$25,000,000 LOAN AGREEMENT
LOAN AGREEMENT
BY AND BETWEEN
WHITNEY NATIONAL BANK
AND
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
This Loan Agreement (the "Agreement"), made on this 20th day of March,
1997, by and between Whitney National Bank ("Bank") and Central Louisiana
Electric Company, Inc. ("Borrower").
I. Definitions
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1.01 For all purposes of this Agreement, unless otherwise expressly
provided or unless the context otherwise requires, the following terms shall
have the following meanings:
"Advance" shall mean a disbursement of a loan in accordance herewith.
"Available Commitment" shall have the meaning ascribed to such term in
Section 2.01.
"Base Rate" shall mean that rate of interest as published or recorded by
Bank from time to time as its prime lending rate with the rate of interest to
change when and as said prime lending rate changes, which prime lending rate is
not necessarily the lowest interest rate charged by Bank.
"Base Rate Loan" shall mean any Loan to Borrower which accrues interest
at the Base Rate at the time of the occurrence thereof or conversion thereto.
"Borrower's Agent" shall mean any one of the individuals whose names are
set forth in Schedule I to this Agreement or any other person subsequently
authorized by a corporate resolution, duly authorized and adopted by the
Borrower's board of directors in form acceptable to Bank. Until Borrower
notifies Bank in writing of the withdrawal of Borrower's Agent's rights and
powers, Bank shall be able to rely conclusively upon the Borrower's Agent's
right to borrow and incur Loans and to make conversions thereof on behalf of
Borrower.
"Business Day" shall mean any day on which banks are required to be open
to carry on normal business in the State of Louisiana.
"Capital Lease Obligations" shall mean, with respect to any Person,
obligations of such Person with respect to leases which, in accordance with
GAAP, are required to be capitalized on the financial statements of such Person.
"Common Equity" shall mean, as of any date of determination, an amount
equal to the sum of (i) common Stock of Borrower, (ii) premium on capital Stock
of Borrower (as such term is used in the Financial Statements) and (iii)
retained earnings of the Borrower, determined on a Consolidated basis in
accordance with GAAP.
"Consolidated" shall mean the Borrower and its Subsidiaries which are
consolidated for financial reporting purposes in accordance with GAAP.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any return on any investment
made by another Person or any Indebtedness, lease, dividend or other obligation
of any other Person in any manner, whether contingent or whether directly or
indirectly, including, without limitation, any obligation in respect of the
liabilities of any partnership in which such other Person is a general partner,
except to the extent that such liabilities of such partnership are nonrecourse
to such other Person and its separate Property. The amount of any Contingent
Obligation of a Person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such
Person in good faith.
"Financial Statements" shall have the meaning ascribed to such term in
Section 4.01(i).
"Indebtedness" shall mean, as to any Person, at a particular time, all
items which constitute, without duplication, (i) indebtedness for borrowed
money or the deferred purchase price of property (other than trade payables
incurred in the ordinary course of business), (ii) indebtedness evidenced by
notes, bonds, debentures or similar instruments, (iii) obligations with respect
to any conditional sale or title retention agreement, (iv) indebtedness arising
under acceptance facilities and the amount available to be drawn under all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder to the extent that such Person shall
not have reimbursed the issuer in respect of the issuer's payment of such
drafts, (v) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof (other than carrier's, warehousemen's, mechanics',
repairmen's or other like non-consensual statutory Liens arising in the
ordinary course of business), (vi) obligations under Capital Lease Obligations
and (vii) Contingent Obligations.
"Interest Period" shall mean with respect to each Libor Rate Loan:
(i) initially, the period commencing on the date of such Loan and
ending 1, 2 or 3 months thereafter (or such other period agreed upon in writing
by Borrower and Bank), as Borrower may elect in the applicable Advance request;
and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Loan and ending 1, 2 or 3 months
thereafter (or such other period agreed upon in writing by Borrower and Bank),
as Borrower may elect pursuant to Section 2.03(b);
provided that:
(iii) subject to clause (iv) below, if any Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period shall end on the
immediately next preceding Business Day; and
(iv) no Interest Period for a LIBOR Loan shall extend beyond the
last day of the Line of Credit Period.
"Libor Base Rate" shall mean, for an Interest Period, (a) the Libor Index
Rate for such Interest Period, if such rate is available, and (b) if the Libor
Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
at which deposits in U.S. dollars in immediately available funds are offered
to Bank as of the opening of business of Bank or as soon thereafter as
practicable on the first day of such Interest Period by two (2) or more major
banks in the London interbank market selected by Bank for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Libor Rate Loan requested by Borrower to be made available by
Bank. As used herein, "Libor Index Rate" means, for any Interest Period, the
London interbank offered rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3875 as of 9:00 a.m.
(New Orleans time) on the first day of such Interest Period.
Page 2
"Libor Rate" shall mean the Libor Base Rate plus 15 basis points (.15%).
