Exhibit 4

 

 

 

CONSOLIDATED EDISON, INC.

 

 

NOTE ASSUMPTION AND EXCHANGE AGREEMENT

Dated as of June 20, 2008

 

 

providing for the assumption by Consolidated Edison, Inc. of

Senior Secured Notes due 2022 of Hawkeye Funding, Limited

Partnership in exchange for Senior Unsecured Notes due 2022

of Consolidated Edison, Inc.

 

 

 

 

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TABLE OF CONTENTS

 

						Page
1.		ASSUMPTION AND EXCHANGE OF NOTES, ETC.				4
		1.1.		Assumption of Hawkeye Notes; Authorization of Notes, Etc.		4
		1.2.		Exchange of Notes; the Closing		4
2.		HAWKEYE NOTEHOLDER REPRESENTATIONS AND CONSENTS				5
		2.1.		Acquisition for Investment		5
		2.2.		Source of Funds		5
		2.3.		Ownership of Hawkeye Notes		7
		2.4.		Consent and Release		7
3.		REPRESENTATIONS AND WARRANTIES OF THE COMPANY				7
		3.1.		Corporate Matters		7
		3.2.		Corporate Power		8
		3.3.		Authorization, Etc.		8
		3.4.		[Intentionally Omitted]		8
		3.5.		Organization and Ownership of Shares of Material Subsidiaries		8
		3.6.		Financial Statements		9
		3.7.		Changes		9
		3.8.		Compliance with Law, Other Instruments, Etc.		9
		3.9.		Governmental Authorizations, Etc.		10
		3.10.		Litigation; Observance of Agreements; Statutes and Orders		10
		3.11.		Taxes		10
		3.12.		Title to Properties; Leases		11
		3.13.		Licenses, Permits, Etc.		11
		3.14.		Compliance with ERISA		12
		3.15.		Private Offering		13
		3.16.		Existing Indebtedness		13
		3.17.		Foreign Assets Control Regulations, Etc.		13
		3.18.		No Undisclosed Fees		14
		3.19.		Potential Default; Event of Default		14
4.		CONDITIONS TO CLOSING				14
		4.1.		Opinions of Counsel		14
		4.2.		[Intentionally Omitted]		14
		4.3.		Officer’s Certificates		15
		4.4.		Execution and Delivery of Documents, Filings		15
		4.5.		Payment of Counsel Fees		16
		4.6.		Proceedings Satisfactory		16
		4.7.		Legality, Etc.		16
		4.8.		Private Placement Numbers		17

 

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		4.9.		Other Hawkeye Noteholders; Cancellation of Hawkeye Notes		17
		4.10.		Surrender and Cancellation of CEI Note		17
5.		[INTENTIONALLY OMITTED]				17
6.		[INTENTIONALLY OMITTED]				17
7.		PAYMENT, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT OF THE NOTES				17
		7.1.		Place of Payment		17
		7.2.		Home Office Payment		17
		7.3.		Registration of Notes		18
		7.4.		Transfer and Exchange of Notes		18
		7.5.		Replacement of Notes		18
8.		PREPAYMENT OF THE NOTES				19
		8.1.		Required Prepayments on Note Payment Dates		19
		8.2.		Optional Prepayment of Notes		19
		8.3.		Notice of Prepayment		20
		8.4.		Maturity; Surrender, Etc.		20
		8.5.		Selection of Notes for Prepayment		20
		8.6.		Purchase of Notes		21
		8.7.		Make-Whole Premium		21
9.		AFFIRMATIVE COVENANTS				22
		9.1.		Ownership of Core Electricity Distribution Business		22
		9.2.		[Intentionally Omitted]		22
		9.3.		Financial Information		22
		9.4.		[Intentionally Omitted]		24
		9.5.		Inspection		24
		9.6.		Compliance with Laws		25
		9.7.		Priority of Obligations		25
		9.8.		Maintenance of Properties		25
		9.9.		Payment of Taxes and Claims		25
		9.10.		Corporate Existence, Etc.		26
		9.11.		Transaction Expenses, Etc.		26
		9.12.		Confirmation of Indemnification and Guaranty Obligations		27
10.		NEGATIVE COVENANTS				27
		10.1.		Mergers and Consolidations		27
		10.2.		Consolidated Debt to Consolidated Capital		28
11.		DEFAULTS; REMEDIES				28
		11.1.		Events of Default		28
		11.2.		Default Remedies		30
		11.3.		Notice of Default		31

