EXHIBIT (10)(i) 110
$50,000,000
CREDIT AGREEMENT
dated as of
October 23, 1996
among
Central ▇▇▇▇▇▇ Gas & Electric Corporation
The Banks Listed Herein
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Agent
Table of Contents
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations 13
SECTION 1.03. Types of Borrowings 14
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend 14
SECTION 2.02. Notice of Committed Borrowings 14
SECTION 2.03. Money Market Borrowings 15
SECTION 2.04. Notice to Banks; Funding of Loans 19
SECTION 2.05. Notes 20
SECTION 2.06. Maturity of Loans 21
SECTION 2.07. Interest Rates 21
SECTION 2.08. Fees 25
SECTION 2.09. Optional Termination or Reduction of
Commitments 25
SECTION 2.10. Mandatory Termination of Commitments 26
SECTION 2.11. Optional Prepayments 26
SECTION 2.12. General Provisions as to Payments 26
SECTION 2.13. Funding Losses 27
SECTION 2.14. Computation of Interest and Fees 27
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness 28
SECTION 3.02. Borrowings 29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power 29
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention 29
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Page
SECTION 4.03. Binding Effect 30
SECTION 4.04. Financial Information 30
SECTION 4.05. Litigation 30
SECTION 4.06. Compliance with ERISA 31
SECTION 4.07. Environmental Matters 31
SECTION 4.08. Taxes 32
SECTION 4.09. Subsidiaries 32
SECTION 4.10. Full Disclosure 32
SECTION 4.11. Equity Capitalization Ratio 32
SECTION 4.12. Fixed Charge Coverage 32
ARTICLE V
COVENANTS
SECTION 5.01. Information 33
SECTION 5.02. Payment of Obligations 35
SECTION 5.03. Maintenance of Property; Insurance 36
SECTION 5.04. Conduct of Business and Maintenance of
Existence 36
SECTION 5.05. Compliance with Laws 37
SECTION 5.06. Inspection of Property, Books and Records 37
SECTION 5.07. Investments 37
SECTION 5.08. Negative Pledge 38
SECTION 5.09. Limitations on Restricted Subsidiaries 39
SECTION 5.10. Consolidations, Mergers and Sales of Assets 39
SECTION 5.11. Use of Proceeds 40
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default 40
SECTION 6.02. Notice of Default 43
SECTION 6.03. Exclusion of Restricted Subsidiaries from
Certain Events of Default 43
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization 43
SECTION 7.02. Agent and Affiliates 43
SECTION 7.03. Action by Agent 43
SECTION 7.04. Consultation with Experts 43
SECTION 7.05. Liability of Agent 44
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ARTICLE VIII
CHANGE IN CIRCUMSTANCES
Page
SECTION 7.06. Indemnification 44
SECTION 7.07. Credit Decision 44
SECTION 7.08. Successor Agent 44
SECTION 7.09. Agent's Fees 45
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair 45
SECTION 8.02. Illegality 46
SECTION 8.03. Increased Cost and Reduced Return 46
SECTION 8.04. Base Rate Loans Substituted for Affected
Fixed Rate Loans 48
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices 49
SECTION 9.02. No Waivers 49
SECTION 9.03. Expenses; Documentary Taxes; Indemnification 49
SECTION 9.04. Sharing of Set-Offs 50
SECTION 9.05. Amendments and Waivers 50
SECTION 9.06. Successors and Assigns 51
SECTION 9.07. Collateral 52
SECTION 9.08. Governing Law; Submission to Jurisdiction 52
SECTION 9.09. Counterparts; Integration 53
SECTION 9.10. WAIVER OF JURY TRIAL 53
iii
CREDIT AGREEMENT
AGREEMENT dated as of October 23, 1996 among CENTRAL
▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION, the BANKS listed on the
signature pages hereof and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW
YORK, as Agent,
WHEREAS, the Borrower, certain banks and ▇▇▇▇▇▇ Bank
(Delaware), as Agent are parties to a Credit Agreement dated as
of December 17, 1990, as amended (the "1990 Credit Agreement");
and
WHEREAS, the 1990 Credit Agreement expires on December
14, 1997 and is to be replaced by this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as
used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money
Market Quotes setting forth Money Market Absolute Rates pursuant
to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section
2.07(b).
"Adjusted London Interbank Offered Rate" has the
meaning set forth in Section 2.07(c).
"Administrative Questionnaire" means, with respect to
each Bank, an administrative questionnaire in the form prepared
by the Agent and submitted to the Agent (with a copy to the
Borrower) duly completed by such Bank.
"Agent" means ▇▇▇▇▇▇ Guaranty Trust Company of New York
in its capacity as agent for the Banks hereunder, and its
successors in such capacity.
"Applicable Lending Office" means, with respect to any
Bank, (i) in the case of its Domestic Loans, its Domestic Lending
Office, (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office and (iii) in the case of its Money
Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section
2.07(b).
"Assignee" has the meaning set forth in Section
9.06(c).
"Bank" means each bank listed on the signature pages
hereof, each Assignee which becomes a Bank pursuant to Section
9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum equal
to the higher of (i) the Prime Rate for such day or (ii) the sum
of 1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a
Bank as a Base Rate Loan in accordance with the applicable Notice
of Committed Borrowing or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee
benefit plan within the meaning of Section 3(3) of ERISA which is
not a Plan or a Multiemployer Plan and which is maintained or
otherwise contributed to by any member of the ERISA Group.
"Borrower" means Central ▇▇▇▇▇▇ Gas & Electric
Corporation, a New York corporation, and its successors.
"Borrower's 1995 Form 10-K" means the Borrower's Annual
Report, on Form 10-K, for the fiscal year ended December 31,
1995, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section
2.07(b).
"CD Loan" means a Committed Loan to be made by a Bank
as a CD Loan in accordance with the applicable Notice of
Committed Borrowing.
"CD Margin" has the meaning set forth in Section
2.07(b).
"CD Reference Banks" means The Bank of New York and
▇▇▇▇▇▇ Guaranty Trust Company of New York.
2
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the signature
pages hereof, as such amount may be reduced from time to time
pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank pursuant
to Section 2.01.
"Consolidated Earnings Available for Fixed Charges" for
any twelve-month period means (i) consolidated net income,
calculated before any extraordinary items and any gains or losses
from the disposition of assets (other than current assets), less
(ii) allowances for equity funds used during construction to the
extent that such allowances, taken as a whole, increased such
consolidated net income, less (iii) the net positive effect (if
any) on such consolidated net income attributable to the
Borrower's use of "Mirror CWIP" accounts (as "Mirror CWIP" is
described in the paragraph entitled "Deferred Finance
Charges-Nine Mile 2 Plant" of Note 1 of the Notes to the
Borrower's Consolidated Financial Statements for the year ended
December 31, 1995, plus (iv) provisions for Federal income taxes
and deferred income taxes, to the extent that such provisions,
taken as a whole, decreased such consolidated net income, plus
(v) Consolidated Fixed Charges, all determined for such twelve-
month period with respect to the Borrower and its Restricted
Subsidiaries on a consolidated basis in accordance with the
accounting classifications used by the Borrower in its
consolidated statement of income for the year ended December 31,
1995.
"Consolidated Fixed Charges" for any twelve-month
period means the sum of (i) interest on mortgage bonds, (ii)
interest on other long-term debt and (iii) other interest
expense, all determined for such twelve-month period with respect
to the Borrower and its Restricted Subsidiaries on a consolidated
basis in accordance with the accounting classifications used by
the Borrower in its consolidated statement of income for the year
ended December 31, 1995.
"Consolidated Shareholders' Equity" means, at any date,
(i) common stock equity at such date, determined with respect to
the Borrower and its Consolidated Subsidiaries on a consolidated
basis in accordance with the accounting classifications used by
the Borrower in its consolidated balance sheet as at December 31,
1995 less (ii) the aggregate amount of the Investments of the
Borrower and its Restricted Subsidiaries in Unrestricted
Subsidiaries at such date (valued, in the case of equity
Investments, on the equity method).
3
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Borrower in its consolidated
financial statements if such statements were prepared as of such
date.
"Consolidated Total Capitalization" means, at any date,
the sum at such date of (i) Consolidated Shareholders' Equity,
(ii) preferred stock of the Borrower and (iii) long-term debt
(excluding current maturities of long-term debt), determined with
respect to the Borrower and its Restricted Subsidiaries on a
consolidated basis in accordance with the accounting
classifications used by the Borrower in its consolidated balance
sheet as at December 31, 1995.
"Debt" 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 obligations of
such Person to purchase securities (or other property) which
arise out of or in connection with the sale of the same or
substantially similar securities or property, (vi) all non-
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, (vii) all Debt of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed
by such Person, and (viii) all Debt of others Guaranteed by such
Person.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Disclosure Documents" means the Borrower's 1995 Form
10-K, the Borrower's Quarterly Reports, on Form 10-Q, for each of
the fiscal quarters ended March 30, 1996 and June 30, 1996 as
filed with the Securities and Exchange Commission, and the
Borrower's Current Reports, on Form 8-K, dated June 11, 1996 as
filed with the Securities and Exchange Commission.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in New
York City or Wilmington, Delaware are authorized by law to close.
4
"Domestic Lending Office" means, as to each Bank, its
office located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Bank
may hereafter designate as its Domestic Lending Office by notice
to the Borrower and the Agent; provided that any Bank may so
designate separate Domestic Lending Offices for its Base Rate
Loans, on the one hand, and its CD Loans, on the other hand, in
which case all references herein to the Domestic Lending Office
of such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or
both.
