Exhibit 4(a) 14
GUARANTY AND ACKNOWLEDGMENT AGREEMENT
Dated as of October 3, 1996
ENTERGY CORPORATION, a Delaware corporation
("Entergy"), ENTERGY TECHNOLOGY HOLDING COMPANY, a Delaware
corporation ("ETHC"), and THE BANK OF NEW YORK (the "Guaranteed
Party") hereby agree as follows (this Guaranty and Acknowledgment
Agreement being herein referred to as this "Agreement"):
W I T N E S S E T H:
WHEREAS, 280 Equity Holdings, Ltd. (the "Seller") is
the owner of a certain Promissory Note of ETHC (together with any
replacement note issued pursuant to Article I hereof, the "ETHC
Note") dated the date hereof in the principal amount of
$27,732,180;
WHEREAS, Seller has agreed to sell to The Bank of New
York and The Bank of New York has agreed to purchase from Seller
the ETHC Note under the Note Purchase Agreement between 280
Equity Holdings, Ltd. and The Bank of New York, dated as of the
date hereof (the "Note Purchase Agreement");
WHEREAS, Seller is the owner of a certain Promissory
Note of ETHC (together with any replacement note issued pursuant
to Article I hereof, the "Escrow Note") dated the date hereof in
the principal amount of $3,200,000;
WHEREAS, Seller has agreed to sell to The Bank of New
York and The Bank of New York has agreed to purchase from Seller
the Escrow Note under the Note Purchase Agreement;
WHEREAS, it is a condition to the obligation of The
Bank of New York to purchase the ETHC Note and the Escrow Note
that Entergy guarantee the full and prompt payment of such Notes
and that Entergy and ETHC make the additional agreements,
acknowledgments, representations and warranties provided for
herein;
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
ISSUANCE OF REPLACEMENT NOTES
Immediately upon the purchase of the original ETHC Note
and the original Escrow Note (together with any replacement notes
issued pursuant to this Article I, the "Notes") by the Guaranteed
Party pursuant to the Note Purchase Agreement, ETHC agrees to
execute and deliver to the Guaranteed Party, against receipt of
the original ETHC Note and the original Escrow Note, replacement
promissory notes payable to the order of the Guaranteed Party in
the form attached hereto as Exhibits A and B (the "ETHC
Replacement Note" and the "Escrow Replacement Note,"
respectively, and together, the "Replacement Notes"). For
purposes hereof, all references to the ETHC Note, the Escrow Note
and Notes shall be deemed to refer to such ETHC Replacement Note,
Escrow Replacement Note and Replacement Notes, respectively.
ARTICLE II
GUARANTY
2.1. Entergy irrevocably and unconditionally
guarantees to the Guaranteed Party the full and prompt payment,
no later than the third Business Day after the giving of notice
by the Guaranteed Party to Entergy, of all amounts payable
(whether at the Maturity Date, at any Prepayment Date, by
acceleration or otherwise) under the Notes by ETHC (all such
amounts being herein collectively called the "Guaranteed
Obligations"). Entergy understands, agrees and confirms that the
Guaranteed Party may enforce this Guaranty up to the full amount
of the Guaranteed Obligations against Entergy without proceeding
against ETHC, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a
portion of the Guaranteed Obligations. All payments by Entergy
hereunder shall be made as provided herein.
2.2. (a) The liability of Entergy hereunder is
exclusive and independent of any security (if any) for or other
guaranty (if any) of the Guaranteed Obligations, and the
liability of Entergy hereunder shall not be affected or impaired
by (i) any direction as to application of payment by ETHC or by
any other party, (ii) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations, (iii) any payment on or
in reduction of any such other guaranty or undertaking, or (iv)
any payment made to the Guaranteed Party on the Guaranteed
Obligations which the Guaranteed Party repays to ETHC pursuant to
court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding with respect to
ETHC, and Entergy waives any right to the deferral or
modification of its obligations hereunder by reason of any such
proceeding.
(b) If claim is ever made upon the Guaranteed Party
for repayment or recovery of any amount or amounts received in
payment or on account of any of the Guaranteed Obligations and
the Guaranteed Party repays all or part of said amount by reason
of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over the Guaranteed Party
or any of its property or (ii) any settlement or compromise of
any such claim effected by the Guaranteed Party with any such
claimant (including Entergy), then and in such event Entergy
agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any instrument
evidencing any liability of ETHC, and Entergy shall be and remain
liable to the Guaranteed Party for the amount so repaid or
recovered to the same extent as if such amount had never
originally been received by the Guaranteed Party.
2.3. The obligations of Entergy hereunder are
independent of the obligations of any other guarantor or ETHC,
and a separate action or actions may be brought and prosecuted
against Entergy whether or not an action is brought against any
other guarantor or ETHC and whether or not any other guarantor or
ETHC be joined in any such action or actions. Entergy waives, to
the fullest extent permitted by law, the benefit of any statute
of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by ETHC or other circumstance
which operates to toll any statute of limitations as to ETHC
shall operate to toll the statute of limitations as to Entergy.
2.4. Except as otherwise provided in the first
sentence of Section 2.1 hereof, Entergy hereby waives (to the
fullest extent permitted by applicable law) notice of acceptance
hereof and notice of any liability to which this Guaranty may
apply, and waives promptness, diligence, presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Guaranteed
Party against, and any other notice to, any party liable thereon.
2.5. The Guaranteed Party may at any time and from
time to time without the consent of, or notice to, Entergy,
without incurring responsibility to Entergy, without impairing or
releasing the obligations of Entergy hereunder, upon or without
any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew, accelerate
or alter, any of the Guaranteed Obligations, any security
therefor, or any liability incurred directly or indirectly in
respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those under this Guaranty) incurred
directly or indirectly in respect thereof or of this Guaranty,
and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights
against ETHC and Entergy or others or otherwise act or refrain
from acting;
(d) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those under this Guaranty) incurred directly or indirectly
in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether
due or not) of ETHC to creditors of ETHC;
(e) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of ETHC to the
Guaranteed Party regardless of what liabilities of ETHC remain
unpaid;
(f) consent to, or waive any breach of, any act,
omission or default under the Notes or any of the instruments or
agreements referred to herein, or otherwise amend, modify or
supplement the Notes or any of such other instruments or
agreements; and/or
(g) act or fail to act in any manner referred to in
this Guaranty which may deprive Entergy of its right to
subrogation against ETHC.
2.6. No invalidity, irregularity or unenforceability
of all or any part of the Guaranteed Obligations or of the
obligations of ETHC under the Notes or of any security therefor
shall affect, impair or be a defense to this Guaranty, and this
Guaranty shall be primary, absolute and unconditional notwith
standing the occurrence of any event or the existence of any
other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations.
