Exhibit 4
CREDIT AGREEMENT
Arranged by
FIRST CHICAGO CAPITAL MARKETS, INC.
Dated as of December 4, 1998
among
CH ENERGY GROUP, INC.
as the Borrower,
CERTAIN LENDERS,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
TABLE OF CONTENTS
Page
SECTION 1 - DEFINITIONS......................................................1
1.1 Defined Terms.....................................................1
1.2 Terms Generally..................................................12
1.3 Accounting Terms; GAAP...........................................12
SECTION 2 - THE COMMITMENTS.................................................12
2.1 Commitment.......................................................12
2.2 Required Payments; Termination...................................13
2.3 Ratable Loans....................................................13
2.4 Types of Advances................................................13
2.5 Commitment Fee; Reductions in Aggregate Commitment...............13
2.6 Minimum Amount of Each Advance...................................13
2.7 Optional Principal Payments......................................13
2.8 Method of Selecting Types and Interest Periods for New Advances..14
2.9 Conversion and Continuation of Outstanding Advances..............14
2.10 Changes in Interest Rate, etc...................................15
2.11 Rates Applicable After Default..................................15
2.12 Method of Payment...............................................15
2.13 Noteless Agreement; Evidence of Indebtedness....................16
2.14 Telephonic Notices..............................................16
2.15 Interest Payment Dates; Interest and Fee Basis..................17
2.16 Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions........................17
2.17 Lending Installations...........................................17
2.18 Non-Receipt of Funds by the Administrative Agent................17
SECTION 3 - YIELD PROTECTION; TAXES.........................................18
3.1 Yield Protection.................................................18
3.2 Changes in Capital Adequacy Regulations..........................19
3.3 Availability of Types of Advances................................19
3.4 Funding Indemnification..........................................19
3.5 Taxes............................................................20
3.6 Lender Statements; Survival of Indemnity.........................21
SECTION 4 - CONDITIONS PRECEDENT............................................22
4.1 Initial Advance..................................................22
4.2 Each Advance.....................................................23
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SECTION 5 - REPRESENTATIONS AND WARRANTIES..................................24
5.1 Existence and Standing...........................................24
5.2 Authorization and Validity.......................................24
5.3 No Conflict; Government Consent..................................24
5.4 Financial Statements.............................................25
5.5 No Material Adverse Change.......................................25
5.6 Taxes............................................................25
5.7 Litigation and Contingent Obligations............................25
5.8 ERISA............................................................25
5.9 Accuracy of Information..........................................26
5.10 Regulation U....................................................26
5.11 Material Agreements.............................................26
5.12 Compliance With Laws............................................26
5.13 Ownership of Properties.........................................26
5.14 Plan Assets; Prohibited Transactions............................26
5.15 Environmental Matters...........................................27
5.16 Investment Company Act..........................................27
5.17 Public Utility Holding Company Act..............................27
5.18 Pari Passu Indebtedness.........................................27
5.19 Year 2000 Problem...............................................27
SECTION 6 - COVENANTS.......................................................27
6.1 Financial Reporting..............................................28
6.2 Use of Proceeds..................................................29
6.3 Notice of Default or Material Adverse Effect.....................29
6.4 Conduct of Business..............................................29
6.5 Taxes............................................................30
6.6 Insurance........................................................30
6.7 Compliance with Laws.............................................30
6.8 Maintenance of Properties........................................30
6.9 Inspection.......................................................30
6.10 Consolidations, Mergers and Sales of Assets.....................30
6.11 Liens...........................................................31
6.12 Affiliates......................................................33
6.13 Investments.....................................................34
6.14 Utility Dividends...............................................34
6.15 Financial Condition.............................................34
6.16 Year 2000.......................................................34
SECTION 7 - DEFAULTS........................................................34
7.1 Breach of Warranty...............................................34
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7.2 Nonpayment Obligations...........................................35
7.3 Nonperformance of Certain Covenants..............................35
7.4 Nonperformance of Agreement......................................35
7.5 Default on Other Material Financial Obligations..................35
7.6 Voluntary Bankruptcy Proceeding, etc.............................35
7.7 Involuntary Bankruptcy Proceeding, etc...........................36
7.8 Government Seizure of Property...................................36
7.9 Judgments........................................................36
7.10 ERISA...........................................................36
7.11 Change in Control...............................................36
7.12 Ownership of the Utility........................................36
SECTION 8 - ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES..................37
8.1 Acceleration.....................................................37
8.2 Amendments.......................................................37
8.3 Preservation of Rights...........................................38
SECTION 9 - GENERAL PROVISIONS..............................................38
9.1 Survival of Representations......................................38
9.2 Governmental Regulation..........................................38
9.3 Headings.........................................................38
9.4 Entire Agreement.................................................38
9.5 Several Obligations; Benefits of this Agreement..................38
9.6 Expenses; Indemnification........................................39
9.7 Numbers of Documents.............................................39
9.8 Accounting.......................................................39
9.9 Severability of Provisions.......................................39
9.10 Nonliability of Lenders.........................................40
9.11 Confidentiality.................................................40
9.12 Nonreliance.....................................................40
SECTION 10 - THE AGENT......................................................40
10.1 Appointment; Nature of Relationship.............................40
10.2 Powers..........................................................41
10.3 General Immunity................................................41
10.4. No Responsibility for Loans, Recitals, etc.....................41
10.5 Action on Instructions of Lenders...............................42
10.6 Employment of Administrative Agents and Counsel.................42
10.7 Reliance on Documents; Counsel..................................42
10.8 Administrative Agent's Reimbursement and Indemnification........42
10.9 Notice of Default...............................................43
10.10 Rights as a Lender.............................................43
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10.11 Lender Credit Decision.........................................43
10.12 Successor Administrative Agent.................................43
10.13 Administrative Agent and Arranger Fees.........................44
10.14 Delegation to Affiliates.......................................44
SECTION 11 - SETOFF; RATABLE PAYMENTS.......................................45
11.1 Setoff..........................................................45
11.2 Ratable Payments................................................45
SECTION 12 - BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..............45
12.1 Successors and Assigns..........................................45
12.2 Participations..................................................46
12.2.1 Permitted Participants; Effect..........................46
12.2.2 Voting Rights...........................................46
12.2.3 Benefit of Setoff.......................................46
12.3 Assignments.....................................................46
12.3.1 Permitted Assignments...................................47
12.3.2 Effect; Effective Date..................................47
12.4 Dissemination of Information....................................47
12.5 Tax Treatment...................................................48
SECTION 13 - NOTICES........................................................48
13.1 Notices.........................................................48
13.2 Change of Address...............................................48
SECTION 14 - COUNTERPARTS...................................................48
SECTION 15 - CHOICE OF LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL..................................................49
15.1 CHOICE OF LAW...................................................49
15.2 CONSENT TO JURISDICTION.........................................49
15.3 WAIVER OF JURY TRIAL............................................49
EXHIBIT A FORM OF OPINION
EXHIBIT B COMPLIANCE CERTIFICATE
EXHIBIT C ASSIGNMENT AGREEMENT
EXHIBIT D LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
EXHIBIT E NOTE
SCHEDULE 1 LIENS
Page iv
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of December 4, 1998 (as amended, supplemented
or otherwise modified from time to time, this "Agreement"), among CH ENERGY
GROUP, INC., a corporation organized and existing under the laws of New York
(the "Borrower"), the financial institutions, including THE FIRST NATIONAL BANK
OF CHICAGO, from time to time parties hereto as lenders (collectively, the
"Lenders") and THE FIRST NATIONAL BANK OF CHICAGO, as administrative agent for
the Lenders (in such capacity, the "Administrative Agent").
The parties hereto agree as follows:
SECTION 1 - DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the meanings specified below:
"Administrative Agent" means The First National Bank of Chicago in its
capacity as contractual representative of the Lenders pursuant to Section 10,
and not in its individual capacity as a Lender, and any successor Administrative
Agent appointed pursuant to Section 10.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Loans made on the
same Borrowing Date (or date of conversion or continuation) by the Lenders to
the Borrower of the same Type and, in the case of Eurodollar Advances, for the
same Interest Period.
"Affiliate" means, with respect to a specified Person, another Person
(other than a subsidiary of the Person specified) that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof. The initial
amount of the Aggregate Commitment is $50,000,000.
"Agreement" is defined in the preamble.
"Alternate Base Rate" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of the Federal Funds Effective Rate as determined by the
Administrative Agent for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum at
which commitment fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors.
"Authorized Officer" means any of the President, the Treasurer or the
Chief Financial Officer of the Borrower, acting singly.
"Borrower" is defined in the preamble.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
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"Closing Date" means the date on which this Agreement shall have been
executed and delivered by the parties hereto.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Control" means the possession, directly or indirectly, of (a) the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise
and/or (b) the ownership or beneficial ownership of 10% or more of the
securities having ordinary voting power for the election of directors of a
Person. "Controlling" and "Controlled" have meanings correlative thereto.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the Code
or Section 4001 of ERISA.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes.
"Default" means an event described in Section 7.
"Dollars" or "$" refers to lawful money of the United States of America.
"Environmental Laws" means any and all applicable federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees,
3
plans, injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i) the protection of
the environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law
or (b) the release or threatened release of any Hazardous Materials into the
environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA Affiliate" means any entity (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b)
or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, is treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043(c) of ERISA or the regulations issued thereunder with respect to a Plan
(other than an event for which the 30-day notice period is waived under
applicable PBGC regulations); (b) the failure to make a required contribution to
any Plan sufficient to give rise to a lien under Section 302(f) of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any plan; (e) the taking of any steps by the Borrower or any of its
ERISA Affiliates to terminate any Plan, if such termination could result in any
liability under Title IV of ERISA with respect to such Plan; (f) the receipt by
the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (g) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal, within the meaning of Section 4063 of ERISA, from any
multiple-employer Plan; or (h) the receipt concerning the imposition of
withdrawal liability or a determination that a multiemployer plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
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"Eurodollar Advance" means an Advance which bears interest at the
applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the rate determined by the Administrative Agent to be
the rate at which First Chicago offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
in the approximate amount of First Chicago's relevant Eurodollar Loan and having
a maturity approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at the applicable
Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
the Applicable Margin. The Eurodollar Rate shall be rounded to the next higher
multiple of 1/16 of 1% if the rate is not such a multiple.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or (ii) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FERC" means the Federal Energy Regulatory Commission and any successor
agency thereto.
5
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Floating Rate" means, for any day, a rate per annum equal to the
Alternate Base Rate for such day, in each case changing when and as the
Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"FPA" means the Federal Power Act, as amended, and all rules and
regulations promulgated thereunder.
"Funding Date" means the date the conditions specified in Section 4.1 are
satisfied or waived as evidenced by the making of the initial Loans.
"GAAP" is defined in Section 1.3.