"Libor Rate Loan" shall mean any Loan to Borrower which accrues interest
at the Libor Rate at the time of the occurrence thereof or conversion thereto.
"Lien" shall mean any mortgage, pledge, hypothecation, security interest,
encumbrance, lien, judgment, garnishment, seizure, tax lien or levy (statutory
or otherwise) or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, or any
capitalized lease, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction).
"Line of Credit" shall mean the credit facility made available by Bank to
Borrower pursuant to Section 2.01.
"Line of Credit Period" shall mean the period commencing on the date
hereof and ending on March 19, 1998.
"Loans" shall mean the loans to Borrower described in Section 2.01, with
each being a Loan, as applicable and shall include all principal, interest,
attorney's fees and costs owed thereon.
"Loan Documents" shall mean this Agreement and the promissory note
evidencing the Loans.
"Material Adverse Effect" shall mean a material adverse effect on the
properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole.
"Permitted Liens" shall mean (i) pledges or deposits by the Borrower or
any of its Subsidiaries under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness of
the Borrower or any of its Subsidiaries) or leases (other than capitalized
leases) to which the Borrower or any of its Subsidiaries is a party, or
deposits to secure statutory obligations of the Borrower or any of its
Subsidiaries or deposits of cash or U.S. Government Bonds to secure surety or
appeal bonds to which the Borrower or any of its Subsidiaries is a party, or
deposits as security for contested taxes or import duties or for the payment of
rent; (ii) Liens imposed by law, such as carriers', warehousemen's,
materialmen's and mechanics' liens, incurred in the ordinary course of business
for sums not overdue or being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
books of Borrower or any Subsidiary of Borrower; (iii) judgment Liens in
existence less than 30 days after the entry thereof or with respect to which
execution has been stayed or the payment of which is covered in full (subject
to a customary deductible) by insurance; (iv) Liens for property taxes not yet
delinquent and Liens for property taxes the payment of which is being actively
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the books of Borrower or any Subsidiary
of Borrower; (v) the Indenture of Mortgage dated as of July 1, 1950 between
Borrower and First National Bank of Commerce in New Orleans, as amended and
supplemented, and (vi) survey exceptions, issues with regard to merchantability
of title, easements or reservations of, or rights of others for rights-of-way,
highways and railroad crossings, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real property incidental to the conduct of the business of the
Borrower or any of its Subsidiaries or to the ownership of its property which
were not incurred in connection with Indebtedness of the Borrower or any
Subsidiary of Borrower, which Liens do not in the aggregate materially detract
from the value of said properties or materially impair their use in the
operation of the business taken as a whole of the Borrower and its Subsidiaries.
Page 3
"Person" shall mean any individual, firm, partnership, joint venture,
corporation, association, business enterprise, limited liability company, joint
stock company, unincorporated association, trust, governmental authority or any
other entity, whether acting in an individual, fiduciary, or other capacity.
"Plan" shall mean any employee benefit plan which is covered by the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and in
respect of which Borrower is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employee" as defined in
Section 3(5) of ERISA, including, without limitation, The Central Louisiana
Electric Company, Inc. 401(k) Savings and Investment Plan ESOP Trust, as the
same may be amended, supplemented or otherwise modified from time to time.
"Stock" shall mean, any and all shares, rights, interests,
participations, warrants or other equivalents (however designated) of corporate
stock.
"Subsidiary" shall mean, as to any Person, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which such Person or any Subsidiary of such Person, directly or indirectly,
either (i) in respect of a corporation, owns or controls more than 50% of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (ii) in respect of an association, partnership, joint venture
or other business entity, is entitled to share in more than 50% of the profits
and losses, however determined.
"Total Capitalization" shall mean the difference between (a) the sum of
(i) preferred Stock of the Borrower (less deferred compensation relating to
unallocated convertible preferred Stock of the Borrower held by any Plan), plus
(ii) common Stock of the Borrower and any premium on capital Stock thereon (as
such term is used in the Financial Statements), plus (iii) retained earnings
of the Borrower, plus (iv) all Indebtedness of the Borrower (net of unamortized
premium and discount (as such term is used in the Financial Statements)), and
(b) treasury Stock of the Borrower.
"Type" shall mean, as to any Loan, its nature as either a Base Rate Loan
or a Libor Rate Loan.
1.02 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificates or other document made or delivered pursuant
hereto unless the context shall otherwise require.
(b) Words used herein in the singular, where the context so permits,
shall be deemed to include the plural and vice versa. Likewise, the
definitions of words used in the singular herein shall also apply to such words
when used in the plural and vice versa, unless the context shall otherwise
require.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(d) Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
1.03. Accounting Terms. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted accounting principles
applied on a consistent basis.
