT I
CONFIRMATION
______________
Date: __________________________________
To: ___________________________________
Telex No. ______________________________
Attention: _____________________________
From: Citibank, N.A., New York
North American Investment Bank
Telex No: 4945326
Transaction Reference Number: ___________________
The purpose of this letter agreement is to set forth the
terms and conditions of the Transaction entered into between us
on the Trade Date referred to below. This letter constitutes a
"Confirmation" as referred to in the Master Agreement specified
below.
The definitions and provisions contained in the 1991 ISDA
Definitions (as published by the International Swap Dealers
Association, Inc.) are incorporated into this Confirmation. In
the event of any inconsistency between those definitions and
provisions and this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms a part of, and is
subject to, the Master Agreement dated as of _____________ (the
"Agreement") between you and us. All provisions contained in the
Agreement shall govern this Confirmation except as expressly
modified below.
2. The terms of the particular Transaction to which this
Confirmation relates are as follows:
[Type of Transaction: [Rate Protection Transaction, Rate
Cap Transaction, Rate Floor Transaction or Rate Collar
Transaction]]
Office through which you are acting:
[Notional Amount:]
Trade Date:
Effective Date:
<PAGE>
Termination Date:
Fixed Amounts:
Fixed Rate Payer: [name of party]
[Fixed Rate Payer Currency Amount:]
Fixed Rate Payer Payment Dates: [or Period End Dates, if
Delayed Payment or Early Payment applies:]
Modified Following Business Day Convention applies
Fixed Amount: [or Fixed Rate and Fixed Rate Day Count
Fraction]:
Floating Amounts:
Floating Rate Payer: [name of party]
Floating Rate Payer Currency Amount:]
[Cap Rate; Floor Rate: ______________________]
Floating Rate Payer Payment Dates: [or Period End Dates, if
Delayed Payment or Early Payment applies:]
Modified Following Business Day Convention applies to
both Reset Dates and Payment Dates
[Floating Rate for initial Calculation Period:]
Floating Rate Option:
Designated Maturity:
Spread: [plus/minus %] [None]
Floating Rate Day Count Fraction:
Reset Dates:
[Rate Cut-off Dates:]
[Method of Averaging:] [Unweighted/Weighted Average Rate]
Compounding: Applicable/Inapplicable
[Compounding Dates:]
<PAGE>
[Initial Exchange:
Initial Exchange Date:
Fixed Rate Payer Initial Exchange Amount:
Floating Rate Payer Initial Exchange Amount:
Final Exchange:
Final Exchange Date:
Fixed Rate Payer Final Exchange Amount:
Floating Rate Payer Final Exchange Amount:
[Business Days for [first Currency]:
Business Days for [second currency]:]
Calculation Agent:
Other Provisions: [ ]
[3. agrees to provide the following
Credit Support Document [or agrees to provide the following in
accordance with [specify Credit Support Document]:]
[4. Additional closing documents: ___________________]
5. Account Details:
Payments to Fixed Rate Payer:
Account for payments in [first currency]:
Account for payments in [second currency]:
Payments to Floating Rate Payer:
Account for payments in [first currency]:
Account for payments in [second currency]:
[6. Offices
(a) The Office of Fixed Rate Payer for the Transaction
is _________________; and
(b) The Office of Floating Rate Payer for the Transaction
is ________________________.]
<PAGE>
[7. Broker/Arranger:]
Please confirm that the foregoing correctly sets forth
the terms of our agreement by executing the copy of this
Confirmation enclosed for that purpose and returning it to us.
CITIBANK, N.A., NEW YORK
By: ______________________________
Name: ____________________________
Title: Vice President
Accepted and confirmed as
of the date first written:
________________________________________
By: ___________________________________
Name: _________________________________
Title: ________________________________
<PAGE>
EXHIBIT II
____________
FORM OF OPINION OF COUNSEL FOR CITIBANK
________________________________________
(Date satisfactory to recipient)
Address: _______________________________
_______________________________
_______________________________
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Schedule to the
Master Agreement dated as of ______________________ (the
"Agreement"), between Citibank, N.A., New York ("Citibank") and
__________________________. Terms defined in the Agreement and
used but not defined herein have the meanings given to them in
the Agreement.
I am Legal Counsel to Citibank. In connection with the execution
and delivery of the Agreement, I have examined such documents as
I have deemed necessary or appropriate for the opinions expressed
herein.
Based on the foregoing and upon such investigation as I have
deemed necessary, I am of the opinion, that, so far as the laws
of the United States of America and of the State of New York are
concerned:
(1) Citibank is a banking association duly existing under
the laws of the United States of America.
(2) Citibank has full corporate power to execute and
deliver the Agreement and to perform its obligations thereunder.
(3) Such actions have been duly authorized by all
necessary corporate action, and are not in conflict with the
corporate charter and related documents of Citibank.
(4) No consents, authorizations or approvals are required
for the execution and delivery by Citibank of the Agreement and
the performance of its obligations thereunder, and no other
action by, and no notice to or filing with, any governmental
authority or regulatory body is required for such execution,
delivery or performance.
<PAGE>
(5) The Agreement has been duly executed and delivered by
Citibank and constitutes the legal, valid and binding obligation
of Citibank enforceable in accordance with its terms (except as
enforcement thereof may be limited by bankruptcy, reorganization,
insolvency, moratorium or other laws affecting the enforcement of
creditors' rights generally and by general principles of equity).
Very truly yours,
Legal Counsel
Citibank
<PAGE>
EXHIBIT III
FORM OF OPINION OF COUNSEL FOR [X]
____________________________________
(Date satisfactory to recipient)
Citibank, N.A.
399 Park Avenue
7th Floor
New York, New York 10043
Ladies and Gentlemen:
This opinion is furnished to you pursuant to the Schedule to
the Master Agreement dated as of ______________, 19___ (the
"Agreement") between _______________ ("[X]") and you. Terms
defined in the Agreement and used but not defined herein have the
meanings given to them in the Agreement.
We have acted as counsel to [X] in connection with the
preparation, execution and delivery of the Agreement. In that
connection we have examined such documents as we have deemed
necessary or appropriate for the opinions expressed herein.
Based on the foregoing and upon such investigations as we
have deemed necessary, we are of the opinion that, so far as the
laws of ________________ are concerned:
(a) [X] is duly organized and validly existing and has the
power and authority to execute and deliver, and to perform its
obligations under, the Agreement.
(b) The execution and delivery of the Agreement by [X] and
the performance of its obligations thereunder have been and
remain duly authorized by all necessary action and do not
contravene any provision of its certificate of incorporation or
by-laws (or equivalent constituent documents) or any law,
regulation or contractual restriction binding on or affecting it
or its property.
(c) All consents, authorizations and approvals (including,
without limitation, exchange control approvals) required for the
execution and delivery by [X] of the Agreement and the
performance of its obligations thereunder have been obtained and
remain in full force and effect, all conditions thereof have bean
duly complied with, and no other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required for such execution, delivery or performance.
<PAGE>
(d) The Agreement is a legal, valid and binding obligation
of [X], enforceable against [X] in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law).
Very truly yours,
<PAGE>
25 Research Drive, Westborough, Massachusetts 01582
===================================================
Exhibit B
June 22, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: New England Energy Incorporated
File No. 70-6971
Ladies and Gentlemen:
Form U-1 and amendments thereto filed in the above proceeding were
permitted to become effective by the Commission's Orders dated August 16,
1984, March 7, 1986, December 17, 1987, December 29, 1989, September 19, 1991,
and December 1, 1993. I have reviewed the following actions taken to carry
out the transaction described therein:
New England Energy Incorporated (NEEI) and Citibank, N.A. executed a
three-year Master Agreement (the Agreement) on June 22, 1995, to exchange
interest payments. The Agreement, dated as of June 7, 1995, covers a notional
amount of $25,000,000.
I have reviewed Form U-1, Application/Declaration in the above
proceeding. It is my opinion that:
(a) the foregoing transaction has been carried out in accordance with
the Application/Declaration;
(b) all State laws applicable to such transaction have been complied
with; and
(c) the consummation of said transaction does not violate the legal
rights of the holders of any securities issued by NEEI or any
associate company.
Very truly yours,
s/Kirk L. Ramsauer
Kirk L. Ramsauer
Assistant General Counsel