 

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12.		INTERPRETATION OF THIS AGREEMENT				31
		12.1.		Terms Defined		31
13.		MISCELLANEOUS				37
		13.1.		Notices		37
		13.2.		Severability		38
		13.3.		Survival		38
		13.4.		Successors and Assigns		38
		13.5.		Amendment and Waiver		38
		13.6.		Jurisdiction and Process; Waiver of Jury Trial		39
		13.7.		Governing Law		40
		13.8.		Counterparts		40
		13.9.		Confidentiality		40

 

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SCHEDULE I		-		Hawkeye Noteholder Information
EXHIBIT A		-		Form of Note
EXHIBIT B-1		-		Form of Opinion of special counsel for the Company pursuant to Section 13(c)(v)(z) of the Hawkeye Note Purchase Agreements
EXHIBIT B-2		-		Form of Opinion of special counsel for the Company and the Lessee
EXHIBIT B-3		-		Form of Opinion of the general counsel for the Company
EXHIBIT B-4		-		Form of Opinion of internal counsel for the Lessee
EXHIBIT B-5		-		Form of Opinion of counsel for the Trustee
EXHIBIT B-6		-		Form of Opinion of special counsel for Hawkeye and ML Leasing
EXHIBIT B-7		-		Form of Opinion of special counsel for the Hawkeye Noteholders
EXHIBIT C		-		Form of Omnibus Assignment and Assumption Agreement
EXHIBIT D		-		Form of Quitclaim Deed
EXHIBIT E		-		Form of Bill of Sale
EXHIBIT F		-		Form of Release Deed (re the Mortgage, Assignment of Rents, Security Agreement and Fixture Filing and the Subordination, Non-Disturbance and Attornment Agreement)
EXHIBIT G		-		Form of Master Termination Agreement
EXHIBIT H		-		Form of Termination of Notice of Lease
EXHIBIT I		-		Form of Indemnity Letter
SCHEDULE 3.5		-		Organization and Ownership of Shares of Material Subsidiaries
SCHEDULE 3.7		-		Changes
SCHEDULE 3.11		-		Taxes
SCHEDULE 8.1		-		Amortization Schedule

 

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CONSOLIDATED EDISON, INC.

4 Irving Place

New York, New York 10003

Re:        8.71% Senior Unsecured Notes due 2022

as of June 20, 2008

TO THE SEVERAL HAWKEYE

NOTEHOLDERS WHOSE NAMES APPEAR IN

THE ACCEPTANCE FORM AT THE END

HEREOF

Ladies and Gentlemen:

Consolidated Edison, Inc. (the “ Company ”), a New York corporation, hereby agrees with you (sometimes individually a “ Hawkeye Noteholder ” and collectively the “ Hawkeye Noteholders ”) as follows:

BACKGROUND

Hawkeye Funding, Limited Partnership, a Delaware limited partnership (“ Hawkeye ”) formed by Hawkeye Funding, Inc., a Delaware corporation, has heretofore issued and sold $340,971,000 aggregate principal amount of its 8.71% Senior Secured Notes due 2022 (the “ Hawkeye Notes ”) pursuant to the several Note Purchase Agreements dated as of November 14, 2000, as heretofore supplemented and amended, entered into by Hawkeye with the institutional investors listed in Schedule I thereto (said Note Purchase Agreements as so supplemented and amended are called the “ Hawkeye Note Purchase Agreements ”). The Hawkeye Notes remain outstanding in the principal amounts set forth opposite each Hawkeye Noteholder’s name on Schedule I hereof and in an aggregate principal amount equal to $326,287,886.85.

Hawkeye used the proceeds from the sale of the Hawkeye Notes to construct and equip a generating facility consisting of two GE Frame 7FA gas-fired combustion turbine generators (with an aggregate generating capacity of approximately 525 megawatts), two heat recovery steam generators, one steam turbine generator and ancillary equipment (said generating facility, together with all improvements and equipment constructed pursuant to the EPC Contract and the Agreement for Lease respectively referred to below, and any replacements thereof, are collectively called the “ Facility ”). The Facility is located on approximately 23 acres of land in the Town of Newington, Rockingham County, New Hampshire, more particularly described in Exhibit A to the Mortgage referred to below (the “ Site ”). Hawkeye acquired fee title to the Site pursuant to (i) the Warranty Deed dated May 23, 2000, from Mareld Company, Inc., Cameron Real Estate, Inc. and Fuel Storage Corporation, as grantors, to Hawkeye, as grantee, and (ii) the Warranty Deed, dated August 4, 2000, from Northeast Medical Properties, Inc., as grantor, to Hawkeye, as grantee (collectively, the “ Deeds ”). The Facility, the Site, and the related easements and other rights and appurtenances are collectively called the “ Project ”.

