Document:

EXHIBIT 10.2

 

 FINANCIAL ASSURANCES AGREEMENT

 This Financial Assurances Agreement made effective as of the 30th day of November, 2017.

BETWEEN:

TRANSCANADA PIPELINES LIMITED 

a Canadian corporation 

(hereinafter called "TransCanada")

AND:

PORTLAND NATURAL GAS TRANSMISSION SYSTEM

a Maine general partnership

(hereinafter called "Shipper")

WITNESSES THAT:

WHEREAS, upon Shipper and TransCanada executing this Financial Assurances Agreement (hereinafter called the "Financial Assurances Agreement"), Shipper and TransCanada shall enter into a Precedent Agreement (hereinafter called the "Precedent Agreement") wherein both parties shall agree, subject to satisfaction of the conditions contained in the Precedent Agreement, to enter into Firm  Transportation Service Contracts for each Phase (as defined below) substantially in the form attached as Exhibit "A" to the Precedent Agreement (each a "Contract" and collectively the "Contracts"); and

WHEREAS, each Contract, upon execution, will be for gas transportation and related services where TransCanada determined it must construct facilities in order to provide such service (the "Expansion Capacity Service") and would provide for TransCanada to transport for the account of Shipper up to 174,311 GJ/d of natural gas from the Union Dawn Receipt Point and 8,440 GJ/d of natural gas from the Parkway Receipt Point to, in both cases, the East Hereford, Quebec Delivery Point  (into the PNGTS system); and

WHEREAS, the Expansion Capacity Service is anticipated to be on a three phased-basis commencing (for each phase, its "In-Service Date") as follows (such three phases are sometimes referred to individually as a "Phase"):

	
·

	
Commencing on the 1st of November, 2018 or as soon as possible thereafter, 39,663 GJ/day from the Dawn Receipt Point and 2,651 GJ/day from the Parkway Receipt Point for an aggregate of 42,314 GJ/day, for a term of 22 years ("Phase I");

	
·

	
Commencing on the 1st of November, 2019 or as soon as possible thereafter, 159,960 GJ/day from the Dawn Receipt Point and 7,481 GJ/day from the Parkway Receipt Point for an aggregate of 167,441 GJ/day, for a term of 21 years ("Phase II");and 

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·

	
Commencing on the 1st of November, 2020 or as soon as possible thereafter, 174,311 GJ/day from the Dawn Receipt Point and 8,440 GJ/day from the Parkway Receipt Point for an aggregate of 182,751 GJ/day, for a term of 20 years (transportation services commencing at this time shall be referred to as "Phase III" of the Expansion Capacity Service); and

WHEREAS the General Terms and Conditions of TransCanada's Canadian Mainline Transportation Tariff that are applicable to each Contract, as such may be amended, replaced or varied from time to time (hereinafter called the "Tariff"), sets out that TransCanada may request and Shipper shall provide if TransCanada so requests, financial assurances for the payment of the charges to be paid by Shipper pursuant to the Contract; and

WHEREAS, the parties wish to enter into this Financial Assurances Agreement for the purpose of describing the manner in which such security is to be provided by Shipper.

NOW THEREFORE THIS FINANCIAL ASSURANCES AGREEMENT WITNESSES THAT, in consideration of the mutual covenants and agreements contained herein, Shipper and TransCanada agree as follows:

	
1.

	
Prior to the execution of each Contract, TransCanada may request financial assurances from Shipper in respect of a particular Phase and the related Contract, in form and substance acceptable to TransCanada and in an amount determined in accordance with the Tariff for the Expansion Capacity Service. Shipper shall provide such financial assurances within four (4) Banking Days of TransCanada's request or such other time as may be set forth by TransCanada in the request.  Upon receipt by TransCanada of the requested financial assurances, section of the Precedent Agreement shall be satisfied with respect to the corresponding Phase, and until receipt by TransCanada of the requested financial assurances, section of the Precedent Agreement shall not be satisfied with respect to the corresponding Phase.

	
2.

	
TransCanada may request that Shipper at any time and from time to time prior to and during service, provide TransCanada with financial assurances acceptable to TransCanada, in form and substance satisfactory to TransCanada and in an amount determined in accordance with the Tariff for Expansion Capacity Service (the "Financial Assurances Request").  