2.7. This Guaranty is a continuing guaranty and all
liabilities to which it applies or may apply under the terms
hereof shall be conclusively presumed to have been created in
reliance hereon. No failure or delay on the part of the
Guaranteed Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies
herein expressly specified are cumulative and not exclusive of
any rights or remedies which the Guaranteed Party would otherwise
have. No notice to or demand on Entergy in any case shall
entitle Entergy to any other further notice or demand in similar
or other circumstances or constitute a waiver of the rights of
the Guaranteed Party to any other or further action in any
circumstances without notice or demand. It is not necessary for
the Guaranteed Party to inquire into the capacity or powers of
Entergy or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers
shall be guaranteed hereunder.
2.8. Entergy waives any right (except as shall be
required by applicable statute or law and cannot be waived) to
require the Guaranteed Party to: (i) proceed against ETHC, any
other guarantor or any other party; (ii) proceed against or
exhaust any security held from ETHC, any other guarantor or any
other party; or (iii) pursue any other remedy in the Guaranteed
Party's power whatsoever. Entergy waives (to the fullest extent
permitted by applicable law) any defense based on or arising out
of any defense of ETHC, any other guarantor or any other party
other than payment in full of the Guaranteed Obligations,
including, without limitation, any defense based on or arising
out of the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of
the liability of ETHC other than payment in full of the
Guaranteed Obligations. The Guaranteed Party may, at its
election, foreclose on any security held by the Guaranteed Party
by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any
other right or remedy the Guaranteed Party may have against
Entergy or any other party, or any security, without affecting or
impairing in any way the liability of Entergy hereunder except to
the extent the Guaranteed Obligations have been paid in full.
Entergy waives any defense arising out of any such election by
the Guaranteed Party, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or
other right or remedy of Entergy against ETHC or any other party
or any security; and
2.9. Entergy assumes all responsibility for being and
keeping itself informed of ETHC's financial condition and assets,
and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which Entergy assumes and incurs
hereunder, and agrees that the Guaranteed Party shall have no
duty to advise Entergy of information known to them regarding
such circumstances or risks.
ARTICLE III
Acknowledgement, Acceptance
and Waiver of ETHC and Entergy
Each of ETHC and Entergy (i) acknowledges and accepts
the terms of the Note Purchase Agreement and the transactions
contemplated thereby, (ii) waives, solely for the benefit of
Guaranteed Party, any and all defenses that it may have at any
time to the obligations of ETHC under the Notes (or any
Replacement Note) and the obligations of Entergy hereunder,
including, but not limited to, any such defenses arising under or
related to the Stock Purchase Agreement and the transactions
contemplated thereby and (iii) agrees that the obligations of
ETHC under the Notes (and any Replacement Note) and the
obligations of Entergy hereunder are irrevocable and
unconditional in accordance with the terms thereof.
ARTICLE IV
Representations and Warranties of ETHC and Entergy
Each of ETHC and Entergy represents and warrants as of
the date hereof to the Guaranteed Party as follows:
4.1 Existence and Good Standing. Each of ETHC and
Entergy is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is duly registered
and qualified to do business in each jurisdiction in which the
character of its properties or nature of its businesses requires
such registration and qualification. Each of ETHC and Entergy
has all requisite power and authority to execute and deliver, and
perform its obligations under, this Agreement and the Notes (and
any Replacement Note) and to consummate the transactions
contemplated hereby and thereby.
4.2 Validity of Agreement and Notes. The execution,
delivery and performance of this Agreement and the Notes (and any
Replacement Note) by each of ETHC and Entergy have been duly
authorized by all necessary action on the part of each of ETHC
and Entergy. This Agreement and the Notes have been (and any
Replacement Note will be) duly executed and delivered by each of
ETHC and Entergy and are (or, in the case of any Replacement
Note, will be) the valid and legally binding obligations of each
of ETHC and Entergy, enforceable against each of ETHC and Entergy
in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally or by
the availability of equitable remedies. Neither the execution
and delivery of this Agreement and the Notes (and any Replacement
Note) nor the compliance by each of ETHC and Entergy with the
terms and provisions hereof and thereof will conflict with,
constitute a default under or result in a breach by either ETHC
or Entergy of any of the terms, conditions or provisions of (i)
any law or any rule, ordinance, regulation, order, judgment or
decree of any court, arbitrator or governmental instrumentality
applicable to either ETHC or Entergy or their respective
properties, (ii) the certificate of incorporation or by-laws of
either ETHC or Entergy, or (iii) any lien, lease, agreement,
contract or instrument to which either ETHC or Entergy is a party
or by which either ETHC or Entergy or their respective properties
may be bound.
4.3 Consents. No license, approval, order or
authorization of, or registration, filing or declaration with,
any governmental or regulatory authority is required to be
obtained or made by either ETHC or Entergy on or prior to the
date hereof, and all consents of any third party required to be
obtained by either ETHC or Entergy, in connection with the
execution, delivery and performance of this Agreement and the
Notes (and any Replacement Note) by ETHC and Entergy or the
consummation of the transactions contemplated hereby have been
obtained.
4.4 Litigation. There is no action, suit, proceeding,
investigation, claim or inquiry pending or, to the knowledge of
either ETHC or Entergy, threatened which questions the validity
of, or, if adversely determined, would materially adversely
affect either ETHC's or Entergy's performance of, this Agreement
or the Notes (or any Replacement Note) or the transactions
contemplated hereby or thereby.
ARTICLE V
Covenants of ETHC and Entergy
Affirmative Covenants
So long as the Notes or any amount payable by either
ETHC or Entergy hereunder or thereunder shall remain unpaid, each
of ETHC and Entergy shall, unless the Guaranteed Party shall
otherwise consent in writing:
1. Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance; Taxes.
(a) keep proper books of record and account, all in
accordance with generally accepted accounting principles;
(b) except as otherwise permitted by Section 5.5 under
the caption "Negative Covenants" below, preserve and keep in full
force and effect its existence and preserve and keep in full
force and effect its licenses, rights and franchises to the
extent necessary to carry on its business;
(c) maintain and keep, or cause to be maintained and
kept, its properties in good repair, working order and condition,
and, from time to time, make or cause to be made all needful and
proper repairs, renewals, replacements and improvements, in each
case to the extent such properties are not obsolete and not
necessary to carry on its business;
(d) comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance
to include, without limitation, payment before the same become
delinquent of all taxes, assessments and governmental charges
imposed upon it or its property except to the extent being
contested in good faith by appropriate proceedings, and
compliance with ERISA and Environmental Laws;
(e) maintain insurance with responsible and reputable
insurance companies or associations or through its own program of
self-insurance in such amounts and covering such risks, and
subject to such retentions or deductibles, as is usually carried
by companies engaged in similar businesses and owning similar
properties, and furnish to the Guaranteed Party, within a
reasonable time after written request therefor, such information
as to the insurance carried as the Guaranteed Party may
reasonably request; and
(f) pay and discharge its obligations and liabilities
in the ordinary course of business, except to the extent that
such obligations and liabilities are being contested in good
faith by appropriate proceedings.