 

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The Facility was constructed pursuant to the EPC Contract, entered into by Hawkeye with Duke/Fluor Daniel, a North Carolina partnership (“ Fluor Daniel ”). Fluor Corporation and Duke Energy Capital guaranteed the obligations of Fluor Daniel under the EPC Contract pursuant to the EPC Guaranty referred to in the Agreement for Lease. Newington Energy, L.L.C., a Delaware limited liability company (the “ Lessee ”), and General Electric International, Inc., a Delaware corporation (“ GEI ”), entered into an Operation and Maintenance Agreement dated as of December 20, 1999 (the “ O&M Agreement ”) in respect of the Facility, and General Electric Company guaranteed the obligations of GEI under the O&M Agreement pursuant to the GE Guaranty referred to in the Agreement for Lease. Such EPC Contract, the EPC Guaranty, the O&M Agreement, the GE Guaranty and other agreements (defined in the Agreement for Lease and the Lease as Project Contracts) are collectively referred to herein as the “ Project Contracts ”.

In connection with the issuance and sale of the Hawkeye Notes: (i) Hawkeye and Newington Energy, L.L.C. (the “ Lessee ”) entered into an Agreement for Lease dated as of November 14, 2000, as heretofore supplemented and amended (as so supplemented and amended and as further supplemented and amended as hereinafter provided the “ Agreement for Lease ”), pursuant to which the Lessee undertook, among other things, to construct and equip the Facility on behalf of Hawkeye and to lease the Project pursuant to the Lease referred to below; (ii) Hawkeye and the Lessee entered into a Lease Agreement dated as of November 14, 2000, as heretofore supplemented and amended (as so supplemented and amended and as further supplemented and amended as hereinafter provided the “ Lease ”), pursuant to which the Lessee has leased the Project from Hawkeye commencing on December 9, 2002; and (iii) the Lessee and Hawkeye entered into a Pledge Agreement dated as of November 14, 2000 as heretofore supplemented and amended (as so supplemented and amended and as further supplemented and amended as hereinafter provided the “ Pledge Agreement ”), pursuant to which the Lessee pledged and created a security interest in all of the Lessee’s right, title and interest in and to the Collateral (as defined in the Pledge Agreement) described therein (including, without limitation, certain Project Contracts, certain Governmental Actions and Permits, the designs, plans and specifications relating to the Project owned by the Lessee and certain insurance, indemnity, warranty and guaranty proceeds) as security for the Lessee’s obligations under the Agreement for Lease and the Lease.

In connection with the issuance and sale of the Hawkeye Notes (i) the Company executed and delivered a Guaranty dated November 14, 2000 (the “ Guaranty ”), pursuant to which the Company unconditionally guaranteed certain obligations of the Lessee under the Agreement for Lease and the Lease, including without limitation all indemnification obligations of the Lessee in respect of the Project, and (ii) ML Leasing Equipment Corp., a Delaware corporation (“ Merrill Leasing ”), entered into a letter agreement with Hawkeye dated November 14, 2000, as assigned to Merrill Lynch & Co., Inc., a Delaware corporation (“ Merrill ”) pursuant to the terms of that certain Assignment and Assumption Agreement dated as of September 21, 2005 between Merrill Leasing and Merrill (as assigned and amended to date, the “ Merrill Shortfall Agreement ”), pursuant to which Merrill agreed to pay Hawkeye certain amounts in connection with a shortfall of proceeds from the sale or deemed sale of the Project in certain circumstances.

 

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Hawkeye and the Company also agreed that Hawkeye could from time to time make loans to the Company from the proceeds of the issuance of the Hawkeye Notes to the extent such proceeds were not used to make Advances under the Agreement for Lease or to pay Project Costs or other Financing Costs (as such terms are defined in the Agreement for Lease), which loans were evidenced by that certain Promissory Note dated November 16, 2000 from the Company to Hawkeye (the “ CEI Note ”). As of the date hereof, no amounts are outstanding under the CEI Note.

