Exhibit B-4
PRELIMINARY DRAFT
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1/9/2001
SUBJECT TO REVISION
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FORM OF
DEBT ASSUMPTION AGREEMENT
THIS DEBT ASSUMPTION AGREEMENT, dated as of , 200 , is between [the
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Intermediate Transmission Entity], a [corporation/limited liability company]
(hereinafter called the "Assumption Party") and [Entergy Louisiana, Inc.,
Entergy Gulf States-LA, Entergy New Orleans, Inc., Entergy Arkansas, Inc. or
Entergy Mississippi, Inc.], a corporation (hereinafter called "the Operating
Company").
RECITALS
1. The Operating Company, a corporation, has heretofore
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entered into the indentures and has issued the series of outstanding debt listed
in Schedule A hereto (the "Outstanding Debt").
2. [Insert appropriate state legislation, if any "the Act"]
3. The Federal Energy Regulatory Commission ("FERC"), pursuant to FERC
Order 2000 established December 15, 2000 as the date by which
FERC-jurisdictional transmission facilities must be committed to an independent
Regional Transmission Organization.
4. As part of the Operating Company's plan to comply with [the Act
and] FERC Order 2000, the Operating Company is transferring transmission assets
to the Assumption Party, and the Assumption Party agrees to assume certain
obligations to the Outstanding Debt.
5. As compensation to the Operating Company for the allocation of
assets to the Assumption Party, and notwithstanding the sole liability of the
Operating Company on the Outstanding Debt, the Assumption Party wishes to assume
certain liabilities of the Operating Company on Outstanding Debt on the terms
and to the extent set forth herein.
6. To secure the obligations of the Assumption Party to the Operating
Company hereunder, but not to secure the obligations of the Assumption Party to
the trustee for, or the holders of, Outstanding Debt pursuant to the Operating
Company are entering into the Mortgage, Deed of Trust and Security Agreement
dated as of , 200 (as it may be supplemented as amended from time to time,
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the "Security Agreement"), in which the Assumption Party grants the Operating
Company a lien on and security interest in certain properties of the Assumption
Party allocated to the Assumption Party in the division.
AGREEMENT
In consideration of the premises and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Assumption Party and the Operating Company DO HEREBY AGREE as follows:
Section 1. Assumption of Obligations
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(a.) The Assumption Party hereby assumes on the basis set forth in the
Instrument of Assumption appended hereto as Exhibit A all of the obligations of
the Operating Company to pay to the applicable trustee for each series of the
Outstanding Debt listed on Schedule A the aggregate principal amount of such
series of Outstanding Debt listed on Schedule A hereto as having been assumed
(such portion of the Outstanding Debt so assumed, the "Assumed Debt") and
interest on the Assumed Debt, such amounts to be paid on the dates, in the
amounts and in the manner provided for by the Outstanding Debt and the
applicable indenture relating thereto, whether at maturity, upon redemption or
otherwise (but not upon the acceleration of maturity of any Assumed Debt not
caused by the default of the Assumption Party); provided, however, that so long
as no Event of Default (as hereinafter defined) shall have occurred hereunder,
the Assumption Party shall not have assumed the obligation to make payments due
upon the voluntary redemption of Outstanding Debt except for redemptions
directed by the Assumption Party in accordance with Section 3 hereof; and
provided, further, that the redemption of Outstanding Debt of any series or
purchase and cancellation of Outstanding Debt of any series at the direction of,
and with funds provided by, the Assumption Party in accordance with Section 3
hereof shall reduce the amount of Assumed Debt of such series by the principal
amount of the Outstanding Debt so redeemed or purchased.
(b.) Concurrently with the execution and delivery hereof, the Assumption
Party shall execute and deliver to the Operating Company and each trustee
identified on Schedule 1 hereto, an Instrument of Assumption, in substantially
the form thereof attached hereto as Exhibit A with such changes as the parties
may agree upon, to evidence the assumption of obligations referred to in
subsection (a) of this Section 1.
Section 2. Reimbursement to the Operating Company
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In the event that the Assumption Party shall have failed to pay when due
any of the obligations assumed by it hereunder and, following such failure, the
Operating Company shall have paid such obligation, the Assumption Party shall
immediately reimburse the Operating Company the full amount so paid by the
Operating Company. Any amount remaining not so immediately reimbursed by the
Assumption Party shall bear interest payable at an annual rate equal to
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, or the maximum legal rate, whichever is less.
