LETTER OF CREDIT AGREEMENT
dated as of October 1, 1995
between
CENTRAL POWER AND LIGHT COMPANY
and
ABN AMRO BANK N.V.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
LETTER OF CREDIT
Section 2.1. Issuance of Letter of Credit . . . . . . . . . . . . . . . 8
Section 2.2. Letter of Credit Drawings. . . . . . . . . . . . . . . . . 8
Section 2.3. Reimbursement of Liquidity Drawings under the
Letter of Credit; Interest . . . . . . . . . . . . . . . 8
Section 2.4. Reimbursement of Drawings Other than Liquidity
Drawings under the Letter of Credit. . . . . . . . . . . 9
Section 2.5. Conversion and Continuation Options. . . . . . . . . . . . 9
Section 2.6. Interest Rates and Payment Dates . . . . . . . . . . . . . 9
Section 2.7. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.8. Method of Payment. . . . . . . . . . . . . . . . . . . . . 10
Section 2.9. Lending Offices and Funding. . . . . . . . . . . . . . . . 10
Section 2.10. Computation of Interest. . . . . . . . . . . . . . . . . . 11
Section 2.11. Payment Due on Non-Business Day to be made
on Next Business Day . . . . . . . . . . . . . . . . . . 11
Section 2.12. Late Payments. . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.13. Source of Funds. . . . . . . . . . . . . . . . . . . . . . 11
Section 2.14. Extension of Stated Expiration Date. . . . . . . . . . . . 11
Section 2.15. Funding Losses . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.16. Basis for Determining Interest Rate Unavailable. . . . . . 12
Section 2.17. Illegality . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.18. Substitute Letter of Credit. . . . . . . . . . . . . . . . 12
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Issuance of Letter
of Credit. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.2. Conditions Precedent to Liquidity Advances . . . . . . . . 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Company's Representations. . . . . . . . . . . . . . . . . 14
ARTICLE V
COVENANTS
Section 5.1. Information. . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.2. Payment of Obligations . . . . . . . . . . . . . . . . . . 18
Section 5.3. Maintenance of Property; Insurance . . . . . . . . . . . . 19
Section 5.4. Conduct of Business and Maintenance of Existence . . . . . 19
Section 5.5. Compliance with Laws . . . . . . . . . . . . . . . . . . . 19
Section 5.6. Inspection of Property, Books and Records. . . . . . . . . 19
Section 5.7. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . 20
Section 5.8. Negative Pledge. . . . . . . . . . . . . . . . . . . . . . 20
Section 5.9. Transactions with Affiliates . . . . . . . . . . . . . . . 20
Section 5.10. Sale of Subsidiaries . . . . . . . . . . . . . . . . . . . 20
Section 5.11. Prohibition of Fundamental Changes . . . . . . . . . . . . 20
Section 5.12. Minimum Consolidated Net Worth . . . . . . . . . . . . . . 21
Section 5.13. Restrictions on Indebtedness . . . . . . . . . . . . . . . 21
Section 5.14. Bond Documents . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.15. Official Statement . . . . . . . . . . . . . . . . . . . . 21
Section 5.16. Optional Redemptions . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI
EVENTS OF DEFAULT
Section 6.1. Events of Default. . . . . . . . . . . . . . . . . . . . . 22
Section 6.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VII
MISCELLANEOUS
Section 7.1. No Deduction; Increased Costs. . . . . . . . . . . . . . . 24
Section 7.2. Right of Setoff; Other Collateral. . . . . . . . . . . . . 25
Section 7.3. Indemnity, Costs, Expenses and Taxes . . . . . . . . . . . 26
Section 7.4. Obligations Absolute . . . . . . . . . . . . . . . . . . . 27
Section 7.5. Liability of the Bank. . . . . . . . . . . . . . . . . . . 27
Section 7.6. Participants . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.7. Survival of this Agreement . . . . . . . . . . . . . . . . 28
Section 7.8. Modification of this Agreement . . . . . . . . . . . . . . 28
Section 7.9. Waiver of Rights by the Bank . . . . . . . . . . . . . . . 28
Section 7.10. Severability . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.11. Governing Law; Submission to Jurisdiction. . . . . . . . . 28
Section 7.12. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 7.13. Survival of Representations and Obligations. . . . . . . . 30
Section 7.14. Taxes and Expenses . . . . . . . . . . . . . . . . . . . . 30
Section 7.15. Headings . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.16. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.17. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . 31
Signature. . . . . . . . . . . . . . . . . . . . . . . . . 31
Appendix I . . . . . . . . . . . . . . . . . . . . . . . . A-1
LETTER OF CREDIT AGREEMENT
Dated as of October 1, 1995
Central Power and Light Company
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Central Power and Light Company (the "Company") desires to secure a
source of funds to be devoted exclusively to the payment by The Bank of New
York, as trustee (the "Trustee"), when and as due, of the principal of and
certain interest on the Bonds, and has applied to the ABN AMRO Bank N.V.,
acting through its Houston Branch (the "Bank"), for issuance by the Bank of
the Letter of Credit in an Original Stated Amount of $43,411,550.
Furthermore, the Bank has been requested by the Company to provide the
Company with a liquidity facility by extending credit to the Company in the
form of a Liquidity Drawing under the Letter of Credit. The Bank has agreed
to issue such Letter of Credit and to provide such liquidity facility in the
following manner and subject to the following terms and conditions.
Accordingly, the Company and the Bank hereby agree as follows:
.C.ARTICLE I
DEFINITIONS
.c2.Section 1.1.Definitions;. As used in this Agreement:
"Acceleration Drawing" - means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of "Exhibit F"
to the Letter of Credit.
"Adjusted LIBOR" - means, for any borrowing of any Eurodollar Loan, a
rate per annum determined in accordance with the following formula:
LIBOR
Adjusted LIBOR Rate = 100% - Eurodollar Reserve Percentage
"LIBOR" means, for an Interest Period for a Eurodollar Loan, the rate
of interest per annum, as determined by the Bank (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%), at which deposits
of U.S. Dollars in immediately available and freely transferable funds are
offered by the Bank at 11:00 a.m. (London, England time) two Business Days
before the commencement of such Interest Period to major banks in the London
interbank market for a period equal to such Interest Period and in an amount
equal or comparable to the principal amount of such Eurodollar Loan.
"Eurodollar Reserve Percentage" means, for any Eurodollar Loan, the
daily average for the applicable Interest Period of the maximum rate
applicable to the Bank at which reserves (including, without limitation, any
supplemental, marginal and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or
any successor) on "eurocurrency liabilities", as defined in such Board's
Regulation D (or in respect of any other category of liabilities that
includes deposits by reference to which the interest rate on eurodollar
loans is determined or any category of extensions of credit or other assets
that include loans by non-United States offices of any lender to United
States residents), having a term equal to such Interest Period, subject to
any amendments of such reserve requirement by such Board or its successor,
taking into account any transitional adjustments thereto.
"Affiliate" - means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Company (a "Controlling
Person") or (ii) any Person (other than the Company or a Subsidiary) which
is controlled by or is under common control with a Controlling Person. As
used herein, the term "control" means possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, no individual shall be an
Affiliate solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries.
"Agreement" - means this Letter of Credit Agreement, as amended or
supplemented from time to time.
"Available Amount" - shall have the same meaning herein as in the
Letter of Credit.
"Bank" - means ABN AMRO Bank N.V., a banking institution organized and
existing under the laws of The Netherlands, acting through its Houston
Branch, as issuer of the Letter of Credit.
"Bank Bonds" - shall have the same meaning herein as in the Indenture.
"Base Rate" - means for any day the greater of:
(i) the rate of interest announced by the Bank from time to time
as its prime commercial rate for U.S. dollar loans as in effect on
such day, with any change in the Prime Rate resulting from a change in
said prime commercial rate to be effective as of the date of the
relevant change in said prime commercial rate; or
(ii) the sum of (x) the rate determined by the Bank to be the
average (rounded upwards, if necessary, to the next higher 1/100 of
1%) of the rates per annum quoted to the Bank at approximately 10:00
a.m. (Houston time) (or as soon thereafter as is practicable) on such
day (or, if such day is not a Business Day, on the immediately
preceding Business Day) by two or more Federal funds brokers selected
by the Bank for the sale to the Bank at face value of Federal funds in
an amount equal or comparable to the principal amount owed to the Bank
for which such rate is being determined, plus (y) 1/2 of 1% (0.50%).
"Base Rate Loan" - means a Liquidity Advance which is accruing
interest based on the Base Rate plus 2% per annum.
"Bond Documents" - means the Indenture, the Installment Payment and
the Bonds.
"Bond Owner," "Bondowner," "Owner" and "Bondholder" - shall have the
same meaning herein as in the Indenture.
"Bonds" means the $40,890,000 aggregate principal amount of
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ River Authority Pollution Control Revenue Refunding Bonds,
Series 1995 (Central Power and Light Company Project).
"Business Day" - shall have the same meaning herein as in the Letter
of Credit and, if the applicable Business Day relates to the borrowing or
payment of a Eurodollar Loan, means any day on which banks are dealing in
U.S. dollar deposits in the interbank market in London, England.
"Cap Interest Rate" - means a rate per annum of 12% calculated on the
basis of a year of 360 days for the actual days elapsed.
"Code" - means the Internal Revenue Code of 1986, as amended, and the
regulations, rulings and proclamations promulgated and proposed thereunder
or under the predecessor Code.
"Commission" - means the Securities and Exchange Commission, or any
entity succeeding to its responsibilities under the Public Utility Holding
Company Act of 1935, as amended.
"Company" - means Central Power and Light Company, a public utility
and corporation duly organized and validly existing under the laws of the
State of Texas, and its lawful successors and assigns, to the extent
permitted by the Installment Payment Agreement and this Agreement.
"Company Bonds" - shall have the same meaning herein as in the
Indenture.
"Consolidated Subsidiary" - means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Company
in consolidated financial statements if such statements were prepared as of
such date.
"Consolidated Net Worth" - means at any date the consolidated common
stock equity of the Company and its Consolidated Subsidiaries determined as
of such date.
"Controlled Group" - means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Company or any Subsidiary, are
treated as a single employer under Section 414 of the Code.
"Date of Issuance" - means the date on which all conditions precedent
under Article III hereof have been met or waived by the Bank and on which
the Letter of Credit is issued.
"Environmental Laws" - means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental restrictions
relating to the environment, the effect of the environment on human health
or to emissions, discharges or releases of pollutants, contaminants,
Hazardous Substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to 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,
in each case as in effect and applicable to the Company and its Subsidiaries
at the time the representation in Section 4.1(m) is made or deemed made or
compliance with Section 5.5 is determined.
"ERISA" - shall mean the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time, and the rules and regulations issued
thereunder, as from time to time in effect.
"Eurodollar Loan" - means a Liquidity Advance which is accruing
interest based on the Adjusted LIBOR plus the LIBOR Margin.
"Event of Default" - shall have the meaning specified in Section 6.1.
"Governmental Body" - shall mean any government, foreign, or domestic,
any court or any foreign or domestic, federal, state, municipal or other
governmental department, commission, board, bureau, agency, public authority
or instrumentality.
"Guarantee" - by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the holder of such Indebtedness of the payment
thereof or to protect such holder against loss in respect thereof (in whole
or in part), provided that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" - means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indenture" - means that certain Indenture of Trust, dated as of
October 1, 1995, between the Issuer and the Trustee, relating to the Bonds,
as amended or supplemented in accordance with the terms hereof and thereof.
"Indebtedness" - of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles, (v) all non-contingent obligations (and, for purposes
of Section 5.13, all contingent obligations) of such Person to reimburse any
bank or other Person in respect of amounts paid under a letter of credit or
similar instrument, (vi) all Indebtedness secured by a Lien on any asset of
such Person, whether or not such Indebtedness is otherwise an obligation of
such Person and (vii) all Indebtedness of others Guaranteed by such Person.
"Installment Payment Agreement" - means the Installment Payment
Agreement, dated as of October 1, 1995, between the Issuer and the Company,
relating to the Bonds, as amended or supplemented in accordance with the
terms thereof.
"Interest Period" - means: (a) with respect to each Eurodollar Loan,
the period commencing on the date of such Eurodollar Loan and ending one,
two or three months thereafter, as selected by the Company and (b) with
respect to each Base Rate Loan, the period commencing on the date of such
Base Rate Loan and ending 30 days thereafter, provided, however, that:
(i) with respect to a Eurodollar Loan, any Interest Period which
would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day unless with respect to a
Eurodollar Loan such Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding
Business Day;
(ii) with respect to a Eurodollar Loan, any Interest Period which
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month;
provided, further, however, that if any such Interest Period shall be less
than one month, the Liquidity Advance for such Interest Period shall be a
Base Rate Loan.
"Issuer" - means the ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ River Authority, a governmental
agency and body politic and corporate organized and validly existing under
the laws of the State of Texas.
"Letter of Credit" - means the irrevocable transferable letter of
credit issued by the Bank for the account of the Company in favor of the
Trustee for the benefit of the owners from time to time of the Bonds
pursuant to this Agreement in the form of Appendix I with appropriate
insertions, as amended.
"Letter of Credit Fee" - means any fee payable by the Company under
Section 2.7.
"Level I Status" - means the S&P Rating is A- or higher and the
▇▇▇▇▇'▇ Rating is A3 or higher.
"Level II Status" - means Level I Status does not exist, but the S&P
Rating is BBB or higher and the ▇▇▇▇▇'▇ Rating is Baa2 or higher.
"Level III Status" - means neither Level I Status or Level II Status
exists, but the S&P Rating is BBB- or higher and the ▇▇▇▇▇'▇ Rating is Baa3
or higher.
"Level IV Status" - means none of Level I Status, Level II Status and
Level III Status exists.
"LIBOR Margin" - means, for the first 3 months any Liquidity Advance
bears interest based on the Adjusted LIBOR, 0.375% per annum and thereafter
0.50% per annum.
"Lien" - means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this
Agreement, the Company or any Subsidiary shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital lease or
other title retention agreement relating to such asset.
"Liquidity Advance" - shall have the meaning specified in Section 2.3.
"Liquidity Drawing" - means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of "Exhibit E"
to the Letter of Credit.
"▇▇▇▇▇'▇ Rating" - means the rating assigned by ▇▇▇▇▇'▇ Investors
Service, Inc. to the outstanding senior unsecured non-credit enhanced
long-term indebtedness of the Company. Any reference in this Agreement to
any specific rating is a reference to such rating as currently defined by
▇▇▇▇▇'▇ Investors Service, Inc. and shall be deemed to refer to the
equivalent rating if such rating system changes.
"Obligations" - means the Liquidity Advances, fees relating to the
Letter of Credit, any and all obligations of the Company to reimburse the
Bank for any drawings under the Letter of Credit, and all other obligations
of the Company to the Bank arising under or in relation to this Agreement.
"Official Statement" - means the Official Statement relating to the
Bonds, dated October 26, 1995.
"Original Stated Amount" - shall have the meaning specified in Section
2.1.
"Outstanding," "Bonds Outstanding" or "Bonds then Outstanding" - shall
have the same meaning herein as in the Indenture.
"Parent" - means Central and South West Corporation, a Delaware
corporation."PBGC" - shall mean the Pension Benefit Guaranty Corporation or
any Governmental Body succeeding to the functions thereof.
"Person" - means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
"Plan" - means, with respect to the Company and each Subsidiary
thereof at any time, an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and either (a) is maintained by a member of the Controlled
Group for employees of a member of the Controlled Group of which either the
Company or such Subsidiary is a part, (b) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which a member of the
Controlled Group of which either the Company or such Subsidiary is a part is
then making or accruing an obligation to make contributions or has within
the preceding five plan years made contributions or (c) under which a member
of the Controlled Group of which either the Company or such Subsidiary is a
part has any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years or by reason of being deemed a contributing
sponsor under Section 4069 of ERISA.
"Potential Default" - means an event which but for the lapse of time
or the giving of notice, or both, would constitute an Event of Default.
"Projects" - shall have the meaning set forth in the Installment
Payment Agreement.
"Related Documents" - means the Bond Documents, this Agreement, the
Letter of Credit and any other agreement or instrument relating thereto.
"Remarketing Agent" - means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, as
remarketing agent under the Indenture, and any successor remarketing agent.
"Reportable Event" - shall mean any of the events set forth in Section
4043(b) of ERISA.
"Requirement of Law" means as to any Person, the articles of
incorporation and regulations or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation, or determination of
any arbitrator or court or other Governmental Body, in each case applicable
to or binding upon such Person or any of its Properties or to which such
Person or any of its property is subject.
"S&P Rating" - means the rating assigned by Standard & Poor's Ratings
Services Group, a division of The ▇▇▇▇▇▇-▇▇▇▇, Inc. to the outstanding
senior unsecured non-credit enhanced long-term indebtedness of the Company.
Any reference in this Agreement to any specific rating is a reference to
such rating as currently defined by Standard & Poor's Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇, Inc. and shall be deemed to refer to the
equivalent rating if such rating system changes.
"State" - means the State of Texas.
"Stated Expiration Date" - means October 26, 2000, or such later date
to which the Stated Expiration Date may be extended from time to time
pursuant to the Letter of Credit.
"Subsidiary" shall mean any corporation organized under the laws of
one of the States of the United States of America of which at least 50% of
the voting stock (except directors qualifying shares) is owned or
controlled, directly or indirectly, by the Company and/or one or more of its
Subsidiaries.
"Termination Date" - shall have the meaning set forth in the Letter of
Credit.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Any capitalized terms used
herein which are not specifically defined herein shall have the same meaning
herein as in the Indenture. All references in this Agreement to times of
day shall be references to Houston time unless otherwise expressly provided
herein Article II.
.C.ARTICLE II
LETTER OF CREDIT
.c2.Section 2.1.Issuance of Letter of Credit;. The Bank agrees to
issue on the Date of Issuance, upon the terms, subject to the conditions and
relying upon the representations and warranties set forth in this Agreement,
the Letter of Credit substantially in the form of Appendix I. The Letter of
Credit shall be in the Original Stated Amount of $43,411,550 (the "Original
Stated Amount"), which is the sum of (i) the principal amount of the Bonds
on the Date of Issuance, plus (ii) interest thereon at the Cap Interest Rate
for a period of One Hundred Eighty-Five (185) days.
.c2.Section 2.2.Letter of Credit Drawings;. The Trustee is authorized
to make drawings under the Letter of Credit in accordance with the terms
thereof. The Company hereby directs the Bank to make payments under the
Letter of Credit in the manner therein provided. The Company hereby
irrevocably approves reductions and reinstatements of the Available Amount
as provided in the Letter of Credit.
.c2.'Section 2.3.Reimbursement of Liquidity Drawings under the Letter
of Credit; Interest';. If the conditions precedent contained in Section 3.2
are satisfied at the time of payment by the Bank of any Liquidity Drawing,
each Liquidity Drawing made under the Letter of Credit shall constitute an
advance ("Liquidity Advance") to the Company. The Company promises to repay
to the Bank each Liquidity Advance on the earliest of (i) the Termination
Date, (ii) the date on which any Bank Bonds are redeemed or canceled
pursuant to the Indenture, (iii) the date on which any Bank Bonds are
remarketed pursuant to the Indenture or (iv) the date on which the Letter of
Credit is replaced by an Alternate Letter of Credit in accordance with the
terms of the Indenture. The Company also promises to pay to the Bank
interest on the unpaid principal amount of each Liquidity Advance from the
date such Liquidity Advance is made until it is paid in full as provided
herein, at a rate per annum for each Interest Period equal to the Base Rate
plus 2%, except to the extent the Company has timely elected as provided in
Section 2.5 hereof. Notwithstanding anything herein to the contrary no
Liquidity Advance which has been outstanding longer than 6 months may be a
Eurodollar Loan.
.c2.Section 2.4.Reimbursement of Drawings Other than Liquidity
Drawings under the Letter of Credit;. The Company agrees to reimburse the
Bank for the full amount of any drawing made under the Letter of Credit,
other than a Liquidity Drawing creating a Liquidity Advance, on the date of
each such drawing. If the Company does not make such reimbursement on such
date, such reimbursement obligation shall bear interest at the rate per
annum specified in Section 2.12.
.c2.Section 2.5.Conversion and Continuation Options;. (a) The Company
may elect from time to time to convert Eurodollar Loans to Base Rate Loans
by giving the Bank at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may
only be made on the last day of an Interest Period with respect thereto.
The Company may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Bank at least three Business Days' prior
irrevocable notice of such election and specifying the applicable Interest
Period. All or any part of outstanding Eurodollar Loans and Base Rate Loans
may be converted as provided herein, provided that (i) no Base Rate Loan may
be converted into a Eurodollar Loan when any Potential Default or Event of
Default has occurred and is continuing and (ii) no Base Rate Loan may be
converted into a Eurodollar Loan after the date that is one month prior to
the Termination Date.
(b) Subject to the terms and conditions hereof, any Eurodollar Loan
may be continued as such upon the expiration of the then current Interest
Period with respect thereto by the Company giving notice to the Bank, in
accordance with the applicable provisions of the term "Interest Period", of
such continuation, provided that no Eurodollar Loan may be continued as such
(i) when any Potential Default or Event of Default has occurred and is
continuing or (ii) after the date that is one month prior to the Termination
Date and provided, further, that (i) if the Company shall fail to give such
notice such Eurodollar Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period.
(c) No Eurodollar Loan may be created or continued if the Liquidity
Advance relating thereto is less than $500,000.
.c2.Section 2.6.Interest Rates and Payment Dates;. (a) Each
Eurodollar Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such day plus the LIBOR Margin payable on the last day of its
Interest Period and, if earlier, on the date the related Liquidity Advance
is payable as provided in Section 2.3 hereof.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus 2% payable on the last day of its Interest Period and,
if earlier, on the date the related Liquidity Advance is payable as provided
in Section 2.3 hereof and on the date such Base Rate Loan is converted to a
Eurodollar Rate Loan as provided in Section 2.05(a) hereof.
.c2.Section 2.7.Fees;. The Company hereby agrees to pay, or cause to
be paid, to the Bank:
(a) on the Issuance Date a non-refundable up-front issuance fee as
set forth in the letter agreement dated October ___, 1995 between the
Company and the Bank; and
(b) the Company shall pay to the Bank a letter of credit fee on the
average daily Available Amount at a rate of : (i) 0.30% per annum for any
day Level I Status exists; (ii) 0.45% per annum for any day Level II Status
exists; (iii) 0.55% per annum for any day Level III Status exists, and (iv)
0.85% per annum for any day Level IV Status exists. Such fee shall be
payable in arrears on the last day of each calendar quarter commencing
December 31, 1995 and on the Termination Date, unless the Letter of Credit
is terminated in whole on any earlier date, in which event the letter of
credit fee for the period to the date of such termination shall be paid on
the date of such termination.
(c) on the date of each drawing under the Letter of Credit, a drawing
fee of $200; and
(d) on the date of each transfer of the Letter of Credit to a
successor Trustee, a transfer fee in an amount equal to the Bank's then
standard fee for transfers in effect on such date.
.c2.Section 2.8.Method of Payment;. All payments to be made by the
Company under this Agreement shall be made to the Bank at
____________________, not later than 1:00 p.m., Houston time, on the date
when due and shall be made in lawful money of the United States of America
(in freely transferable U.S. dollars) and in immediately available funds.
.c2.Section 2.9.Lending Offices and Funding;. The Bank may, at its
option, elect to fund its Liquidity Advances hereunder at the branch, office
or affiliate specified in Section 7.12 (each a "Lending Office") or at such
other of its branches, offices or affiliates as it may from time to time
elect and designate in a written notice to the Company. Notwithstanding any
other provision of this Agreement, the Bank shall be entitled to fund and
maintain its funding of all or any part of the Liquidity Advances in any
manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if each Bank
had actually funded and maintained each Eurodollar Loan through the purchase
of deposits in the eurodollar interbank market having a maturity
corresponding to such Eurodollar Loan's Interest Period and bearing an
interest rate equal to the Adjusted LIBOR for such Interest Period.
.c2.Section 2.10.Computation of Interest;. All computations of
interest and fees payable by the Company under this Agreement shall be made
on the basis of a three hundred sixty (360) day year and actual days elapsed
except where interest is computed using the Base Rate in which case a year
of 365 or 366 days and actual days elapsed shall be used. Interest shall
accrue during each period during which interest is computed from and
including the first day thereof to but excluding the last day thereof.
.c2.Section 2.11.Payment Due on Non-Business Day to be made on Next
Business Day;. If any sum becomes payable pursuant to this Agreement on a
day which is not a Business Day, the date for payment thereof shall be
extended, without penalty, to the next succeeding Business Day, and such
extended time shall be included in the computation of interest and fees. If
the date for any payment of principal is extended by operation of law or
otherwise, interest shall be payable for such extended time.
.c2.Section 2.12.Late Payments;. If the principal amount of any
Obligation is not paid when due, such Obligation shall bear interest
(computed on the basis of a 365 or 366 day year and actual days elapsed)
from the due date thereof until paid in full at a rate per annum equal to
the Base Rate from time to time in effect plus four percent (4%) payable on
demand.
.c2.Section 2.13.Source of Funds;. All payments made by the Bank
pursuant to the Letter of Credit shall be made from funds of the Bank and
not from funds obtained from any other Person.
.c2.Section 2.14.Extension of Stated Expiration Date;. At any time
there shall remain no more than 4 1/2 years and no less than 4 1/4 years to
the then current Stated Expiration Date, the Company may request the Bank to
extend such Stated Expiration Date for a period of not less than one
additional year. If the Bank, in its sole discretion, elects to extend the
Stated Expiration Date then in effect, it shall deliver to the Trustee a
Notice of Amendment in the form of Exhibit K to the Letter of Credit (herein
referred to as a "Notice of Extension") designating the date to which the
Stated Expiration Date is being extended. Such extension of the Stated
Expiration Date shall be effective, after receipt of such notice, on the
Business Day following the date of delivery of such Notice of Extension, and
thereafter all references in this Agreement to the Stated Expiration Date
shall be deemed to be references to the date designated as such in the most
recent Notice of Extension delivered to the Trustee. Any date to which the
Stated Expiration Date has been extended in accordance with this Section
2.12 may be extended in like manner. Failure of the Bank to deliver a
Notice of Extension as herein provided within thirty (30) days of a request
by the Company to extend such Stated Expiration Date shall constitute an
election by the Bank not to extend the Stated Expiration Date.
.c2.Section 2.15.Funding Losses;. If the Company makes any payment or
prepayment of principal with respect to any Eurodollar Loan on any day other
than the last day of an Interest Period applicable to such Eurodollar Loan,
or if the Company fails to borrow any Eurodollar Loan after notice has been
given to the Bank in accordance with Section 2.5, the Company shall
reimburse the Bank within fifteen (15) days after demand for any resulting
loss or expense incurred by it (or by any existing or prospective
participant in the related Eurodollar Loan) including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties; provided, however, that the Bank shall have delivered to the
Company a certificate as to the amount of such loss, which certificate shall
be conclusive in the absence of manifest error.
.c2.Section 2.16.Basis for Determining Interest Rate Unavailable;. If
on or prior to the first day of any Interest Period deposits in dollars (in
the applicable amounts) are not being offered to the Bank in the London
interbank market for such Interest Period, the Bank shall forthwith give
notice thereof to the Company, whereupon the obligation of the Bank to make
a Eurodollar Loan shall be suspended until the Bank notifies the Company
that the circumstances giving rise to such suspension no longer exist.
Unless the Company notifies the Bank at least two Business Days before the
date of any Eurodollar Loan for which a notice of borrowing has previously
been given that it elects to repay such loan on such date, such loan shall
instead be made as a Base Rate Loan.
.c2.Section 2.17.Illegality;. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
the Bank with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for the Bank to make, maintain or fund its Eurodollar
Loans, the Bank shall forthwith so notify the Company, whereupon the Bank's
obligation to make Eurodollar Loans shall be suspended. If the Bank shall
determine that it may not lawfully continue to maintain and fund any of its
outstanding Eurodollar Loans to maturity and shall so specify in such
notice, the Company shall immediately prepay in full the then outstanding
principal amount of each such Eurodollar Loan, together with accrued
interest thereon. Concurrently with prepaying each such Eurodollar Loan,
the Company shall borrow a Base Rate Loan in an equal principal amount for
an Interest Period coincident with the remaining term of the Interest Period
applicable to such Eurodollar Loan, and the Bank shall make such Base Rate
Loan.
.c2.Section 2.18.Substitute Letter of Credit;. Notwithstanding any
provisions of the Indenture to the contrary, the Company agrees not to
replace or otherwise terminate the Letter of Credit prior to the earliest of
(i) if the Bonds are then rated by ▇▇▇▇▇'▇, the date on which ▇▇▇▇▇'▇ shall
have lowered or withdrawn either the long-term rating on the Bonds backed by
the Bank's Letter of Credit below "A" or the short-term rating on the Bonds
backed by the Bank's Letter of Credit below "P-1," (ii) if the Bonds are
then rated by S&P, the date on which S&P shall have lowered or withdrawn
either the long-term rating on the Bonds backed by the Bank's Letter of
Credit below "A" or the short-term rating on the Bonds backed by the Bank's
Letter of Credit below "A-1," or (iii) the initial Stated Expiration Date.
.C.ARTICLE III
CONDITIONS PRECEDENT
.c2.Section 3.1.Conditions Precedent to Issuance of Letter of Credit;.
As conditions precedent to the obligation of the Bank to issue the Letter of
Credit (a) the Company shall provide to the Bank on or before the Date of
Issuance, in form and substance satisfactory to the Bank and its counsel:
(i) a written opinion of counsel to the Company dated the Date
of Issuance, in form and substance satisfactory to the Bank's counsel,
including but not limited to an opinion relating to usury;
(ii) the written opinion or opinions of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., bond counsel, dated the Date of Issuance, in form and
substance satisfactory to the Bank's counsel;
(iii) a certificate signed by an authorized officer of the
Company, dated the Date of Issuance and stating that:
(1) the representations and warranties of the Company
contained in Article IV are correct on and as of the Date
of Issuance as though made on such date; and
(2) none of the Events of Default (as defined in
Article VI) has occurred and is continuing, or would result
from the issuance of the Letter of Credit or the execution
and delivery of this Agreement, and no event has occurred
and is continuing which would constitute an Event of
Default or a Potential Default;
(iv) a copy of resolutions of the board of directors of the
Company certified as of the Date of Issuance by the Secretary or an
Assistant Secretary of the Company, authorizing, among other things,
the execution, delivery and performance by the Company of this
Agreement and authorizing the Company to obtain the issuance of the
Letter of Credit;
(v) certified copies of the Company's regulations and articles
of incorporation;
(vi) a certificate of the Secretary or any Assistant Secretary
of the Company certifying the name and true signatures of the officers
of the Company authorized to sign this Agreement;
(vii) evidence of the status of the Company as a duly organized
and validly existing corporation under the laws of the State of Texas;
(viii) evidence that the Remarketing Agent has acknowledged and
accepted in writing its appointment as Remarketing Agent under the
Indenture and its duties and obligations thereunder;
(ix) executed originals of the Related Documents;
(x)Reliance letters with respect to each of the opinions delivered in
connection with (ii) above;
(xi) a copy of the order of the Commission referred to in
Section 4.1(b);
(xii) the receipt of such other documents, certificates and
opinions as the Bank or its counsel may reasonably request;
(b) no law, regulation or ruling of the United States or any
political subdivision or authority therein or thereof shall be in effect or
shall have occurred, the effect of which would be to prevent the Bank from
fulfilling its obligations under this Agreement; and
(c) all legal requirements provided herein incident to the execution,
delivery and performance of this Agreement and the Related Documents and the
transaction contemplated hereby and thereby, shall be reasonably
satisfactory to the Bank and its counsel.
.c2.Section 3.2.Conditions Precedent to Liquidity Advances;.
Following payment by the Bank of a Liquidity Drawing under the Letter of
Credit, a Liquidity Advance shall be made available to the Company only if
on the date of payment of such drawing by the Bank the following statements
shall be true:
(a) the representations and warranties of the Company contained in
Article IV are correct in all material respects on and as of the date of
such payment as though made on and as of such date; and
(b) no event has occurred and is continuing, or would result from
such payment, which constitutes a Potential Default or Event of Default.
Unless the Company shall have previously advised the Bank in writing that
one or both of the above statements is no longer true, the Company shall be
deemed to have represented and warranted on the date of such payment that
both of the above statements are true and correct.
.C.ARTICLE IV
REPRESENTATIONS AND WARRANTIES
.c2.Section ▇.▇.▇▇▇▇▇▇▇'s Representations;. In order to induce the
Bank to enter into this Agreement, the Company represents and warrants as of
the Date of Issuance that:
(a) The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Texas, has all requisite power and
authority to own its property and to carry on its business as now conducted,
and is in good standing and authorized to do business in each jurisdiction
in which the character of the property owned or leased by it therein or the
transaction of its business makes such qualification necessary.
(b) The Company has full corporate power and authority to enter into,
execute, deliver and carry out its obligations under this Agreement and the
Related Documents to which the Company is a party, and to incur the
obligations provided for herein and therein, all of which have been duly
authorized by all proper and necessary corporate action and are in full
compliance with the Company's articles of incorporation and regulations.
The Commission has issued an order under the Public Utility Holding Company
Act of 1935, as amended, authorizing the Company, among other things, to
enter into this Agreement and each of the Related Documents to which the
Company is a party, and such order is in full force and effect in the form
issued. No other consent or approval of, or exemption by, or notice to or
filing with any Person is required in respect of the Company to authorize
the execution, delivery and performance of, or as a condition to the
validity or enforceability of, this Agreement, the Related Documents to
which the Company is a party or any other agreement of the Company delivered
in connection herewith or therewith, except those which have been obtained
and except those which are required under the securities or blue sky laws of
any jurisdiction.
(c) The officer of the Company who has executed this Agreement, who
has requested the issuance of the Letter of Credit and who has executed or
will execute the Related Documents to which the Company is a party and all
other documents, instruments and agreements required to be delivered or
contemplated hereunder or thereunder was and is properly in office and was
and is duly authorized to execute the same.
(d) This Agreement and the Related Documents to which the Company is
a party each constitutes the valid and legally binding obligations of the
Company enforceable in accordance with their respective terms except that
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights
generally and by equitable principles.
(e) Except as disclosed in the Parent's Annual Report on Form 10-K
for the year ended December 31, 1994 and the Parent's Quarterly Report on
Form 10-Q for the quarters ended June 30, 1995, there are no actions, suits
or arbitration proceedings pending or, to the knowledge of the Company,
threatened against the Company, at law or in equity, before any
Governmental Body which individually or in the aggregate, if adversely
determined, would materially and adversely affect the financial condition of
the Company or materially impair the ability of the Company to perform its
obligations under this Agreement, the Related Documents to which the Company
is a party, or any other document, instrument or agreement required to be
delivered or contemplated hereunder or thereunder. There are no proceedings
pending or, to the knowledge of the Company, threatened against the Company
which call into question the validity or enforceability of this Agreement,
the Related Documents to which the Company is a party or any agreement of
the Company delivered in connection herewith or therewith.
(f) The execution, delivery and performance by the Company of this
Agreement and the Related Documents to which the Company is a party (i) do
not violate any provision of the articles of incorporation or regulations of
the Company, (ii) do not violate any order, decree or judgment, or any
provision of any statute, rule or regulation applicable to or binding on the
Company or affecting any of its property, (iii) do not violate or conflict
with, result in a breach of or constitute (with notice or lapse of time, or
both) a default under any shareholder agreement or stock preference
agreement or under any material mortgage, indenture, contract or other
agreement to which the Company is a party or by which any of its property is
bound and (iv) do not result in the creation or imposition of any lien upon
any material property of the Company.
(g) The Company has filed all material United States tax returns and
all other material tax returns, if any, which are required to be filed by
the Company, and has paid all taxes due, if any, as shown on said returns,
or pursuant to any assessment received by the Company, except such taxes, if
any, as are being contested in good faith and by appropriate proceedings.
(h) The consolidated financial statements of the Parent and its
consolidated subsidiaries as of December 31, 1993 and 1994 contained in the
Parent's Annual Report on Form 10-K for the year ended December 31, 1994 a
copy of which has been furnished to the Bank, present fairly the
consolidated financial position of the Company and its Consolidated
Subsidiaries as of December 31, 1993 and December 31 1994 and the results of
their operations for the two years ended December 31, 1994 in conformity
with generally accepted accounting principles consistently applied. The
consolidated financial statements contained in the Parent's Quarterly
Reports on Form 10-Q for the quarters ended June 30, 1994, copies of which
have been furnished to the Bank, present fairly the consolidated financial
position of the Company and its Consolidated Subsidiaries as of the dates
thereof and have been prepared in conformity with generally accepted
accounting principles applied on the basis consistent with that used in the
audited consolidated financial statements for the year ended December 31,
1994 (subject to normal year-end and audit adjustments). The Company has no
contingent liabilities which are required by generally accepted accounting
principles to be shown on the financial statements of the Parent other than
as indicated on said financial statements and since December 31, 1994, there
have been no material adverse changes in the financial condition or
operations of the Company.
(i) To the best knowledge of the Company, after appropriate
investigation, the Company is not in default with respect to any judgment,
order, writ, injunction, decree or decision of any Governmental Body which
default would have material adverse effect on the financial condition,
business or operations of the Company.
(j) The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System, as amended. No
part of the proceeds of the Bonds or any Liquidity Advance will be used,
directly or indirectly, by the Company for a purpose which violates any law,
rule, or regulation of any Governmental Body, including, without limitation,
the provisions of Regulation U or X of the Board of Governors of the Federal
Reserve System, as amended.
(k)No Potential Default or Event of Default has occurred and is continuing
or would result from the obligations incurred by the Company hereunder or by
the actions contemplated hereby.
(l) The representations and warranties of the Company in the Related
Documents to which it is a party are true and correct in every material
respect, and the Company has furnished the Bank a true and correct copy of
all the Related Documents as in effect on the date hereof.
(m) In the ordinary course of its business, the Company 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 liabilities and costs arising
under or imposed by Environmental Laws (including, without limitation, 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 Environmental Law, 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 Substances, and any actual or potential
liabilities to third parties, including employees). On the basis of this
review, the Company has no reason to conclude that such liabilities and
costs arising under, including the costs of compliance with, Environmental
Laws, are likely to have a material adverse effect on the business,
financial condition or results of operations of the Company and its
Consolidated Subsidiaries, considered as a whole.
(n) No Plan has been terminated nor have any proceedings been
instituted to terminate any Plan; the Company has not withdrawn from any
Plan in a complete or partial withdrawal nor has a condition occurred which
if continued would result in a complete or partial withdrawal; the Company
has not incurred any withdrawal liability (or contingent withdrawal
liability pursuant to Section 4062, 4063, 4064 or 4204 of ERISA) to PBGC or
to any Plan; the Company has not incurred any liability to PBGC other than
for required insurance premiums which have been paid when due; no Reportable
Event has occurred; and no Plan has an accumulated funding deficiency under
Section 302 of ERISA or Section 412 of the Code. Each employee benefit plan
as defined in Section 3(3) of ERISA to which the Company is a party is in
substantial compliance with ERISA, is not insolvent or in reorganization,
has not engaged in a "prohibited transaction" as defined in Section 406 of
ERISA or in Section 4975 of the Code and does not have an "accumulated
funding deficiency" as defined in Section 302 of ERISA or in Section 4971 of
the Code.
.C.ARTICLE V
COVENANTS
The Company covenants and agrees with the Bank that it will do the
following so long as any amounts may be drawn under the Letter of Credit,
and thereafter, so long as any amounts remain outstanding or Obligations
remain unfulfilled under this Agreement, unless the Bank shall otherwise
consent in writing:
.c2.Section 5.1.Information;. The Company will deliver to the Bank:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Parent, the annual report of the Parent and
its subsidiaries filed with the Commission on Form 10-K for such year;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Parent,
the quarterly report of the Parent and its Subsidiaries filed with the
Commission on Form 10-Q for such quarter;
(c) within five days after any officer of the Company obtains
knowledge of any Potential Default or Event of Default, if such Potential
Default or Event of Default is then continuing, a certificate of the chief
financial officer or the chief accounting officer of the Company setting
forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto;
(d) promptly upon the mailing thereof to the shareholders of the
Parent or Company generally, copies of all financial statements, reports and
proxy statements so mailed;
(e) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Form 8-K (or its equivalent)
which the Parent or Company shall have filed with the Commission;
(f) if and when any member of the ERISA Group (i) gives notice to the
PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of any
Plan has given notice of any such reportable event, a copy of the notice of
such reportable event given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Section 4201, 4203 or 4204 of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated under Section 4241, 4245 or 4041A of ERISA, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any Plan,
a copy of such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or makes any amendment to any
Plan which has resulted or which may reasonably be expected to result in the
imposition of a lien or the posting of a bond or other security under
Section 401(a)(29) or 412(n) of the Internal Revenue Code, or Section 302(f)
or 307 of ERISA, a certificate of the chief financial officer or the chief
accounting officer of the Company setting forth details as to such
occurrence and action, if any, which the Company or applicable member of the
ERISA Group is required or proposes to take;
(g) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as the
Bank may reasonably request.
(h) copies of each of the notices, reports and certificates which are
required to be given (i) to the Trustee by the Company under any of the Bond
Documents and (ii) to the holders of the Bonds by the Trustee under the
Indenture; and
(i) as promptly as possible and in any event within one Business Day
after the Company has knowledge thereof, notice of any change in the S&P
Rating or the ▇▇▇▇▇'▇ Rating.
.c2.Section 5.2.Payment of Obligations;. The Company will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, except
where the same may be contested in good faith by appropriate proceedings,
and will maintain, and will cause each Subsidiary to maintain, in accordance
with and to the extent required by generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
.c2.'Section 5.3.Maintenance of Property; Insurance';. (a) The Company will
keep, and will cause each of its Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear
and tear excepted.
(b) The Company will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Company or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance
on all their respective properties in at least such amounts, against at
least such risks and with no greater than such risk retention as are
customarily maintained, insured against or retained, as the case may be, in
the same general area by companies of established repute engaged in the same
or a similar business; and will furnish to the Bank, upon reasonable request
from the Bank, information presented in reasonable detail as to the
insurance so carried.
.c2.Section 5.4.Conduct of Business and Maintenance of Existence;.
The Company will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as now conducted by the Company
and its Subsidiaries, and will preserve, renew and keep in full force and
effect, and will cause each Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal
conduct of business; provided that nothing in this Section 5.4 shall
prohibit (i) the merger of a Subsidiary into the Company or the merger or
consolidation of a Subsidiary with or into another Person if the corporation
surviving such consolidation or merger is a Subsidiary and if, in each case,
after giving effect thereto, no Default shall have occurred and be
continuing, (ii) the transfer of assets, rights, privileges, licenses,
franchises or businesses from one Subsidiary to another Subsidiary or (iii)
the termination of the corporate existence of any Subsidiary if the Company
in good faith determines that such termination is in the best interest of
the Company and is not materially disadvantageous to the Bank.
.c2.Section 5.5.Compliance with Laws;. The Company will comply, and
cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) except where the
necessity or fact of compliance therewith is contested in good faith by
appropriate proceedings.
.c2.Section 5.6.Inspection of Property, Books and Records;. The
Company will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities;
and will permit, and will cause each Subsidiary to permit, representatives
of the Bank at the Bank's expense to visit and inspect any of their
respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often as
may reasonably be desired.
.c2.Section 5.7.Use of Proceeds;. None of such proceeds of any
drawing under the Letter of Credit will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of buying or
carrying any "margin stock" within the meaning of Regulation U.
.c2.Section 5.8.Negative Pledge;. The Company will not create, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired by
it, except: Liens that would not result in a default under the Indenture
dated February 1, 1940 between the Company and Continental Texas National
Bank and Trust Company of Houston and ▇.▇. ▇▇▇▇▇▇, as successor trustees, as
amended by the indentures supplemental thereto through the date hereof (the
"First Mortgage Indenture") [to be discussed with the Company].
.c2.Section 5.9.Transactions with Affiliates;. The Company will not,
and will not permit any Subsidiary to, directly or indirectly, pay any funds
to or for the account of, make any investment (whether by acquisition of
stock or indebtedness, by loan, advance, transfer of property, guarantee or
other agreement to pay, purchase or service, directly or indirectly, any
Debt, or otherwise) in, lease, sell, transfer or otherwise dispose of any
assets, tangible or intangible, to, or participate in, or effect, any
transaction with, any Affiliate except on an arm's-length basis on terms at
least as favorable to the Company or such Subsidiary than could have been
obtained from a third party who was not an Affiliate; provided that the
foregoing provisions of this Section shall not prohibit any such Person from
declaring or paying any lawful dividend or other payment ratably in respect
of all of its capital stock of the relevant class so long as, after giving
effect thereto, no Default shall have occurred and be continuing.
.c2.Section ▇.▇▇.▇▇▇▇ of Subsidiaries;. The Company will not and will
not permit any Subsidiary to, at any time, sell or otherwise transfer,
directly or indirectly, any capital stock of or other equity interest in any
Subsidiary if, after giving effect thereto, such Subsidiary would no longer
be a Subsidiary.
.c2.Section 5.11.Prohibition of Fundamental Changes;. The Company
shall not:
(a) enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); or
(b) convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or a substantial portion all of
its business or property.
Notwithstanding the foregoing provisions of this Section 5.11, the Company
may merge or consolidate with any other Person if the Company is the
surviving corporation or the surviving corporation assumes the liabilities
of the Company by operation of law or otherwise and no Event of Default or
Potential Default shall have occurred and be continuing immediately prior to
such transaction and after giving effect thereto. .c2.Section 5.12.Minimum
Consolidated Net Worth;. The Company shall not permit its Consolidated Net
Worth to be less than $950,000,000 at any time.
.c2.Section 5.13.Restrictions on Indebtedness;. The Company will not, and
will not permit any of its Subsidiaries to, create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness arising under any of the Related Documents;
(b) current liabilities of the Company incurred in the ordinary
course of business not incurred through (i) the borrowing of money, or (ii)
the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section ___;
(d) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(e) Indebtedness of a Subsidiary of the Company to the Company;
(f) Indebtedness of the Company arising under the First Mortgage
Indenture [to be discussed with Company];
(g) Indebtedness of the Company arising from borrowings under the
"CSW Money Pool [to be defined]" in an aggregate principal amount
outstanding not to exceed $300,000,000; and
(h) Indebtedness not otherwise permitted by this Section 5.13
aggregating not more than $50,000,000 and any substitutions, replacements
and refinancings thereof.
.c2.Section ▇.▇▇.▇▇▇▇ Documents;. The Company will not directly or
indirectly amend, modify, terminate or grant, or permit the amendment,
modification, termination or grant of, any waiver under (or consent to, or
permit or suffer to occur any action or omission which results in, or is
equivalent to, an amendment, modification, or grant of a waiver under) the
Bond Documents. The Company will perform and comply in all material
respects all terms, covenants and conditions of each of the Bond Documents.
.c2.Section 5.15.Official Statement;. The Company will not refer to
the Bank in any official statement or offering memorandum (other than the
Official Statement) or make any changes in reference to the Bank in any
revision of the Official Statement.
.c2.Section 5.16.Optional Redemptions;. The Company will not permit
an optional redemption or purchase for purposes of cancellation of the
Bonds; provided, however, that if the Company has deposited with the Bank or
the Trustee an amount equal to the principal amount of the Bonds to be
redeemed, the Bank shall consent to such optional redemption to the extent
of such amounts.
.C.ARTICLE VI
EVENTS OF DEFAULT
.c2.Section ▇.▇.▇▇▇▇▇▇ of Default;. If any of the following events
shall occur and be continuing, each such event shall be an "Event of
Default":
(a) any material representation or warranty made by the Company in
this Agreement or the Bond Documents or in any certificate, agreement,
instrument or statement contemplated by or made or delivered pursuant to or
in connection herewith or therewith, shall prove to have been false or
misleading in any material respect when made;
(b) any "event of default" shall have occurred under any of the Bond
Documents (as defined respectively therein);
(c) default in payment by the Company of any Obligations required to
be paid or reimbursed under this Agreement to the Bank when and as the same
shall become due and payable as herein provided;
(d) default in any material respect in the due observance or
performance by the Company of any covenant set forth in Section 5.8, 5.11,
5.12, 5.13, 5.14, 5.15 or 5.16;
(e) default in any material respect in the due observance or
performance by the Company of any other term, covenant or agreement set
forth in this Agreement and such default has not been remedied within thirty
(30) days after receiving notice from the Bank;
(f) any material provision of this Agreement, or any of the Bond
Documents shall cease to be valid and binding, or the Company or any
governmental authority shall contest the validity or binding effect of any
such provision, or the Company, or any agent or trustee on behalf of the
Company, shall deny that it has any or further liability under this
Agreement or any of the Bond Documents;
(g) the Company makes an assignment for the benefit of creditors,
files a petition in bankruptcy, is unable generally to pay its debts as they
come due, is adjudicated insolvent or bankrupt or there is entered any order
or decree granting relief in any involuntary case commenced against the
Company under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or if the Company petitions or applies to any
tribunal for any receiver, trustee, liquidator, assignee or custodian or
other similar official of the Company, or commences any proceeding in a
court of law for a reorganization, arrangement, dissolution, liquidation or
other similar procedure under any bankruptcy law or laws for the relief of
debtors, whether now or hereafter in effect, or if there is commenced
against the Company any such proceeding in a court of law which remains
undismissed or shall not be discharged, vacated or stayed, or such
jurisdiction shall not be relinquished, within sixty (60) days after
commencement, or the Company by any act, indicates its consent to, approval
of, or acquiescence in any such proceeding in a court of law, or to an order
for relief in an involuntary case commenced against the Company under any
such law, or the appointment of any receiver, trustee, liquidator, assignee,
custodian or other similar official for the Company, or if the Company
suffers any such receivership, trusteeship, liquidation, assignment or
custodianship or other similar procedure to continue undischarged for a
period of sixty (60) days after commencement or if the Company takes any
action for the purposes of effecting the foregoing;
(h) a default shall occur and be continuing under any agreement or
under any obligation owed by the Company if the effect of such default is to
accelerate, or permit the acceleration of, the maturity of any indebtedness
of the Company under such agreement or obligation in an aggregate principal
amount exceeding $25,000,000;
(i) any judgment or judgments, writ or writs or warrant or warrants
of attachment, or any similar process or processes in an aggregate amount in
excess of $25,000,000 shall be entered or filed against the Company or
against any of its property and remain unvacated, unbonded or unstayed for
a period of 30 days;
(j) the Parent at any time shall fail to directly own and control
beneficially and of record 100% of the outstanding voting stock of the
Company;
(k) there shall have occurred a material adverse change in the
condition (financial or otherwise), operation or business prospects of the
Company or any Subsidiary; or
(l) the Trustee shall fail to have a valid and enforceable pledge and
assignment of the Trust Estate (as defined in the Indenture).
.c2.Section 6.2.Remedies;. Upon the occurrence of any Event of
Default the Bank may exercise any one or more of the following rights and
remedies in addition to any other remedies herein or by law provided:
(a) by written notice to the Company and the Trustee, require that
the Company immediately prepay to the Bank in immediately available funds an
amount equal to the Available Amount of the Letter of Credit (such amount to
be held by the Bank as collateral security for the Obligations and applied
by the Bank to reimburse the Bank for subsequent drawings with respect to
the Letter of Credit); provided, however, that in the case of an Event of
Default described in Section 6.1(g), such prepayment of Obligations shall
automatically become due and payable without any notice;
(b) declare the principal of and interest on the Obligations owing
hereunder immediately due and payable, notwithstanding the provisions of
Section 2.3 and such amounts shall thereupon become immediately due and
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company, provided, however, that upon
the occurrence of an Event of Default under Section 6.1(g) such acceleration
shall automatically occur;
(c) give notice of the occurrence of an Event of Default to the
Trustee and instruct the Trustee to accelerate the Bonds, thereby causing
the Letter of Credit to expire fifteen (15) days thereafter;
(d) pursue any rights and remedies it may have under the Related
Documents; or
(e) pursue any other remedy available at law or in equity.
.C.ARTICLE VII
MISCELLANEOUS
.c2.'Section ▇.▇.▇▇ Deduction; Increased Costs';. (a) All sums
payable by the Company hereunder, whether of principal, interest, fees,
expenses or otherwise, shall be paid in full, without any deduction or
withholding whatsoever. In the event that the Company is compelled by law
to make any such deduction or withholding, the Company shall nevertheless
pay the Bank such amounts as will result in the receipt by the Bank of the
sum it would have received had no such deduction or withholding been
required to be made.
(b) If any applicable law, treaty, regulation, guideline or directive
(including, without limitation, regulations and guidelines with respect to
capital adequacy and Regulation D promulgated by the Board of Governors of
the Federal Reserve System as now and from time to time hereafter in effect)
or any new law, treaty, regulation, guideline or directive, or any
interpretation of any of the foregoing by any authority charged with the
administration or interpretation thereof or any central bank of other
fiscal, monetary or other authority having jurisdiction over the Bank or the
transactions contemplated by this Agreement (whether or not having the force
of law) shall:
(i) subject the Bank to any tax, deduction or withholding with
respect to the Bonds, the Letter of Credit or this Agreement, or any
amount paid or to be paid by the Bank as the issuer of the Letter of
Credit (other than any tax measured by or based upon the overall net
income of the Bank imposed by any jurisdiction having control over the
Bank);
(ii) impose, modify, require, make or deem applicable to the
Bank any reserve requirement, capital requirement, special deposit
requirement, insurance assessment or similar requirement against any
assets held by, deposits with or for the account of, or loans, letters
of credit or commitments by, an office of the Bank;
(iii) change the basis of taxation of payments due the Bank
under this Agreement or the Bonds (other than by a change in taxation
of the overall net income of the Bank);
(iv) cause or deem letters of credit to be assets held by the
Bank and/or as deposits on its books; or
(v) impose upon the Bank any other condition with respect to
such amount paid or payable to or by the Bank or with respect to this
Agreement, the Letter of Credit or the Bonds;
and the result of any of the foregoing is to increase the cost to the
Bank of making any payment or maintaining the Letter of Credit, or to
reduce the amount of any payment (whether of principal, interest or
otherwise) receivable by the Bank, or to reduce the rate of return on
the capital of the Bank (taking into consideration the Bank's policies
with respect to capital adequacy) or to require the Bank to make any
payment on or calculated by reference to the gross amount of any sum
received by it, or to increase the cost to the Bank of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum
received or receivable by the Bank under this Agreement with respect
thereto, in each case by an amount which the Bank in its reasonable
judgment deems material, then:
(1) the Bank shall promptly notify the Company in
writing of the happening of such event and will designate
a different lending office if such designation will avoid
the need for, or reduce the amount of, such compensation
and will not, in the judgment of the Bank, be otherwise
disadvantageous to the Bank;
(2) the Bank shall promptly deliver to the Company a
certificate stating the change which has occurred or the
reserve requirements or other costs or conditions which
have been imposed on the Bank or the request, direction or
requirement with which it has complied, together with the
date thereof, the amount of such increased cost, reduction
or payment and a reasonably detailed description of the way
in which such amount has been calculated, and the Bank's
determination of such amounts, absent fraud or manifest
error, shall be conclusive (in determining such amount, the
Bank may use any reasonable averaging and attribution
methods); and
(3) the Company shall pay to the Bank, from time to
time as specified by the Bank, such amount as will
compensate the Bank for such additional cost, reduction or
payment.
The protection of this paragraph shall be available to the Bank
regardless of any possible contention of invalidity or inapplicability of
the law, regulation or condition which has been imposed; provided, however,
that if it shall later be determined by the Bank that any amount so paid by
the Company pursuant to this Section 7.1 is in excess of the amount payable
under the provisions hereof, the Bank shall refund such excess amount to the
Company.
.c2.'Section 7.2.Right of Setoff; Other Collateral';. (a) Upon the
occurrence and during the continuance of an Event of Default, the Bank is
hereby authorized at any time and from time to time without notice to the
Company (any such notice being expressly waived by the Company), and to the
fullest extent permitted by law, to setoff, to exercise any banker's lien or
any right of attachment and apply any and all balances, credits, deposits
(general or special, time or demand, provisional or final), accounts or
monies at any time held and other indebtedness at any time owing by the Bank
to or for the account of the Company (irrespective of the currency in which
such accounts, monies or indebtedness may be denominated and the Bank is
authorized to convert such accounts, monies and indebtedness into United
State dollars) against any and all of the Obligations of the Company,
whether or not the Bank shall have made any demand for any amount owing to
the Bank by the Company.
(b) The rights of the Bank under this Section 7.2 are in addition to,
in augmentation of, and, except as specifically provided in this Section
7.2, do not derogate from or impair other rights and remedies (including,
without limitation, other rights of setoff) which the Bank may have.
.c2.Section 7.3.Indemnity, Costs, Expenses and Taxes;. The Company
agrees to indemnify and hold the Bank and its officers, directors and
employees harmless from and against, and to pay on demand, any and all
claims, damages, losses, liabilities, costs and expenses whatsoever which
the Bank and its officers, directors and employees may incur or suffer by
reason of or in connection with the execution and delivery of this Agreement
or the Letter of Credit, or any other documents which may be delivered in
connection with this Agreement or the Letter of Credit, or in connection
with any payment under the Letter of Credit, including, without limitation,
the reasonable fees and expenses of counsel for the Bank with respect
thereto and with respect to advising the Bank as to its rights and
responsibilities under this Agreement and the Letter of Credit and all
reasonable fees and expenses, if any, in connection with the enforcement or
defense of the rights of the Bank in connection with this Agreement or the
Letter of Credit, or the collection of any monies due under this Agreement
or such other documents which may be delivered in connection with this
Agreement or the Letter of Credit; except, only if, and to the extent that
any such claim, damage, loss, liability, cost or expense shall be caused by
the willful misconduct or gross negligence of the Bank in performing its
obligations under this Agreement or in making payment against a drawing
presented under the Letter of Credit which does not comply with the terms
thereof (it being understood and agreed by the parties hereto that in making
such payment the Bank's exclusive reliance on the documents presented to the
Bank in accordance with the terms of the Letter of Credit as to any and all
matters set forth therein, whether or not any statement or any document
presented pursuant to the Letter of Credit proves to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein proves to be
untrue or inaccurate in any respect whatsoever shall not be deemed willful
misconduct or gross negligence of the Bank). The Company, upon demand by
the Bank at any time, shall reimburse the Bank for any legal or other
expenses incurred in connection with investigating or defending against any
of the foregoing except if the same is directly due to the Bank's gross
negligence or willful misconduct. Promptly after receipt by the Bank of
notice of the commencement, or threatened commencement, of any action
subject to the indemnities contained in this Section, the Bank shall
promptly notify the Company thereof; provided, however, that the failure of
the Bank to notify the Company will not affect the obligation of the Company
to indemnify the Bank with respect to such action or any other action
pursuant to this Section. The obligations of the Company under this Section
shall survive payment of any amounts due under this Agreement and the
expiration or termination of the Letter of Credit.
.c2.Section 7.4.Obligations Absolute;. The obligations of the Company
under this Agreement shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under
all circumstances whatsoever.
.c2.Section 7.5.Liability of the Bank;. The Company assumes all risks
of the acts or omissions of the Trustee, the Remarketing Agent, the Paying
Agent or any agent of the Trustee, the Remarketing Agent or the Paying Agent
and any transferee of the Letter of Credit with respect to their use of the
Letter of Credit. Neither the Bank nor any of its officers or directors
shall be liable or responsible for (a) the use of the Letter of Credit or
for any acts or omissions of the Trustee and any transferee in connection
therewith, (b) the validity or genuineness of documents, or of any
endorsement thereon, even if such documents should in fact prove to be in
any or all respects invalid, fraudulent or forged, (c) payment by the Bank
against presentation of documents which do not comply with the terms of the
Letter of Credit, including failure of any documents to bear any reference
or adequate reference to the Letter of Credit, or (d) any other
circumstances whatsoever in making or failing to make payment under the
Letter of Credit; provided, however, that the Company shall have a claim
against the Bank, and the Bank shall be liable to the Company, to the extent
of any direct, as opposed to consequential, damages suffered by the Company
which the Company proves were caused by (i) the Bank's willful misconduct or
gross negligence in determining whether documents presented under the Letter
of Credit comply with the terms of the Letter of Credit or (ii) the Bank's
willful or grossly negligent failure to make lawful payment under the Letter
of Credit after the presentation to the Bank by the Trustee or a successor
trustee under the Indenture of a draft and certificate strictly complying
with the terms and conditions of the Letter of Credit (it being understood
that in making such payment the Bank's exclusive reliance on the documents
presented to the Bank in accordance with the terms of the Letter of Credit
as to any and all matters set forth therein, whether or not any statement or
any document presented pursuant to the Letter of Credit proves to forged,
fraudulent, invalid or insufficient in any respect or any statement
whatsoever, shall not be deemed willful misconduct or gross negligence of
the Bank). The Bank is hereby expressly authorized and directed to honor
any demand for payment which is made under the Letter of Credit without
regard to, and without any duty on its part to inquire into the existence
of, any disputes or controversies between the Issuer, the Company, the
Remarketing Agent, the Trustee, the Paying Agent, or any other person or the
respective rights, duties or liabilities of any of them, or whether any
facts or occurrences represented in any of the documents presented under the
Letter of Credit are true and correct.
.c2.Section 7.6.Participants;. The Bank shall have the right to grant
participations in the Letter of Credit to one or more other banking
institutions, and such participants shall be entitled to the benefits of
this Agreement, including, without limitation, Sections 2.15, 7.1, 7.3 and
7.14 hereof, to the same extent as if they were a direct party hereto;
provided, however, that no such participation by any such participant shall
in any way affect the obligation of the Bank under the Letter of Credit; and
provided further that no such participant shall be entitled to receive
payment hereunder of any amount greater than the amount which would have
been payable had the Bank not granted a participation to such participant.
.c2.Section 7.7.Survival of this Agreement;. All covenants,
agreements, representations and warranties made in this Agreement shall
survive the issuance by the Bank of the Letter of Credit and shall continue
in full force and effect so long as the Letter of Credit shall be unexpired
or any sums drawn or due hereunder shall be outstanding and unpaid,
regardless of any investigation made by any person. Wherever in this
Agreement the Bank is referred to, such reference shall be deemed to include
the successors and assigns of the Bank and all covenants, promises and
agreements by or on behalf of the Company which are contained in this
Agreement shall inure to the benefit of the successors and assigns of the
Bank. The rights and duties of the Company, however, may not be assigned or
transferred, except as specifically provided in this Agreement or with the
prior written consent of the Bank, and all obligations of the Company
hereunder shall continue in full force and effect notwithstanding any
assignment by the Company of any of its rights or obligations under any of
the Bond Documents or any entering into, or consent by the Company, to any
supplement or amendment to any of the Bond Documents.
.c2.Section 7.8.Modification of this Agreement;. No amendment,
modification or waiver of any provision of this Agreement or the Letter of
Credit shall be effective unless the same shall be in writing and signed by
the Bank, and no consent to any departure by the Company therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Bank. Any such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Company in any case shall entitle the Company to any other or further notice
or demand in the same, similar or other circumstances.
.c2.Section 7.9.Waiver of Rights by the Bank;. No course of dealing
or failure or delay on the part of the Bank in exercising any right, power
or privilege hereunder or under the Letter of Credit shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise, or the exercise of any other right or privilege.
The rights of the Bank under this Agreement and the Letter of Credit are
cumulative and not exclusive of any rights or remedies which the Bank would
otherwise have.
.c2.Section 7.10.Severability;. In case any one or more of the
provisions contained in this Agreement shall be held or deemed to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby. The parties shall endeavor in good
faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close
as possible to that of the invalid, illegal or unenforceable provisions.
.c2.'Section 7.11.Governing Law; Submission to Jurisdiction.';. This
Agreement shall be governed by and construed in accordance with the laws of
the State of Texas. The Company hereby submits to the nonexclusive
jurisdiction of the United States District Court for the ______________
District of Texas and of any Texas State court sitting in Houston for
purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company irrevocably
waives, to the fullest extent permitted by law, any objection which it may
now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum.
.c2.Section 7.12.Notices;. (a) Except as otherwise specified herein,
all notices hereunder shall be given by United States certified or
registered mail, by telegram or by other telecommunication device capable of
creating written record of such notice and its receipt. Notices hereunder
shall be effective when received and shall be addressed:
If to the Bank:
ABN AMRO Bank N.V.
Houston Branch
▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
with a copy to:
ABN AMRO North America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Utilities Group
If to the Company:
__________________________
__________________________
__________________________
__________________________
Attention: ______________
If to the Issuer:
__________________________
__________________________
__________________________
__________________________
Attention: ______________
If to the Remarketing Agent:
__________________________
__________________________
__________________________
__________________________
Attention: ______________
If to the Trustee:
__________________________
__________________________
__________________________
__________________________
Attention: ______________
Any party may change its address for purposes hereof by notice to the other
parties.
(b) The Bank agrees to give immediate notice, promptly confirmed in
writing, to the Remarketing Agent of any notice of an Event of Default given
to the Trustee by the Bank.
.c2.Section 7.13.Survival of Representations and Obligations;. All
representations and warranties of the Company contained in this Agreement
shall survive delivery of this Agreement and the transactions contemplated
hereby. The obligation of the Company to reimburse the Bank pursuant to
Sections 7.1, 7.3 and 7.14 shall survive the payment of the Bonds and the
termination of this Agreement.
.c2.Section 7.14.Taxes and Expenses;. Any taxes (excluding income and
franchise taxes) payable or ruled payable by any Governmental Body in
respect of this Agreement, the Letter of Credit or the Bonds shall be paid
by the Company, together with interest and penalties, if any; provided,
however, that the Company may reasonably contest any such taxes with the
prior written consent of the Bank. The Company shall reimburse the Bank for
all reasonable out of pocket expenses and charges paid or incurred by the
Bank in connection with the preparation, execution, delivery, administration
and enforcement (including reasonable attorneys' fees and disbursements of
the Bank's counsel) of this Agreement or the Letter of Credit and any
amendment to this Agreement or the Letter of Credit.
.c2.Section 7.15.Headings;. The table of contents and captions in
this Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.
.c2.Section 7.16.Counterparts;. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original but both or
all of which, when taken together, shall constitute one instrument, and
shall become effective when copies hereof bearing the signatures of each of
the parties hereto shall be delivered to the Company and the Bank.
.c2.Section 7.17.Waiver of Jury Trial;. Each of the Borrower, the
Agent and the Banks hereby irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
Please signify your agreement and acceptance of the foregoing by
executing this Letter of Credit Agreement in the space provided below.
.c4.Signature;Very truly yours,
ABN AMRO Bank N.V.,
acting through its Houston Branch
By:
Title:
By:
Title:
Accepted and agreed to:
Central Power and Light Company
By:
Title:
APPENDIX I
IRREVOCABLE TRANSFERABLE LETTER OF CREDIT
____________, 1995
**U.S. $43,411,550
No. __________
The Bank of New York, as trustee (the "Trustee")
under the Indenture of Trust dated as of
October 1, 1995 (the "Indenture"), between
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ River Authority (the "Issuer"),
and the Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Ladies and Gentlemen:
We hereby establish in your favor as Trustee for the benefit of the
holders of the Bonds (as hereinafter defined), our irrevocable
transferable Letter of Credit No. ________ for the account of Central
Power and Light Company (the "Company"), whereby we hereby irrevocably
authorize you to draw on us from time to time, from and after the date
hereof to and including the earliest to occur of our close of business on:
(i) October 26, 2000 (as extended from time to time, the "Stated
Expiration Date"), (ii) the earlier of (A) the date which is fifteen (15)
days following the conversion of all of the Bonds to either the
Multiannual Mode or Fixed Rate Mode (as each term is defined in the
Indenture) as such date is specified in a certificate in the form of
Exhibit A hereto (the "Conversion Date") or (B) the date on which the Bank
honors a drawing under the Letter of Credit on or after the conversion of
all of the Bonds to either the Multiannual Mode or Fixed Rate Mode, (iii)
the date which is fifteen (15) days following receipt from you of a
certificate in the form set forth as Exhibit B hereto, (iv) the date on
which an Acceleration Drawing is honored by us, and (v) the date which is
fifteen (15) days following receipt by you of a written notice from us
specifying the occurrence of an Event of Default under the Letter of
Credit Agreement dated as of October 1, 1995, between the Company and us
(the "Letter of Credit Agreement") and directing you to accelerate the
Bonds (the "Termination Date"), a maximum aggregate amount not exceeding
Forty Three Million Four Hundred Eleven Thousand Five Hundred Fifty United
States Dollars (U.S. $43,411,550 - the "Original Stated Amount") to pay
principal of and accrued interest on, or the purchase price of, the
$40,890,000 Pollution Control Revenue Refunding Bonds (Central Power and
Light Company Project) Series 1995 issued by the Issuer (the "Bonds"), in
accordance with the terms hereof (said $43,411,550 having been calculated
to be equal to $40,890,000, the original principal amount of the Bonds,
plus $2,521,550 which is at least 185 days' accrued interest on said
principal amount of the Bonds at the rate of twelve percent (12%) per
annum (the "Cap Interest Rate")). This credit is available to you against
presentation of the following documents (the "Payment Documents")
presented to ABN AMRO Bank N.V., acting through its Houston Branch (the
"Bank"), as described below:
A certificate (with all blanks appropriately completed) (i) in
the form attached as Exhibit C hereto to pay accrued interest
on the Bonds as provided for under Section 4.03(e) of the
Indenture (an "Interest Drawing"), (ii) in the form attached
as Exhibit D hereto to pay the principal amount of and accrued
interest on the Bonds in respect of any redemption of the
Bonds as provided for in Section 4.03(e) of the Indenture (a
"Redemption Drawing"), provided that in the event the date of
redemption or purchase coincides with an Interest Payment Date
(as defined in the Indenture) the Redemption Drawing shall not
include any accrued interest on the Bonds (which interest is
payable pursuant to an Interest Drawing), (iii) in the form
attached as Exhibit E hereto, to allow The Bank of New York,
as Paying Agent (together with its permitted successors and
assigns, the "Paying Agent"), to pay the purchase price of
Bonds tendered for purchase as provided for in Section
2.10(b)(ii) of the Indenture which have not been successfully
remarketed or for which the purchase price has not been
received by the Paying Agent by 10:00 a.m., Houston time, on
the purchase date (a "Liquidity Drawing"), provided that in
the event the purchase date coincides with an Interest Payment
Date, the Liquidity Drawing shall not include any accrued
interest on the Bonds (which interest is payable pursuant to
an Interest Drawing), (iv) in the form attached as Exhibit F
hereto, to pay the principal of and accrued interest in
respect of Bonds the payment of which has been accelerated
pursuant to Section 6.02 of the Indenture (an "Acceleration
Drawing"), or (v) in the form attached as Exhibit G hereto to
pay the principal amount of Bonds maturing on _____________,
_______ (a "Stated Maturity Drawing"), each certificate to
state therein that it is given by your duly authorized officer
and dated the date such certificate is presented hereunder.
No drawings shall be made under this Letter of Credit for
Company Bonds or Bank Bonds (as each term is defined in the
Indenture).
All drawings shall be made by presentation of each Payment Document
at our office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ as
aforesaid, by tested telex (at telex number ___________ Answerback:
___________) or by telecopier (at telecopier number (312) ___________),
Attention: ______________________, without further need of documentation,
including the original of this Letter of Credit, it being understood that
each Payment Document so submitted is to be the sole operative instrument
of drawing. You shall use your best efforts to give telephonic notice of
a drawing to the Bank at its ______________________, ((312) ___________)
on the Business Day preceding the day of such drawing (but such notice
shall not be a condition to drawing hereunder and you shall have no
liability for not doing so).
We agree to honor and pay the amount of any Interest, Redemption,
Liquidity, Acceleration or Stated Maturity Drawing if presented in
compliance with all of the terms of this Letter of Credit. If such
drawing, other than a Liquidity Drawing, is presented prior to 3:00 P.M.,
Houston time, on a Business Day, payment shall be made to the account
number or address designated by you of the amount specified, in
immediately available funds, by 10:00 A.M., Houston time, on the following
Business Day. If any such drawing, other than a Liquidity Drawing, is
presented at or after 3:00 P.M., Houston time, on a Business Day, payment
shall be made to the account number or address designated by you of the
amount specified, in immediately available funds, by 1:30 P.M., Houston
time, on the following Business Day. If a Liquidity Drawing is presented
prior to 10:00 A.M., Houston time, on a Business Day, payment shall be
made to the account number or address designated by you of the amount
specified, in immediately available funds, by 2:00 P.M., Houston time, on
the same Business Day. If a Liquidity Drawing is presented at or after
10:00 A.M., Houston time, payment shall be made to the account number or
address designated by you of the amount specified, in immediately
available funds, by 10:00 A.M., Houston time, on the following Business
Day. Payments made hereunder shall be made by wire transfer to you or by
deposit into your account with us in accordance with the instructions
specified by the Trustee in the drawing certificate relating to a
particular drawing hereunder. "Business Day" means any day other than a
day on which banking institutions in the city in which the principal
corporate trust office of the Trustee or the principal corporate trust
office of the Paying Agent or the principal office of the Remarketing
Agent (as defined in the Indenture) is located, or in the City of Houston,
Texas, are required or authorized by law to remain closed, or other than a
day on which the New York Stock Exchange is closed.
The Available Amount (as hereinafter defined) will be reduced
automatically by the amount of any drawing hereunder; provided, however,
that the amount of any Interest Drawing hereunder, less the amount of the
reduction in the Available Amount attributable to interest as specified in
a certificate in the form of Exhibit D or H hereto, shall be automatically
reinstated immediately effective the 11th day after such drawing unless
you shall have received notice by telecopy (or other facsimile
telecommunication) within ten (10) calendar days of the date of any
Interest Drawing that the Bank has not been reimbursed in full for any
such drawing or any other Event of Default has occurred under the Letter
of Credit Agreement and as a consequence thereof the Letter of Credit will
not be so reinstated. After payment by us of a Liquidity Drawing, the
obligation of the Bank to honor drawings under this Letter of Credit will
be automatically reduced by an amount equal to the Original Purchase Price
of any Bonds (or portions thereof) purchased pursuant to said drawing. In
addition, prior to the conversion of all of the Bonds to either the
Multiannual Mode or Fixed Rate Mode, in the event of the remarketing of
the Bonds (or portions thereof) previously purchased with the proceeds of
a Liquidity Drawing, our obligation to honor drawings hereunder will be
automatically reinstated concurrently upon receipt by us, or the Trustee
or the Paying Agent on our behalf, of an amount equal to the Original
Purchase Price of such Bonds (or portion thereof); the amount of such
reinstatement shall be equal to the Original Purchase Price of such Bonds
(or portions thereof). "Original Purchase Price" shall mean the principal
amount of any Bond purchased with the proceeds of a Liquidity Drawing plus
the amount of accrued interest on such Bond paid with the proceeds of a
Liquidity Drawing (and not pursuant to an Interest Drawing) upon such
purchase.
Upon receipt by us of a certificate of the Trustee in the form of
Exhibit D or H hereto, the Letter of Credit will automatically and
permanently reduce the amount available to be drawn hereunder by the
amount specified in such certificate. Such reduction shall be effective
as of the next Business Day following the date of delivery of such
certificate.
Upon any permanent reduction of the amounts available to be drawn
under this Letter of Credit, as provided herein, we may deliver to you a
substitute Letter of Credit in exchange for this Letter of Credit or an
amendment to this Letter of Credit substantially in the form of Exhibit I
hereto to reflect any such reduction. If we deliver to you such a
substitute Letter of Credit you shall simultaneously surrender to us for
cancellation the Letter of Credit then in your possession. The "Available
Amount" shall mean the Original Stated Amount (i) less the amount of all
prior reductions pursuant to Interest, Redemption, Liquidity, Acceleration
or Stated Maturity Drawings, (ii) less the amount of any reduction thereof
pursuant to a reduction certificate in the form of Exhibit D or H hereto
to the extent such reduction is not already accounted for by a reduction
in the Available Amount pursuant to (i) above, (iii) plus the amount of
all reinstatements as above provided.
Prior to the Termination Date, we may extend the Stated Expiration
Date from time to time at the request of the Company by delivering to you
an amendment to this Letter of Credit in the form of Exhibit K hereto
designating the date to which the Stated Expiration Date is being
extended. Each such extension of the Stated Expiration Date shall become
effective on the Business Day following delivery of such notice to you and
thereafter all references in this Letter of Credit to the Stated
Expiration Date shall be deemed to be references to the date designated as
such in such notice. Any date to which the Stated Expiration Date has
been extended as herein provided may be extended in a like manner.
Upon the Termination Date this Letter of Credit shall automatically
terminate and be delivered to the Bank for cancellation.
This Letter of Credit is transferable in whole only to your
successor as Trustee. Any such transfer (including any successive
transfer) shall be effective upon receipt by us (which receipt shall be
subsequently confirmed in writing to the transferor and the transferee by
the Bank) of a signed copy of the instrument effecting each such transfer
signed by the transferor and by the transferee in the form of Exhibit J
hereto (which shall be conclusive evidence of such transfer) and, in such
case, the transferee instead of the transferor shall, without the
necessity of further action, be entitled to all the benefits of and rights
under this Letter of Credit in the transferor's place; provided that, in
such case, any certificates of the Trustee to be provided hereunder shall
be signed by one who states therein that he is a duly authorized officer
or agent of the transferee.
Communications with respect to this Letter of Credit shall be
addressed to us at ABN AMRO Bank N.V., Houston Branch, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ______________________,
specifically referring to the number of this Letter of Credit.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by, and construed in accordance with,
the terms of the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500
(the "Uniform Customs"), except for Article 41 and the first sentence of
Article 48(g) thereof. As to matters not governed by the Uniform Customs,
this Letter of Credit shall be governed by and construed in accordance
with the laws of the State of Texas, including without limitation the
Uniform Commercial Code as in effect in the State of Texas.
All payments made by us hereunder shall be made from our funds and
not with the funds of any other person.
This Letter of Credit sets forth in full the terms of our
undertaking, and such undertaking shall not in any way be modified or
amended by reference to any other document whatsoever.
ABN AMRO Bank N.V.,
acting through its Houston
Branch
By:__________________________
Its
EXHIBIT A
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
NOTICE OF CONVERSION DATE
ABN AMRO Bank N.V.
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Attention: ______________________
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. ________ dated ___________, 199_ (the "Letter of
Credit"), which has been established by you for the account of Central
Power and Light Company, in favor of the Trustee.
The undersigned hereby certifies and confirms that the conversion of
all of the Bonds to either the Multiannual Mode or Fixed Rate Mode has
occurred on [insert date], and, accordingly, the Letter of Credit shall
terminate 15 days after such conversion in accordance with its terms.
All defined terms used herein which are not otherwise defined herein
shall have the same meaning as in the Letter of Credit.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
EXHIBIT B
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
NOTICE OF TERMINATION
ABN AMRO Bank N.V.
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Attention: ______________________
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. ________ dated October 26, 1995 (the "Letter of
Credit"), which has been established by you for the account of Central
Power and Light Company in favor of the Trustee.
The undersigned hereby certifies and confirms that [(i) no Bonds (as
defined in the Letter of Credit) remain Outstanding within the meaning of
the Indenture, (ii) all drawings required to be made under the Indenture
and available under the Letter of Credit have been made and honored, or
(iii) on Alternate Letter of Credit has been issued to replace the Letter
of Credit pursuant to the Indenture and the Installment Payment Agreement
dated as of October 1, 1995, between the Issuer and the Company,][1] and,
accordingly, the Letter of Credit shall be terminated in accordance with
its terms.
All defined terms used herein which are not otherwise defined shall
have the same meaning as in the Letter of Credit.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
__________________
[1] Insert appropriate subsection.
By Telecopy of Tested Telex
EXHIBIT C
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
INTEREST DRAWING CERTIFICATE
ABN AMRO Bank N.V.
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Attention: ______________________
The undersigned individual, a duly authorized representative of
__________________ (the "Beneficiary"), hereby Certifies on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable
Transferable Letter of Credit No. ________ dated October 26, 1995 (the
"Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank") in favor of
the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of
Credit) under the Indenture.
2. The Beneficiary is entitled to make this drawing in the amount
of $_____________ under the Letter of Credit pursuant to the Indenture
with respect to the payment of interest due on all Bonds outstanding on
the Interest Payment Date (as defined in the Indenture) occurring on
[insert applicable date], other than Bank Bonds and Company Bonds (as each
term is defined in the Letter of Credit).
3. The amount of the drawing is equal to the amount required to be
drawn by the Trustee pursuant to Section 4.03(e) of the Indenture.
4. The amount of the drawing made by this Certificate was computed
in compliance with the terms of the Indenture and, when added to the
amount of any other drawing under the Letter of Credit made simultaneously
herewith, does not exceed the Available Amount (as defined in the Letter
of Credit).
5. Payment by the Bank pursuant to this drawing shall be made to
______________________________, ABA Number ________________________,
Account Number ___________________, Attention:
___________________________________, Re: _________________________.
In Witness Whereof, this Certificate has been executed this ____ day
of ____________________, ______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy of Tested Telex
EXHIBIT D
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
REDEMPTION DRAWING AND REDUCTION CERTIFICATE
ABN AMRO Bank N.V.
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Attention: ______________________
The undersigned individual, a duly authorized representative of
_____________ _____________________ (the "Beneficiary"), hereby Certifies
on behalf of the Beneficiary as follows with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. ________ dated October 26,
1995 (the "Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank")
in favor of the Beneficiary; (ii) those certain Bonds (as defined in the
Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of
Credit) under the Indenture.
2. The Beneficiary is entitled to make this drawing in the amount
of $____________ under the Letter of Credit pursuant to Section 4.03(e) of
the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal
amount of Bonds to be redeemed by the Issuer (as defined in the Letter of
Credit) pursuant to Section 2.06[(a)][(b)[(c)]* of the Indenture on
[insert applicable date] (the "Redemption Date") other than Bank Bonds and
Company Bonds (as each term is defined in the Letter of Credit), plus (ii)
interest on such Bonds accrued from the immediately preceding Interest
Payment Date (as defined in the Indenture) to the Redemption Date,
provided that in the event the Redemption Date coincides with an Interest
Payment Date this drawing does not include any accrued interest on such
Bonds.
__________________
* Insert appropriate subsection.
(b) Of the amount stated in paragraph 2 above:
(i) $______________ is demanded in respect of the principal
amount of the Bonds referred to in subparagraph (a) above; and
(ii) $_____________ is demanded in respect of accrued interest
on such Bonds.
4. Payment by the Bank pursuant to this drawing shall be made to
_________________________, ABA Number _____________________________,
Account Number ____________________________, Attention:
_____________________________, Re: _________________________________.
5. The amount of the drawing made by this Certificate was computed
in compliance with the terms and conditions of the Indenture and, when
added to the amount of any other drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount (as defined
in the Letter of Credit).
6. Upon payment of the amount drawn hereunder, the Bank is hereby
directed to permanently reduce the Available Amount by $[insert amount of
reduction] and the Available Amount shall thereupon equal $[insert new
Available Amount]. The Available Amount has been reduced by an amount
equal to the principal of Bonds paid with this drawing and an amount equal
to 185 days' interest thereon at the Cap Interest Rate (as defined in the
Letter of Credit).
7. Of the amount of the reduction stated in paragraph 6 above:
(i) $____________ is attributable to the principal amount of
Bonds redeemed; and
(ii) $___________ is attributable to interest on such Bonds
(i.e., 185 days' interest thereon at the Cap Interest Rate.
8. The amount of the reduction in the Available Amount has been
computed in accordance with the provisions of the Letter of Credit.
9. Following the reduction, the Available Amount shall be at least
equal to the aggregate principal amount of the Bonds outstanding (to the
extent such Bonds are not Bank Bonds or Company Bonds (as each term is
defined in the Letter of Credit)) plus 185 days' interest thereon at the
Cap Interest Rate.
*10. In the case of a redemption pursuant to Section 2.06(b) of the
Indenture, the Trustee, prior to giving notice of redemption to the owners
of the Bonds, received written evidence from the Bank that the Bank has
consented to such redemption.
__________________
* To be included in certificate only if Section 2.06(b) is referenced
in paragraph numbered 3 above.
In Witness Whereof, this Certificate has been executed this ______
day of _______________, ______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy of Tested Telex
EXHIBIT E
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
LIQUIDITY DRAWING CERTIFICATE
ABN AMRO Bank N.V.
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Attention: ______________________
The undersigned individual, a duly authorized representative of
___________ (the "Beneficiary") hereby Certifies as follows with respect
to (i) that certain Irrevocable Transferable Letter of Credit No. ________
dated October 26, 1995 (the "Letter of Credit"), issued by ABN AMRO Bank
N.V. (the "Bank") in favor of the Beneficiary; (ii) those certain Bonds
(as defined in the Letter of Credit); and (iii) that certain Indenture (as
defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make this drawing under the
Letter of Credit in the amount of $_____________ with respect to the
payment of the purchase price of Bonds tendered for purchase in accordance
with Section 2.11 of the Indenture and to be purchased on [insert
applicable date] (the "Purchase Date") which Bonds have not been
remarketed as provided in the Indenture or the purchase price of which has
not been received by the Paying Agent (as defined in the Letter of Credit)
by 10:00 a.m., Houston time, on said Purchase Date.
3. (a) The amount of the drawing is equal to (i) the principal
amount of Bonds to be purchased pursuant to the Indenture on the Purchase
Date other than Bank Bonds and Company Bonds (as each term is defined in
the Letter of Credit), plus (ii) interest on such Bonds accrued from the
immediately preceding Interest Payment Date (as defined in the Indenture)
(or if none, the date of issuance of the Bonds) to the Purchase Date,
provided that in the event the Purchase Date coincides with an Interest
Payment Date this drawing does not include any accrued interest on such
Bonds.
(b) Of the amount stated in paragraph (2) above:
(i) $_________________ is demanded in respect of the principal
portion of the purchase price of the Bonds referred to in
subparagraph (2) above; and
(ii) $_______________________ is demanded in respect of payment
of the interest portion of the purchase price of such Bonds.
4. The amount of the drawing made by this Certificate was computed
in compliance with the terms and conditions of the Indenture and, when
added to the amount of any other drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount (as defined
in the Letter of Credit).
5. The Beneficiary will register or cause to be registered in the
name of the Bank, upon payment of the amount drawn hereunder, Bonds in the
principal amount of the Bonds being purchased with the amounts drawn
hereunder and will deliver such Bonds to the Trustee in accordance with
the Indenture.
6. Payment by the Bank pursuant to this drawing shall be made to
_________________________, ABA Number ___________________________, Account
Number _____________________, Attention: _______________________________,
Re: _____________________________.
In Witness Whereof, this Certificate has been executed this _____
day of _____________________, ______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy of Tested Telex
EXHIBIT F
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
ACCELERATION DRAWING CERTIFICATE
ABN AMRO Bank N.V.
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Attention: ______________________
The undersigned individual, a duly authorized representative of
_________________ (the "Beneficiary"), hereby Certifies on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable
Transferable Letter of Credit No. ________ dated October 26, 1995 (the
"Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank") in favor of
the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. An Event of Default has occurred under subsection [insert
subsection] of Section 6.01 of the Indenture and the Trustee has declared
the principal of and accrued interest on all Bonds then outstanding
immediately due and payable. The Beneficiary is entitled to make this
drawing in the amount of $_____________ under the Letter of Credit
pursuant to Section 6.02 of the Indenture in order to pay the principal of
and interest accrued on the Bonds due to an acceleration thereof in
accordance with Section 6.02 of the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal
amount of Bonds outstanding on [insert date of acceleration] (the
"Acceleration Date") other than Bank Bonds and Company Bonds (as each term
is defined in the Letter of Credit), plus (ii) interest on such Bonds
accrued from the immediately preceding Interest Payment Date (as defined
in the Indenture) to the Acceleration Date.
(b) Of the amount stated in paragraph 2 above:
(i) $____________ is demanded in respect of the principal
portion of the Bonds referred to in subparagraph (a) above; and
(ii) $__________________ is demanded in respect of accrued
interest on such Bonds.
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount (as defined
in the Letter of Credit).
5. Payment by the Bank pursuant to this drawing shall be made to
_______________________, ABA Number ________________________, Account
Number _________________, Attention: ______________________, Re:
_____________________.
In Witness Whereof, this Certificate has been executed this ____ day
of ______________________, _____.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy of Tested Telex
EXHIBIT G
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
STATED MATURITY DRAWING CERTIFICATE
ABN AMRO Bank N.V.
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Attention: ______________________
The undersigned individual, a duly authorized representative of
_______________ (the "Beneficiary"), hereby Certifies on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable
Transferable Letter of Credit No. ____________________ dated October 26,
1995 (the "Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank")
in favor of the Beneficiary; (ii) those certain Bonds (as defined in the
Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make this drawing in the amount
of $___________ under the Letter of Credit pursuant to Section 4.03(e) of
the Indenture.
3. The amount of this drawing is equal to the principal amount of
Bonds outstanding on [___________, ________,] the maturity date thereof as
specified in Section 2.01 of the Indenture, other than Bank Bonds and
Company Bonds (as each term is defined in the Letter of Credit).
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any other drawing under the Letter of Credit
made simultaneously herewith, does not exceed the Available Amount (as
defined in the Letter of Credit) .
5. Payment by the Bank pursuant to this drawing shall be made to
____________________, ABA Number __________________, Account Number
______________, Attention: __________________________, Re:
_____________________.
In Witness Whereof, this Certificate has been executed this _____
day of ___________, _______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
EXHIBIT H
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
REDUCTION CERTIFICATE
ABN AMRO Bank N.V.
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Attention: ______________________
The undersigned hereby Certifies with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. ________ dated October 26,
1995 (the "Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank")
in favor of the Beneficiary; (ii) those certain Bonds (as defined in the
Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. Upon receipt by the Bank of this Certificate, the Available
Amount (as defined in the Letter of Credit) shall be reduced by
$__________ and the Available Amount shall thereupon equal
$______________. $__________________ of the new Available Amount is
attributable to interest.
3. The amount of the reduction in the Available Amount has been
computed in accordance with the provisions of the Letter of Credit.
4. Following the reduction, the Available Amount shall be at least
equal to the aggregate principal amount of the Bonds outstanding (other
than Bank Bonds and Company Bonds (as each term is defined in the Letter
of Credit)) plus 185 days' interest thereon at the Cap Interest Rate (as
defined in the Letter of Credit).
In Witness Whereof, this Certificate has been executed this ______
day of ___________________, _____.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
EXHIBIT I
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
NOTICE OF AMENDMENT
[Trustee]
________________________
________________________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. ________ dated October 26, 1995 (the "Letter of
Credit"), established by us in your favor as Beneficiary. We hereby
notify you that, in accordance with the terms of the Letter of Credit and
that certain Letter of Credit Agreement dated as of October 1, 1995,
between Central Power and Light Company and us, the Available Amount (as
defined in the Letter of Credit) has been reduced to $_____________.
This letter should be attached to the Letter of Credit and made a
part thereof.
ABN AMRO Bank N.V.
By_________________________
Its_______________________
EXHIBIT J
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
TRANSFER CERTIFICATE
ABN AMRO Bank N.V.
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ______________________
Ladies and Gentlemen:
Reference is made to that certain Irrevocable Transferable Letter of
Credit No. ________ dated October 26, 1995 (the "Letter of Credit"), which
has been established by the Bank in favor of
______________________________.
The undersigned, a duly authorized officer or agent of [Name of
Transferor], has transferred and assigned (and hereby confirms to you said
transfer and assignment) all of its rights in and under said Letter of
Credit to [Name of Transferee] and confirms that [Name of Transferor] no
longer has any rights under or interest in said Letter of Credit.
Transferor and Transferee have indicated on the face of said Letter
of Credit that it has been transferred and assigned to Transferee.
The undersigned, a duly authorized officer or agent of the
Transferee, hereby certifies that the Transferee is a duly authorized
Transferee under the terms of said Letter of Credit and is accordingly
entitled, upon presentation of the documents called for therein, to
receive payment thereunder.
__________________________________
Name of Transferor
By________________________________
[Title of Authorized Officer
of Transferor]
__________________________________
Name of Transferee
By________________________________
[Title of Authorized Officer
of Transferor]
EXHIBIT K
TO
ABN AMRO BANK N.V.
LETTER OF CREDIT
NO. ________
NOTICE OF EXTENSION
[Trustee]
_____________________
_____________________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. ________ dated October 26, 1995 (the "Letter of
Credit"), established by us in your favor as Beneficiary. We hereby
notify you that, in accordance with the terms of the Letter of Credit and
that certain Letter of Credit Agreement dated as of October 1, 1995,
between Central Power and Light Company and us, the Stated Expiration Date
(as defined in the Letter of Credit) has been extended to ___________,
______.
This letter should be attached to the Letter of Credit and made a
part thereof.
ABN AMRO Bank N.V.
By_________________________
Its_______________________