The Hawkeye Notes are secured by an Indenture of Trust, Security Agreement and Collateral Assignment of Contracts dated as of November 14, 2000, as heretofore supplemented and amended (as so supplemented and amended the “ Collateral Indenture ”), from Hawkeye to The Bank of New York, as collateral trustee for the holders from time to time of the Hawkeye Notes (the “ Trustee ”), covering, among other things, Hawkeye’s right, title and interest in and to the Facility, the Agreement for Lease, the Lease, the Operating Account, the CEI Note, the Guaranty, the Merrill Shortfall Agreement, the Pledge Agreement, the Project Contracts and other Collateral (as defined in the Collateral Indenture). The Hawkeye Notes are also secured by a Mortgage, Assignment of Rents, Security Agreement and Fixture Filing from Hawkeye to the Trustee, as Mortgagee, dated as of November 14, 2000, as heretofore supplemented and amended (as so supplemented and amended, the “ Mortgage ”), covering, among other things, Hawkeye’s right, title and interest in and to the Facility and the Site.

Pursuant to Section 13(a) of the Lease, the Lessee delivered to Hawkeye a notice dated March 20, 2008 (the “ Purchase Option Notice ”) informing Hawkeye of its intent to purchase the Project as a whole for an amount equal to its Adjusted Acquisition Cost on the Basic Rent Payment Date occurring on June 20, 2008 (the “ Purchase ”). In connection with the Purchase, Hawkeye and the Lessee intend to terminate the Agreement for Lease, the Lease, the Pledge Agreement, the Merrill Shortfall Agreement, the CEI Note, the Guaranty, the Collateral Indenture, the Mortgage and certain ancillary documents delivered by Hawkeye, the Lessee, the Company, Merrill Leasing and the Trustee in connection with the Lease and the Hawkeye Note Purchase Agreements.

Pursuant to Section 13(a) of the Lease and Section 13(a) of the Hawkeye Note Purchase Agreements, the Lessee and the Company have elected to effect the Purchase Option Assumption (as defined therein), pursuant to which the purchase price for the Lessee’s Purchase of the Project will be paid through a combination of (i) cash and (ii) the assumption by the Company of each of the outstanding Hawkeye Notes. The Lessee and the Company provided notice of such election to Hawkeye pursuant to a notice dated May 1, 2008, a copy of which Hawkeye included in its Purchase Option Assumption Notice (as defined in Section 13(a) of the Hawkeye Note Purchase Agreements) dated May 6, 2008, previously delivered by the Trustee to each of the Hawkeye Noteholders.

The Company now proposes that the Lessee acquire the Project from Hawkeye and the Company assume the obligations of Hawkeye under the Hawkeye Notes and the Hawkeye Note Purchase Agreements. In connection therewith the Company also proposes to (i) amend and restate the Hawkeye Note Purchase Agreements in their entirety and to combine the Hawkeye Note Purchase Agreements as so amended and restated into one Note Assumption

 

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and Exchange Agreement, all pursuant to this Agreement, (ii) terminate the Collateral Indenture, the Agreement for Lease, the Lease, the Pledge Agreement, the CEI Note, the Guaranty, the Consent and Agreement of the Company, the Consent and Agreement of the Lessee, the Consent and Agreement of Merrill Leasing, the Management Agreement dated as of November 14, 2000, between Hawkeye and Merrill Leasing and the Reimbursement Agreement, dated as of November 14, 2000, among Hawkeye, as lessor, the Lessee, as lessee, and Merrill Leasing. The Company and Hawkeye also propose that, concurrently with such assumption, Hawkeye, Merrill Leasing and Merrill be released from their respective obligations under the Hawkeye Note Purchase Agreements, the Collateral Indenture, the other Finance Documents (as defined in the Hawkeye Note Purchase Agreements) to which they are party and the Subordination, Non-Disturbance and Attornment Agreement dated as of November 20, 2000, as the same has been amended from time to time, by and among the Lessee, Hawkeye and the Trustee (as amended, the “ SNDA ”).