	
3.

	
Shipper shall provide TransCanada with the financial assurances requested in the Financial Assurances Request within the time period set out in the Tariff. 

	
4.

	
If Shipper fails to provide TransCanada with the financial assurances requested, then TransCanada may, in addition to any other remedy available to it, exercise any remedies available to it in the Precedent Agreement, any Contract or the Tariff.

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5.

	
This Financial Assurances Agreement shall become effective on the date of execution hereof and shall remain in effect until:

	
(a)

	
the Precedent Agreement is terminated by either party in accordance with the terms thereof and all of the Shipper's obligations pursuant to the Precedent Agreement have been satisfied, and

	
(b)

	
if any Contract is executed, then with regard to the financial assurances associated with a specific Contract only and not the financial assurances associated with any other Contract, the rights and obligations hereunder shall terminate in the event:

	
(i)

	
the Contract is terminated by either party in accordance with the terms thereof and all of the Shipper's obligations pursuant to the Contract have been satisfied; or

	
(ii)

	
all of the Shipper's obligations pursuant to the Contract for the initial term have been satisfied; or

	
(iii)

	
the Contract is assigned in full by Shipper to one or more third parties with the consent of TransCanada; provided that such third parties agree to assume all obligations under the Contract and execute financial assurance agreements, in a form satisfactory to TransCanada.

	
6.

	
For greater certainty, this Financial Assurances Agreement is deemed to be a financial assurances agreement under the Tariff.

	
7.

	
This Financial Assurances Agreement and the rights and obligations of the parties hereunder shall be subject to all present and future laws, rules, regulations, decisions and orders of any legislative body or duly constituted authority now or hereafter having jurisdiction over any of the matters contained herein, including without limitation the General Terms and Conditions of the Tariff.

	
8.

	
Any notice, request or demand (hereinafter called a "Notice") to or upon the respective parties hereto, shall be in writing and shall be validly communicated by the delivery thereof to its addressee, either personally or by courier, first class mail,  telecopier or email to the address hereinafter mentioned:

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In the case of TransCanada:

	
TRANSCANADA PIPELINES LIMITED

 

	
Delivery Address:

	
TransCanada PipeLines Tower

	 	
450 – 1st Street S.W.

	 	
Calgary, Alberta

	 	
T2P 5H1

 

	
Mailing Address:

	
P.O. Box 1000, Station M

	 	
Calgary, Alberta

	 	
T2P 4K5

	 	
Attention:  Director, Counterparty Risk

	 	
Telecopier: (403) 920-2359

	 	 
	
Email:

	
counterparty_risk@transcanada.com

	 	 
	 	 
	
In the case of Shipper:              

	
Portland Natural Gas Transmission System

 

	
Delivery Address:

	
700 Louisiana Street

	 	
Houston, Texas

	 	
77002-2700

	 	 
	
Mailing Address:

	
Same As Above

	 	 
	 	
Attention: Vice-President, Business Development

	 	
Telecopier:  832-320-5555

	 	 
	
Email :

	
Email Address: russell_mahan@transcanada.com

 

 

Any Notice shall be sent in order to ensure prompt receipt by the other party.  Such Notice sent as aforesaid shall be deemed to have been received by the party to whom it is sent:  (a) at the time of its delivery if personally delivered or if sent by telecopier or email, or (b) on the business day following transmittal thereof if sent by courier, or (c) on the third (3rd) Banking Day following the transmittal thereof if sent by first class mail; provided, however, that in the event normal mail service, courier service,  telecopier or email  shall be interrupted by a cause beyond the control of the parties hereto, then the party sending the Notice shall utilize any of the said services which has not been so interrupted or shall personally deliver such Notice.  Each party shall provide Notice to the other of any change of address for the purposes hereof.

	
9.