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Section 3. Redemption or Purchase of Assumed Debt.
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(a.) Except as provided for in subsection (d.) below, the Operating Company
shall take such action under the indenture pursuant to which a series of Assumed
Debt has been issued as shall be directed by the Assumption Party to voluntarily
redeem all or a portion of the Outstanding Debt of such series in an amount not
to exceed the Assumed Debt portion of such series, but, so long as no Event of
Default (as hereinafter defined) shall have occurred and be continuing, shall
take no action other than as directed by the Assumption Party to voluntarily
redeem such series of Outstanding Debt in an amount which would cause the
Assumed Debt portion of such series to be redeemed.
(b.) To the extent not prohibited under the terms of any Assumed Debt or
the indenture relating thereto, the Assumption Party may purchase, in any manner
permitted by law, Assumed Debt of any series and direct the Operating Company to
deliver such purchased Assumed Debt to the applicable trustee for cancellation.
(c.) For the one series of Outstanding Debt that shall not have become due
and payable before August 1, 2005 as listed on Schedule A hereto, the Assumption
Party will use its best efforts to issue securities and to utilize the proceeds
thereof in accordance with this Section 3 to cause the redemption or purchase
and cancellation of such Assumed Debt on or prior to 200 .
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(d.) At any time, the Assumption Party may direct the Operating Company to
voluntarily redeem all or a part of the Assumed Debt of any series in accordance
with its terms. Upon the delivery of the principal and accrued interest payable
upon such redemption, the obligations of the Assumption Party with respect to
such Assumed Debt shall be satisfied, notwithstanding that the Operating Company
may have applied such principal and interest to the redemption of other
Outstanding Debt (the "Redeemed Debt"), but, if the Redeemed Debt shall have
been assumed in whole or in part by the Assumption Party, the obligations of the
Assumption Party in respect of the Redeemed Debt shall continue as if the
redemption had not occurred. The Assumption Party understands and agrees that,
concurrently with the execution and delivery of this Assumption Agreement, The
Operating Company is entering into assumption agreements with [other companies]
(the "Other Assumption Agreements") which contain a provision to the same effect
as this Section 3 (d), and that any redemptions of Outstanding Debt by pursuant
to the Other Assumption Agreements shall not reduce the obligations of the
Assumption Party hereunder, notwithstanding that all or a portion of the Assumed
Debt is no longer outstanding, and such obligations shall continue as if the
redemptions had not occurred. the Operating Company agrees that it will apply
any monies received from the Assumption Party for the voluntary redemption of
Assumed Debt to the redemption of Outstanding Debt of the series that produces
the greatest savings.
Section 4. General Covenant; Indemnification.
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(a.) Neither the Operating Company nor the Assumption Party shall take or
omit to take any action which shall result in an event of default under any
indenture pursuant to which Outstanding Debt has been issued.
(b.) The Assumption Party shall indemnify and hold the Operating Company
harmless from and against all losses, claims, damages, taxes, penalties,
liabilities, disbursements, litigation expenses, attorney's fees and expenses or
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court costs arising out of any breach by the Assumption Party of any of its
obligations contained herein or assumed hereunder.
(c.) The Operating Company shall indemnify and hold the Assumption Party
harmless from and against all losses, claims, damages, taxes, penalties,
liabilities, disbursements, litigation expenses, attorney's fees and expenses or
court costs arising out of any breach by the Operating Company of any of its
obligations contained herein or contained in the Outstanding Debt and in any
indenture under which Outstanding Debt has been issued and which has not been
assumed by the Assumption Party.
Section 5. Events of Default.