5.2. ETC Status. Take all actions (including
obtaining any required determinations, consents and approvals)
required to maintain at all times the status of each of ETHC and
its respective subsidiaries as, and, in the case of ETHC, engage,
and cause each of its subsidiaries to engage, only in the
businesses permitted to be engaged in by, an "exempt
telecommunications company" within the meaning of section
34(a)(1) of PUHCA.
5.3. Reporting Requirements. Furnish to the
Guaranteed Party:
(a) as soon as available and in any event within 60
days after the end of each of, in the case of Entergy, the first
three quarters of each fiscal year of Entergy and, in the case of
ETHC, the four quarters of each fiscal year of ETHC, (A)
consolidated balance sheets of, respectively, Entergy and its
subsidiaries and ETHC and its subsidiaries as of the end of such
quarter and (B) consolidated statements of income and retained
earnings of, respectively, Entergy and its subsidiaries and ETHC
and its subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
each certified by the duly authorized officer of Entergy as
having been prepared in accordance with generally accepted
accounting principles, consistently applied;
(b) as soon as available and in any event within 120
days after the end of each fiscal year of Entergy, a copy of the
annual report for such year for Entergy and its subsidiaries,
containing consolidated financial statements for such year
certified by Coopers & Xxxxxxx (or such other nationally
recognized public accounting firm as the Guaranteed Party may
approve), and certified by a duly authorized officer of Entergy
as having been prepared in accordance with generally accepted
accounting principles, consistently applied;
(c) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of Entergy and within 120 days after the end of the
fiscal year of Entergy, a certificate of the duly authorized
officer of Entergy, stating that no Prepayment Event or Event of
Default has occurred and is continuing or, if a Prepayment Event
or Event of Default has occurred and is continuing, a statement
setting forth details of such Prepayment Event or Event of
Default, as the case may be, and the action that Entergy has
taken and proposes to take with respect thereto;
(d) as soon as possible and in any event within five
days after either ETHC or Entergy has knowledge of the occurrence
of each Prepayment Event, Event of Default and each event that,
with the giving of notice or lapse of time or both, would
constitute an Event of Default, a statement of the duly
authorized officer of ETHC or Entergy, as the case may be,
setting forth details of such Prepayment Event, Event of Default
or event, as the case may be, and the actions that either or both
of ETHC and Entergy have taken and propose to take with respect
thereto;
(e) as soon as possible and in any event within five
days after the commencement of any litigation against, or any
arbitration, administrative, governmental or regulatory
proceeding involving, Entergy or any of its subsidiaries, that,
if adversely determined, could reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), operations, business, properties or prospects of
either ETHC or Entergy, notice of such litigation, arbitration or
proceeding describing in reasonable detail the facts and
circumstances concerning such litigation, arbitration or
proceeding and Entergy's or such subsidiary's proposed actions in
connection therewith;
(f) promptly after the sending or filing thereof,
copies of all reports that Entergy sends to its securities
holders, and copies of all reports and registration statements
that Entergy files with the SEC or any national securities
exchange pursuant to the Securities Act of 1933 or the Exchange
Act, of all certificates (if any) pursuant to Rule 24 that either
ETHC or Entergy files with the SEC pursuant to PUHCA having
relevancy to the Notes, and of all applications and other filings
made to or with the FCC or the SEC pursuant to Section 34 of
PUHCA or otherwise having relevancy to the Notes;
(g) as soon as possible and in any event (A) within 30
days after Entergy knows or has reason to know that any ERISA
Termination Event described in clause (i) of the definition of
ERISA Termination Event with respect to any ERISA Plan has
occurred and (B) within 10 days after Entergy knows or has reason
to know that any other ERISA Termination Event with respect to
any ERISA Plan has occurred, a statement of the chief financial
officer of Entergy describing such ERISA Termination Event and
the action, if any, that Entergy proposes to take with respect
thereto;
(h) promptly and in any event within two Business Days
after receipt thereof by Entergy from the PBGC, copies of each
notice received by Entergy in respect of the PBGC's intention to
terminate any ERISA Plan or to have a trustee appointed to
administer any ERISA Plan;
(i) promptly, if requested by the Guaranteed Party,
copies of the then current Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each ERISA
Plan;
(j) promptly and in any event within five Business
Days after receipt thereof by Entergy from a Multiemployer Plan
sponsor, a copy of each notice received by Entergy concerning the
imposition of withdrawal liability pursuant to Section 4202 of
ERISA;
(k) promptly and in any event within five Business
Days after Xxxxx'x or S&P has changed any Senior Debt Rating of
any Significant Subsidiary, notice of such change; and
(l) such other information respecting the condition or
operations, financial or otherwise, of ETHC, Entergy, any
Significant Subsidiary or any subsidiary of ETHC as the
Guaranteed Party may from time to time reasonably request.