	
Any company which shall succeed by purchase, merger or consolidation to the assets substantially or in entirety, of Shipper or TransCanada, as the case may be, shall be entitled to the rights and shall be subject to the obligations of its predecessor under this Financial Assurances Agreement.  Either party may, without relieving itself of its obligations under this Financial Assurances Agreement, assign any of its rights and obligations hereunder to an affiliate 

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(as such term is defined in the Canada Business Corporations Act) of such party without the consent of the other party hereto, but otherwise no assignment of this Financial Assurances Agreement or any of the rights or obligations hereunder shall be made unless there first shall have been obtained the written consent thereto of the other party, such consent not to be unreasonably withheld.  Notwithstanding the foregoing, Shipper may not assign its rights or obligations hereunder unless Shipper concurrently assigns its rights and/or obligations under the Precedent Agreement or the Contracts to the same assignee.  It is agreed, however, that the restrictions on assignment contained in this paragraph shall not in any way prevent either party to this Financial Assurances Agreement from pledging or mortgaging its rights hereunder as security for its indebtedness.  This Financial Assurances Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto.

	
10.

	
This Financial Assurances Agreement shall be construed and applied in accordance with, and be subject to, the laws of the Province of Alberta, and, where applicable, the laws of Canada.

	
11.

	
If any provision of this Financial Assurances Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or enforceability shall apply only to such provision and all other provisions hereof shall continue in full force and effect.

	
12.

	
TransCanada and Shipper hereby stipulate and agree that this Financial Assurances Agreement is executed for the sole benefit of TransCanada and Shipper, including all successors and assignees permitted under the terms of this Financial Assurances Agreement.  TransCanada and Shipper expressly intend that no rights under this Financial Assurances Agreement inure to any other parties.

	
13.

	
Shipper acknowledges and agrees that it has reviewed and is familiar with the terms, conditions and provisions of the Tariff.  

	
14.

	
TransCanada and Shipper agree that any upper case terms not defined herein shall have the meaning ascribed thereto in the Tariff.

	
15.

	
No personal liability whatsoever will be attached to, be imposed upon, or otherwise be incurred by, any partner, agent, management official or employee of Shipper (or any shareholder, director, officer or employee of Shipper) for any liability that may arise by reason of this Financial Assurances Agreement or for any claim based on such liability, other than by a partner in respect of assets of Shipper held in the name of, or on behalf by, such partner.  The sole recourse of TransCanada for any such liability or claim is limited to the assets of Shipper, whether held in its own name or held for Shipper in the name of one or more of its partners.

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16.

	
This Financial Assurances Agreement may be so executed in counterpart and a complete set of counterpart pages shall be provided to each party.

IN WITNESS WHEREOF, the parties hereto have executed this Financial Assurances Agreement as of the date first above written.

 

 

 

 

	
PORTLAND NATURAL GAS TRANSMISSION SYSTEM

By its Operator, PNGTS Operating Co., LLC

 

	
TRANSCANADA PIPELINES LIMITED

	
Per:

	
/s/ James Eckert

	 	
Per:

	 /s/ Karl Johannson
	 	
Name: James Eckert

	 	 	
Name: Karl Johannson

	 	
Title: President

	 	 	
Title: Executive Vice-President & President, Canada & Mexico, Natural Gas Pipelines & Energy

	 	 	 	 	 
	
Per:

	
/s/ Lauri Newton

	 	
Per:

	 /s/ Don Bell
	 	
Name: Lauri Newton

	 	 	
Name: Don Bell

	 	
Title: Chief Compliance Officer, FERC

	 	 	
Title: General Manager

 

 

  

	
Contract Approval

	
Customer Service Leader

	 
	
Customer Representative

	 
	
Legal Review

	
Proforma 

 

 

 

 

 

6Exhibit

EXHIBIT 10.1

AMENDMENT NO. 9
Dated as of December 20, 2017
to
CREDIT AGREEMENT
Dated as of September 12, 2014
THIS AMENDMENT NO. 9 (“Amendment”) is made as of December 20, 2017 and shall, upon satisfaction of the conditions precedent set forth in Section 2 below be effective as of the date hereof (the “Amendment No. 9 Effective Date”), by and among AmTrust Financial Services, Inc., a Delaware corporation (the “Borrower”), the financial institutions listed on the signature pages hereof and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), under that certain Credit Agreement dated as of September 12, 2014, by and among the Borrower, the Lenders and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”).  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.
WHEREAS, the Borrower has requested that the requisite Lenders and the Administrative Agent agree to make certain modifications to the Credit Agreement;
WHEREAS, the Borrower, the Lenders party hereto and the Administrative Agent have so agreed on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders party hereto and the Administrative Agent hereby agree to enter into this Amendment.
1.Amendments to Credit Agreement.  Effective as of the Amendment No. 9 Effective Date but subject to the satisfaction of the conditions precedent set forth in Section 3 below, the Credit Agreement is hereby amended as follows:
(a)    Section 1.01 of the Credit Agreement is amended to insert the following definitions therein in their appropriate alphabetical order:
“Amendment No. 9 Effective Date” means December 20, 2017.
“Specified Fee Business Ancillary Agreement” means each “Ancillary Agreement” as defined in the Specified Fee Business Investment Agreement.