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(a.) Any of the following shall constitute an "Event of Default" hereunder:
(i) an event of default under any indenture pertaining to
Outstanding Debt resulting from the failure by the
Assumption Party to pay or otherwise perform an obligation
assumed by it hereunder;
(ii) the failure by the Assumption Party to make when due any
reimbursement required by Section 2 hereof;
(iii) the failure by the Assumption Party to perform any covenant
(other than as set forth in clauses (i) and (ii) above) on
its part contained herein or assumed hereunder and the
continuation of such failure for a period of thirty (30)
days after the Operating Company shall have given the
Assumption Party written notice thereof;
(iv) the assumption by the Assumption Party of any of the
obligations assumed by it hereunder shall at any time cease
to be valid and binding on the Assumption Party, or shall be
declared to be null and void, or the validity or
enforceability thereof shall be contested by the Assumption
Party or any governmental agency or authority; or the
Assumption Party shall deny in writing that it has any or
further liability or obligation under this Agreement;
(v) the Assumption Party shall fail to observe or perform any
term, covenant or agreement contained in the Security
Agreement on its part to be observed or performed;
(vi) the Assumption Party shall (a) fail to make any payment,
equal to or exceeding $2,000,000, of any Debt (as defined
below) or to make any payment, equal to or exceeding
$2,000,000, of any interest or premium thereon, when due
(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 (b) fail to perform or observe any terms, covenant
or condition on its part to be performed or observed under
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any agreement or instrument relating to any Debt when
required to be performed or observed, and such failure shall
continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of
such failure to perform or observe is to accelerate, or to
permit the acceleration of, the maturity of any Debt, the
unpaid principal amount of which then equals or exceeds
$2,000,000. "Debt" of the Assumption Party means (a)
indebtedness for borrowed money or for the deferred purchase
price of property or services in respect of which the
Assumption Party is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which the
Assumption Party otherwise assures a creditor against loss,
and (b) obligations under leases which shall have been or
should be, in accordance with generally accepted accounting
principles, recorded as capital leases in respect of which
obligations the Assumption Party is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect
of which obligations the Assumption Party assures a creditor
against loss; or
(vii) the Assumption Party shall (a) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian
or the like of itself or of its property, (b) admit in
writing its inability to pay its debts generally as they
become due, (c) make a general assignment for the benefit of
creditors, (d) be adjudicated a bankrupt or insolvent, or
(e) commence a voluntary case under the Federal bankruptcy
laws of the United States of America or file a voluntary
petition or answer seeking reorganization, an arrangement
with creditors or an order for relief or seeking to take
advantage of any insolvency law or file an answer admitting
the material allegations of a petition filed against it in
any bankruptcy, reorganization or insolvency proceedings or
corporate action shall be taken by it for the purpose of
effecting any of the foregoing, or (f) if without the
application, approval or consent of the Assumption Party, a
proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking in
respect of the Assumption Party an order for relief or any
adjudication in bankruptcy, reorganization dissolution,
winding up, liquidation, a composition or arrangement with
creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of
the Assumption Party or of all or any substantial part of
its assets, or other like relief in respect thereof under
any bankruptcy or insolvency law, and if such proceeding is
being contested by the Assumption Party in good faith, the
same shall (A) result in the entry of an order for relief or
any such adjudication or appointment or (B) continue
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undismissed, or pending and unstayed, for any period of
sixty (60) consecutive days.
(b.) Upon the occurrence and continuance of any Event of Default, the
Operating Company shall be relieved and discharged from all of its obligations
hereunder, and the Operating Company may, by written notice to the Assumption
Party, declare the full unpaid principal amount of all indebtedness of the
Assumption Party to the Operating Company hereunder to be immediately due and
payable, whereupon the same shall become and be immediately due and payable
without protest, presentment, notice or demand, or other formalities of any
kind, all of which are expressly waived by the Assumption Party and the
Operating Company may exercise any rights and remedies available to it under the
Security Agreement.
Section 6. Effective Date.
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This Agreement shall become effective as of A.M., New York time, on
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.
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Section 7. Termination
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The parties agree that this Agreement shall terminate when all of the
obligations of the Assumption Party shall have been performed.
This Agreement shall be construed in accordance with and be governed by the
laws of the state of New York.
IN WITNESS WHEREOF, the Operating Company and the Assumption Party have
caused this Agreement to be executed as of the day and year first above written.
The Operating Company
By
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Title:
[Assumption Party]
By
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Title:
[Note: This Debt Assumption Agreement may be used for debt issued under more
than one indenture. However, a separate Instrument of Assumption will be
utilized for each separate Indenture. Due to the structural documentary
differences of pollution control documents, one or more separate Debt Assumption
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Agreements will be utilized for pollution control bonds, however, such
agreements would be substantially similar to this Form.]
Schedule 1
I. [Identify indenture by name, date, parties]
Name of Series Outstanding Amount Assumed Amount Redemption Date
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a)
b)
c)
d)
II. [Identify indenture by name, date, parties]
Name of Series Outstanding Amount Assumed Amount Redemption Date
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a)
b)
c)
d)
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EXHIBIT A
INSTRUMENT OF ASSUMPTION
THIS INSTRUMENT OF ASSUMPTION, dated , 200 , is entered into by
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The Intermediate Transmission Entity, a [corporation/limited liability company]
(the "Assumption Party").