Negative Covenants
So long as the Notes or any amount payable by either
ETHC of Entergy hereunder or thereunder shall remain unpaid,
Entergy shall not, without the written consent of the Guaranteed
Party:
5.4. Liens, Etc. Create or suffer to exist any Lien
upon or with respect to any of its properties (including, without
limitation, any shares of any class of equity security of any of
Entergy's Significant Subsidiaries or of New Orleans) or ETHC's
properties, in each case to secure or provide for the payment of
Debt, other than: (i) Liens in existence on the date hereof; (ii)
Liens for taxes, assessments or governmental charges or levies to
the extent not past due, or which are being contested in good
faith in appropriate proceedings diligently conducted and for
which ETHC or Entergy, as the case may be, has provided adequate
reserves for the payment thereof in accordance with generally
accepted accounting principles; (iii) pledges or deposits in the
ordinary course of business to secure obligations under worker's
compensation laws or similar legislation; (iv) other pledges or
deposits in the ordinary course of business (other than for
borrowed monies) that, in the aggregate, are not material to ETHC
or Entergy, as the case may be; (v) purchase money mortgages or
other liens or purchase money security interests upon or in any
property acquired or held by Entergy or ETHC in the ordinary
course of business to secure the purchase price of such property
or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such property; (vi) Liens imposed by
law such as materialmen's, mechanics', carriers', workers' and
repairmen's Liens and other similar Liens arising in the ordinary
course of business for sums not yet due or currently being
contested in good faith by appropriate proceedings diligently
conducted; (vii) attachment, judgment or other similar Liens
arising in connection with court proceedings, provided that such
Liens, in the aggregate for both ETHC and Entergy, shall not
exceed $50,000,000 at any one time outstanding, (viii) other
Liens not otherwise referred to in the foregoing clauses (i)
through (vii) above, provided that such Liens, in the aggregate
for both ETHC and Entergy, shall not exceed $100,000,000 at any
one time and no such Lien on any of the properties or assets of
ETHC shall secure or provide for the payment of Debt of ETHC or
Entergy and (ix) Liens created for the sole purpose of extending,
renewing or replacing in whole or in part Debt secured by any
Lien permitted pursuant to the foregoing clauses (i) through
(viii) above, provided that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or
replacement and that such extension, renewal or replacement, as
the case may be, shall be limited to all or a part of the
property or Debt that secured the Lien so extended, renewed or
replaced (and any improvements on such property); provided,
further, that no Lien permitted under the foregoing clauses (i)
through (ix) shall be placed upon any shares of any class of
equity security of any Significant Subsidiary or of New Orleans
unless the obligations of ETHC and Entergy to the Guaranteed
Party hereunder are simultaneously and ratably secured by such
Lien pursuant to documentation satisfactory to the Guaranteed
Party.
5.5. Mergers, Etc. Merge with or into or consolidate
with or into any other Person, or permit ETHC to do so, except
that either ETHC or Entergy may merge with any other Person,
provided that, immediately after giving effect to any such
merger, (i) ETHC or Entergy, as the case may be, is the surviving
corporation or (A) the surviving corporation shall be organized
under the laws of one of the states of the United States of
America and shall assume ETHC's or Entergy's, as the case may be,
obligations hereunder in a manner acceptable to the Guaranteed
Party, and (B) after giving effect to such merger, the Senior
Debt Ratings of the two Significant Subsidiaries (other than
SERI) having the highest Senior Debt Ratings shall be at least
BBB- and Baa3, (ii) no event shall have occurred and be
continuing that constitutes a Prepayment Event or an Event of
Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both, and
(iii) ETHC or Entergy, as the case may be, shall not be liable
with respect to any Debt or allow its property to be subject to
any Lien that would not be permissible with respect to it or its
property hereunder on the date of such transaction.
5.6. Disposition of Assets. Sell, lease, transfer,
convey or otherwise dispose of (whether in one transaction or in
a series of transactions) any shares of voting common stock (or
of stock or other instruments convertible into voting common
stock) of any Significant Subsidiary or of New Orleans, or permit
any Significant Subsidiary or New Orleans to issue, sell or
otherwise dispose of any of its shares of voting common stock (or
of stock or other instruments convertible into voting common
stock), except to Entergy or a Significant Subsidiary.
5.7. Limitation on Debt. Permit the total principal
amount of all Debt of Entergy and its subsidiaries, determined on
a consolidated basis and without duplication of liability
therefor, at any time to exceed 65% of Capitalization determined
as of the last day of the most recently ended fiscal quarter of
Entergy; provided, however, that for purposes of this Section
5.7, "Debt" and "Capitalization" shall not include (i) Junior
Subordinated Debentures and (ii) any Debt of any subsidiary of
Entergy that is Non-Recourse Debt.
ARTICLE VI
Miscellaneous
6.1 Expenses. ETHC and Entergy hereby agree, jointly
and severally, to pay all costs and expenses incurred by the
Guaranteed Party in connection with the preparation, execution,
delivery, administration, enforcement or attempted enforcement of
this Agreement, the ETHC Note, the Escrow Note, the Note Purchase
Agreement, the Seller Note and any other instruments or documents
which may be delivered in connection with this Agreement, the
ETHC Note, the Escrow Note, the Note Purchase Agreement or the
Seller Note including, but not limited to, the reasonable fees
and expenses of counsel to the Guaranteed Party.
6.2 Entire Agreement; Assignment. This Agreement
constitutes the entire agreement between the parties as to the
subject matter hereof and shall be binding upon and inure to the
benefit of the parties and their respective legal
representatives, successors and assigns; provided, however, that
no party may assign this Agreement, in whole or in part, or any
of their respective rights, interests or obligations hereunder,
without the prior written consent of the other parties. Any
amendments or supplements to this Agreement must be made in
writing and duly executed by each of the parties hereto.
6.3 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an
original, and all such counterparts taken together shall
constitute but one instrument.
6.4 Governing Law. The rights and duties of
Guaranteed Party, ETHC and Entergy shall, pursuant to New York
General Obligations Law Section 5-1401, be governed by the law of
the State of New York.
ARTICLE VI
Definitions
As used herein, the following terms shall have the
following meanings:
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Capitalization" means, as of any date of
determination, with respect to Entergy and its subsidiaries
determined on a consolidated basis, an amount equal to the sum of
(i) the total principal amount of all Debt of Entergy and its
subsidiaries outstanding on such date, (ii) Consolidated Net
Worth as of such date and (iii) to the extent not otherwise
included in Capitalization, all preferred stock and other
preferred securities of Entergy and its subsidiaries outstanding
on such date.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"Environmental Laws" means any federal, state or local
laws, ordinances or codes, rules, orders, or regulations relating
to pollution or protection of the environment, including, without
limitation, laws relating to hazardous substances, laws relating
to reclamation of land and waterways and laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment (including,
without limitation, ambient air, surface water, ground water,
land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollution, contaminants,
chemicals, or industrial, toxic or hazardous substances or
wastes.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"Escrow Note" means the Promissory Note, dated the date
hereof, issued by ETHC to 280 Equity Holdings, Ltd. in the
principal amount of $3,200,000 and the Escrow Replacement Note
issued pursuant to Article I hereof.
"Escrow Replacement Note" means the replacement note
issued pursuant to Article I hereof against receipt of the
original Escrow Note.
"ETHC Note" means the Promissory Note, dated the date
hereof, issued by ETHC to 280 Equity Holdings, Ltd. in the
principal amount of $27,732,180 and the ETHC Replacement Note
issued pursuant to Article I hereof.
"ETHC Replacement Note" means the replacement note
issued pursuant to Article I hereof against receipt of the
original ETHC Note.
"ETHC" means Entergy Technology Holding Company.
"Event of Default" has the meaning specified in the
ETHC Replacement Note under the caption "Events of Default".
"FCC" means the United States Federal Communications
Commission.
"Guaranty" means the guaranty by Entergy provided
herein.