"Hazardous Materials" means all materials defined as hazardous substances
under the Federal Comprehensive Environmental Response, Compensation and
Liability Act, as amended, petroleum or petroleum distillates, or friable
asbestos or friable asbestos containing materials, and all similar items under
the laws of each jurisdiction where the Borrower and
its Subsidiaries operate.
"Hedging Agreement" means, with respect to any Person, any interest rate
swap, cap or collar agreement, any commodity or currency swap agreement, or any
similar agreement designed to protect such Person against fluctuations in
interest rates, commodity prices or currency exchange rates.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
property arising out of or in connection with the sale of the same or
substantially similar securities or property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations, (viii) all obligations, contingent or
otherwise, with respect to the face amount of letters of credit (whether or not
drawn) and bankers' acceptances issued for the account of such Person, (ix) all
obligations under Hedging Agreements and (x) any other obligation for borrowed
money or other financial
6
accommodation which in accordance with GAAP would be shown as a liability
on the consolidated balance sheet of such Person.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" means, relative to any Person, (a) any loan or advance made
by such Person to any other Person, (b) any Contingent Obligation of such Person
with respect to another Person and (c) any investment made by such Person in any
other Person. The amount of any Investment shall be the original principal or
capital amount thereof less all returns of principal or equity thereon and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to the
fair market value of such property at the time of such Investment.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on a
Schedule or otherwise selected by such Lender or the Administrative Agent
pursuant to Section 2.17.
"Lien" means, with respect to any asset, any lien (statutory or other),
mortgage, pledge, charge, security interest or other encumbrance of any kind in
respect of such asset (including the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant
to Section 2 (or any conversion or continuation thereof).
"Loan Documents" means this Agreement and any Notes issued pursuant to
Section 2.13.
7
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Administrative Agent or the Lenders thereunder.
"Material Financial Obligation" means Indebtedness of the Borrower or any
Subsidiary, or obligations of the Borrower or any Subsidiary in respect of any
Securitization Transaction, in an aggregate amount (for all applicable
Indebtedness and obligations in respect of Securitization Transactions, but
without duplication) equal to $10,000,000 or more.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Non-Energy Related Business" means any business other than businesses
engaged in or directly related to: (i) the production, sale, brokerage,
management, transportation, delivery or other provision of energy products,
including but not limited to, electricity, natural gas, oil, coal, propane and
renewable energy producing materials, (ii) the provision of energy conservation
services, including, but not limited to, energy audits, installation of energy
conservation devices, energy efficient equipment and related systems, (iii) the
provision of services and equipment in connection with the procurement of such
energy products or conservation of energy, (iv) engineering, consulting,
construction, operational or maintenance services in connection with such energy
products, the conservation of energy or with equipment utilizing such energy
products or (v) the manufacturing of equipment used in connection with energy
production or conservation.
"Non-Regulated Subsidiary" means a Subsidiary of the Borrower other than a
Regulated Subsidiary.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit E.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other
8
obligations of the Borrower to the Lenders or to any Lender, the
Administrative Agent or any indemnified party arising under the Loan Documents.
"Other Taxes" is defined in Section 3.5(ii).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last Business Day of each March, June, September
and December.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or Section 302 of ERISA or subject to the minimum funding standards
under Section 412 of the Code as to which the Borrower or any member of the
Controlled Group may have any liability.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Public Reports" means the Utility's (i) annual report on Form 10-K for
the year ended December 31, 1997 and (ii) quarterly reports on Form 10-Q for the
quarterly periods ending March 31, 1998, June 30, 1998 and September 30, 1998,
each filed with the SEC under the Exchange Act.
"PUHCA" means the Public Utility Holding Company Act of 1935, as amended.
"Purchasers" is defined in Section 12.3.1.
"Regulated Subsidiary" means a Subsidiary of the Borrower subject to
regulation under the FERC, the FPA, the PUHCA and/or any state utilities code.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official
9
interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 66-2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66-2/3% of the aggregate unpaid
principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Securitization Transaction" means any sale, assignment or other transfer
by the Borrower or any Subsidiary of accounts receivable or other payment
obligations owing to the Borrower or any Subsidiary or any interest in any of
the foregoing, together in each case with any collections and other proceeds
thereof, any collection or deposit accounts related thereto,
10
and any collateral,guaranties or other property or claims in favor of the
Borrower or such Subsidiary supporting or securing payment by the obligor
thereon of, or otherwise related to, any such receivables.
"Settlement Agreement" means the amended and restated settlement agreement
dated January 2, 1998 among the Staff of the New York Public Service Commission,
the Utility and others, as adopted by the New York Public Service Commission in
Opinion No. 98-14, issued and effective June 30, 1998.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means at any date, any corporation, limited
liability company, partnership, association or other entity the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity that is, as of such
date, otherwise Controlled, by such Person or one or more subsidiaries of such
Person or by such Person and one or more subsidiaries of such Person.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Termination Date" means December 4, 2001 or any earlier date on which the
Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the
terms hereof.
"Total Capitalization" means (a) with respect to the Borrower and its
Subsidiaries, the sum of Total Debt of the Borrower and its subsidiaries
determined on a consolidated basis plus the Borrower's consolidated
shareholders' equity and (b) with respect to the Borrower and its Non-Regulated
Subsidiaries, the Total Debt of the Borrower and its Non-Regulated Subsidiaries
determined on a consolidated basis plus the Borrower's consolidated
shareholders' equity excluding any portion thereof attributable to the
Borrower's Regulated Subsidiaries.
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"Total Debt" means, with respect to any Person, all Indebtedness of such
Person referred to in clauses (i), (ii), (iii), (iv), (v), (vi), and (viii) of
the definition of "Indebtedness" and (without duplication) all Contingent
Obligations in respect of any of the foregoing.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Utility" means Central ▇▇▇▇▇▇ Gas & Electric Corporation, the Borrower's
parent prior to the Funding Date and a Wholly-Owned Subsidiary of the Borrower
on and subsequent to the Funding Date.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or Controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
Controlled.
"Year 2000 Problem" means the risk that computer applications and embedded
microchips in non-computing devices may be unable to recognize and perform
properly date- sensitive functions involving certain dates prior to and any date
after December 31, 1999.
1.2 Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented, amended and restated or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof and (d) all
references herein to Sections,
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Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits
and Schedules to, this Agreement.
1.3 Accounting Terms; GAAP. Unless otherwise specified, all accounting
terms used herein or in any other Loan Document shall be interpreted, all
accounting determinations and computations hereunder or thereunder (including
under Section 6.15) shall be made, and all financial statements required to be
delivered hereunder or thereunder shall be prepared in accordance with, those
generally accepted accounting principles ("GAAP") applied in the preparation of
the financial statements referred to in Section 5.4. For purposes of clause (b)
of Section 6.15 (and any related definitions), Regulated Subsidiaries shall not
be consolidated with the Borrower and its Non-Regulated Subsidiaries.
SECTION 2 - THE COMMITMENTS
2.1 Commitment. From and including the date of this Agreement and prior to
the Termination Date, each Lender severally agrees, on the terms and conditions
set forth in this Agreement, to make Loans to the Borrower from time to time in
amounts not to exceed in the aggregate at any one time outstanding the amount of
its Commitment. Subject to the terms of this Agreement, the Borrower may borrow,
repay and reborrow at any time prior to the Termination Date. The Commitments to
lend hereunder shall expire on the Termination Date.
2.2 Required Payments; Termination. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by the Borrower on the Termination
Date.
2.3 Ratable Loans. Each Advance hereunder shall consist of Loans made from
the several Lenders ratably in proportion to the ratio that their respective
Commitments bear to the Aggregate Commitment.
2.4 Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5 Commitment Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee at a per annum rate equal to the Applicable Fee Rate on the daily
unused portion of such Lender's Commitment from the date hereof to and including
the Termination Date, payable on each Payment Date hereafter and on the
Termination Date. The Borrower may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in integral multiples of
$10,000,000, upon at least three Business Days' prior written notice to the
Administrative Agent, which notice shall specify the amount of any such
reduction, provided,
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however, that the amount of the Aggregate Commitment may not be reduced
below the aggregate principal amount of the outstanding Advances. All accrued
and unpaid commitment fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans hereunder.
2.6 Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$5,000,000 (and in multiples of $1,000,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.7 Optional Principal Payments. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances, or, in a
minimum aggregate amount of $5,000,000 or any integral multiple of $100,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon one
Business Day's prior notice to the Administrative Agent. The Borrower may from
time to time pay, subject to the payment of any funding indemnification amounts
required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $5,000,000 or any
integral multiple of $100,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior notice to the Administrative
Agent.
2.8 Method of Selecting Types and Interest Periods for New Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time. The Borrower
shall give the Administrative Agent irrevocable notice (a "Borrowing Notice")
not later than 11:00 a.m. (Chicago time) on the Borrowing Date of each Floating
Rate Advance and not later than 11:00 a.m. (Chicago time) three Business Days
before the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected and
(iv) in the case of each Eurodollar Advance, the Interest Period applicable
thereto.
Not later than 1:00 p.m. (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans in funds immediately available in Chicago
to the Administrative Agent at its address specified pursuant to Section 13. To
the extent funds are received from the Lenders, the Administrative Agent will
make such funds available to the Borrower at the
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Administrative Agent's aforesaid address. No Lender's obligation to make any
Loan shall be affected by any other Lender's failure to make any Loan.
2.9 Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.9 or are repaid in accordance with Section 2.7. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with Section 2.7 or (y) the Borrower shall have given
the Administrative Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such Eurodollar Advance
continue as a Eurodollar Advance for the same or another Interest Period.
Subject to the terms of Section 2.6, the Borrower may elect from time to time to
convert all or any part of a Floating Rate Advance into a Eurodollar Advance.
The Borrower shall give the Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.10 Changes in Interest Rate, etc. Each Floating Rate Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the Eurodollar Rate determined by the Administrative Agent as
applicable to such Eurodollar Advance based upon the Borrower's selections under
Sections 2.8 and 2.9 and otherwise in accordance with the terms hereof. No
Interest Period may end after the Termination Date.
15
2.11 Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum and (ii)
each Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum, provided that,
during the continuance of a Default under Section 7.6 or 7.7, the interest rates
set forth in clauses (i) and (ii) above shall be applicable to all Advances
without any election or action on the part of the Administrative Agent or any
Lender.
2.12 Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent's address specified
pursuant to Section 13, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by noon (Chicago time) on the date when due and shall be applied
ratably by the Administrative Agent among the Lenders. Each payment delivered to
the Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds
that the Administrative Agent received at its address specified pursuant to
Section 13 or at any Lending Installation specified in a notice received by the
Administrative Agent from such Lender.
2.13 Noteless Agreement; Evidence of Indebtedness. (i) Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in which it
will record (a) the amount of each Loan made hereunder, the Type thereof and the
Interest Period with respect thereto, (b) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (c) the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
16
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note (a "Note"). In such event, the Borrower shall prepare, execute and deliver
to such Lender a Note payable to the order of such Lender in substantially the
form of Exhibit E hereto. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (including after any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 12.3, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described
in paragraphs (i) and (ii) above.