 

1.	ASSUMPTION AND EXCHANGE OF NOTES, ETC.

 

1.1.	Assumption of Hawkeye Notes; Authorization of Notes, Etc.

The Company and the Noteholders agree to amend and restate the Hawkeye Note Purchase Agreements in their entirety and to combine the Hawkeye Note Purchase Agreements as so amended and restated into one Note Assumption and Exchange Agreement, all pursuant to this Agreement. The Company hereby unconditionally and expressly assumes the due and punctual payment of the unpaid principal of and premium, if any, and interest and all other amounts on all of the Hawkeye Notes and the due and punctual performance of all obligations of Hawkeye under the Hawkeye Note Purchase Agreements, as amended and restated by this Agreement. The Company agrees to perform and observe each and every one of the covenants, rights, promises, agreements, terms, conditions, obligations, duties and liabilities of Hawkeye under and in respect of the Hawkeye Notes and the Hawkeye Note Purchase Agreements, as so amended and restated, and under any other documents, instruments or agreements executed and delivered or furnished in connection therewith.

In furtherance of the foregoing, and in order to evidence the indebtedness assumed hereunder by the Company as currently evidenced by the Hawkeye Notes, the Company has duly authorized an issue of $326,287,886.85 aggregate principal amount of its Senior Unsecured Notes, which Notes shall be substantially in the form of Exhibit A.

As used herein the term “ Notes ” means all notes originally issued and delivered pursuant to this Agreement and the term “ Hawkeye Notes ” means all notes originally delivered under the Hawkeye Note Purchase Agreements, and each such term includes all notes delivered in substitution or exchange for any of such notes and, where applicable, includes the singular number as well as the plural; and the terms “ Note, ” and “ Hawkeye Note, ” mean one of the Notes or Hawkeye Notes, as applicable.

 

1.2.	Exchange of Notes; the Closing.

Subject to the terms of this Agreement and in furtherance of the Company’s assumption of the Hawkeye Notes, the Company hereby agrees to deliver to you Notes in the

 

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aggregate principal amount or amounts set forth opposite your name in Schedule I hereto, upon surrender by you in exchange therefor of Hawkeye Notes in the same unpaid principal amount or amounts as set forth opposite your name in Schedule I .

The closing of the assumption and surrender of the Hawkeye Notes and the delivery of Notes in exchange therefor under this Agreement will be held at the office of Winston & Strawn LLP, 200 Park Avenue, New York, NY 10166, at 10:00 A.M. at a closing (the “ Closing ”). The Closing will be on June 20, 2008. At the Closing the Company will deliver to you one or more Notes, registered in your name or the name of your nominee, in any denominations (integral multiples of $100,000 or, if less, in the amount of the unpaid principal of the corresponding Hawkeye Note), in the aggregate principal amount or amounts to be acquired by you, all as you may specify by timely notice to the Company (or, in the absence of such notice, one Note for each Hawkeye Note being surrendered by you, registered in the same name as such Hawkeye Note), duly executed and dated December 30, 2007 (the most recent interest payment date on the Hawkeye Notes), against surrender of the Hawkeye Notes to be exchanged by you.

If at the Closing the Company shall fail to tender the Notes to be delivered to you as provided in this Section 1.2, or any of the conditions specified in Section 4 hereof shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment.

 

2.	HAWKEYE NOTEHOLDER REPRESENTATIONS AND CONSENTS.

 

2.1.	Acquisition for Investment.

You severally represent that you are acquiring Notes in exchange for your Hawkeye Notes at the Closing for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all times be within your or their control. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. Your exchange of your Hawkeye Notes for the Notes at the Closing will constitute your confirmation of such representation.

You also severally represent that in connection with your acquisition of Notes in exchange for Hawkeye Notes you have had an opportunity to request and obtain such information as you have required regarding the Company.

 

2.2.	Source of Funds.

You severally represent that at least one of the following statements is an accurate representation as to each source of the Hawkeye Notes (a “ Source ”) to be surrendered by you in exchange for the Notes to be acquired by you hereunder:

(a) the Source is an “insurance company general account,” as such term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“ PTE ”) 95-60 in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the “ NAIC Annual Statement ”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with your state of domicile; or

 

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(b) the Source is a separate account that is maintained solely in connection with your fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1, or (ii) a bank collective investment fund, within the meaning of PTE 911-38 and, except as you have disclosed to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(c) the Source constitutes assets of an “investment fund” (within the meaning of Part V of PTE 84-14 (the “ QPAM Exemption ”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of “control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company and the Lessee in writing pursuant to this clause (c); or

(d) the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of PTE 96-23 (the “INHAM Exemption” )) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in

 

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Section IV(d) of the INHAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (d); or

(e) the Source is a governmental plan; or

(f) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company or the Lessee in writing pursuant to this clause (f); or

(g) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 2.2, the terms “ employee benefit plan ,” “ governmental plan ” and “ separate account ” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

 

2.3.	Ownership of Hawkeye Notes.

You severally represent to the Company that you are the beneficial owner of Hawkeye Notes in the unpaid principal amount or amounts set forth opposite your name in Schedule I hereto and you have received all principal and interest payments due on account of such Hawkeye Notes up to and including December 30, 2007.

 

2.4.	Consent and Release.

Subject to the satisfaction of the conditions to its obligation to surrender Hawkeye Notes in exchange for Notes at the Closing as hereinafter provided, each Hawkeye Noteholder severally (i) consents to, and approves the terms of, the Omnibus Assignment and Assumption Agreement, the Master Termination Agreement and the Release Deed and (ii) instructs the Trustee to execute and deliver such instruments and documents in connection with any of the transactions described herein as may be required or contemplated for the Closing by this Agreement. Each Hawkeye Noteholder’s surrender of its respective Hawkeye Notes at the Closing in exchange for Notes shall be deemed to constitute such Hawkeye Noteholder’s release of Hawkeye from all of its duties and obligations under the Hawkeye Note Purchase Agreements and the Hawkeye Notes so surrendered.

 

3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to you that:

 

3.1.	Corporate Matters.

The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New York, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, except where the failure to so qualify would not materially impair the ability of the Company to perform its obligations under this Agreement, the Notes and the Indemnity Letter.

 

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3.2.	Corporate Power.

The Company has full corporate power and authority to execute, deliver and perform its obligations under this Agreement, the Notes and the Indemnity Letter and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement, the Notes and the Indemnity Letter.

 

3.3.	Authorization, Etc.

This Agreement, the Notes and the Indemnity Letter have been duly authorized by all necessary corporate and shareholder action on the part of the Company, and this Agreement, each of the Notes and the Indemnity Letter constitute a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

3.4.	[Intentionally Omitted]

 

3.5.	Organization and Ownership of Shares of Material Subsidiaries.

(a) Schedule 3.5 to this Agreement contains on the date hereof complete and correct lists of (i) the Material Subsidiaries, showing, as to each such Material Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary of the Company and (ii) the Company’s directors and senior officers.

(b) All of the outstanding shares of capital stock or similar equity interests of each Material Subsidiary shown in Schedule 3.5 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 3.5 ).

(c) Each Material Subsidiary is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on (i) the ability of the Company to perform its obligations under this Agreement in a timely manner, (ii) the business, assets, properties, financial condition, operations or prospects of the Company, or (iii) the rights or interests of the Noteholders

 

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under this Agreement. Each such Material Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

(d) As of the date hereof, no Material Subsidiary is a party to or otherwise subject to any legal restriction or any agreement (other than this Agreement, the agreements listed on Schedule 3.5 and customary limitations imposed by corporate law statutes and applicable regulatory requirements, including without limitation the Energy Policy Act of 2005, as amended, and similar provisions of state and local law) restricting the ability of such Material Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock of such Material Subsidiary.

 

3.6.	Financial Statements.

The Company has furnished to you copies of its (i) Annual Report on Form 10-K for the year ended December 31, 2007 and (ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 2008. The consolidated financial statements of the Company contained in such documents (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Consolidated Subsidiaries as of the respective dates of such financial statements and the consolidated results of their operations and cash flows for the respective periods of such financial statements and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). The Company and its Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements.

 

3.7.

Changes.

Except as disclosed in public filings made by the Company with the SEC after the date of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 and prior to the date hereof, copies of which are attached as Schedule 3.7 , since December 31, 2007, there has been (i) no material adverse change in the business, assets, properties, revenues, financial condition, operations or prospects of the Company or any Material Subsidiary, and (ii) no change that individually or in the aggregate could reasonably be expected to have a material adverse effect on (a) the ability of the Company to perform its obligations under this Agreement, the Notes and the Indemnity Letter in a timely manner, (b) the business, assets, properties, financial condition, operations or prospects of the Company or any Material Subsidiary, or (c) the rights or interests of the Noteholders under this Agreement, the Notes or the Indemnity Letter.

 

3.8.	Compliance with Law, Other Instruments, Etc.

The execution, delivery and performance by the Company of this Agreement, the Notes and the Indemnity Letter will not (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any of its Subsidiaries under, any indenture, mortgage, deed of trust, loan, purchase or credit

 

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agreement, lease, corporate charter or by-laws, or any other Material agreement or instrument to which the Company or any of its Subsidiaries is bound or by which the Company or any of its Subsidiaries or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any of its Subsidiaries or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any of its Subsidiaries.

 

3.9.	Governmental Authorizations, Etc.

No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement, the Notes or the Indemnity Letter.

 

3.10.

Litigation; Observance of Agreements; Statutes and Orders.

(a) Except as disclosed in public filings made by the Company with the SEC after the date of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 and prior to the date hereof, copies of which are attached as Schedule 3.7 (including the consolidated financial statements incorporated therein by reference), since December 31, 2007, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries or any property of the Company or any of its Subsidiaries in any court or before any arbitrator of any kind or before or by any Governmental Authority, which, if adversely determined, could reasonably be expected to have a material adverse effect on (i) the ability of the Company to perform its obligations under this Agreement, the Notes or the Indemnity Letter, (ii) the business, assets, properties, financial condition, operations or prospects of the Company, or (iii) the rights or interests of the Noteholders under this Agreement, the Notes or the Indemnity Letter.

(b) Neither the Company nor any of its Subsidiaries is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to it, or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Requirements) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a material adverse effect on (i) the ability of the Company to perform its obligations under this Agreement, the Notes or the Indemnity Letter, (ii) the business, assets, properties, financial condition, operations or prospects of the Company, or (iii) the rights or interests of the Noteholders under this Agreement, the Notes or the Indemnity Letter.

 

3.11.

Taxes.

Except as disclosed in (i) the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 (including the consolidated financial statements incorporated therein by reference), (ii) the Company’s Quarterly Report on Form 10-Q for the quarter ended

 

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March 31, 2008 (including the consolidated financial statements incorporated therein by reference), and (iii) filings made by the Company with the SEC after the date of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and prior to the date hereof, copies of which are attached as Schedule 3.11 , the Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the nonpayment of which could not, individually or in the aggregate, be expected to have a material adverse effect on (i) the ability of the Company to perform its obligations under this Agreement, the Notes and the Indemnity Letter, (ii) the business, assets, properties, financial condition, operations or prospects of the Company, or (iii) the rights or interests of the Noteholders under this Agreement, the Notes or the Indemnity Letter; or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or any of its Subsidiaries, as the case may be, has established adequate reserves in accordance with GAAP.

 

3.12.

Title to Properties; Leases.

The Company and its Material Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material to their respective businesses, including all such properties reflected in the most recent audited balance sheet included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 or purported to have been acquired by the Company or any Material Subsidiary after the date of such balance sheet (except as sold or otherwise disposed of (i) in the ordinary course of business, (ii) in the manner disclosed on Form 8-K dated May 8, 2008 filed by the Company with the SEC or (iii) in the manner disclosed on Form 8-K dated December 10, 2007 filed by the Company with the SEC). All leases of the Company and its Material Subsidiaries that individually or in the aggregate are Material to their respective businesses are valid and subsisting and are in full force and effect in all material respects.

 

3.13.

Licenses, Permits, Etc.

(a) The Company and its Material Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, proprietary software, copyrights, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others.

(b) No product of the Company or any Material Subsidiary infringes in any Material respect on any license, permit, franchise, authorization, patent, proprietary software, copyright, service mark, trademark, trade name or other right owned by any other Person.

(c) There is no Material violation by any Person of any right of the Company or any of its Material Subsidiaries with respect to any patent, proprietary software, copyright, service mark, trademark, trade name or other right owned or used by the Company or any of its Material Subsidiaries.

 

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3.14.

Compliance with ERISA.

(a) The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a material adverse effect on (i) the ability of the Company to perform its obligations under this Agreement, the Notes and the Indemnity Letter, (ii) the business, assets, properties, financial condition, operations or prospects of the Company, or (iii) the rights or interests of the Noteholders under this Agreement, the Notes and the Indemnity Letter. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), other than such liabilities as would not, individually or in the aggregate, be Material, and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not, individually or in the aggregate, be Material.

(b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined on the basis of the actuarial assumptions specified for funding purposes in such Plan’s mo