"Guaranteed Obligations" has the meaning specified in
Section 2.1 hereof.
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Junior Subordinated Debentures" means any junior
subordinated deferrable interest debentures issued by any of the
Significant Subsidiaries and New Orleans from time to time.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset. For the purposes hereof, a Person
or any of its subsidiaries shall be deemed to own, subject to a
Lien, any asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such asset.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the tenth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"Moody's" means Xxxxx'x Investors Service, Inc. or any
successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which Entergy or any
ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding three plan
years made or accrued an obligation to make contributions.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"Non-Recourse Debt" means any Debt of any subsidiary of
Entergy that does not also constitute Debt of Entergy, any
Significant Subsidiary or New Orleans.
"Note Purchase Agreement" means the Note Purchase
Agreement, dated as of the date hereof, between 280 Equity
Holdings, Ltd. and The Bank of New York, as amended from time to
time.
"Notes" means the ETHC Note and the Escrow Note.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" shall have the meaning ascribed to
that term in the ETHC Replacement Note.
"Prepayment Event" shall have the meaning ascribed to
that term in the ETHC Note.
"PUHCA" means the Public Utility Holding Company Act of
1935, as amended.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"S&P" means Standard & Poor's Rating Group or any
successor thereto.
"SEC" means the United States Securities and Exchange
Commission.
"Seller" means 280 Equity Holdings, Ltd.
"Seller Note" means the Demand Promissory Note, dated
the date hereof, issued by 280 Equity Holdings, Ltd. to The Bank
of New York.
"Senior Debt Rating" means, as to any Person, the
rating assigned by Moody's or S&P to the senior secured long-term
debt of such Person.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Stock Purchase Agreement" means a certain stock
purchase agreement among Seller, ETHC and certain other parties.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
THE BANK OF NEW YORK
By:______________________________
Name:
Title:
ENTERGY TECHNOLOGY HOLDING COMPANY
By:______________________________
Name:
Title:
ENTERGY CORPORATION
By:______________________________
Name:
Title:
EXHIBIT A
FORM OF ETHC REPLACEMENT NOTE
PROMISSORY NOTE
$27,732,180 ___________, 1996
FOR VALUE RECEIVED, ENTERGY TECHNOLOGY HOLDING COMPANY
("ETHC") hereby promises to pay to the order of THE BANK OF NEW
YORK (the "Bank"), on the Maturity Date (as defined below), in
such manner and to such account as the Bank shall designate, in
lawful money of the United States of America, in immediately
available funds, the principal amount of TWENTY-SEVEN MILLION
SEVEN HUNDRED THIRTY-TWO THOUSAND ONE HUNDRED AND EIGHTY DOLLARS
($27,732,180).
ETHC shall pay interest on the unpaid principal amount
hereof for each day, in like money and funds and in such manner
and to such designated account, at a rate per annum equal to __%,
such interest to be payable (i) quarterly in arrears on each
January 3rd, April 3rd, July 3rd and October 3rd, until the
Maturity Date, (ii) when the principal amount hereof shall be due
(whether on the Maturity date, upon acceleration or otherwise)
and (iii) on the date of any prepayment hereof. Overdue
principal and, to the extent permitted under applicable law,
interest shall bear interest for each day from the due date
thereof until paid in full at a rate per annum equal to (i) the
rate of interest otherwise payable hereunder plus (ii) 2%, such
interest to be payable on demand. Interest shall be computed on
the basis of a year of 360 days consisting of twelve 30 day
months.
This Promissory Note is entitled to the benefits of the
Guaranty provided in the Guaranty Agreement (as defined below).
Except as hereinafter provided in the following two
sentences, this Promissory Note may not be prepaid. ETHC may
prepay this Promissory Note, in whole but not in part, at any
time at the applicable Prepayment Price (as defined below),
provided, however, that no such prepayment may be made unless
ETHC shall have simultaneously prepaid the Escrow Replacement
Note in the manner provided for therein. The Bank shall have the
right, on not less than five days' prior written notice to ETHC,
to require ETHC to prepay this Promissory Note on any Prepayment
Date at the applicable Prepayment Price. The Prepayment Price
payable in connection with any such prepayment shall be paid no
later than 1:00 p.m. (New York time) in such manner and to such
account as the Bank shall designate, in lawful money of the
United States of America, in immediately available funds.
Whenever any payment to be made pursuant hereto shall
be due on a day that is not a Business Day (as defined below),
such payment shall be made on the next succeeding business day,
and any such extension of time shall be included in computing
interest, if any, with respect to such payment.
Presentment, protest and notice of dishonor are hereby
waived by ETHC.
EVENTS OF DEFAULT
Each of the following events shall constitute an "Event
of Default" hereunder:
1. ETHC shall fail to pay interest on any amount
payable under this Promissory Note or the Escrow Replacement Note
within three Business Days after such interest becomes due and
payable; or
2. Any representation or warranty made by either ETHC
or Entergy or any of its officers in the Guaranty Agreement or
otherwise in connection with this Promissory Note shall prove to
have been incorrect or misleading in any material respect when
made; or
3. Either ETHC or Entergy shall fail to perform or
observe (i) any term, covenant or agreement contained in Section
5.2 under the caption "Affirmative Covenants" of the Guaranty
Agreement or in any paragraph under the caption "Negative
Covenants" therein or (ii) any other term, covenant or agreement
contained in the Guaranty Agreement (and not otherwise addressed
in this paragraph 3) on its part to be performed or observed if
the failure to perform or observe such other term, covenant or
agreement shall remain unremedied for 30 days after written
notice thereof shall have been given to ETHC or Entergy, as the
case may be, by the Bank; or
4. Either Entergy or ETHC shall assert or shall have
instituted any proceeding seeking to establish that the Guaranty
Agreement is unenforceable or invalid in any material respect;
5. Either ETHC or Entergy shall default in any
obligation in any interest rate swap agreement or other hedging
agreement between ETHC and the Guaranteed Party entered into in
connection with or otherwise related to this Promissory Note;
6. (i) Either ETHC or Entergy shall fail to pay any
principal of or premium or interest on any Debt of such Person
that is outstanding in a principal amount, together with the
principal amount of all other Debt with respect to which such a
failure by either ETHC or Entergy shall have occurred and be
continuing, in excess of $50,000,000 in the aggregate (but
excluding Debt evidenced by this Promissory Note) when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt,
or (ii) any default shall exist under any agreement pursuant to
which a lender has, or lenders have, committed to lend a
principal amount in excess of $50,000,000 to ETHC or Entergy; or
7. ETHC, Entergy, any Significant Subsidiary or New
Orleans shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
ETHC or Entergy, any Significant Subsidiary or New Orleans
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or ETHC, Entergy, any Significant Subsidiary or New
Orleans shall take any corporate action to authorize or to
consent to any of the actions set forth above in this paragraph
7; or
8. Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against ETHC or Entergy
and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive Business Days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
9. (i) An ERISA Plan of Entergy or any ERISA Affiliate
of Entergy shall fail to maintain the minimum funding standards
required by Section 412 of the Internal Revenue Code of 1986 for
any plan year or a waiver of such standard is sought or granted
under Section 412(d) of the Internal Revenue Code of 1986, or
(ii) an ERISA Plan of Entergy or any ERISA Affiliate of Entergy
is, shall have been or will be terminated or the subject of
termination proceedings under ERISA, or (iii) Entergy or any
ERISA Affiliate of Entergy has incurred or will incur a liability
to or on account of an ERISA Plan under Section 4062, 4063 or
4064 of ERISA and there shall result from such event either a
liability or a material risk of incurring a liability to the PBGC
or an ERISA Plan, or (iv) any ERISA Termination Event with
respect to an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy shall have occurred, and in the case of any event
described in clauses (i) through (iv), (A) such event (if
correctable) shall not have been corrected and (B) the then
present value of such ERISA Plan's vested benefits exceeds the
then current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an ERISA
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount); or
10. Entergy shall at any time fail to own and control
100% of the outstanding capital stock of, and other equity
interests in, ETHC.