2.14 Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be acting on behalf of the Borrower. The Borrower agrees
to deliver promptly to the Administrative Agent a written confirmation, if such
confirmation is requested by the Administrative Agent or any Lender, of each
telephonic notice signed by an Authorized Officer. If the written confirmation
differs in any material respect from the action taken by the Administrative
Agent and the Lenders, the records of the Administrative Agent and the Lenders
shall govern absent manifest error.
2.15 Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Floating Rate Advances which
are bearing interest at the Corporate Base Rate shall be calculated for actual
days elapsed on the basis of a 365-day year or, when appropriate, 366-day year.
All other interest and commitment fees shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (Chicago time) at the place of payment (it being
understood that the Administrative Agent shall be deemed to have received a
payment prior to noon (Chicago time) if (x) the Borrower has provided the
Administrative Agent with evidence satisfactory to the Administrative Agent that
the Borrower has initiated a wire transfer of such payment prior to such time
and (y) the Administrative Agent actually receives such payment on the same
17
Business Day on which such wire transfer was initiated). If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.16 Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Administrative Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Administrative Agent will notify each Lender of the
interest rate applicable to each Eurodollar Advance promptly upon determination
of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.
2.17 Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans and any Notes issued hereunder shall be deemed held
by each Lender for the benefit of such Lending Installation. Each Lender may, by
written notice to the Administrative Agent and the Borrower in accordance with
Section 13, designate replacement or additional Lending Installations through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.18 Non-Receipt of Funds by the Administrative Agent. Unless the Borrower
or a Lender, as the case may be, notifies the Administrative Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (i)
in the case of a Lender, the proceeds of a Loan or (ii) in the case of the
Borrower, a payment of principal, interest or fees to the Administrative Agent
for the account of the Lenders, that it does not intend to make such payment,
the Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
the Administrative Agent makes the amount of any such payment available to the
intended recipient and a Lender or the Borrower, as the case may be, has not in
fact made such payment to the Administrative Agent, such recipient shall, on
demand by the Administrative Agent, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (y) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
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SECTION 3 - YIELD PROTECTION; TAXES
3.1 Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender in respect of its
Eurodollar Loans, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining its Eurodollar Loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with its Eurodollar Loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of Eurodollar Loans held or interest
received by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received.
3.2 Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased
19
capital which such Lender determines is attributable to this Agreement, its
Loans or its Commitment to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "Change" means (i) any change after
the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "Risk-Based
Capital Guidelines" means (i) the risk-based capital guidelines in effect in the
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3 Availability of Types of Advances. If (i) any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (a)
deposits of a type and maturity appropriate to match fund Eurodollar Advances
are not available or (b) the interest rate applicable to a Type of Advance does
not accurately reflect the cost of making or maintaining such Advance, then the
Administrative Agent shall suspend the availability of the affected Type of
Advance and, in the case of clause (i), require any affected Eurodollar Advances
to be repaid or converted to Floating Rate Advances, subject to the payment of
any funding indemnification amounts required by Section 3.4.
3.4 Funding Indemnification. If any payment of a Eurodollar Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not
made on the date specified by the Borrower for any reason other than default by
the Lenders, the Borrower will indemnify each Lender for any loss or cost
incurred by it resulting therefrom, including any loss or cost in liquidating or
employing deposits acquired to fund or maintain such Eurodollar Advance.
3.5 Taxes. (i) All payments by the Borrower to or for the account of any
Lender or the Administrative Agent hereunder or under any Note shall be made
free and clear of and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Administrative Agent, (a) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.5) such Lender or the Administrative Agent (as the case may be) receives an
amount
20
equal to the sum it would have received had no such deductions been made,
(b) the Borrower shall make such deductions, (c) the Borrower shall pay the full
amount deducted to the relevant authority in accordance with applicable law and
(d) the Borrower shall furnish to the Administrative Agent the original copy of
a receipt evidencing payment thereof within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Administrative Agent and
each Lender for the full amount of Taxes or Other Taxes (including any Taxes or
Other Taxes imposed on amounts payable under this Section 3.5) paid by the
Administrative Agent or such Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto. Payments due
under this indemnification shall be made within 30 days of the date the
Administrative Agent or such Lender makes demand therefor pursuant to Section
3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of the Borrower and the Administrative Agent a
United States Internal Revenue Form W-8 or W-9, as the case may be, and certify
that it is entitled to an exemption from United States backup withholding tax.
Each Non-U.S. Lender further undertakes to deliver to each of the Borrower and
the Administrative Agent (x) renewals or additional copies of such form (or any
successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the Administrative
Agent. All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
21
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
3.6 Lender Statements; Survival of Indemnity. To the extent reasonably
possible and upon the request of the Borrower, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar Loans to reduce
any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or
to avoid the unavailability of Eurodollar Advances under Section 3.3, so long as
such designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Administrative Agent) as to the amount due, if any,
under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Eurodollar Loan shall be calculated as though each Lender
funded its Eurodollar Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable within 10 days after receipt by the
Borrower of such written statement. The obligations of the Borrower under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and
termination of this Agreement.
22
SECTION 4 - CONDITIONS PRECEDENT
4.1 Initial Advance. The Lenders shall not be required to make the initial
Advance hereunder unless (a) the Borrower has paid for its own account all fees
costs and expenses due and payable pursuant to Section 9.6 and (b) the Borrower
has furnished to the Administrative Agent with sufficient copies for the
Lenders:
(i) Copies of the articles or certificate of incorporation of the
Borrower, together with all amendments, and a certificate of good
standing, each certified by the appropriate governmental officer in
its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower, of its by-laws and of its Board of Directors' resolutions
and of resolutions or actions of any other body authorizing the
execution of the Loan Documents to which the Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and title
and bear the signatures of the Authorized Officers and any other
officers of the Borrower authorized to sign the Loan Documents to
which the Borrower is a party, upon which certificate the
Administrative Agent and the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the Funding Date no Default or Unmatured
Default has occurred and is continuing and during the period from
the Closing Date to the Funding Date no event has occurred which has
had, or is reasonably likely to have, a Material Adverse Effect.
(v) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit A.
(vi) Any Notes requested by a Lender pursuant to Section 2.15 payable to
the order of each such requesting Lender.
(vii) Written money transfer instructions, in substantially the form of
Exhibit D, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Administrative Agent may have reasonably
requested.
23
(viii) Copies of written information evidencing, as of the Funding Date,
the restructuring of the Borrower as a holding company for the
Utility capitalized with contributions of cash equity by the Utility
to the Borrower of not less than the amount required for the
Borrower to be in compliance with Section 6.15(b), on terms and
conditions satisfactory to the Agent and the Lenders.
(ix) Copies of written information, reasonable satisfactory to the
Lenders and Administrative Agent, regarding the Borrower's and its
Subsidiaries' plans for addressing the Year 2000 Problem.
(x) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2 Each Advance. The Lenders shall not be required to make any Advance
(other than an Advance that, after giving effect thereto and to the application
of the proceeds thereof, does not increase the aggregate amount of outstanding
Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) There exists no litigation, arbitration, governmental investigation,
proceeding or inquiry pending against or, to the knowledge of any of
their officers, affecting the Borrower or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse
Effect, which seeks to prevent, enjoin or delay the making of any
Loan or to revoke or modify the exemption of the Borrower and its
Subsidiaries from the provisions (other than Section 9(a)(2)) of the
PUHCA.
(iii) The representations and warranties contained in Section 5 are true
and correct in all material respects as of such Borrowing Date
except to the extent any such representation or warranty is stated
to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct in all
material respects on and as of such earlier date.
Each Borrowing Notice shall constitute a representation and warranty by
the Borrower that the conditions set forth above have been satisfied. Any Lender
may require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making an Advance.
24
SECTION 5 - REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1 Existence and Standing. The Borrower is a corporation, and each of its
Subsidiaries is a corporation, partnership or limited liability company, in each
case duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization.
Each of the Borrower and each of its Subsidiaries has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
5.2 Authorization and Validity. The Borrower has the power and authority
and legal right to execute and deliver the Loan Documents and to perform its
obligations thereunder. The execution and delivery by the Borrower of the Loan
Documents and the performance by the Borrower of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium, reorganization or other
laws, judicial decisions or principles of equity relating to or affecting the
enforcement of creditors' rights generally (regardless of whether enforceability
is considered in a proceeding in equity or at law).
5.3 No Conflict; Government Consent. Neither the execution and delivery by
the Borrower of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
(i) any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Borrower or any of its Subsidiaries or (ii) the Borrower's
articles or certificate of incorporation or by-laws or (iii) the provisions of
any indenture, instrument or agreement to which the Borrower or any Subsidiary
is a party or is subject, or by which any such entity or its Property, is bound,
or conflict with or constitute a default thereunder, or result in, or require,
the creation or imposition of any Lien in, of or on the Property of the Borrower
or any Subsidiary pursuant to the terms of any such indenture, instrument or
agreement (it being understood that prior to the Funding Date, the Utility shall
obtain an amendment to or waiver of the change of control provision set forth in
Section 6.01(l) of its Credit Agreement dated as of October 23, 1996 with
various financial institutions and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
agent, which amendment or waiver shall permit the Utility to become a Subsidiary
of the Borrower). No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority (including the FERC), or any subdivision thereof,
25
which has not been obtained by the Borrower or the applicable Subsidiary,
is required to be obtained by the Borrower or any Subsidiary in connection with
the execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Borrower of the Obligations or the
legality, validity, binding effect or enforceability of any of the Loan
Documents.
5.4 Financial Statements. The September 30, 1998 consolidated financial
statements of the Utility, contained in the Utility's Quarterly Report on Form
10-Q filed with the SEC under the Exchange Act for the quarterly period ended
September 30, 1998 and heretofore delivered to the Lenders, were prepared in
accordance with GAAP and fairly present the consolidated financial position of
the Utility and its Subsidiaries at such date and the consolidated results and
cash flow of their operations for the period then ended.
5.5 No Material Adverse Change. No material adverse change has occurred in
the Borrower's business or financial condition from that reflected in the report
of the Utility referred to in Section 5.4; and (except for matters discussed in
the Public Reports) since the date of such report there has been no development
or event or change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries which
has had or could reasonably be expected to have a Material Adverse Effect.
5.6 Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP and as to which no Lien exists. The United
States income tax returns of the Borrower and its Subsidiaries have been audited
by the Internal Revenue Service through the fiscal year ended December 31, 1991.
No tax liens have been filed and no material claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are adequate.
5.7 Litigation and Contingent Obligations. Other than as discussed in the
Public Reports, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect, or which seeks
to prevent, enjoin or delay the making of any Loans. Other than any liability
incident to any litigation, arbitration or proceeding which could not reasonably
be expected to have a Material Adverse Effect, the Borrower has no material
contingent obligations not provided for or discussed in the report referred to
in Section 5.4.
26
5.8 ERISA. The Borrower and each other member of the Controlled Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Plan. Neither the Borrower nor any other member of the Controlled Group has
(i) sought a waiver of the minimum funding standard under Section 412 of the
Code in respect of any Plan, (ii) failed to make any contribution or payment to
any Plan or Multiemployer Plan, or made any amendment to any Plan which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA.
5.9 Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Administrative Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.10 Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge or other restriction
hereunder.
5.11 Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which is reasonably likely to have a Material Adverse
Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.
5.12 Compliance With Laws. The Borrower and its Subsidiaries have complied
with all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect.
5.13 Ownership of Properties. Except as set forth on Schedule 1, on the
date of this Agreement, the Borrower and its Subsidiaries will own, free of all
Liens other than those permitted by Section 6.11, all of the Property and assets
reflected in the Borrower's most recent consolidated financial statements
provided to the Administrative Agent as owned by the Borrower and its
Subsidiaries.
27
5.14 Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.
5.15 Environmental Matters. In the ordinary course of its business, the
Borrower conducts an ongoing review of the effect of Environmental Laws on the
business, operations and properties of the Borrower and its Subsidiaries, in the
course of which it identifies and evaluates associated liabilities and costs
(including any capital or operating expenditures required for clean-up or
closure of properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license, permit or
contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, any costs or liabilities
in connection with off-site disposal of wastes or Hazardous Materials, and any
actual or potential liabilities to third parties, including employees, and any
related costs and expenses). On the basis of this review, the Borrower has
reasonably concluded that such associated liabilities and costs, including the
costs of compliance with Environmental Laws, are unlikely to have a Material
Adverse Effect.
5.16 Investment Company Act. Neither the Borrower nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.17 Public Utility Holding Company Act. As of the date of this Agreement
and at all times prior to the Funding Date, the Borrower and its Subsidiaries
are and will not be subject to PUHCA. On and after the Funding Date, the
Borrower and its Subsidiaries will be exempt from the provisions of the PUHCA,
except Section 9(a)(2) thereof.
5.18 Pari Passu Indebtedness. The Indebtedness under the Loan Documents
ranks at least pari passu with all other unsecured Indebtedness of the Borrower.
5.19 Year 2000 Problem. The Borrower and its Subsidiaries (a) have
reviewed the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the Year 2000 Problem and (b) have made appropriate inquiries as
to the effect the Year 2000 Problem will have on their material suppliers and
customers. Based on such review, program and inquiries, the Borrower reasonably
believes that the "Year 2000 Problem" will not have a Material Adverse Effect.
28
SECTION 6 - COVENANTS
So long as any Lender has a Commitment hereunder and thereafter until all
Obligations are paid in full, unless the Required Lenders shall otherwise
consent in writing:
6.1 Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by PricewaterhouseCoopers LLP or other
firm of independent certified public accountants which is a member of the
"Big Five," prepared in accordance with GAAP on a consolidated basis for
itself and its Subsidiaries, including balance sheets as of the end of such
period and related statements of income, retained earnings and cash flows,
accompanied by (a) any management letter prepared by said accountants, and
(b) a certificate of said accountants that, in the course of their
examination necessary for their audit report, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof; provided that, if the -------- Borrower is then
a "registrant" within the meaning of Rule 1-01 of Regulation S-X of the SEC
and required to file a report on Form 10-K with the SEC, a copy of the
Borrower's annual report on Form 10-K (excluding the exhibits thereto,
unless such exhibits are requested under clause (ix) of this Section) or
any successor form and a manually executed copy of the accompanying report
of the Borrower's independent public accountant, as filed with the SEC,
shall satisfy the requirements of this clause (i) other than subclause (b);
(ii) Within 45 days after the close of the first three quarterly periods of
each of its fiscal years, for itself and its Subsidiaries, either (i)
consolidated and consolidating unaudited balance sheets as at the close of
each such period and consolidated and consolidating profit and loss and
reconciliation of surplus statements and a statement of cash flows for the
period from the beginning of such fiscal year to the end of such quarter,
all certified by its chief financial officer or (ii) if the Borrower is
then a "registrant" within the meaning of Rule 1-01 of Regulation S-X of
the SEC and required to file a report on Form 10-Q with the SEC, a copy of
the Borrower's report on Form 10-Q for such quarterly period, excluding the
exhibits thereto, unless such exhibits are requested under clause (ix) of
this Section.
29
(iii) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the form of
Exhibit B signed by its chief accounting officer stating that no Default
or Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(iv) As soon as possible and in any event within 10 days after the Borrower
knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of the Borrower,
describing said Reportable Event and the action which the Borrower proposes
to take with respect thereto.
(v) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements
so furnished.
(vi) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports
which the Borrower files with the SEC.
(vii) Promptly upon the request of the Administrative Agent or any Lender,
such updated information or documentation as may be requested from time to
time regarding the efforts of the Borrower and its Subsidiaries to address
the Year 2000 Problem.
(ix) Such other information (including non-financial information) as the
Administrative Agent or any Lender may from time to time reasonably
request.
6.2 Use of Proceeds. The Borrower will use the proceeds of the Advances
for general corporate purposes of the Borrower and its Subsidiaries, including
acquisitions (provided that no such proceeds shall be used to acquire any other
Person unless the board of directors or equivalent governing body of such Person
has approved such acquisition). The Borrower will not use any of the proceeds of
the Advances to purchase or carry any "margin stock" (as defined in Regulation
U).
6.3 Notice of Default or Material Adverse Effect. The Borrower will, and
will cause each Subsidiary to, give prompt notice in writing to the Lenders of
the occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which could reasonably be expected to have a Material
Adverse Effect.
6.4 Conduct of Business. The Borrower will, and will cause each Regulated
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted (provided that the foregoing shall not prevent any sale of assets
otherwise permitted hereunder); and the Borrower will, and will cause each
Subsidiary to, do all things necessary to remain duly
30
incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic corporation, partnership
or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted
(provided that the foregoing shall not prohibit the voluntary dissolution or
liquidation of any Subsidiary, other than the Utility, to the extent permitted
hereunder).
6.5 Taxes. The Borrower will, and will cause each Subsidiary to, timely
file United States federal and applicable foreign, state and local tax returns
required by law and pay when due all taxes, assessments and governmental charges
and levies upon it or its income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside in accordance with GAAP.
6.6 Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice as are usually insured against in the same general area
by companies of established repute engaged in the same or a similar business,
and the Borrower will furnish to any Lender upon request full information as to
the insurance carried.
6.7 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including
all Environmental Laws.
6.8 Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times; provided that
nothing in this Section shall prevent the Borrower or any Subsidiary from
ceasing to operate, or consenting to cessation of operation of, any of its
plants or any other property if the Borrower in good faith determines that it is
advisable not to operate the same, that the operation thereof is not essential
to the maintenance and continued operation of the rest of its properties and
that such cessation of operation is in the best interest of the Borrower.
6.9 Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Administrative Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property, books and financial
records of the Borrower and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of the Borrower
and each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Administrative Agent or
any Lender may
31
designate and upon reasonable advance notice, all subject to the
confidentiality provisions of Section 9.11. After the occurrence and during the
continuance of a Default, any such inspection shall be at the Borrower's
expense; at all other times, the Borrower shall not be liable to pay the
expenses of the Administrative Agent or any Lender in connection with such
inspections.
6.10 Consolidations, Mergers and Sales of Assets. The Borrower will not,
and will not permit any Subsidiary to, be a party to any merger or
consolidation, or sell or otherwise dispose of any of its assets (other than in
the ordinary course of business), or sell or assign with or without recourse any
accounts receivable, except:
(i) A Wholly-Owned Subsidiary may be merged into the Borrower or with
another Wholly-Owned Subsidiary.
(ii) Any Subsidiary may sell assets to the Borrower or another
Subsidiary.
(iii) The Borrower may sell all or substantially all of its
assets to, or consolidate with or merge into, any other
corporation, or permit another corporation to merge into it;
provided, however, that (a) the surviving corporation, if such
surviving corporation is not the Borrower, or the transferee
corporation in the case of a sale of all or substantially all of
the Borrower's assets (1) shall be a corporation organized and
existing under the laws of the United States of America or a
state thereof or the District of Columbia, and (2) shall
expressly assume in writing the due and punctual payment of the
Obligations and the due and punctual performance of and
compliance with all of the terms of this Credit Agreement and the
other Loan Documents to be performed or complied with by the
Borrower and (b) immediately before and after such merger,
consolidation or sale, there shall not exist any Default or
Unmatured Default.
(iv) The Borrower and its Subsidiaries may sell generating assets
(including the Utility's Nine Mile 2 Nuclear Plant) for fair market
value.
(v) The sale, assignment or other transfer of accounts receivable or
other rights to payment pursuant to any Securitization Transaction.
(vi) The Borrower and its Subsidiaries may sell or otherwise dispose of
assets (other than accounts receivable and other rights to payment
unless in connection with the sale of a particular business line) so
long as the aggregate amount of all assets sold or otherwise
disposed of in any fiscal year of the Borrower (other than assets
sold or otherwise disposed of in the ordinary course of business or
pursuant to clauses (ii) and (iv) above) does not exceed 5% of the
consolidated
32
assets of the Borrower and its Subsidiaries as of the
last day of the preceding fiscal year of the Borrower.
6.11 Liens. The Borrower will not, and will not permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more than
90 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall have
been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's compensation
laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions, zoning laws or ordinances
and such other encumbrances or charges against real property as are
of a nature generally existing with respect to properties of a
similar character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in the
business of the Borrower or its Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule 1
(including Liens on after-acquired property arising under agreements
described in Schedule 1 as such agreements are in effect on the date
hereof).
(vi) Judgment Liens which secure payment of legal obligations that would
not constitute a Default under Section 7.
(vii) Liens on Property acquired by the Borrower or a Subsidiary after the
date hereof, existing on such Property at the time of acquisition
thereof (and not created in anticipation thereof), provided that in
any such case no such Lien shall extend to or cover any other
Property of the Borrower or such Subsidiary, as the case may be.
33
(viii) Deposits and/or similar arrangements to secure the performance of
bids, fuel procurement contracts or other trade contracts (other
than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business by the Borrower
or any Subsidiary.
(ix) Liens on assets of the Borrower and its Subsidiaries arising out of
obligations or duties to any municipality or public authority with
respect to any franchise, grant, license, permit or certificate.
(x) Rights reserved to or vested in any municipality or public authority
to control or regulate any property or asset of the Borrower or any
Subsidiary or to use
such property or asset in a manner which does not materially impair
the use of such property or asset for the purposes for which it is
held by the Borrower or any Subsidiary.
(xi) Irregularities in or deficiencies of title to any Property which do
not materially affect the use of such property by the Borrower or
any Subsidiary in the normal course of its business.
(xii) Any Lien on any property or asset of any corporation or other entity
existing at the time such corporation or entity is acquired, merged
or consolidated or amalgamated with or into the Borrower or any
Subsidiary and not created in contemplation of such event.
(xiii) Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by
clause (v), (vii) or (xii) of this Section, provided that such
Indebtedness is not increased and is not secured by any additional
assets.
(xiv) Rights of lessees arising under leases entered into by the Borrower
or any Subsidiary as lessor, in the ordinary course of business.
(xv) Liens granted by Central ▇▇▇▇▇▇ Enterprises Corporation, SCASCO,
Inc. or any of their respective subsidiaries to its lenders on the
interests of such entity in (a) energy-related equipment installed
in the premises of third parties and/or, (b) the performance by
third parties of energy-related contracts with such entity and/or
(c) energy distribution equipment and related assets.
(xvi) Other Liens, in addition to those permitted by clauses (i) through
(xv), securing Indebtedness or arising in connection with
Securitization Transactions, provided that the sum (without
duplication) of all such Indebtedness, plus the aggregate
34
investment or claim held at any time by all purchasers, assignees
or other transferees of (or of interests in) receivables and other
rights to payment in all Securitization Transactions, shall not at
any time exceed $25,000,000.
6.12 Affiliates. The Borrower will not, and will not permit any Subsidiary
to, enter into any transaction (including the purchase or sale of any Property
or service) with, or make any payment or transfer to, any Affiliate (other than
the Borrower or another Subsidiary) except in the ordinary course of business
and pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arm's-length transaction.
6.13 Investments. The Borrower will not, and will not permit its Regulated
Subsidiaries to, make Investments in Non-Regulated Subsidiaries in an aggregate
outstanding amount at any time exceeding $300,000,000 during the period from
November 1, 1998 (even if any Regulated Subsidiary did not become a Subsidiary
until after such date) to the Termination Date; and the Borrower will not, and
will not permit its Subsidiaries to, make Investments or otherwise invest (by
way of capital expenditures or otherwise) in Non-energy Related Businesses or
activities in an aggregate amount exceeding $50,000,000 during the term of this
Agreement.
6.14 Utility Dividends. The Borrower will not permit to exist any legal or
contractual restriction on the ability of the Utility to pay dividends to the
Borrower except as set forth in the Settlement Agreement.
6.15 Financial Condition. The Borrower will not permit (a) the ratio of
Total Debt of the Borrower and its Subsidiaries determined on a consolidated
basis to Total Capitalization of the Borrower and the Subsidiaries to exceed
0.65:1.00, provided that, at any time on and after the Funding Date during which
the maximum permissible dividend payable by the Utility to the Borrower is
limited to not more than 50% of the Utility's average annual income available
for dividends (or a lesser percentage) pursuant to the terms of paragraph 22 of
the Settlement Agreement, the Borrower will not permit such ratio to exceed
0.60:1.00; or (b) the ratio of Total Debt of the Borrower and its Non-Regulated
Subsidiaries determined on a consolidated basis to Total Capitalization of the
Borrower and its Non-Regulated Subsidiaries to exceed 0.50:1.00.
6.16 Year 2000. The Borrower will take, and will cause each of its
Subsidiaries to take, all such actions as are reasonably necessary to
successfully implement the Year 2000 Program and to assure that Year 2000 Issues
will not have a Material Adverse Effect. At the request of the Administrative
Agent, the Borrower will provide (for distribution to the Lenders) a description
of the Year 2000 Program, together with any updates or progress reports with
respect thereto.
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SECTION 7 - DEFAULTS
Each of the following events or occurrences shall constitute a "Default".
7.1 Breach of Warranty. Any representation or warranty made or deemed made
by or on behalf of the Borrower to the Lenders or the Administrative Agent under
or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2 Nonpayment Obligations. Nonpayment of principal of any Loan when due;
or nonpayment of interest upon any Loan or of any commitment fee or other
obligation under any of the Loan Documents within five days after the same
becomes due.
7.3 Nonperformance of Certain Covenants. The breach by the Borrower of any
of the terms or provisions of Section 6.2, 6.3, 6.10, 6.11. 6.12, 6.13, 6.14 or
6.15.
7.4 Nonperformance of Agreement. The breach by the Borrower (other than a
breach which constitutes a Default under another provision of this Section 7) of
any of the terms or provisions of this Agreement which is not remedied within
five Business Days (or, in the case of Section 6.16, thirty Business Days) after
written notice from the Administrative Agent or any Lender.
7.5 Default on Other Material Financial Obligations. Failure of the
Borrower or any of its Subsidiaries to pay when due any Indebtedness aggregating
in excess of $10,000,000; ("Material Financial Obligations"); or the default by
the Borrower or any of its Subsidiaries in the performance of any term,
provision or condition contained in one or more agreements under which any
Material Financial Obligations were created or are governed, or any other event
shall occur or condition exist, the effect of which default or event is to
cause, or to permit the holder or holders of such Material Financial Obligations
to cause, such Material Financial Obligations to become due prior to the stated
maturity thereof (or to be purchased, repurchased, defeased or cash
collateralized prior to the scheduled date (if any) for such event); or any
Material Financial Obligations of the Borrower or any of its Subsidiaries shall
be declared to be due and payable or be required to be prepaid (other than by a
regularly scheduled prepayment) prior to the stated maturity thereof (or to be
purchased, repurchased, defeased or cash collateralized prior to the scheduled
date (if any) for such event); or the Borrower or any of its Subsidiaries shall
not pay, or admit in writing its inability to pay, its debts generally as they
become due.
7.6 Voluntary Bankruptcy Proceeding, etc. The Borrower or any of its
Subsidiaries shall (i) have an order for relief entered with respect to it under
the Federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek,
36
consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (iv) institute any proceeding seeking an order for
relief under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7 Involuntary Bankruptcy Proceeding, etc. Without the application,
approval or consent of the Borrower or any of its Subsidiaries, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for the
Borrower or any of its Subsidiaries or any Substantial Portion of its Property,
or a proceeding described in Section 7.6(iv) shall be instituted against the
Borrower or any of its Subsidiaries and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of 30
consecutive days.
7.8 Government Seizure of Property. Any court, government or governmental
agency shall condemn, seize or otherwise appropriate, or take custody or control
of, all or any portion of the Property of the Borrower and its Subsidiaries
which, when taken together with all other Property of the Borrower and its
Subsidiaries so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.
7.9 Judgments. The Borrower or any of its Subsidiaries shall fail within
30 days to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $10,000,000 (either singly or in the aggregate
with all other such judgments), which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10 ERISA. An ERISA Event shall have occurred that in the opinion of the
Required Lenders, when taken together, with all other ERISA Events that have
occurred, could reasonably be expected to have a Material Adverse Effect.
7.11 Change in Control. (a) Any Person or group of Persons (within the
meaning of Section 13 or 14 of the Exchange Act) shall acquire beneficial
ownership (within the meaning of Rule 13d-3 promulgated under such Act) of 20%
or more of the outstanding shares of common stock of the Borrower; or (b) during
any 12-month period (or, if less, during the period beginning on the Closing
Date and ending on the date of determination), individuals who at the beginning
of such period constituted the Borrower's Board of Directors (together with any
new directors whose election by the Borrower's Board of Directors or whose
nomination for election by the Borrower's shareholders was approved by a vote of
a majority of the directors who either were
37
directors at the beginning of such period or whose election or nomination
was previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower.
7.12 Ownership of the Utility. After the Funding Date, the Borrower shall
cease to directly own, free and clear of all liens, 100% of the issued and
outstanding capital stock of the Utility.
SECTION 8 - ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration. If any Default described in Section 7.6 or 7.7 occurs
with respect to the Borrower, the obligations of the Lenders to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of the
Administrative Agent or any Lender. If any other Default occurs, the Required
Lenders (or the Administrative Agent with the consent of the Required Lenders)
may terminate or suspend the obligations of the Lenders to make Loans hereunder,
or declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
If, within 30 days after acceleration of the maturity of the Obligations
or termination of the obligations of the Lenders to make Loans hereunder as a
result of any Default (other than any Default as described in Section 7.6 or 7.7
with respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Administrative Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or termination.
8.2 Amendments. Subject to the provisions of this Section 8, the Required
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or forgive all or any portion
of the principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
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(iii) Extend the Termination Date, or reduce the amount or extend the
payment date for, the mandatory payments required under Section 2.2,
or increase the amount of the Commitment of any Lender hereunder, or
permit the Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent. The Administrative Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party to this
Agreement.
8.3 Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.2, and
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Administrative Agent and the Lenders until the
Obligations have been paid in full.
SECTION 9 - GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Loans
herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the
39
Lenders relating to the subject matter thereof other than the letter
agreement described in Section 10.13.
9.5 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that the Arranger shall enjoy the benefits of
the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.
9.6 Expenses; Indemnification. (i) The Borrower shall reimburse the
Administrative Agent and the Arranger for any reasonable costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for the Administrative Agent, which attorneys may be employees of the
Administrative Agent) paid or incurred by the Administrative Agent or the
Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Administrative Agent, the
Arranger and the Lenders for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the
Administrative Agent, the Arranger and the Lenders, which attorneys may be
employees of the Administrative Agent, the Arranger or the Lenders) paid or
incurred by the Administrative Agent, the Arranger or any Lender in connection
with the collection and enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Administrative
Agent, the Arranger and each Lender, its directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
reasonable expenses (including all expenses of litigation or preparation
therefor whether or not the Administrative Agent, the Arranger or any Lender is
a party thereto) which any of them may pay or incur arising out of or relating
to this Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of the
proceeds of any Loan hereunder except to the extent that they are determined in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the payment of the Obligations and termination of this Agreement.
9.7 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
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9.8 Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP.
9.9 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10 Nonliability of Lenders. The relationship between the Borrower on the
one hand and the Lenders and the Administrative Agent on the other hand shall be
solely that of borrower and lender. Neither the Administrative Agent, the
Arranger nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Administrative Agent, the Arranger nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Administrative Agent, the
Arranger nor any Lender shall have liability to the Borrower (whether sounding
in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Administrative Agent, the Arranger
nor any Lender shall have any liability with respect to, and the Borrower hereby
waives, releases and agrees not to ▇▇▇ for, any special, indirect or
consequential damages suffered by the Borrower in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.
9.11 Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which that Lender is a party and (vi) permitted by Section 12.4.
9.12 Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
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SECTION 10 - THE AGENT
10.1 Appointment; Nature of Relationship. The First National Bank of
Chicago is hereby appointed by each of the Lenders as its contractual
representative (herein referred to as the "Administrative Agent") hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Section 10.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Administrative Agent
(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.
10.2 Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
10.3 General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including
any
42
agreement by an obligor to furnish information directly to each Lender; (c)
the satisfaction of any condition specified in Section 4, except receipt of
items required to be delivered solely to the Administrative Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Administrative Agent shall have no duty
to disclose to the Lenders information that is not required to be furnished by
the Borrower to the Administrative Agent at such time, but is voluntarily
furnished by the Borrower to the Administrative Agent (either in its capacity as
Administrative Agent or in its individual capacity).
10.5 Action on Instructions of Lenders. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders. The Lenders
hereby acknowledge that the Administrative Agent shall be under no duty to take
any discretionary action permitted to be taken by it pursuant to the provisions
of this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
10.6 Employment of Administrative Agents and Counsel. The Administrative
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, agents, and attorneys-in-fact
and shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning the
contractual arrangement between the Administrative Agent and the Lenders and all
matters pertaining to the Administrative Agent's duties hereunder and under any
other Loan Document.
10.7 Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
10.8 Administrative Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Administrative Agent ratably in proportion
to their respective
43
Commitments (or, if the Commitments have been terminated, in proportion to
their Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including any expenses incurred by the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby (including for
any such amounts incurred by or asserted against the Administrative Agent in
connection with any dispute between the Administrative Agent and any Lender or
between two or more of the Lenders), or the enforcement of any of the terms of
the Loan Documents or of any such other documents, provided that no Lender shall
be liable for any of the foregoing to the extent any of the foregoing is found
in a final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Administrative
Agent. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower referring to this Agreement describing such Default or
Unmatured Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders.
10.10 Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Commitment and its Loans
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the term "Lender" or "Lenders" shall, at any time when the
Administrative Agent is a Lender, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is
not restricted hereby from engaging with any other Person.
10.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as
44
it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement and the other Loan Documents. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12 Successor Administrative Agent. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower,
such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five days after the retiring Administrative Agent gives notice
of its intention to resign. The Administrative Agent may be removed at any time
with or without cause by written notice received by the Administrative Agent
from the Required Lenders, such removal to be effective on the date specified by
the Required Lenders. Upon any such resignation or removal, the Required Lenders
(with, so long as no Default or Unmatured Default exists, the consent of the
Borrower), shall have the right to appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Administrative Agent's giving notice of its intention to resign,
then the resigning Administrative Agent may appoint, on behalf of the Borrower
and the Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of the
Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as a successor Administrative Agent hereunder. If the Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this
Section X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then the term
45
"Corporate Base Rate" as used in this Agreement shall mean the prime rate,
base rate or other analogous rate of the new Administrative Agent.
10.13 Administrative Agent and Arranger Fees. The Borrower agrees to pay
to the Administrative Agent and Arranger, for its own account, the fees agreed
to by the Borrower, the Administrative Agent and the Arranger pursuant to the
letter agreement dated September 29, 1998 among such parties, or as otherwise
agreed among such parties from time to time.
10.14 Delegation to Affiliates. The Borrower and the Lenders agree that
the Administrative Agent may delegate any of its duties under this Agreement to
any of its Affiliates. Any such Affiliate (and such Affiliate's directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Administrative Agent is entitled
under Sections 9 and 10.
SECTION 11 - SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
SECTION 12 - BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
46
12.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. Notwithstanding clause (ii) of this Section, any Lender may
at any time, without the consent of the Borrower or the Administrative Agent,
assign all or any portion of its rights under this Agreement and any Note to a
Federal Reserve Bank; provided, however, that no such assignment to a Federal
Reserve Bank shall release the transferor Lender from its obligations hereunder.
The Administrative Agent may treat the Person which made any Loan or which holds
any Note as the owner thereof for all purposes hereof unless and until such
Person complies with Section 12.3 in the case of an assignment thereof or, in
the case of any other transfer, a written notice of the transfer is filed with
the Administrative Agent. Any assignee or transferee of the rights to any Loan
or any Note agrees by acceptance of such transfer or assignment to be bound by
all the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder, transferee or assignee of the rights to such Loan.
12.2 Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Loan Documents. In the event of any such sale
by a Lender of participating interests to a Participant, such
Lender's obligations under the Loan Documents shall remain unchanged,
such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, such Lender shall
remain the owner of its Loans and the holder of any Note issued to it in
evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrower
and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Termination Date
or postpones any date fixed for
47
any regularly-scheduled payment of principal of, or interest or fees on,
any such Loan or Commitment.
12.2.3 Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of setoff provided in
Section 11.1 with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in Section
11.1, agrees to share with each Lender, any amount received pursuant to
the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
12.3 Assignments.
12.3.1 Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of
its rights and obligations under the Loan Documents. Such assignment shall
be substantially in the form of Exhibit C or in such other form as may be
agreed to by the parties thereto. The consent of the Borrower and the
Administrative Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof; provided, however, that if a Default has occurred and
is continuing, the consent of the Borrower shall not be required. Such
consents shall not be unreasonably withheld or delayed. Each such
assignment shall (unless each of the Borrower and the Administrative Agent
otherwise consents) be in an amount not less than the lesser of (i)
$5,000,000 or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment).
12.3.2 Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in the form
attached as Exhibit "I" to Exhibit C (a "Notice of Assignment"), together
with any consents required by Section 12.3.1, and (ii) payment by the
transferor Lender or the Purchaser of a $3,000 fee to the Administrative
Agent for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of Assignment.
The Notice of Assignment shall contain a representation by the Purchaser
to the effect that none of the consideration used to make the purchase of
the Commitment and Loans under the applicable assignment agreement are
"plan assets" as defined under ERISA and that the rights and interests of
the Purchaser in and under the Loan Documents will not be "plan assets"
under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement and
any other Loan Document executed by or on
48
behalf of the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Borrower,
the Lenders or the Administrative Agent shall be required to
release the transferor Lender with respect to the percentage of the
Aggregate Commitment and Loans assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Administrative Agent and the Borrower
shall, if the transferor Lender or the Purchaser desires that its Loans be
evidenced by Notes, make appropriate arrangements so that new Notes or, as
appropriate, replacement Notes are issued to such transferor Lender and
new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
12.4 Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees in writing to be bound by
Section 9.11 of this Agreement.
12.5 Tax Treatment. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
SECTION 13 - NOTICES
13.1 Notices. Except as otherwise permitted by Section 2.16 with respect to
borrowing notices, all notices, requests and other communications to any party
hereunder shall be in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any Lender,
at its address or facsimile number set forth below its signature hereto or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent and the Borrower in accordance with the provisions of this Section 13.1.
Each such notice, request or other communication shall be effective (i) if given
by facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other means,
when delivered (or, in the case of electronic transmission, received) at the
49
address specified in this Section; provided that notices to the Administrative
Agent under Section 2 shall not be effective until received.
13.2 Change of Address. The Borrower, the Administrative Agent and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
SECTION 14 - COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Administrative Agent
and the Lenders and each party has notified the Administrative Agent by
facsimile transmission or telephone that it has taken such action.
SECTION 15 - CHOICE OF LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY
50
LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
51
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have executed this Agreement as of the date first above written.
CH ENERGY GROUP, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇, III
____________________________
Title:Chairman of the Board and
Chief Executive Officer
____________________________
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Commitments
___________
$20,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇
____________________________
Title: Vice President
____________________________
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
$15,000,000 THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
____________________________
Title: Vice President
____________________________
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
52
$15,000,000 MARINE MIDLAND BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________
Title: Vice President
____________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
___________
$50,000,000 TOTAL
53
PRICING SCHEDULE
The Applicable Margin and the Commitment Fee shall be determined from time
to time based upon the ▇▇▇▇▇'▇ Rating and the S&P Rating of the Utility as set
forth in the table below:
Applicable Commitment
Level ▇▇▇▇▇'▇ Rating S&P Rating Margin Fee
----- -------------- ---------- ---------- ----------
I A3 or better A- or better 0.450% 0.100%
II Baa1 BBB+ 0.500% 0.125%
III Baa2 BBB 0.550% 0.150%
IV Baa3 BBB- 0.625% 0.200%
V Below Baa3 Below BBB- 0.850% 0.300%
If there is a split rating (i.e., the ▇▇▇▇▇'▇ Rating and the S&P Rating
would not result in the same pricing), the Borrower shall be entitled to the
benefit of the higher rating; provided that there is a differential of two or
more levels in the table above, the intermediate level at the midpoint (or, if
there is no midpoint, the higher intermediate level) shall apply. In the event
that a rating is available from only one rating agency, such rating shall
control. In the event that a rating is not available from either rating agency,
the Applicable Margin and the Commitment Fee shall be equal to 0.30% and 0.85%,
respectively.
In addition, at any time that the outstanding principal amount of all
Loans exceeds 50% of the Aggregate Commitment, the Applicable Margin (at all
levels) shall be increased by 0.05%.
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"▇▇▇▇▇'▇ Rating" means, at any time, the rating issued by ▇▇▇▇▇'▇ and then
in effect with respect to the Utility's senior unsecured long-term debt
securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Utility's senior unsecured long-term debt securities
without third-party credit enhancement.
The credit rating in effect on any date for the purposes of this Schedule
shall be that in effect at the close of business on such date.
EXHIBIT A
A-1
FORM OF OPINION
The Administrative Agent and the Lenders which are parties to the Credit
Agreement described below.
Gentlemen/Ladies:
We are counsel for CH Energy Group, Inc., a New York corporation (the
"Borrower"), and have represented the Borrower in connection with the execution
and delivery of the Credit Agreement dated as of December 4, 1998 (the
"Agreement") among the Borrower, various financial institutions and The First
National Bank of Chicago, as Administrative Agent, and providing for Advances in
an aggregate principal amount not exceeding $50,000,000 at any one time
outstanding. All capitalized terms used in this opinion and not otherwise
defined herein shall have the respective meanings attributed to them in the
Agreement.
We have examined the Borrower's **[describe constitutive documents of
Borrower and appropriate evidence of authority to enter into the transaction]**,
the Loan Documents and such other matters of fact and law which we deem
necessary in order to render this opinion. In connection with such examination,
we have assumed, without independent investigation, that:
(a) all signatures of the parties on all items submitted to us are
genuine;
(b) all natural persons, including persons acting on behalf of a
business entity, are legally competent;
(c) all items submitted to us as originals are authentic, and all
documents submitted to us as copies conform to authentic original
documents; and
(d) each of the Administrative Agent and each Lender has full power
and authority to execute, deliver and perform its obligations under the
Agreement, and the Agreement has been duly authorized by all necessary
corporate or other action on the part of such parties and constitutes the
legal, valid and binding obligation of each such party, enforceable
against each such party in accordance with its terms. Based upon the
foregoing, and subject to the qualifications set forth herein, it is our
opinion that:
l. Each of the Borrower and each of its Subsidiaries is a corporation,
partnership or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such concept
applies to such entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
A-2
2. The execution and delivery by the Borrower of the Loan Documents and
the performance by the Borrower of its obligations thereunder have been duly
authorized by proper corporate proceedings on the part of the Borrower and will
not:
(a) require any consent of the Borrower's shareholders (other than
any such consent as has already been given and remains in full force and
effect);
(b) violate or conflict with, or constitute a default under, (i)
any law, rule or regulation or, to our knowledge, any order, writ,
judgment, injunction, decree or award binding on the Borrower or any of
its Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii) to
our knowledge, the provisions of any indenture, instrument or agreement
to which the Borrower or any Subsidiary is a party or is subject;
(c) to our knowledge, result in or require the creation or
imposition of any Lien on any Property of the Borrower or any Subsidiary
pursuant to the terms of any indenture, instrument or agreement binding
upon the Borrower or such Subsidiary.
3. The Loan Documents have been duly executed and delivered by the
Borrower and constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms.
4. To our knowledge, other than as discussed in the Public Reports, there
is no litigation, arbitration, governmental investigation, proceeding or inquiry
pending or threatened against the Borrower or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
5. No order, consent, adjudication, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof is required to be obtained by the Borrower or any Subsidiary
in connection with the execution and delivery by the Borrower of the Loan
Documents, the borrowings under the Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
Our opinions are subject to the following qualifications:
(a) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, receivership, fraudulent
conveyance, equitable subordination, readjustment of debt, moratorium or
similar law affecting creditors' rights generally and
A-3
to the effect of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and by limitations on the availability of specific performance,
injunctive relief or other equitable remedies.
(b) We express no opinion as to obligations relating to
indemnification, contribution or exculpation of costs, expenses or
liabilities which contravene public policy.
(c) We express no opinion as to the enforceability, under certain
circumstances, of provisions imposing penalties or forfeitures, late
payment charges or an increase in interest rate upon delinquency in
payment or the occurrence of a default.
(d) We express no opinion as to any provision of any Loan Document
that purports to establish an evidentiary standard for determinations by
the Lenders or the Administrative Agent.
(e) We express no opinion as to the effect of the law of any
jurisdiction other than the State of New York wherein enforcement of any
Loan Document may be sought.
(f) We express no opinion as to any provision of the Agreement
purporting to convey rights to Persons other than parties to the
Agreement.
(g) We express no opinion as to:
(i) any agreement by the Company to the subject matter
jurisdiction of a United States federal court or to the waiver
of the right to jury trial; or
(ii) any provision purporting to waive any objection to
the laying of venue or any claim that an action or proceeding
has been brought in an inconvenient forum.
(h) Our opinions are limited to the federal laws of the United
States and the laws of the State of New York. For purposes of this
opinion, we have assumed that the Loan Documents would be construed and
interpreted in accordance with the laws of the State of New York
(notwithstanding the parties' selection of Illinois law as the governing
law of the Loan Documents).
(i) For purposes of our opinion, as to the incorporation, existence and
good standing of _______, we have relied on a Good Standing Certificate
issued by the Secretary of State of Connecticut.
A-4
The opinions expressed herein shall be effective only as of the date of
this opinion letter. We do not assume responsibility for updating this opinion
letter as of any date subsequent to the date of this opinion letter, and assume
no responsibility for advising you of any change with respect to any matter
described in this opinion letter that may occur subsequent to the date of this
opinion letter or from the discovery subsequent to the date of this opinion
letter of information not previously known to us pertaining to the events
occurring prior to the date of this opinion letter.
This opinion letter is solely for the benefit of the addressees hereof
(and their respective successors and permitted assignees and participants) in
connection with the transactions contemplated by the Agreement, and this opinion
letter may not be relied upon by any other Person or for any other purpose.
This opinion may be relied upon by the Administrative Agent, the Lenders
and their participants, assignees and other transferees.
Very truly yours,
A-5
EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders which are parties to the
Credit Agreement described below
This Compliance Certificate is furnished pursuant to the Credit Agreement
dated as of December 4, 1998 (as amended or otherwise modified from time to
time, the "Agreement") among CH Energy Group, Inc. (the "Borrower"), the lenders
party thereto and The First National Bank of Chicago, as Administrative Agent.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the respective meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. Based on such examinations, set forth on Schedule II hereto is an
accurate calculation of the financial covenants set forth in Section 6.15 of the
Agreement; and
4. Such examinations did not disclose, and I have no knowledge of, the
existence of any condition or event which constitutes a Default or Unmatured
Default during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate, except as set forth
below.
Described below are the exceptions, if any, to paragraph 3 listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking or proposes to
take with respect to each such condition or event:
B-1
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
The foregoing certifications, together with the financial statements
delivered with this Certificate in support hereof, are made and delivered this
____ day of___________ ,_______ .
____________________________
B-2
SCHEDULE I
TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
B-3
SCHEDULE II
TO COMPLIANCE CERTIFICATE
Section 6.15 - Financial Ratios
Section 6.15(a)
(1) Total Debt (Borrower and
Subsidiaries-consolidated) _____________
(2) Total Shareholders' equity
(Borrower and Subsidiaries _____________
(3) Total Capitalization
(Borrower and Subsidiaries-
consolidated)(1) + (2) _____________
(4) Ratio of (1) to (3) _____________
Maximum Ratio _____________*
Section 6.15(b)
(1) Total Debt (Borrower and
Non-regulated Subsidiaries)_____________
(2) Total Shareholders' Equity
(Borrower and Non-regulated
Subsidiaries) _____________
(3) Total Capitalization (Borrower
and Non-regulated Subsidiaries)
(1) + (2) _____________
(4) Ratio of (1) to (3) _____________
Maximum Ratio 0.50:1.00
_____________________________
*/ 0.65:1.00 unless the maximum permissible dividend payable by the
Utility to the Borrower is limited to not more than 50% of the Utility's
average annual income available for dividends (or a lesser percentage)
pursuant to the terms of paragraph 22 of the Settlement Agreement,in which case
0.60:1.00.
B-4
EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_______________ (the"Assignor") and _______________(the "Assignee") is dated as
of ________,_____ . The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended or otherwise modified from time to time, is herein
called the "Credit Agreement") described in Item 1 of Schedule 1 attached hereto
("Schedule 1"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 2 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 2 of
Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans, if
the applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 3 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 4 of Schedule
1 or two Business Days (or such shorter period agreed to by the Administrative
Agent) after a Notice of Assignment substantially in the form of Exhibit "I"
attached hereto has been delivered to the Administrative Agent. Such Notice of
Assignment must include any consents required to be delivered to the
Administrative Agent by Section 12.3.1 of the Credit Agreement. In no event will
the Effective Date occur if the payments required to be made by the Assignee to
the Assignor on the Effective Date under Sections 4 and 5 hereof are not made on
the proposed Effective Date. The Assignor will notify the Assignee of the
proposed Effective Date no later than the Business Day prior to the proposed
Effective Date. As of the Effective Date, (i) the Assignee shall have the rights
and obligations of a Lender under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
C-1
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee shall
be entitled to receive from the Administrative Agent all payments of principal,
interest and fees with respect to the interest assigned hereby. The Assignee
shall advance funds directly to the Administrative Agent with respect to all
Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby. In the event that either party hereto
receives any payment to which the other party hereto is entitled under this
Assignment Agreement, then the party receiving such amount shall promptly remit
it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a
fee on each day on which a payment of interest or commitment fees is made under
the Credit Agreement with respect to the amounts assigned to the Assignee
hereunder (other than a payment of interest or commitment fees for the period
prior to the Effective Date or, in the case of Fixed Rate Loans, the Payment
Date, which the Assignee is obligated to deliver to the Assignor pursuant to
Section 4 hereof). The amount of such fee shall be the difference between (i)
the interest or fee, as applicable, paid with respect to the amounts assigned to
the Assignee hereunder and (ii) the interest or fee, as applicable, which would
have been paid with respect to the amounts assigned to the Assignee hereunder if
each interest rate was of 1% less than the interest rate paid by the Borrower or
if the commitment fee was of 1% less than the commitment fee paid by the
Borrower, as applicable. In addition, the Assignee agrees to pay % of the
recordation fee required to be paid to the Administrative Agent in connection
with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE
ASSIGNOR'S LIABILITY. The Assignor represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
C-2
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements requested by the Assignee and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement, (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information at it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, (iii) appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1, (vi) confirms
that none of the funds, monies, assets or other consideration being used to make
the purchase and assumption hereunder are "plan assets" as defined under ERISA
and that its rights, benefits and interests in and under the Loan Documents will
not be "plan assets" under ERISA, (vii) confirms that it is an Eligible
Assignee, **[and (viii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any United
States federal income taxes]**.**
**to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including reasonable
attorneys' fees) and liabilities incurred by the Assignor in connection with or
arising in any manner from the Assignee's non-performance of the obligations
assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 12.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including
its obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Commitment occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of Schedule 1 shall
remain the same,
C-3
but the dollar amount purchased shall be recalculated based on the reduced
Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice of
Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth in the attachment to Schedule 1.
C-4
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
**[NAME OF ASSIGNOR]**
By: ______________________
Title: ______________________
______________________
______________________
**[NAME OF ASSIGNEE]**
By: ______________________
Title: ______________________
______________________
______________________
C-5
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Credit Agreement dated as of
December 2, 1998 among CH Energy Group, Inc., various financial institutions,
and The First National Bank of Chicago, as Administrative Agent.
2. Amounts (As of Date of Item 2 above):
a. Total of Commitments
(Loans)** under
Credit Agreement $ _______
b. Assignee's Percentage
of each Facility purchased
under the Assignment
Agreement*** _______%
c. Amount of Assigned Share in
each Facility purchased under
the Assignment
Agreement $_______
3. Assignee's Aggregate (Loan
Amount)** Commitment Amount
Purchased Hereunder: $_______
4. Proposed Effective Date: _______
Accepted and Agreed:
**[NAME OF ASSIGNOR]** **[NAME OF ASSIGNEE]**
By: ____________________ By: ____________________
Title: ____________________ Title: ____________________
** If a Commitment has been terminated, insert outstanding Loans in
place of Commitment
*** Percentage taken to 10 decimal places
C-6
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
Contact:
Name: _____________________ Telephone No.: __________________
Fax No.:_____________________ Telex No.: __________________
Answerback: __________________
Payment Information:
Name & ABA # of Destination Bank: ______________________________________________
________________________________________________________________________________
Account Name & Number for Wire Transfer: _______________________________________
________________________________________________________________________________
Other Instructions: ____________________________________________________________
________________________________________________________________________________
Address for Notices for Assignor: ______________________________________________
________________________________________________________________________________
________________________________________________________________________________
ASSIGNEE INFORMATION
Credit Contact:
Name: _____________________ Telephone No.: __________________
Fax No.:_____________________ Telex No.: __________________
Answerback: __________________
C-7
Key Operations Contacts:
Booking Installation:_______________ Booking Installation: _________________
Name: ______________________________ Name: _________________________________
Telephone No.: _____________________ Telephone No.: ________________________
Fax No.: ___________________________ Fax No.: ______________________________
Telex No.: _________________________ Telex No.: ____________________________
Answerback:_________________________ Answerback: ___________________________
Payment Information:
Name & ABA # of Destination Bank: ______________________________________________
________________________________________________________________________________
Account Name & Number for Wire Transfer: _______________________________________
________________________________________________________________________________
Other Instructions:_____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Address for Notices for Assignee:_______________________________________________
________________________________________________________________________________
________________________________________________________________________________
C-8
FNBC INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
Initial Funding Contact: Subsequent Operations Contact:
Name: ______________________ Name: ________________________
Telephone No.:______________ Telephone No.: _(312)_________
Fax No.:____________________ Fax No.: _(312)_______________
FNBC Telex No.: 190201 (Answerback: FNBC UT)
Initial Funding Standards:
Libor - Fund 2 days after rates are set.
FNBC Wire Instructions: The First National Bank of Chicago,
ABA #▇▇▇▇▇▇▇▇▇ BNF = 7521-7653/DES,Ref:
Address for Notices for FNBC: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Agency/Compliance Division, Suite 0353
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇) ▇▇▇-▇▇▇▇
C-9
EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
______________, 19___
To: CH Energy Group, Inc.
The First National Bank of Chicago, as Administrative Agent
From: **[NAME OF ASSIGNOR]** (the "Assignor")
**[NAME OF ASSIGNEE]** (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement")
described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered
to the Borrower and the Administrative Agent pursuant to Section 12.3.2 of the
Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ________,_______ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period as agreed to by the Administrative Agent)after this
Notice of Assignment and any consents and fees required by Sections 12.3.1 and
12.3.2 of the Credit Agreement have been delivered to the Administrative Agent,
provided that the Effective Date shall not occur if any condition precedent
agreed to by the Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Borrower and the
Administrative Agent notice of the assignment and delegation referred to herein.
The Assignor will confer with the Administrative Agent before the date specified
in Item 5 of Schedule 1 to determine if the
Assignment Agreement will become effective on such date pursuant to Section 3
hereof, and will confer with the Administrative Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Administrative Agent if the Assignment Agreement does
not become effective on any proposed Effective Date as a result of the failure
to satisfy the conditions precedent agreed to by the Assignor and the Assignee.
At the request of the Administrative Agent, the Assignor will give the
Administrative Agent written confirmation of the satisfaction of the conditions
precedent.
5. The Assignor or the Assignee shall pay to the Administrative
Agent on or before the Effective Date the processing fee of $3,000 required by
Section 12.3.2 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and
the Assignee request and direct that the Administrative Agent prepare and cause
the Borrower to execute and deliver new Notes or, as appropriate, replacement
notes, to the Assignor and the Assignee. The Assignor and, if applicable, the
Assignee each agree to deliver to the Administrative Agent the original Note
received by it from the Borrower upon its receipt of a new Note in the
appropriate amount.
7. The Assignee advises the Administrative Agent that notice and
payment instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that its
rights, benefits, and interests in and under the Loan Documents will not be
"plan assets" under ERISA.
9. The Assignee authorizes the Administrative Agent to act as its
agent under the Loan Documents in accordance with the terms thereof. The
Assignee acknowledges that the Administrative Agent has no duty to supply
information with respect to the Borrower or the Loan Documents to the Assignee
until the Assignee becomes a party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: ____________________ By: ____________________
Title:__________________ Title: _________________
ACKNOWLEDGED AND [ACKNOWLEDGED AND
CONSENTED TO] CONSENTED TO
BY THE FIRST NATIONAL BANK BY CH ENERGY GROUP, INC.
OF CHICAGO, as
Administrative Agent
By: ________________________ By: ________________________
Title: _____________________ Title:______________________]*
*Include only if consent of the Borrower is required pursuant to Section 12.3.1
of the Credit Agreement.
[Attach photocopy of Schedule 1 to Assignment]
EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Administrative Agent (the "Administrative Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement dated as of December 4, 1998 (amended or otherwise
modified, the "Credit Agreement"), among CH Energy Group, Inc. (the
"Borrower") the Lenders named therein and the Administrative Agent.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to
act upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 13.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.14 of the Credit Agreement.
Facility Identification Number(s)______________________________________________
Customer/Account Name__________________________________________________________
Transfer Funds To______________________________________________________________
______________________________________________________________
For Account No.________________________________________________________________
Reference/Attention To_________________________________________________________
Authorized Officer (Customer Representative) Date________________
__________________________________ ________________
__________________________________ _______________________
(Please Print) Signature
Bank Officer Name Date___________________________
______________________________ _______________________________
(Please Print) Signature
D-1
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
D-2
EXHIBIT E
NOTE
$_______________ _________,_______
CH ENERGY GROUP, INC., a New York corporation (the "Borrower"),
promises to pay to the order of ____________________________________ (the
"Lender") the lesser of the principal sum of ______________________________
Dollars or the aggregate unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to Section 2 of the Agreement (as hereinafter defined),
in immediately available funds at the main office of The First National Bank of
Chicago in Chicago, Illinois, as Administrative Agent, together with interest on
the unpaid principal amount hereof at the rates and on the dates set forth in
the Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Termination Date.
The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of _____________, 1998 (as
amended or otherwise modified from time to time, the "Agreement"), among the
Borrower, various financial institutions, including the Lender, and The First
National Bank of Chicago, as Administrative Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
CH ENERGY GROUP, INC.
By: _____________________________________
Print Name:______________________________
Title:___________________________________
E-1
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF CH ENERGY GROUP, INC.
DATED __________,________
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
____ _________ ___________ _________ _______
▇-▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇
(▇▇▇ Sections 5.13 and 6.11)
A. The following are the exceptions referred to in Section 5.13 of the
Agreement.
1. The Utility owns a ten-acre parcel in Honk Falls, New York, on
which is located a substation for the transmission and distribution of
electricity. The Utility believes it has good and marketable title to this
parcel, and the county property records support that belief. However, the
Utility has received a letter from an attorney for a neighboring property owner,
▇▇. ▇▇▇▇▇▇, claiming that ▇▇. ▇▇▇▇▇▇ owns the ten-acre substation parcel. ▇▇.
▇▇▇▇▇▇'▇ claim apparently rests on two facts: ▇▇. ▇▇▇▇▇▇ received, in 1994, a
deed from the estate of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, purportedly passing title to the
ten-acre parcel; and, allegedly, ▇▇. ▇▇▇▇▇▇▇▇▇ and then ▇▇. ▇▇▇▇▇▇ were
inappropriately listed on the county tax rolls for a period of time as owners
of, and they allegedly paid the property taxes on, thirty acres which apparently
included the ten-acre parcel. The tax rolls have been corrected and there is no
indication on the county's property records that ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ever had title
to the parcel.
2. Utility's Neversink Hydro Electric Generating
Facility ownership to revert back to the New York City Board of Water Supply in
the year 2003.
B. The following are the Liens referred to in Section 6.11(v) of the
Agreement:
1. Indenture, dated January 1, 1927, between Utility and American
Exchange Irving Trust Company (now The Bank of New York) as Trustee, as
supplemented and amended; being the Utility's First Mortgage Indenture.
2. The Company is a Co-Tenant Owner with others in an undivided
interest in the following electric generation plants: Roseton Electric
Generating Plant, located at Roseton, N.Y. and Nine ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇ Nuclear
Generating Plant located in Oswego County, N.Y. The Company's ownerships therein
are encumbered by certain rights of others (e.g. rights of first-refusal on a
sale of interest) and by related agreements among all or some of such Co-
Tenants (e.g. Operating Agreements).
3. The following are documents to which Central ▇▇▇▇▇▇ Enterprises
Corporation ("CHEC")is a party and which create or relate to Liens of CHEC:
S-1
a) Marine Midland loan facility (PSE&G Standard Offer
Program), represented by a Term Loan Agreement (and
related documents) dated Oct. 22, 1993, amended as of
August 1, 1994, which requires a Security Agreement and an
Assignment of Contract Rights and Security Agreement to be
executed, and UCC-1 financing statements to be delivered,
for each draw-down. This loan facility is not open for
future draw-downs. The amount outstanding under this loan
facility as of October 31, 1998, was $2,281,000.
b) Key Bank loan facility, represented by a Term Loan
Agreement (and related documents) dated June 3, 1994,
which requires a Security Agreement and an Assignment of
Contract Rights and Security Agreement to be executed, and
UCC-1 financing statements to be delivered, for each
draw-down. This loan facility is not open for future
draw-downs. The amount outstanding under this loan
facility as of October 31, 1998, was $1,508,000.
c) Key Bank loan facility in the amount of $5,000,000,
represented by a Term Loan Agreement (and related
documents) dated September 30, 1998, which requires a
Security Agreement and an Assignment of Contract Rights
and Security Agreement to be executed, and UCC-1 financing
statements to be delivered, for each draw-down. This loan
facility remains open for future draw-downs.
d) Marine Midland loan facility, represented by a Term Loan
Agreement (and related documents) dated as of December 17,
1990, pursuant to which a Security Agreement and an
Assignment of Contract Rights and Security Agreement
were executed, and UCC-1 financing statements delivered,
at the time of closing. This loan facility is not open for
future draw-downs. The amount outstanding under this loan
facility as of October 31, 1998, was $354,000.
e) Marine Midland loan facility (PSE&G - LSCI Loan),
represented by a Loan Agreement (and related documents)
dated June 23, 1993, which requires a Security Agreement
and an Assignment of Contract Rights and Security
Agreement to be executed, and UCC-1 financing statements
to be delivered, for each draw-down. This loan facility is
not open for future draw-downs. The amount outstanding
under this loan facility as of October 31, 1998, was
$1,710,000.
S-2
f) Commercial Installment Loan Agreement and Variable Rate
Installment Note, each dated December 31, 1997 toMarine
Midland Bank under the Public Service Electric & Gas
Standard Offer Program for Newark Airport Project. The
amount outstanding under this Note as of October 31, 1998,
was $314,000.
g) Working capital ($500,000) line of credit with Key Bank
under an Optional Demand Line of Credit Grid Note dated
July 23, 1998. As of October 31, 1998, the entire amount
was available.
h) Irrevocable Standby Letter of Credit with Marine Midland
dated September 1, 1998 in the sum of $650,000. The
beneficiary under this Letter of Credit is Public Service
Electric & Gas.
4. The following are documents to which SCASCO, Inc. is a party and
which create or relate to Liens:
a) Commercial Installment Loan Agreement, Installment Note
and General Security Agreement, each dated August 20,
1998, with Marine Midland Bank in the amount of $502,337.
The amount outstanding under this loan as of October 31,
1998, was $478,000.
b) Working capital line of credit between SCASCO, Inc. and
Marine Midland Bank, under a Note, dated as of August 19,
1998 providing $1,000,000 in credit. As of October 31,
1998 this entire amount was available.
S-3