“Specified Fee Business Holdco” means a newly-formed Wholly Owned Subsidiary of the Borrower, 51% of the Equity Interests of which are to be sold at the Specified Fee Business Closing.
“Specified Fee Business Closing” means the occurrence of the “Closing” as defined in the Specified Fee Business Investment Agreement.
“Specified Fee Business Investment Agreement” means that certain Contribution and Stock Purchase Agreement, dated as of November 3, 2017, by and among the Borrower, Mayfield Holdings LLC and Feeco Holdings LP (an affiliate of Madison Dearborn Partners, LLC) (as amended, supplemented or otherwise modified from time to time).
“Specified Fee Business Transactions” means the reorganization, debt incurrence and sale transactions, and all other transactions to be effected by the Borrower and certain of its Subsidiaries, substantially in accordance with the terms set forth in the Specified Fee Business Investment Agreement and the Specified Fee Business Ancillary Agreements.
(b)    The definition of “Affiliate” set forth in Section 1.01 of the Credit Agreement is hereby amended to insert the following proviso immediately prior to the period at the end of the first sentence of such definition:
“; provided that under no circumstances shall Specified Fee Business Holdco or any of its subsidiaries be deemed to be an “Affiliate” of the Borrower or any of its Subsidiaries from and after the Specified Fee Business Closing”
(c)    The definition of “subsidiary” set forth in Section 1.01 of the Credit Agreement is hereby amended to insert the following proviso immediately prior to the period at the end of such definition:
“; provided that under no circumstances shall Specified Fee Business Holdco or any of its subsidiaries be deemed to be a “subsidiary” of the Borrower or any of its Subsidiaries from and after the Specified Fee Business Closing”
(d)    Section 6.01 of the Credit Agreement is amended to (1) delete the word “and” at the end of clause (x) thereof, (2) replace the period at the end of clause (y) thereof with “; and” and (3) insert a new clause (z) therein as follows:
“(z)    Indebtedness incurred by Specified Fee Business Holdco and/or its subsidiaries, substantially concurrently with the Specified Fee Business Closing; provided, that after the Specified Fee Business Closing, neither the Borrower nor any of its Subsidiaries shall be an obligor with respect to any such Indebtedness.” 

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(e)    Section 6.02 of the Credit Agreement is amended to (1) delete the word “and” at the end of clause (n) thereof, (2) replace the period at the end of clause (o) thereof with “; and” and (3) insert a new clause (p) therein as follows:
“(p)    Liens on property or assets of Specified Fee Business Holdco and/or any of its subsidiaries, securing Indebtedness permitted under Section 6.01(z); provided, that after the Specified Fee Business Closing, no such Lien shall encumber any property or asset of the Borrower or any of its Subsidiaries.” 
(f)    Section 6.04 of the Credit Agreement is amended to (1) delete the word “and” at the end of clause (o) thereof, (2) replace the period at the end of clause (p) thereof with “; and” and (3) insert a new clause (q) therein as follows:
“(q)    From and after the Specified Fee Business Closing, ownership by the Borrower (directly or indirectly) of Equity Interests issued by Specified Fee Business Holdco.” 
(g)    Section 6.05 of the Credit Agreement is amended to (1) delete the word “and” at the end of clause (i) thereof, (2) replace the period at the end of clause (j) thereof with “; and” and (3) insert a new clause (k) therein as follows:
“(k)    the execution, delivery and performance of the Specified Fee Business Investment Agreement and the Specified Fee Business Ancillary Agreements and the consummation of the Specified Fee Business Transactions.” 
(h)    Section 6.14(c) of the Credit Agreement is amended and restated in its entirety as follows:
“(c)    Consolidated Fixed Charge Coverage Ratio. The Borrower will not permit the Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the Borrower during any period set forth below to be less than the applicable ratio set forth below opposite such period:
	
		
	Period:
	Consolidated Fixed Charge Coverage Ratio

	Effective Date through the date immediately preceding the Amendment No. 9 Effective Date
	4.0 to 1.0

	Amendment No. 9 Effective Date and thereafter

	2.0 to 1.0

2.    Conditions of Effectiveness.  The effectiveness of this Amendment is subject to the conditions precedent that the Administrative Agent shall have received (i) counterparts of this Amendment duly executed by the Borrower, the Required Lenders and the Administrative 

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Agent, (ii) for the account of each Lender party hereto that delivers its executed signature page to this Amendment by no later than the date and time specified by the Administrative Agent, an amendment fee in an amount equal to $5,000 and (iii) payment and/or reimbursement of the Administrative Agent’s and its affiliates’ fees and expenses (including, to the extent invoiced, the reasonable fees and expenses of counsel for the Administrative Agent) in connection with this Amendment. 
3.    Representations and Warranties of the Borrower.  The Borrower hereby represents and warrants as follows:
(a)    This Amendment and the Credit Agreement as amended hereby constitute legal, valid and binding obligations of the Borrower and are enforceable against the Borrower in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b)    As of the date hereof and giving effect to the terms of this Amendment, (i) no Default or Event of Default shall have occurred and be continuing and (ii) the representations and warranties of the Borrower set forth in the Credit Agreement, as amended hereby, are true and correct as of the date hereof.
4.    Reference to and Effect on the Credit Agreement.
(a)    Upon the effectiveness hereof, each reference to the Credit Agreement in the Credit Agreement or any other Loan Document shall mean and be a reference to the Credit Agreement as amended hereby.
(b)    Each Loan Document and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed.
(c)    Except with respect to the subject matter hereof and as set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, nor constitute a waiver of any provision of the Credit Agreement, the Loan Documents or any other documents, instruments and agreements executed and/or delivered in connection therewith.
(d)    This Amendment shall be a Loan Document.
5.    Governing Law.  This Amendment shall be construed in accordance with and governed by the law of the State of New York.
6.    Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

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7.    Counterparts.  This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
[Signature Pages Follow]

5

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.
AMTRUST FINANCIAL SERVICES, INC.,  
as the Borrower 
 
 
By: /s/ Stephen Ungar     
Name: Stephen Ungar 
Title: Secretary
JPMORGAN CHASE BANK, N.A.,  
individually as a Lender, as Issuing Bank and as Administrative Agent 
 
 
By: /s/ Hector J. Varona     
Name: Hector J. Varona  
Title: Executive Director    
KEYBANK NATIONAL ASSOCIATION,  
as a Lender 
 
 
By: /s/ James Cribbet    
Name: James Cribbet  
Title: Senior Vice President    
SUNTRUST BANK, 
as a Lender 
 
 
By: /s/ Paula Mueller    
Name: Paula Mueller  
Title: Director   

Signature Page to Amendment No. 9 to 
Credit Agreement dated as of September 12, 2014 
AmTrust Financial Services, Inc.

LLOYDS BANK PLC, 
as a Lender 
 
 
By: /s/ Jennifer Larrow     
Name: Jennifer Larrow  
Title: Assistant Manager
 
 
By: /s/ Daven Popat     
Name: Daven Popat
Title: Senior Vice President
ASSOCIATED BANK, NATIONAL ASSOCIATION 
as a Lender 
 
 
By: /s/ Liliana Huerta Correa     
Name: Liliana Huerta Correa  
Title: Vice President   
CIBC BANK USA, as successor in interest to The PrivateBank and Trust Company, as a Lender 
 
 
By: /s/ Daniel A. Palmer     
Name: Daniel A. Palmer  
Title: Managing Director   
MORGAN STANLEY BANK, N.A., as a Lender 
 
 
By: /s/ Harry Comninellis     
Name: Harry Comninellis  
Title: Authorized Signatory

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