RIGHTS UPON PREPAYMENT EVENT OR EVENT OF DEFAULT
If any Prepayment Event or Event of Default shall occur
and be continuing, then, and in any such event, the Bank may, by
notice to ETHC and Entergy, declare all amounts owing by ETHC
under this Promissory Note to be forthwith due and payable in an
amount equal to the applicable Prepayment Price, whereupon all
such amounts shall become and be forthwith due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by ETHC and Entergy;
provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to either of ETHC or Entergy,
any Significant Subsidiary or New Orleans under the Federal
Bankruptcy Code, all amounts owing by ETHC under this Promissory
Note shall automatically become and be due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by ETHC and Entergy.
DEFINITIONS
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"Escrow Note" means the Promissory Note issued by ETHC
to 280 Equity Holdings, Ltd., dated the date hereof, in the
principal amount of $3,200,000.
"Escrow Replacement Note" means the Promissory Note,
dated the date hereof, issued by ETHC to The Bank of New York
against receipt of the original Escrow Note, pursuant to Article
I of the Guaranty Agreement.
"ETHC" means Entergy Technology Holding Company.
"Event of Default" has the meaning specified herein
under the caption "Events of Default".
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty" means the guaranty by Entergy provided in
the Guaranty Agreement.
"Guaranty Agreement" means the Guaranty and
Acknowledgment Agreement, dated as of the date hereof, among the
Guaranteed Party, ETHC and Entergy.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the tenth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" means (i) the first anniversary of
the date hereof and each semi-annual anniversary thereof and
occurring thereafter and (ii) any date on which a material change
(as determined by the Bank) in the character or extent of the
business or assets of ETHC shall have occurred, including, but
not limited to, a material acquisition or disposition by ETHC,
and any date following any such occurrence.
"Prepayment Event" means the occurrence of any event or
the existence of any condition under any agreement or instrument
relating to any Debt of either ETHC or Entergy or of a
Significant Subsidiary that, in either case, is outstanding in a
principal amount in excess of $50,000,000 in the aggregate, which
occurrence or event results in the declaration of such Debt being
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof.
"Prepayment Price" means, with respect to any
prepayment hereof or acceleration of the maturity hereof as
provided above under the caption "Rights Upon Prepayment Event or
Event of Default", the sum, determined as of the date of such
prepayment or acceleration, of (a) the amount of accrued and
unpaid interest on this Promissory Note through but excluding the
date of prepayment or payment upon acceleration, as the case may
be, and (b) the present value, based on the yield to maturity of
U.S. Dollar Libor swaps having payment dates comparable to the
payment dates for principal of and interest on this Promissory
Note, of the unpaid principal amount of this Promissory Note to
be paid on the Maturity Date hereof and interest on such
principal amount, to be paid quarterly as provided in this
Promissory Note, for the period from and including the date of
prepayment or acceleration through but excluding the Maturity
Date as determined by the Bank in its sole discretion, such
determination to be conclusive absent manifest error.
"Promissory Note" means this Promissory Note.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
MISCELLANEOUS
No delay by the Bank in exercising any right with
respect to any of the obligations evidenced hereby shall operate
as a waiver thereof, nor shall the exercise of any right with
respect to such obligations waive or preclude the later exercise
of any other right with respect to such obligations or the later
exercise of any right with respect to any other obligations
evidenced hereby.
Any notice to ETHC or Entergy to be given hereunder or
in connection herewith shall be in writing and shall be sent by
mail to 000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx, 00000, Mail
Stop L-ENT-15E, Attention: Vice President and Treasurer, or by
telecopier to (000) 000-0000.
The rights and duties of the Bank (and its successors
and assigns) and ETHC under this Promissory Note shall, pursuant
to New York General Obligations Law Section 5-1401, be governed
by the law of the State of New York.
ENTERGY TECHNOLOGY HOLDING COMPANY
By__________________________
Name:
Title:
EXHIBIT B
FORM OF ESCROW REPLACEMENT NOTE
PROMISSORY NOTE
$3,200,000 ___________, 1996
FOR VALUE RECEIVED, ENTERGY TECHNOLOGY HOLDING COMPANY
("ETHC") hereby promises to pay to the order of THE BANK OF NEW
YORK (the "Bank"), on the Maturity Date (as defined below), in
such manner and to such account as the Bank shall designate, in
lawful money of the United States of America, in immediately
available funds, the principal amount of THREE MILLION TWO
HUNDRED THOUSAND DOLLARS ($3,200,000).
ETHC shall pay interest on the unpaid principal amount
hereof for each day, in like money and funds and in such manner
and to such designated account, at a rate per annum equal to __%,
such interest to be payable (i) quarterly in arrears on each
January 3rd, April 3rd, July 3rd and October 3rd, until the
Maturity Date, (ii) when the principal amount hereof shall be due
(whether on the Maturity date, upon acceleration or otherwise)
and (iii) on the date of any prepayment hereof. Overdue
principal and, to the extent permitted under applicable law,
interest shall bear interest for each day from the due date
thereof until paid in full at a rate per annum equal to (i) the
rate of interest otherwise payable hereunder plus (ii) 2%, such
interest to be payable on demand. Interest shall be computed on
the basis of a year of 360 days consisting of twelve 30 day
months.
