CREDIT OFFER
Montreal, [Month Day, Year]
[Transmission Customer]
[Address]
Based on the information supplied by [Name of Transmission Customer] to Hydro-Québec
TransÉnergie, we are pleased to offer a credit for the amount, terms and conditions contained herein,
subject to your acceptance (hereby "Credit Offer").
1)
Transmission Provider
Hydro-Québec, acting through its Hydro-Québec TransÉnergie
division, (hereafter “Transmission Provider”).
2)
Transmission Customer [Name of Transmission Customer] (hereafter “Customer”).
3)
Guarantor
[Name of Guarantor] (hereafter “Guarantor”).
4)
Nature of Credit
Pursuant to Article 11 of the Hydro-Québec Open-access
Transmission Tariff (hereafter “Tariff”), the Transmission Provider is
able to protect itself against the risks of payment default by its
transmission customers and to require reasonable credit review
procedures.
5)
Transmission Credit
Facility
Credit for the use of the Transmission Provider's transmission service
by the Customer under transmission service agreements entered
from time to time (hereafter the "Transmission Agreements") up to the
maximum amount of [Text Amount] Canadian dollars (CAD
$[Number Amount]) (hereafter “Transmission Credit”).
The Transmission Credit is a revolving credit payable on demand,
which amount, terms and conditions are subject to change, without
prior notice, at the discretion of the Transmission Provider, which
change shall be communicated in writing to the Customer and, if
applicable, to the Guarantor.
The amount of credit used under the Transmission Credit includes all
unpaid incurred and accrued amounts, charges, fees and interest,
whether invoiced or not, due to the Transmission Provider by the
Customer under the Transmission Agreements (hereafter
“Outstanding Amounts”).
6)
Conditions
The availability of the Transmission Credit is conditional upon prior
receipt by the Transmission Provider of the duly executed
Transmission Agreements, Credit Offer and specified guarantees, as
well as ongoing compliance with the terms and conditions of the Tariff
and the Credit Offer by the Customer.
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CREDIT OFFER
The Customer must supply and maintain in force the guarantees,
stipulated in the Credit Offer, at the entire satisfaction of the
Transmission Provider.
At all times, upon verification of the creditworthiness of the [Customer
/ Guarantor], at the sole discretion of the Transmission Provider, if the
financial condition of the [Customer / Guarantor] is materially
reduced, the Transmission Provider may request an additional
guarantee at the satisfaction of the Transmission Provider, which
shall be maintained until such time as the financial condition of the
[Customer / Guarantor] has recovered at the satisfaction of the
Transmission Provider (hereafter the "Additional Guarantee").
7)
Financial Information
The Customer shall supply or render readily accessible through the
internet, to the Transmission Provider, without any cost and in a
satisfactory printed or downloadable format, the following:
a) The annual audited consolidated financial statements of the
[Customer / Guarantor] within [Number of days] days following
the end of each financial year.
b) The quarterly unaudited consolidated financial statements of
the [Customer / Guarantor] within [Number of days] days
following the end of each of the first three financial quarters of
each financial year.
c) Any reasonable information requested by the Transmission
Provider for the purpose of determining the creditworthiness of
the Customer and the Guarantor and, without limitation of the
preceding, any change in their constitution or shareholding.
8)
Guarantees
The Customer shall supply and maintain in force one or more of the
following guarantees, which shall be at the Transmission Provider's
entire satisfaction:
a) Cash or equivalent guarantee of [Text Amount] Canadian
dollars (CAD $[Number Amount]) (herein “Cash Collateral”).
b) Irrevocable and unconditional standby letter of credit issued by
a financial institution acceptable to the Transmission Provider,
and payable upon presentation at the Montreal office counter
of its Canadian branch or affiliate, or of a Canadian bank, in
the amount of [Text Amount] Canadian dollars (CAD
$[Number Amount]), with an initial term of at least one year
subject to automatic annual renewals with cancellation prior
notice of at least ninety (90) days (hereafter “Letter of Credit”).
The issuing, advising, and confirming banks involved with the
Letter of Credit, as the case may be (hereafter “L/C Banks”),
shall be and remain satisfactory to the Transmission Provider,
otherwise the Transmission Provider may request a
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CREDIT OFFER
substitution of any and all involved L/C Banks (herein
“Substitution Request”).
c) A Guarantee Agreement from Guarantor for a minimum
amount of [Text Amount] Canadian dollars (CAD $[Number
Amount]) (herein “Corporate Guarantee”).