Page 4
II. The Loan
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2.01 Loans. Subject to the due and faithful performance of the terms and
conditions of this Agreement and in any instrument or agreement executed
contemporaneous herewith or as a consequence hereof and in accordance with the
terms and conditions of this Agreement, Bank agrees to make Advances to
Borrower from time to time during the Line of Credit Period in an aggregate
outstanding principal amount not to exceed the sum of Twenty-Five Million and
No/100 ($25,000,000.00) Dollars (the "Available Commitment"); provided however
any Advance shall be in increments of $100,000.00 or greater and any Advance
shall accrue interest of the same Type and Interest Period. The obligation of
the Borrower to repay the loans shall be evidenced by a promissory note made
payable to the order of Bank in the principal sum of $25,000,000.00, a copy of
which is attached hereto as Exhibit A. The outstanding principal balance of
the Loans shall accrue interest in accordance with Section 2.03 from date of
each Advance until paid. Notwithstanding any provisions of this Agreement, all
Loans hereunder shall mature and become due and payable at the end of the Line
of Credit Period.
2.02 (a) Advance Request. Upon the terms and subject to the conditions
hereof and subject to the amount of such Advance not exceeding the Available
Commitment, the Borrower may request an Advance under the Line of Credit during
a Business Day between the hours of 9:00 a.m. and 4:00 p.m. (New Orleans time).
If Bank receives the Borrower's proper request for an Advance by no later than
1:00 p.m. (New Orleans time), then Bank shall make the Advance in accordance
herewith. If Bank receives the Borrower's request for an Advance later than
1:00 p.m. (New Orleans time), then Bank shall make the Advance in accordance
herewith on the next Business Day. Each request for an Advance shall be made
either by telephone calls to Bank or in writing, by delivering to Bank by mail,
hand-delivery, or facsimile a request (i) specifying the amount to be borrowed
(ii) specifying the date the funds will be advanced, (iii) specifying the
Type of Loan to be made and its Interest Period, and (iv) complying with the
requirements of this Section. Bank shall have the right to verify the
telephone requests by calling the person who made the request at the telephone
number identified by the Borrower. If the Advance request is by telephone, the
Borrower will confirm said request in writing within two (2) Business Days.
All such Advance requests shall be made by the Borrower's Agent. Borrower
agrees that only its duly authorized Borrower's Agent shall make an Advance
request.
(b) Credit Advice. After the borrowing of any Advance under the Line of
Credit in accordance with this Agreement, Bank will mail to the Borrower an
advice showing the amount of the Advance and the amount of funds credited into
the Borrower's account. All Advances shall either (1) be credited to a demand
deposit account (the "Account") maintained by the Borrower with Bank or (2)
transferred by the Bank to an account of the Borrower at another financial
institution in accordance with the wire transfer instructions set forth in
Schedule II to this Agreement. Any request to transfer funds from the Account
by wire transfer shall be governed by Bank's standard Funds Transfer Agreement
properly completed and executed by the Borrower. Bank's failure to mail the
credit advice shall not alter the Borrower's obligation to repay the Loans or
make the Bank liable to the Borrower for failure to mail the credit advice.
(c) Internal Records Shall Control. The principal amount shown on the
face of the note evidencing the Loans evidences the maximum aggregate principal
amount that may be outstanding from time to time under the Loans. The Borrower
agrees that the internal records of Bank shall constitute for all purposes
prima facie evidence of (i) the amount of principal and interest owing on the
Loans from time to time, (ii) the amount of each Advance or Loan made to the
Borrower and (iii) the amount of each principal and/or interest payment
received by Bank on the Loans.
Page 5
2.03 (a) Interest Rates; Interest Payments. The unpaid principal
balance of the Loans shall accrue interest, at the Borrower's option, either
at: (i) the Base Rate or (ii) the Libor Rate; provided that if any LIBOR Rate
Loan or any portion thereof shall, as a result of clause (iv) of the definition
of Interest Period, have an Interest Period of less than 30 days, such portion
shall bear interest during such Interest Period at the rate applicable to Base
Rate Loans during such period. Interest on the outstanding principal owed on
the Loans shall be computed and assessed on the basis of the actual number of
days elapsed over a year composed of 360 days. Interest shall be payable on
all Base Rate Loans quarterly in arrears on the last day of each quarter (or the
immediate subsequent Business Day if any such last day is not a Business Day)
and at maturity. Interest shall be payable on each Libor Rate Loan for each
Interest Period on the last day thereof.
(b) Duration of Interest Periods and Selection of Interest Rates. The
commencement date and duration of the initial Interest Period for each Libor
Rate Loan shall be as specified in the applicable Advance request. Borrower
shall elect the duration of each subsequent Interest Period applicable to such
Libor Rate Loan or elect to convert to a Base Rate Loan (and Borrower shall
have the option (x) in the case of any Base Rate Loan, to elect that such Loan
become a Libor Rate Loan and the Interest Period to be applicable thereto or
(y) in the case of any Libor Rate Loan, to elect that such Loan become a Base
Rate Loan), by giving notice of such election to Bank by 1:00 p.m. (New Orleans
time) on the last day of the then expiring Interest Period (in the case of an
existing Libor Rate Loan) or on the date of the requested conversion of a Base
Rate Loan to a Libor Rate Loan, as applicable; provided, however, that
notwithstanding the foregoing, in addition to and without limiting the rights
and remedies of Bank under Section VI hereof, so long as any Default under this
Agreement has occurred and is continuing, Borrower shall not be permitted to
renew any Libor Rate Loan or to convert any Base Rate Loan into a Libor Loan.