This Promissory Note is entitled to the benefits of the
Guaranty provided in the Guaranty Agreement (as defined below).
Except as hereinafter provided in the following two
sentences, this Promissory Note may not be prepaid. ETHC may
prepay this Promissory Note, in whole but not in part, at any
time at the applicable Prepayment Price (as defined below),
provided, however, that no such prepayment may be made unless
ETHC shall have simultaneously prepaid the ETHC Replacement Note
in the manner provided for therein. The Bank shall have the
right, on not less than five days' prior written notice to ETHC,
to require ETHC to prepay this Promissory Note on any Prepayment
Date at the applicable Prepayment Price. The Prepayment Price
payable in connection with any such prepayment shall be paid no
later than 1:00 p.m. (New York time) in such manner and to such
account as the Bank shall designate, in lawful money of the
United States of America, in immediately available funds.
Whenever any payment to be made pursuant hereto shall
be due on a day that is not a Business Day (as defined below),
such payment shall be made on the next succeeding business day,
and any such extension of time shall be included in computing
interest, if any, with respect to such payment.
Presentment, protest and notice of dishonor are hereby
waived by ETHC.
EVENTS OF DEFAULT
Each of the following events shall constitute an "Event
of Default" hereunder:
1. ETHC shall fail to pay interest on any amount
payable under this Promissory Note or the EHTC Replacement Note
within three Business Days after such interest becomes due and
payable; or
2. Any representation or warranty made by either ETHC
or Entergy or any of its officers in the Guaranty Agreement or
otherwise in connection with this Promissory Note shall prove to
have been incorrect or misleading in any material respect when
made; or
3. Either ETHC or Entergy shall fail to perform or
observe (i) any term, covenant or agreement contained in Section
5.2 under the caption "Affirmative Covenants" of the Guaranty
Agreement or in any paragraph under the caption "Negative
Covenants" therein or (ii) any other term, covenant or agreement
contained in the Guaranty Agreement (and not otherwise addressed
in this paragraph 3) on its part to be performed or observed if
the failure to perform or observe such other term, covenant or
agreement shall remain unremedied for 30 days after written
notice thereof shall have been given to ETHC or Entergy, as the
case may be, by the Bank; or
4. Either Entergy or ETHC shall assert or shall have
instituted any proceeding seeking to establish that the Guaranty
Agreement is unenforceable or invalid in any material respect;
5. Either ETHC or Entergy shall default in any
obligation in any interest rate swap agreement or other hedging
agreement between ETHC and the Guaranteed Party entered into in
connection with or otherwise related to this Promissory Note;
6. (i) Either ETHC or Entergy shall fail to pay any
principal of or premium or interest on any Debt of such Person
that is outstanding in a principal amount, together with the
principal amount of all other Debt with respect to which such a
failure by either ETHC or Entergy shall have occurred and be
continuing, in excess of $50,000,000 in the aggregate (but
excluding Debt evidenced by this Promissory Note) when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt,
or (ii) any default shall exist under any agreement pursuant to
which a lender has, or lenders have, committed to lend a
principal amount in excess of $50,000,000 to ETHC or Entergy; or
7. ETHC, Entergy, any Significant Subsidiary or New
Orleans shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
ETHC or Entergy, any Significant Subsidiary or New Orleans
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 30 days, or
any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property)
shall occur; or ETHC, Entergy, any Significant Subsidiary or New
Orleans shall take any corporate action to authorize or to
consent to any of the actions set forth above in this paragraph
7; or
8. Any judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against ETHC or Entergy
and either (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive Business Days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
9. (i) An ERISA Plan of Entergy or any ERISA Affiliate
of Entergy shall fail to maintain the minimum funding standards
required by Section 412 of the Internal Revenue Code of 1986 for
any plan year or a waiver of such standard is sought or granted
under Section 412(d) of the Internal Revenue Code of 1986, or
(ii) an ERISA Plan of Entergy or any ERISA Affiliate of Entergy
is, shall have been or will be terminated or the subject of
termination proceedings under ERISA, or (iii) Entergy or any
ERISA Affiliate of Entergy has incurred or will incur a liability
to or on account of an ERISA Plan under Section 4062, 4063 or
4064 of ERISA and there shall result from such event either a
liability or a material risk of incurring a liability to the PBGC
or an ERISA Plan, or (iv) any ERISA Termination Event with
respect to an ERISA Plan of Entergy or any ERISA Affiliate of
Entergy shall have occurred, and in the case of any event
described in clauses (i) through (iv), (A) such event (if
correctable) shall not have been corrected and (B) the then
present value of such ERISA Plan's vested benefits exceeds the
then current value of assets accumulated in such ERISA Plan by
more than the amount of $25,000,000 (or in the case of an ERISA
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall
exceed such amount); or
10. Entergy shall at any time fail to own and control
100% of the outstanding capital stock of, and other equity
interests in, ETHC.
RIGHTS UPON PREPAYMENT EVENT OR EVENT OF DEFAULT
If any Prepayment Event or Event of Default shall occur
and be continuing, then, and in any such event, the Bank may, by
notice to ETHC and Entergy, declare all amounts owing by ETHC
under this Promissory Note to be forthwith due and payable in an
amount equal to the applicable Prepayment Price, whereupon all
such amounts shall become and be forthwith due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by ETHC and Entergy;
provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to either of ETHC or Entergy,
any Significant Subsidiary or New Orleans under the Federal
Bankruptcy Code, all amounts owing by ETHC under this Promissory
Note shall automatically become and be due and payable in an
amount equal to the applicable Prepayment Price, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by ETHC and Entergy.
DEFINITIONS
"Arkansas" means Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company), an Arkansas corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City.
"Consolidated Net Worth" means the sum of the capital
stock (excluding treasury stock and capital stock subscribed for
and unissued) and surplus (including earned surplus, capital
surplus and the balance of the current profit and loss account
not transferred to surplus) accounts of Entergy and its
subsidiaries appearing on a consolidated balance sheet of Entergy
and its subsidiaries prepared as of the date of determination in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the most
recently audited financial statements of Entergy, after
eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any, in the stock
and surplus of subsidiaries.
"Debt" of any Person means (without duplication) all
liabilities, obligations and indebtedness (whether contingent or
otherwise) of such Person (i) for borrowed money or evidenced by
bonds, debentures, notes, or other similar instruments, (ii) to
pay the deferred purchase price of property or services (other
than such obligations incurred in the ordinary course of business
on customary trade terms), (iii) as lessee under leases which
shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv)
under reimbursement agreements or similar agreements with respect
to the issuance of letters of credit (other than obligations in
respect of letters of credit opened to provide for the payment of
goods or services purchased in the ordinary course of business),
(v) under any Guaranty Obligations and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Entergy" means Entergy Corporation.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder, each as amended and
modified from time to time.