The Transmission Provider may request any Additional Guarantee as
specified in Section 6.
9)
Representations &
Warranties
The Customer represents and warrants as follows:
a) The Customer is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
and has full corporate power to execute, deliver and perform
this Credit Offer;
b) The execution, delivery and performance of this Credit Offer
have been and remain duly authorized by all necessary
corporate action and do not contravene the Customer's
constating documents or any contractual restriction binding on
the Customer or its assets;
c) This Credit Offer constitutes the legal, valid and binding
obligation of the Customer enforceable against Customer in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting the Transmission
Provider's rights.
10) Events of Default
An “Event of Default” shall mean, with respect to the Customer, the
occurrence of any of the following:
a) Any representation or warranty made by Customer herein is
false or misleading in any material respect when made or
when deemed made or repeated;
b) The failure of Customer to satisfy any requirement, condition,
covenant or obligation under the Tariff or the Credit Offer, if
such failure is not remedied within three (3) business days
after written notice;
c) Customer becomes Bankrupt;
d) With respect to Customer’s Guarantor:
(i)
If any representation or warranty made by the Guarantor
in connection with any guarantee made in connection with
this Credit Offer is false or misleading in any material
respect when made or when deemed made or repeated;
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CREDIT OFFER
(ii)
The failure of the Guarantor to make any payment
required or to perform any other material covenant or
obligation in any guaranty made in connection with this
Credit Offer and such failure shall not be remedied within
three business (3) days after written notice;
(iii) The Guarantor becomes Bankrupt;
(iv) The Guarantor repudiates, disaffirms, disclaims, or
rejects, in whole or in part, or challenges the validity of
any guarantee.
e) With respect to any of the Customer or the Guarantor, if any of
the following termination events shall have occurred and be
continuing (hereafter “Termination Event”):
(i)
Receipt by the Transmission Provider of a cancellation,
non-renewal or any other notice having for effect to
terminate any Letter of Credit, Corporate Guarantee or
Additional Guarantee, without giving effect to a
satisfactory substitution, as provided herein;
(ii)
Failure for the Transmission Provider to have received a
satisfactory renewal or substitution, eighty (80) days prior
to the expiry date of any Letter of Credit, and thirty five
(35) days prior to the expiry date, if applicable, of any
Corporate Guarantee or Additional Guarantee;
(iii) Thirty (30) days following receipt by the Customer of a
Substitution Request from the Transmission Provider
regarding any L/C Banks involved with the Letter of
Credit, unless satisfactory substitution has been effected
within the thirty-day delay.
Upon any Event of Default or Termination Event, the Transmission
Provider shall have the right to:
a) Terminate or suspend all transactions under the Transmission
Agreements;
b) Accelerate all Outstanding Amounts owing by the Customer to
the Transmission Provider;
c) Withhold, up to the amount of the Customer's Outstanding
Amounts, any payments due to the Customer under the
Transmission Agreements;
d) Suspend performance under the Transmission Agreements;
e) Apply any Cash Collateral provided against the Outstanding
Amounts;
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CREDIT OFFER
f) Draw under any Letter of Credit provided;
g) Request immediate payment of any unpaid Outstanding
Amounts from the Customer, the Guarantor or both; and
h) Terminate this Credit Offer.
Any omission, negligence or tolerance by the Transmission Provider
of an Event of Default does not constitute a renunciation to exercise
its rights.
11) Governing Law &
Jurisdiction
This Credit Offer is governed by the laws of the Province of Quebec
and the laws of Canada applicable therein. Exclusive jurisdiction shall
be vested in the courts of the Province of Quebec, district of Montreal.
12) Previous credit offer
The previous credit offer dated [Date] is hereby terminated and
revoked as of the date of the last signature below.
Please confirm your acceptance of this Credit Offer by returning an original of this document duly
executed by the Customer and, if applicable, the Guarantor.
Hydro-Québec, acting through its Hydro-Québec TransÉnergie division
By: Stéphane Verret
Title: Directeur Commercialisation et Affaires
réglementaires
By: Pierre Fortin
Title: Directeur principal Analyse et gestion des
risques
Accepted on [Month Day, Year] by [Customer]:
By:
Title:
By:
Title:
Acknowledged on [Month day, year] by [Guarantor]:
By:
Title:
By:
Title:
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