RECITALS
1. [Insert proper party, Entergy Louisiana, Inc., Entergy New Orleans,
Inc., Entergy Gulf States-LA, Entergy Mississippi, Inc., or Entergy Arkansas,
Inc.] has heretofore entered into the [Identify Indenture], dated as of
(as heretofore and hereafter amended or supplemented, the
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"Indenture"), with , a (the "Trustee"), and has
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issued under the Indenture the series of outstanding debt listed in Schedule A
hereto (the "Outstanding Debt").
2. [Insert appropriate state legislation, if any (`the Act")]
3. The Federal Regulatory Commission ("FERC") pursuant to FERC Order
2000 established December 15, 2000, as the date by which FERC-jurisdictional
transmission facilities must be committed to an independent Regional
Transmission Organization.
4. As part of the Operating Company's plan to comply with the
requirements of [the Act and] FERC Order 2000, the Operating Company is
transferring transmission assets to the Assumption Party, and the Assumption
Party agrees to assume certain obligations with regard to the Outstanding Debt.
5. As compensation to the Operating Company for the allocation of
assets to the Assumption Party, and notwithstanding the sole liability of the
Operating Company on the Outstanding Debt resulting from the Division, the
Assumption Party wishes to assume certain liabilities of the Operating Company
on Outstanding Debt.
6. The Operating Company and the Assumption Party have entered into
the Debt Assumption Agreement, dated as of , 200 (as amended or
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supplemented from time to time, the "Debt Assumption Agreement"), pursuant to
which, among other things, the Assumption Party agreed to assume certain
obligations of the Operating Company on the Outstanding Debt and agreed to
execute and deliver to the Operating Company and the Trustee this Instrument of
Assumption as evidence of the assumption of certain of such obligations;
NOW, THEREFOR, BE IT KNOWN that, in consideration of the premises and of
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Assumption Party DOES HEREBY ASSUME:
all of the obligations of the Operating Company to pay for each series
of Outstanding Debt the aggregate principal amount of Outstanding Debt
listed on Schedule A hereto as having been assumed (such portion of
A-1
the Outstanding Debt so assumed, the "Assumed Debt") and the premium,
if any, and interest on the Assumed Debt, such amounts to be paid on
the dates, in the amounts and in the manner provided for in the
Outstanding Debt and in the Indenture, whether at maturity, upon
redemption or otherwise; provided, however, that, so long as no Event
of Default, as defined in and under the Debt Assumption Agreement,
shall have occurred and be continuing, the Assumption Party shall not
have assumed the obligation to make voluntary redemptions of
Outstanding Debt except for redemption directed by the Assumed Party
in accordance with Section 3 of the Debt Assumption Agreement; and
provided, further, that the redemption of Outstanding Debt of any
series or the purchase and cancellation of Outstanding Debt of any
series at the direction of, and with funds provided by, the Assumption
Party in accordance with Section 3 of the Debt Assumption Agreement
shall reduce the amount of Assumed Debt of such series by the
principal amount of Outstanding Debt so redeemed or purchased.
all of such obligations assumed by the Assumption Party being
hereinafter called the "Assumed Obligations."
The Assumption Party hereby agrees to pay the Assumed Obligations when due
and without demand, and acknowledges that the Trustee may enforce against the
Assumption Party the obligations of the Operating Company assumed hereunder by
the Assumption Party, in accordance with their respective claims, whether or not
demand for payment thereof shall theretofore have been made upon the Operating
Company; provided, however, that the enforcement of the Assumed Obligations
against the Assumption Party by such parties may be effected only in accordance
with the terms of this Instrument of Assumption and that this Instrument of
Assumption is not intended to confirm or create any additional rights in such
parties as against the Assumption Party other than those contained herein.
No provision of this Instrument of Assumption shall be waived, amended or
supplemented except by a written instrument executed by the Operating Company,
the Assumption Party and the Trustee. This Instrument of Assumption shall be
governed by and be construed and interpreted in accordance with the laws of the
State of New York. This Instrument of Assumption shall first become effective as
of , New York time, on .
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A-2
IN WITNESS WHEREOF, the Assumption Party has caused this Instrument to be
executed as of the day and year first above written.
[ASSUMPTION PARTY]
By
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Title:
Address:
[Name and address of Trustee]
[Name and address of the Operating Company]
A-3
Schedule A
Name of Series Outstanding Amount Assumed Amount Redemption Date
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a)
b)
c)
d)
A-4