"ERISA Affiliate" of a person or entity means any trade
or business (whether or not incorporated) that is a member of a
group of which such person or entity is a member and that is
under common control with such person or entity within the
meaning of Section 414 of the Internal Revenue Code of 1986, and
the regulations promulgated and rulings issued thereunder, each
as amended or modified from time to time.
"ERISA Plan" means an employee benefit plan maintained
for employees of any Person or any ERISA Affiliate of such Person
subject to Title IV of ERISA.
"ERISA Termination Event" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the
provision for 30-day notice to PBGC), or (1) the withdrawal of
Entergy or any of its ERISA Affiliates from an ERISA Plan during
a plan year in which Entergy or any of its ERISA Affiliates was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (2) the filing of a notice of intent to terminate an ERISA
Plan or the treatment of an ERISA Plan amendment as a termination
under Section 4041 of ERISA, or (3) the institution of
proceedings to terminate an ERISA Plan by the PBGC or to appoint
a trustee to administer any ERISA Plan, or (4) any other event or
condition that would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"ETHC" means Entergy Technology Holding Company.
"ETHC Note" means the Promissory Note issued by ETHC to
280 Equity Holdings, Ltd., dated the date hereof, in the
principal amount of $27,732,180.
"ETHC Replacement Note" means the Promissory Note,
dated the date hereof, issued by ETHC to The Bank of New York
against receipt of the original ETHC Note, pursuant to Article I
of the Guaranty Agreement.
"Event of Default" has the meaning specified herein
under the caption "Events of Default".
"Guaranteed Party" means The Bank of New York, a New
York banking corporation.
"Guaranty" means the guaranty by Entergy provided in
the Guaranty Agreement.
"Guaranty Agreement" means the Guaranty and
Acknowledgment Agreement, dated as of the date hereof, among the
Guaranteed Party, ETHC and Entergy.
"Guaranty Obligations" means (i) direct or indirect
guaranties in respect of, and obligations to purchase or
otherwise acquire, or otherwise to assure a creditor against loss
in respect of, Debt of any Person and (ii) other guaranty or
similar obligations in respect of the financial obligations of
others, including, without limitation, Support Obligations.
"Gulf States" means Entergy Gulf States, Inc. (formerly
Gulf States Utilities Company), a Texas corporation.
"Louisiana" means Entergy Louisiana, Inc. (formerly
Louisiana Power & Light Company), a Louisiana corporation.
"Maturity Date" means the date which is the tenth
anniversary of the date hereof.
"Mississippi" means Entergy Mississippi, Inc. (formerly
Mississippi Power & Light Company), a Mississippi corporation.
"New Orleans" means Entergy New Orleans, Inc. (formerly
New Orleans Public Service Inc.), a Louisiana corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Prepayment Date" means (i) the first anniversary of
the date hereof and each semi-annual anniversary thereof and
occurring thereafter and (ii) any date on which a material change
(as determined by the Bank) in the character or extent of the
business or assets of ETHC shall have occurred, including, but
not limited to, a material acquisition or disposition by ETHC,
and any date following any such occurrence.
"Prepayment Event" means the occurrence of any event or
the existence of any condition under any agreement or instrument
relating to any Debt of either ETHC or Entergy or of a
Significant Subsidiary that, in either case, is outstanding in a
principal amount in excess of $50,000,000 in the aggregate, which
occurrence or event results in the declaration of such Debt being
due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated
maturity thereof.
"Prepayment Price" means, with respect to any
prepayment hereof or acceleration of the maturity hereof as
provided above under the caption "Rights Upon Prepayment Event or
Event of Default", the sum, determined as of the date of such
prepayment or acceleration, of (a) the amount of accrued and
unpaid interest on this Promissory Note through but excluding the
date of prepayment or payment upon acceleration, as the case may
be, and (b) the present value, based on the yield to maturity of
U.S. Dollar Libor swaps having payment dates comparable to the
payment dates for principal of and interest on this Promissory
Note, of the unpaid principal amount of this Promissory Note to
be paid on the Maturity Date hereof and interest on such
principal amount, to be paid quarterly as provided in this
Promissory Note, for the period from and including the date of
prepayment or acceleration through but excluding the Maturity
Date as determined by the Bank in its sole discretion, such
determination to be conclusive absent manifest error.
"Promissory Note" means this Promissory Note.
"Reportable Event" has the meaning assigned to that
term in Title IV of ERISA.
"SERI" means Systems Energy Resources, Inc., an
Arkansas corporation.
"Significant Subsidiary" means Arkansas, Gulf States,
Louisiana, Mississippi and SERI, and any other domestic regulated
utility subsidiary of Entergy: (i) the total assets (after
intercompany eliminations) of which exceed 5% of the total
consolidated assets of Entergy and its subsidiaries or (ii) the
net worth of which exceeds 5% of the Consolidated Net Worth of
Entergy and its subsidiaries, in each case as shown on the most
recent audited consolidated balance sheet of Entergy and its
subsidiaries.
"Support Obligations" means any financial obligation,
contingent or otherwise, of any Person guaranteeing or otherwise
supporting any Debt or other obligation of any other Person in
any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Debt of
the payment of such Debt, (iii) to maintain the working capital,
equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary
obligor to pay such Debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements so as to assure
any Person with respect to the payment of such Debt or the
performance of such obligation, or (v) to provide financial
support for the performance of, or to arrange for the performance
of, any non-monetary obligations or non-funded debt payment
obligations (including, without limitation, guaranties of
payments under power purchase or other similar arrangements) of
the primary obligor.
MISCELLANEOUS
No delay by the Bank in exercising any right with
respect to any of the obligations evidenced hereby shall operate
as a waiver thereof, nor shall the exercise of any right with
respect to such obligations waive or preclude the later exercise
of any other right with respect to such obligations or the later
exercise of any right with respect to any other obligations
evidenced hereby.
Any notice to ETHC or Entergy to be given hereunder or
in connection herewith shall be in writing and shall be sent by
mail to 000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx, 00000, Mail
Stop L-ENT-15E, Attention: Vice President and Treasurer, or by
telecopier to (000) 000-0000.
The rights and duties of the Bank (and its successors
and assigns) and ETHC under this Promissory Note shall, pursuant
to New York General Obligations Law Section 5-1401, be governed
by the law of the State of New York.
ENTERGY TECHNOLOGY HOLDING COMPANY
By__________________________
Name:
Title:
