EXHIBIT B-4
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of ___________, 2002, by and between VERMONT
YANKEE NUCLEAR POWER CORPORATION, a Vermont corporation ("Vermont Yankee" or
"Debtor") having a principal office at _____ Xxx Xxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxx 00000, and ENTERGY NUCLEAR VERMONT YANKEE, LLC, a Delaware limited
liability company having a principal office at 000 Xxx Xxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxx 00000 (the "Secured Party").
WITNESSETH:
WHEREAS, Vermont Yankee and the Secured Party have entered into a Purchase
and Sale Agreement (the "PSA"), dated as of August 15, 2001, pursuant to which
Vermont Yankee agreed to sell and assign to the Secured Party certain assets and
liabilities, including Vermont Yankee's operating nuclear powered generating
plant (the "Plant"), which transaction is being consummated on the date hereof,
and a Power Purchase Agreement (the "PPA"), dated _______ __, 2001, pursuant to
which Vermont Yankee agreed to purchase from the Secured Party certain products
to be produced by the Plant after the closing of the sale for resale at
wholesale to certain of Vermont Yankee's sponsoring utilities (the "Sponsors");
and
WHEREAS, Vermont Yankee and each of its Sponsors have entered into certain
amendatory agreements that modify the Power Contracts and Additional Power
Contracts (as defined below) between said parties, which contracts as so
modified have been approved by the Federal Energy Regulatory Commission and
provide for the resale to such Sponsors of the energy and ancillary products to
be purchased by Vermont Yankee pursuant to the PPA and obligate the Sponsors to
make certain payments to Vermont Yankee in addition to the power purchase
payments, including payments in respect of costs incurred by Vermont Yankee
under the PSA; and
WHEREAS, the parties hereto desire that this Security Agreement be entered
into for the purpose of securing the interests of the Secured Party under the
PSA and PPA.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. The following terms shall have the following meanings,
unless the context otherwise requires:
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"Additional Power Contracts" means the several separate Additional Power
Contracts, dated as of February 1, 1984, as amended by the 2001 Amendatory
Agreements, between Vermont Yankee and each of the Sponsors.
"Amended Power Contracts" means the Power Contracts and the Additional
Power Contracts, each as amended and in effect from time to time.
"Code" means the Uniform Commercial Code as in effect in the State of
Vermont from time to time.
"Collateral" has the meaning set forth in Section 2(a).
"Default" or "Event of Default" means any of the following: (a) failure by
any Sponsor to make its monthly payment under its Amended Power Contract when
due and such failure continues for three (3) days; (b) failure by Vermont Yankee
to make a payment under Section 5 of the PPA when due and such failure continues
for three (3) days; (c) failure by Vermont Yankee to pay any PSA Obligation (as
defined in the Amended Power Contract) when due and such failure continues for
twenty (20) days; (b) filing of a voluntary or involuntary petition by or
against Vermont Yankee or any Sponsor seeking reorganization, arrangement,
readjustment of its debts or other relief under the Bankruptcy Code, as amended.
"Power Contracts" means the separate Power Contracts dated as February 1,
1968, as amended through the 2001 Amendatory Agreement, between Vermont Yankee
and each of the Sponsors
"PPA" has the meaning set forth in the recitals hereto.
"PSA" has the meaning set forth in the recitals hereto.
"Secured Party Obligations" means the payments, if any, owed by Vermont
Yankee pursuant to Sections 3(g), 5, 7(h) and 9 of the PPA, if any, and Sections
2.4, 6.11(b), 6.12 and 9.1(b) of the PSA, if any.
"Secured Party Payments" means the portion of each monthly payment owed by
Sponsors to Vermont Yankee pursuant to (i) clause (D) of Section 7 of each of
the Amended Power Contracts and described therein as "Vermont Yankee's PSA
Obligations, if any, for such month", (ii) clause (E) of Section 7 of each of
the Amended Power Contracts and described therein as "Vermont Yankee's PPA
Obligations, if any, for such month" and (iii) clause (a) of Section 7A of each
Amended Power Contracts and described therein as "Purchase of Future Power";
"Sponsor" means each of Central Vermont Public Service Corporation, Green
Mountain Power Corporation, New England Power Company, The Connecticut Light and
Power Company, Central Maine Power Company, Public Service Company of New
Hampshire, Western
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Massachusetts Electric Company and Cambridge Electric Company; and "Sponsors"
means two or more of the foregoing.
"2001 Amendatory Agreements" means the separate 2001 Amendatory
Agreements, dated as of September , 2001, between Vermont Yankee and each of the
Sponsors.
2. Grant of Security Interest. (a) As collateral security for the prompt and
complete payment and performance of the Secured Party Obligations, the
Debtor hereby assigns, conveys, mortgages, pledges, hypothecates and
transfers to the Secured Party, and hereby grants to the Secured Party a
security interest in, all the Debtor's right, title and interest in and to
the Secured Party Payments which the Debtor is entitled to receive and
collect under each of the Amended Power Contracts (collectively called the
"Collateral").
(b) The security interest granted by clause (a) above is and shall be a
first priority security interest.
3. Assignment of Rights, Powers and Privileges. In addition to the above
security interest granted in Section 2 hereof and without limitation of
any of the other rights and remedies provided for in this Security
Agreement, the Debtor hereby irrevocably assigns and transfers to the
Secured Party, absolutely and not merely as collateral security, the right
to exercise any and all of the Debtor's rights, remedies, powers and
privileges, but none of its obligations, duties or liabilities, with
respect to the Secured Party Payments or any other rights, remedies,
powers and privileges, under or arising out of the Amended Power
Contracts, including, without limitation, the Debtor's right and/or power
to (a) take or refrain from taking any action under the Amended Power
Contracts, or (b), pursue any right or remedy with respect to any default
by the Debtor or any Sponsor. In furtherance of the foregoing, and
without limiting the generality of the power granted in Section 7(a)
hereof, the Debtor hereby irrevocably constitutes and appoints the Secured
Party, with full power of substitution, as its true and lawful
attorney-in-fact, with full irrevocable power and authority in the place
and stead of the Debtor and in the name of the Debtor or in its own name,
from time to time in the Secured Party's discretion, to exercise any and
all such rights, remedies, powers or privileges.
4. Grant of License. Notwithstanding the foregoing, until notified by the
Secured Party of a Default or Event of Default under this Security
Agreement, the Debtor shall have a revocable license to exercise its
rights under the Amended Power Contracts, including the collection of the
Secured Party Payments.
5. Liabilities under Agreements. It is expressly agreed that, anything
contained herein to the contrary notwithstanding, (a) Vermont Yankee shall
at all times remain liable to observe and perform all of its respective
duties and obligations under the PSA, PPA and Amended Power Contracts to
the same extent as if this Security Agreement had not been executed; (b)
the exercise by the Secured Party of any of the rights assigned hereunder
shall not release the Debtor or any Sponsor from any of their respective
duties or
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obligations under the Amended Power Contracts; and (c) the Secured Party
shall not have any obligations or liability under the Amended Power
Contracts by reason of or arising out of this Security Agreement or the
receipt by the Secured Party of any payment under the Amended Power
Contracts, nor shall the Secured Party be obligated to perform or fulfill
any of the duties or obligations of the Debtor under the Amended Power
Contracts or to make any payments thereunder, or to make any inquiry as to
the nature or sufficiency of any payment received by it thereunder, or the
sufficiency of performance by any party thereunder, or to present or file
any claim, or to take any action to collect or enforce any performance or
the payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.
6. Covenants. The Debtor covenants and agrees with the Secured Party that
from and after the date of this Security Agreement and until the Secured
Party Obligations are fully satisfied:
(a) Further Documentation. At any time and from time to time, upon the
written request of the Secured Party, and at the sole expense of the
Debtor, the Debtor will promptly and duly execute and deliver any
and all documents and take such further action as the Secured Party
may reasonably deem desirable in obtaining the full benefits of this
Security Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or
continuation statements under the Code with respect to the liens and
security interests granted hereby. The Debtor also hereby authorizes
the Secured Party to file any such financing or continuation
statements without the signature of the Debtor to the extent
permitted by applicable law.
(b) Maintenance of Records. The Debtor will keep and maintain at its own
cost and expense records satisfactory to the Secured Party of the
Collateral including, without limitation, a record of all payments
received and all credits granted with respect to the Collateral and
all other dealings with the Collateral. The Debtor will xxxx its
books and records pertaining to the Collateral to evidence this
Security Agreement and the security interest granted hereby. For the
Secured Party's further security, the Debtor agrees that the Secured
Party shall have access to all of the Debtor's books and records
pertaining to the Collateral during the term of this Security
Agreement and the Debtor shall deliver and, upon the occurrence and
continuance of a Default hereunder, turn over any such books and
records to the Secured Party or its representatives at any
reasonable time on demand of the Secured Party. The Secured Party
and the Debtor shall have the right at all reasonable times to
inspect and copy such books and records which are in the possession
of the other.
(c) Indemnification. In any suit, proceeding or action brought by the
Secured Party under the PPA or Amended Power Contracts for any sum
owing thereunder, or to
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enforce any provisions thereof, the Debtor will save, indemnify and
keep the Secured Party harmless from and against all expense, loss
or damage suffered by reason of any defense, set off, counterclaim,
recoupment or reduction or liability whatsoever of the obligee
thereunder, arising out of a breach by the Debtor of any obligation
thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such obligee from the
Debtor.
7. Secured Party's Appointment as Attorney-in-Fact. (a) The Debtor hereby
irrevocably constitutes and appoints the Secured Party and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place
and stead of the Debtor and in the name of the Debtor or in its own name,
from time to time in the Secured Party's discretion, for the purpose of
carrying out the terms of this Security Agreement, to take any and all
appropriate action and to execute any and all documents and instruments
which may be necessary or desirable in the judgment of the Secured Party
to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby gives the Secured Party
the power and right, on behalf of the Debtor without notice to or assent
by the Debtor, to do the following:
(i) upon the occurrence and continuance of a Default, to ask, demand,
collect, receive and give acquittances and receipts for any and all monies due
and to become due, or any performance to be rendered, under the Amended Power
Contracts, PSA or PPA and, in the name of the Debtor or its own name or
otherwise, to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of monies due under
Amended Power Contracts, PSA or PPA with respect to the Collateral and to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Secured Party for the purpose of
collecting any all such monies due or securing any performance to be rendered
under the Amended Power Contracts, PSA or PPA;
(ii) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral;
(iii) upon the occurrence and continuance of any Default, (A) to direct
any party liable for any payment or performance under any of the Amended Power
Contracts to make payment of any and all monies due and to become due thereunder
with respect to the Collateral or to render any performance provided for therein
directly to the Secured Party or as the Secured Party shall direct; (B) to
receive payment of and receipt for any and all monies and other amounts due and
to become due at any time with respect to the Collateral; (C) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof or
Proceeds relating thereto and to enforce any other right in respect of any
Collateral; (D) to defend any suit, action or proceeding brought against the
Debtor with respect to any Collateral (it being understood that Debtor shall
have the right to participate in the defense of any suit, action or proceeding);
(E) to settle, compromise or adjust any suit,
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action or proceeding described above and, in connection therewith, to give such
discharges or releases as the Secured Party may deem appropriate; and (F)
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Secured Party were the absolute owner thereof for all purposes, and to do, at
the Secured Party's option and the Debtor's expense, at any time, or from time
to time, all acts and things which the Secured Party deems necessary to protect,
preserve or realize upon the Collateral and the security interest purported to
be created therein in favor of the Secured Party, in order to effect the intent
of this Security Agreement, all as fully and effectively as the Debtor might do.
The power of attorney under this Security Agreement is a power coupled
with an interest and shall be irrevocable.
(b) The powers conferred on the Secured Party hereunder are solely to
protect the interests of the Secured Party in the Collateral and shall not
impose any duty upon the Secured Party to exercise any such powers. The Secured
Party shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Debtor or any Sponsor
or, except as otherwise agreed to by the Secured Party, any other party for any
act or failure to act, except for its gross negligence or willful misconduct,
unless a higher standard is imposed by law.
8. Performance by Secured Party of Debtor's Obligations. If the Debtor fails
to perform or comply with any of its agreements contained herein, in the
PSA, PPA or Amended Power Contracts, and the Secured Party, as provided
for by the terms of this Security Agreement, itself performs or complies,
or otherwise causes performance or compliance, with such agreements, the
reasonable expenses of the Secured Party incurred in connection with such
performance or compliance, shall be payable by the Debtor to the Secured
Party on demand and until such payment shall constitute obligations
secured hereby.
9. Remedies, Rights Upon Default. (a) If an Event of Default shall occur and
be continuing, the Secured Party may exercise in addition to all other
rights and remedies granted to it in this Security Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Secured Party Obligations, all rights and remedies of a secured party
under the Code.
(b) The Debtor also agrees to pay all reasonable costs of the Secured
Party, including attorneys' fees and expenses, incurred with respect to the
collection of any of the Secured Party Obligations and the enforcement of the
Secured Party's rights hereunder.
(c) Except as otherwise expressly provided in Section 9 (a) above, the
Debtor hereby waives presentment, demand, or protest (to the extent permitted by
applicable law) of any kind in connection with this Security Agreement or any
Collateral.
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10. Limitation on Secured Party's Duty in Respect of Collateral. Beyond the
safe custody thereof, the Secured Party shall not have any duty as to any
Collateral in its possession or control or in the possession or control of
any agent or nominee of it or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto.
11. Notices. Any notice to the Secured Party hereunder shall be deemed to
have been duly given when delivered or when deposited in the mail, first
class postage prepaid, addressed: if to the Secured Party, at
If to Secured Party, at
Entergy Nuclear Vermont Yankee, LLC
_____________________________
_____________________________
with copy to:
_____________________________
_____________________________
_____________________________
If to Vermont Yankee, at
Vermont Yankee Nuclear Power Corporation
000 Xxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: _____________________
with copy to:
Downs Xxxxxxx & Xxxxxx PLLC
00 Xxxxxxxx Xxxxxx
X.X. Xxx 00
Xx. Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
12. Severability. Any provision of this Security 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 hereof, and
to this end, the provisions of this Security Agreement are deemed
severable. Any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
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13. No Waiver; Cumulative Remedies; Amendments. The Secured Party shall not
by any act, delay, omission or otherwise be deemed to have waived any of
its rights or remedies hereunder and no waiver shall be valid unless in
writing, signed by the Secured Party, and then only to the extent therein
set forth. A waiver by the Secured Party of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy
which the Secured Party would otherwise have had on any future occasion.
No failure to exercise nor any delay in exercising on the part of the
Secured Party, any right, power or privilege hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of any rights,
power or privilege hereunder preclude any other or further exercise
thereof, nor shall any single or partial exercise of any other right,
power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights and remedies provided by law. None of the terms
or provisions of this Security Agreement may be waived, altered, modified
or amended except by an instrument in writing, duly executed by the
Secured Party.
14. Successors and Assigns; Governing Law. This Security Agreement and all
obligations of the Debtor hereunder shall be binding upon the successors
and assigns of the Debtor, and shall inure to the benefit of the Secured
Party and its respective successors and assigns. This Security Agreement
shall be governed by, and be construed and interpreted in accordance with,
the laws of the State of Vermont.
15. Financing Statement. A carbon, photographic, or other reproduction of
this Security Agreement is sufficient as a financing statement.
IN WITNESS WHEREOF, the Debtor and the Secured Party have each caused this
Security Agreement to be executed by its duly authorized officer on the date
first set forth above.
ENTERGY NUCLEAR VERMONT YANKEE, LLC
By __________________________________
VERMONT YANKEE NUCLEAR POWER
CORPORATION
By __________________________________
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