All Libor Rate Loans, whether by conversion or by an Advance, shall be in
increments of $100,000.00 or greater. All Loans which bear interest at a
particular Libor Rate for a particular Interest Period shall constitute a
single Libor Loan. Notwithstanding the foregoing, the duration of each
Interest Period shall be subject to the provisions of the definition of
Interest Period.
(c) Failure to Elect. If Bank does not receive a notice of election for
the continuation of a Libor Rate Loan for a subsequent Interest Period pursuant
to subsection (b) above within the applicable time limits specified therein,
Borrower shall be deemed to have elected to convert such Libor Loan on the last
day of the current Interest Period with respect thereto to a Base Rate Loan
in the principal amount of such expiring Libor Rate Loan on such date.
(d) Reliance on Communications. Borrower hereby authorizes Bank to rely
on telephonic, telegraphic, telecopy, telex or written or oral instructions
believed by Bank in good faith to have been sent, delivered or given by
Borrower's Agent with respect to any request to make a Loan or a repayment
hereunder, to continue a Loan, or to convert any Base Rate Loan or Libor Rate
Loan to any other type of Loan available hereunder, and on any signature which
Bank in good faith believes to be genuine.
2.04 Facility Fee. Borrower shall pay to Bank, in arrears, on the last
Business Day of each calendar quarter during the Line of Credit Period and on
the last day of the Line of Credit Period, an annual facility fee of .05% of
the Available Commitment calculated on the basis of the actual number of days
elapsed over a year of 365/366 days as the case may be.
2.05 Prepayment. Borrower shall have the right at any time and from time
to time to prepay the Loans in whole or in part in amounts aggregating
$100,000.00 or any larger multiple thereof, without penalty by paying all or a
portion of the unpaid principal balance of the Loans, as applicable, plus
accrued interest through the date of prepayment; provided that, Borrower shall
not have the right to prepay a Libor Rate Loan through the making of a Libor
Rate Loan.
Page 6
2.06 Increased Costs. Illegality. etc. In the event that Bank shall have
determined in good faith (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):
(i) at the time the Borrower gives a request with respect to the
making or continuance of, or conversion into, any Libor Rate Loan
(in the case of the initial Interest Period applicable thereto) or
on the last Business Day prior to the expiration of an Interest
Period applicable to such Libor Rate Loan (in the case of any
subsequent Interest Period), that, by reason of any changes arising
after the date of this Agreement affecting the London interbank
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition
of Libor Rate; or
(ii) at any time, that Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Libor Rate Loan because of any change since the date
of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request or in the interpretation or
administration thereof and including the introduction of any new law
or governmental rule, regulation, order, guideline or request, such
as, for example, but not limited to: (A) a change in the basis of
taxation of payment to Bank of the principal or interest on such
Libor Rate Loan (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of Bank) or
(B) a change in official reserve requirements; or
(iii) at any time, that the making or continuance of any Libor Rate
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by Bank in good
faith with any governmental request (whether or not having force of
law) or (z) impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely
affects the London interbank market;
then, and in any such event, Bank shall promptly give notice (by telephone
confirmed in writing) to the Borrower. Thereafter (x) in the case of clause (i)
above, Libor Rate Loans shall no longer be available until such time as Bank
notifies the Borrower that the circumstances giving rise to such notice no
longer exist, and any Advance request or request to continue or convert given
by the Borrower with respect to Libor Rate Loans which have not yet been
incurred, continued or converted shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower agrees to pay to Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as agreed
to by Bank and the Borrower) as shall be required to compensate Bank for such
increased costs or reductions in amounts received or receivable hereunder (a
written notice as to the additional amounts owed to Bank, showing the basis for
the calculation thereof, submitted to the Borrower by Bank in good faith shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto) and (z) in the case of clause (iii) above, the Borrower agrees that if
the affected Libor Rate Loan is then being requested initially such Loan will
be made as a Base Rate Loan or if the affected Libor Rate Loan is then
outstanding, such Loan shall be converted into a Base Rate Loan. Bank agrees
that if it gives notice to the Borrower of any of the events described in
clause (i) or (iii) above, it shall promptly notify the Borrower if such event
ceases to exist. If any such event described in clause (iii) above ceases to
exist as to Bank, Bank's obligations to make Libor Rate Loans and to convert
Loans into Libor Rate Loans on the terms and conditions contained herein shall
be reinstated.
2.07. Use of Proceeds. The Borrower shall use the proceeds of the Loans
for general corporate purposes.
Page 7
III. Loan Documents
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3.01 Opinion of Borrower's Counsel. At Closing or at such other time
satisfactory to Bank, Borrower shall have counsel satisfactory to Bank provide
an opinion to Bank in form satisfactory to Bank relating to the Loan Documents.
3.02 Closing Costs. Borrower agrees to pay all reasonable costs and fees
incurred by the Bank and counsel for the Bank in the preparation of or in
connection with the Loan Documents or in connection with the Loans subject to
the limitation contained in the commitment letter dated February 7, 1997
between the Bank and the Borrower.
IV. Warranties, Representations and Covenants of Borrower
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4.01 Representations and Warranties. In order to induce Bank to enter
into this Agreement and make the Loans, Borrower hereby represents, warrants
and covenants to Bank, the following:
(a) Borrower is a validly organized corporation duly existing and in
good standing under the laws of the State of Louisiana and is duly qualified as
a foreign corporation in all jurisdictions wherein the property owned or the
business transacted by it make such qualifications necessary.
(b) The making and performance by Borrower of this Agreement, the
borrowing by Borrower and the execution of the Loan Documents by Borrower, all
as provided herein, has not resulted and will not result in a breach of, or
constitute a default under any agreement, indenture or other instrument to
which Borrower is a party or by which Borrower is bound which could have a
Material Adverse Effect.
(c) No further consent or approval of any governmental agency or
authority required in connection with the execution, delivery and performance
by Borrower of the Loan Documents is required.
(d) All Loan Documents are legal, valid and binding obligations of
Borrower enforceable according to their terms and conditions, and all
statements made in this Agreement are true and correct as of the date hereof.
(e) To the extent applicable, Borrower and each of its Subsidiaries has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code, and has not incurred any liability to the Pension
Benefit Guaranty Corporation or to a Plan under Title IV of ERISA which the
failure to comply with could have a Material Adverse Effect.
(f) Neither Borrower nor any Subsidiary of Borrower is in default in the
performance, observance or fulfillment of (i) any of the obligations, covenants
or conditions contained in any indenture, agreement or other instrument to
which it is a party or (ii) with respect to any judgment, order, writ,
injunction, decree or decision of any government agency or authority, and
which could have a Material Adverse Effect. It shall not be considered that
Borrower is in default under clause (i) of this subsection (f) by virtue of the
provisions of any indenture, agreement or other instrument to which it is a
party solely because the holder of any obligation of Borrower shall have the
right to declare or has declared such obligation due and payable prior to
a stated maturity date by virtue of a right of redemption or has the right to
declare but has not declared such obligation due and payable because of a
material adverse change in the financial condition of Borrower.
(g) Neither Borrower nor any Subsidiary of Borrower has any material
(individually or in the aggregate) liabilities, direct or contingent, except as
disclosed or referred to in the Financial Statements. There is no litigation,
Page 8
legal or administrative proceeding, investigation or other action of any
nature pending or, to the knowledge of Borrower, threatened against or
affecting Borrower or any of its Subsidiaries which involves the possibility of
any judgment, order, ruling, or liability not fully covered by insurance or
fully reserved for by the Borrower or any of its Subsidiaries, and which could
have a Material Adverse Effect.
(h) Borrower and each of its Subsidiaries has filed all tax returns and
reports required to be filed and has paid all taxes, assessments, fees and
other governmental charges levied upon Borrower or any of its Subsidiaries or
upon any property owned by Borrower or any of its Subsidiaries, or upon
Borrower's or its Subsidiary's income, which are due and payable, including
interest and penalties, or has provided adequate reserves for the payment
thereof.
(i) Each of the Borrower and its Subsidiaries has good and marketable
title to all of its property, title to which is material to the Borrower or
such Subsidiary, subject to no Liens, except Permitted Liens.
(j) Each of Borrower and its Subsidiaries has complied in all material
respects with all laws that are applicable to all or any part of the operation
of its business activities, including, without limitation, (i) all laws
regarding the collection, payment, and deposit of employees' income,
unemployment, social security, sales, and excise taxes, all laws with respect
to pension liabilities, and (ii) all laws pertaining to environmental
protection and occupational safety and health which the failure to comply with
could have a Material Adverse Effect.
(i) Borrower has heretofore delivered to Bank copies of its Form 10-K
for the fiscal year ending December 31, 1995, containing the audited
Consolidated Balance Sheets of the Borrower and its Subsidiaries and the
related Consolidated Statements of Operations, Stockholder's Equity and Cash
Flows for the period then ended, and its Form 10-Q for the fiscal quarter ended
September 30, 1996, containing the unaudited Consolidated Balance Sheet of the
Borrower and its Subsidiaries as of the end of such fiscal quarter, together
with the related Consolidated Statements of Operations and Cash Flows through
such fiscal quarter then ended (with the applicable related notes and
schedules, the "Financial Statements"). The Financial Statements submitted by
Borrower to Bank have been prepared in accordance with GAAP and fairly present
the Consolidated financial condition and results of the operations of the
Borrower and its Subsidiaries as of the dates and for the periods indicated
therein and since the date of such statements, the Borrower and each of its
Subsidiaries has conducted its business only in the ordinary course and there
has been no Material Adverse Change.
4.02 Affirmative Covenants. From the date of this Agreement and so long
as any Loan shall be outstanding, unless compliance shall have been waived in
writing by Bank, Borrower shall:
(a) Maintain, as of the last day of each fiscal quarter, Common Equity
equal to at least 30% of Total Capitalization.
(b) Furnish to Bank:
(i) As soon as available, but in any event within 120 days after
the end of each fiscal year, a copy of Borrower's annual report
on Form 10-K in respect of such fiscal year required to be
filed by Borrower with the SEC, together with the financial
statements attached thereto;
(ii) As soon as available, but in any event within 60 days after the
end of each fiscal quarter, a copy of the Borrower's quarterly
report on Form 10-Q in respect of such fiscal quarter required
to be filed by the Borrower with the SEC, together with the
financial statements attached thereto;
Page 9
(iii) Within 60 days after the end of each of the first three fiscal
quarters (120 days after the end of the last fiscal quarter), a
certificate of the chief financial officer of the Borrower (or
such other officer as shall be acceptable to Bank) as to
Borrower's compliance, as of such fiscal quarter ending date,
with Section 4.02(a), and as to the occurrence or continuance of
no Default as of such fiscal quarter ending date and the date of
such certificate; and
(iv) immediately upon becoming aware of the occurrence of any event
which constitutes a Default (as hereinafter defined) or which
could constitute a Default with the passage of time or the
giving of notice, or both, provide written notice of such
occurrence together with a detailed statement by Borrower of the
steps being taken by Borrower to cure the effect of such event.
(c) Comply, and cause each of its Subsidiary's so to do, in all material
respects with all laws that are applicable to all or any part of the operation
of its business activities, including, without limitation, (i) all laws
regarding the collection, payment, and deposit of employees' income,
unemployment, social security, sales, and excise taxes, all laws with respect
to pension liabilities, and (ii) all laws pertaining to environmental
protection and occupational safety and health which the failure to comply with
could have a Material Adverse Effect.
(d) Pay and discharge, and cause each of its Subsidiary's so to do, all
taxes, assessments and governmental charges or levies imposed upon it, or upon
its income and profits prior to the date on which penalties might attach
thereto and all lawful claims which, if unpaid, might become a lien or charge
upon the assets of Borrower or any of its Subsidiaries (other than a Permitted
Lien); provided, however, that Borrower and its Subsidiaries shall not be
required to pay and discharge any such tax, assessment, charge, levy or claim
so long as the legality thereof shall be contested in good faith and by
appropriate proceedings and for which the Borrower and its Subsidiaries have
provided adequate reserves.
(e) Maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability and business interruption coverage)
as are usually insured against in the same general area by companies engaged
in the same or a similar business; and furnish to Bank, upon written request of
Bank, full information as to the insurance carried.
(f) At all times, maintain, protect and keep in good repair, working
order and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all property necessary to the operation of the
Borrower's or such Subsidiary's material businesses.
(g) Obtain or maintain, as applicable, and cause each of its
Subsidiaries to obtain or maintain, as applicable, in full force and effect,
all licenses, franchises, intellectual property, permits, authorizations and
other rights as are necessary for the conduct of its business and the failure
of which to obtain or maintain could, individually or collectively, have a
Material Adverse Effect.
(h) Observe and comply, and cause each of its Subsidiaries to observe
and comply, (to the extent necessary so that any failure will not have a
Material Adverse Effect) with all valid laws, statutes, codes, acts,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
certificates, franchises, permits, licenses, authorizations, directions and
requirements of all federal, state, county, municipal and other governments,
agencies, departments, divisions, commissions, boards, courts, authorities,
officials and officers, domestic or foreign.
Page 10
(i) Promptly notify Bank of (i) the arising of any litigation or
dispute, threatened against or affecting assets of Borrower or any Subsidiary
of Borrower, which, if adversely determined, could have a Material Adverse
Effect; or (ii) any act of Default under this Agreement, or any material
default under any other contract to which Borrower or any of its Subsidiaries
is a party which could have a Material Adverse Effect.
(g) Provide Bank with information that the Bank deems reasonably
necessary to monitor the Loans.
(h) Cure, within a reasonable period of time, any defects in the
creation, execution and delivery of the Loan Documents. Borrower at its
expense will promptly execute and deliver to Bank upon request all such other
and further documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements of Borrower in the Loan
Documents.
4.03 Negative Covenants. From the date of this Agreement and so long as
any Loan shall be outstanding, Borrower shall not without the prior written
consent of Bank:
(a) sell or lease all, or substantially all, of its assets or permit any
of its Subsidiaries so to do;
(b) at any time, make any loan or advance to, or enter into any
arrangement for the purpose of providing funds or credit to, any Person other
than a Subsidiary, or permit any of its Subsidiaries so to do, other than
loans, advances or arrangements the total amount of which, when added to
the total consideration paid by the Borrower and its Subsidiaries in connection
with all mergers, consolidations and acquisitions of or by the Borrower and its
Subsidiaries during the Line of Credit Period, shall not exceed the greater of
(i) $110,000,000 or (ii) 10% of total assets as of the most recently completed
fiscal quarter;
(c) mortgage or encumber any of its assets or suffer any Liens to exist
on any of its assets other than Permitted Liens or permit any of its
Subsidiaries so to do;
(d) assign this Agreement or any interest herein; or
(e) merge or consolidate with any other Person, or permit any of its
Subsidiaries so to do, except that the Borrower or any of its Subsidiaries may
merge or consolidate with another corporation, if (i) permitted under the terms
and conditions of that certain Revolving Credit Agreement by and among
Borrower, the Lenders Party thereby and The Bank of New York, as Agent dated as
of June 15, 1995, (ii) the merger or consolidation would not have a Material
Adverse Effect and (iii) in the case of a merger or consolidation involving
Borrower, the "surviving corporation" expressly assumes the Loan Documents.
V. Each Extension of Credit
------------------------
The Bank will not be obligated to make any Loan if:
(a) The representations and warranties of Borrower contained in this
Agreement are not true and correct on and as of the date of the Loan;
(b) Borrower has failed to observe or perform promptly when due any
covenant, agreement, or obligation under this Agreement or under any of the
other Loan Documents;
(c) A material adverse change in the properties, assets, liabilities,
business, operations, prospects, income or condition (financial or otherwise)
of Borrower and its Subsidiaries taken as a whole shall have occured; or
Page 11
(d) A Default shall have occurred and be continuing, or there shall have
occurred any condition, event or act which constitutes, or with notice or lapse
of time (or both) would constitute a Default.
VI. Defaults
--------
6.01 Default. The occurrence of any of the following events shall be
considered a "Default" as that term is used herein:
(a) the failure of Borrower to pay promptly when due any interest or
principal on any of the Loans;
(b) the failure of Borrower to observe or perform promptly when due any
covenant, agreement, or obligation under this Agreement or under any of the
other Loan Documents;
(c) the material inaccuracy at any time of any warranty, representation,
or statement made to Bank by Borrower, whether such warranty, representation,
or statement is made (i) in this Agreement, or (ii) in any other agreement,
document, or writing;
(d) the occurrence of an "Event of Default" under that certain Revolving
Credit Agreement by and among Borrower, the Lenders Party thereby and The Bank
of New York, as Agent dated as of June 15, 1995;
(e) any obligation(s) of the Borrower (other than the Loans) or any of
its Subsidiaries, whether as principal, guarantor, surety or other obligor,
for the payment of any Indebtedness or operating leases in excess of
$10,000,000 in the aggregate (i) shall become or shall be declared to be due
and payable prior to the expressed maturity thereof, (ii) shall not be paid
when due or within any grace period (as such grace period may be extended from
time to time pursuant to and in accordance with the documentation evidencing
such obligation) for the payment thereof, or (iii) any holder of any such
obligation shall have the right to declare such obligation due and payable
prior to the expressed maturity thereof; provided, however, that it shall not
be considered that a Default has occurred by virtue of subsections (d) and (e)
of Section 6.01 solely because the holder of any obligation of Borrower shall
have the right to declare or has declared such obligation due and payable prior
to a stated maturity date by virtue of a right of redemption or has the right
to declare but has not declared such obligation due and payable because of a
material adverse change in the financial condition of Borrower;
(f) The Borrower or any of its Subsidiaries shall (i) suspend or
discontinue its business, (ii) make an assignment for the benefit of creditors,
(iii) generally not pay its debts as such debts become due, (iv) admit in
writing its inability to pay its debts as they become due, (v) file a
voluntary petition in bankruptcy, (vi) become insolvent (however such
insolvency shall be evidenced), (vii) file any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment of debt,
liquidation or dissolution or similar relief under any present or future
statute, law or regulation of any jurisdiction, (viii) petition or apply to any
tribunal for any receiver, custodian or any trustee for any substantial part of
its property, (ix) be the subject of any such proceeding filed against it which
remains undismissed for a period of 45 days, (x) file any answer admitting
or not contesting the material allegations of any such petition filed against
it or admitting or not contesting the material allegations of any such
petition filed against it or any order, judgment or decree approving such
petition in any such proceeding, (xi) seek, approve, consent to, or acquiesce
in any such proceeding, or in the appointment of any trustee, receiver,
sequestrator, custodian, liquidator, or fiscal agent for it, or any substantial
part of its property, or an order is entered appointing any such trustee,
receiver, custodian, liquidator or fiscal agent and such order remains in
effect for 45 days, or (xii) take any formal action for the purpose of
effecting any of the foregoing or looking to the liquidation or dissolution of
the Borrower or such Subsidiary;
Page 12
(g) An order for relief is entered under the United States bankruptcy
laws or any other decree or order is entered by a court having jurisdiction (i)
adjudging the Borrower or any of its Subsidiaries bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization, liquidation,
arrangement, adjustment or composition of or in respect of the Borrower or any
of its Subsidiaries under the United states bankruptcy laws or any other
applicable Federal or state law, (iii) appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of the
Borrower or any of its Subsidiaries or of any substantial part of the property
thereof, or (iv) ordering the winding up or liquidation of the affairs of the
Borrower or any of its Subsidiaries, and any such decree or order continues
unstayed and in effect for a period of 45 days;
(h) Judgments or decrees against the Borrower or any of its Subsidiaries
aggregating in excess of $10,000,000 shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of at least 30 days;
(i) Any Loan Documents shall cease, for any reason, to be in full force
and effect or the Borrower shall so assert in writing or shall disavow any of
its obligations thereunder; or
(j) Any authorization or approval or other action by any governmental
agency or authority required for the execution, delivery or performance of the
Loan Documents shall be terminated, revoked or rescinded or shall otherwise no
longer be in full force and effect.
6.02 Notice of Default and Remedies. In the event of a Default and such
Default continues for a period of thirty (30) days (five (5) days for the
failure to make a payment of principal or interest under the Loans) after Bank
has given written notice of such Default to Borrower or after Borrower shall
have obtained knowledge of such Default, Bank, at its option, shall have the
right to exercise any and all of Bank's rights under the Loan Documents.
6.03 No Obligation to Lend. In the event of a Default, Bank shall have
no obligation to make any Loan.
VII. Miscellaneous
--------------
7.01 Amendments and Waivers. Neither this Agreement, nor any provisions
hereof, may be changed, waived, discharged or terminated orally, or in any
manner other than by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
7.02 No Third Party Beneficiary. This Agreement is solely for the
benefit of the parties and is not a stipulation for the benefit of any other
person or entity except for any approved assignee of Borrower and any assignee
of Bank.
7.03 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Louisiana.
7.04 No Effect on Other Obligations. Nothing in this Agreement shall
affect, modify or release any other obligations of Borrower to Bank; provided
that this Agreement will supersede and replace the commitment letter dated
February 7, 1997 between the Bank and the Borrower.
7.05 Conflict. In the event any of the provisions of this Agreement
conflict with any provisions contained in any other Loan Documents, the
provisions of this Agreement shall govern.
Page 13
7.06 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation hereof in any respect.
7.07 Notices. Except as provided for in Sections 2.02(a), 2.03(b) and
2.06, all communications under or in connection with this Agreement shall be in
writing and shall be mailed by first class mail or express delivery, postage
prepaid, or otherwise sent by telex, telegram, telecopy or other similar form
of rapid transmission, or personally delivered to an officer of the receiving
party. All such communications shall be mailed, sent or delivered:
To Bank: Whitney National Bank
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇
Assistant Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Carver, Darden, Koretzky, Tessier,
Finn, Blossman & Areaux, L.L.C.
Energy Centre
Suite 2700, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To Borrower: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Director, Financing and Cash Management
Central Louisiana Electric Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
7.08 Counterparts. This Agreement may be executed in several
counterparts and if executed shall constitute the agreement, binding upon all
the parties hereto, notwithstanding all the parties are not signatories to the
original and same counterparts.
Page 14
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day, month and year hereinabove first written.
BANK:
WHITNEY NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇
------------------------
Its: Assistant Vice-President
------------------------
BORROWER:
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Its: Secretary-Treasurer
-------------------
Page 15
SCHEDULE I
The individuals whose names, positions, and signatures appear below are
hereby designated as Borrower's Agent(s):
NAME TITLE SIGNATURE
K. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Administrator, Cash /s/ K. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Management Services ------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Cash Management /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Specailist ------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ Director, Financing and /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ Management ------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Secretary - Treasurer /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Any replacement of or modification to this Schedule I shall not be valid
unless signed by the President or a Vice President or Secretary - Treasurer
of the Borrower.
SCHEDULE II
If specified by a Borrower's Agent at the time of an Advance request,
proceeds from an Advance shall be transferred by the Bank in immediately
available funds for credit to the Borrower in accordance with the following
instructions:
Name of Financial Institution: The First National Bank of Chicago
ABA # of Financial Institution: ▇▇▇▇▇▇▇▇▇
Beneficiary: Central Louisiana Electric Company,Inc.
Beneficiary's Account Number: ▇▇▇▇▇▇▇
The above wire transfer instructions shall remain in full force and effect
unless revised in writing by a notice to the Bank signed by the President and a
Vice President or the Secretary - Treasurer of the Borrower.