"Domestic Reserve Percentage" has the meaning set forth
in Section 2.07(b).
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or 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, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer
under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business
Day on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank,
its office, branch or affiliate located at its address set forth
5
in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office)
or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by
a Bank as a Euro-Dollar Loan in accordance with the applicable
Notice of Committed Borrowing.
"Euro-Dollar Margin" has the meaning set forth in
Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal
London offices of The Bank of New York and ▇▇▇▇▇▇ Guaranty Trust
Company of New York.
"Euro-Dollar Reserve Percentage" has the meaning set
forth in Section 2.07(c).
"Event of Default" has the meaning set forth in Section
6.01.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upward, if necessary, to the nearest 1/100th of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such
day is not a Domestic Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next
preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted
to ▇▇▇▇▇▇ Guaranty Trust Company of New York on such day on such
transactions as determined by the Agent.
"First Mortgage Indenture of the Borrower" means the
Indenture dated January 1, 1927 between the Borrower and American
Exchange Irving Trust Company as trustee, as such Indenture has
been and may hereafter be amended, modified or supplemented in
accordance with the provisions thereof.
"First Mortgage Bonds" means first mortgage bonds of
the Borrower which have been and may hereafter be issued under
the First Mortgage Indenture of the Borrower.
6
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans
or Money Market Loans (excluding Money Market LIBOR Loans bearing
interest at the Prime Rate pursuant to Section 8.01(a)) or any
combination of the foregoing.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt 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 Debt (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 obligee of
such Debt of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided
that the term Guarantee shall not include (A) endorsements for
collection or deposit in the ordinary course of business or (B)
any agreement which Borrower was obligated to enter into for the
purchase of electric power pursuant to the Public Utility
Regulatory Policy Act of 1978 or Section 66-c of the New York
Public Service Law. The term "Guarantee" used as a verb has a
corresponding meaning.
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of such
Borrowing and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-
Dollar 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, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar
month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Borrowing, the period
commencing on the date of such Borrowing and ending 30, 60, 90 or
7
180 days thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise
end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Base Rate Borrowing, the
period commencing on the date of such Borrowing and ending 30
days thereafter; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise
end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market LIBOR Borrowing,
the period commencing on the date of such Borrowing and ending
one, two, three or six months thereafter as the Borrower may
elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-
Dollar 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, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar
month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(5) with respect to each Money Market Absolute Rate
Borrowing, the period commencing on the date of such Borrowing
and ending such number of days thereafter (but not less than 7
days) as the Borrower may elect in accordance with Section 2.03;
provided that:
8
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended, or any successor statute.
"Investment" means any investment in any Person,
whether by means of share purchase, capital contribution, loan,
time deposit or otherwise.
"Level I Status" exists at any date if, at such date,
the First Mortgage Bonds are rated A- or higher by S&P and A3 or
higher by Moody's.
"Level II Status" exists at any date if, at such date,
(i) Level I Status does not exist and (ii) the First Mortgage
Bonds are rated BBB- or higher by S&P and Baa3 or higher by
Moody's.
"Level III Status" exists at any date if, at such date,
(i) Level I Status and Level II Status do not exist and (ii) the
First Mortgage Bonds are rated BB- or higher by S&P and Ba3 or
higher by Moody's.
"Level IV Status" exists at any date if, at such date,
Level I Status, Level II Status and Level III Status do not
exist.
"LIBOR Auction" means a solicitation of Money Market
Quotes setting forth Money Market Margins based on the London
Interbank Offered Rate pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset. For the purposes of this
Agreement, (i) the Borrower 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 and (ii) a sale of
receivables that is treated as a sale under generally accepted
accounting principles shall not be deemed to create a Lien on the
sold receivables.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a
Money Market Loan and "Loans" means Domestic Loans or Euro-Dollar
Loans or Money Market Loans or any combination of the foregoing.
9
"London Interbank Offered Rate" has the meaning set
forth in Section 2.07(c).
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of $25,000,000.
"Money Market Absolute Rate" has the meaning set forth
in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be
made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank,
its Domestic Lending Office or such other office, branch or
affiliate of such Bank as it may hereafter designate as its Money
Market Lending Office by notice to the Borrower and the Agent;
provided that any Bank may from time to time by notice to the
Borrower and the Agent designate separate Money Market Lending
Offices for its Money Market LIBOR Loans, on the one hand, and
its Money Market Absolute Rate Loans, on the other hand, in which
case all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing
interest at the Prime Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or
a Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a
Money Market Loan in accordance with Section 2.03.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of the ERISA Group is then making or
accruing an obligation to make contributions or has within the
preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA
Group during such five year period.
"1990 Credit Agreement" has the meaning set forth in
the first "WHEREAS" clause at the beginning of this Agreement.
10
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Loans, and "Note" means
any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section
9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, a corporation, a
partnership, a limited liability company, an association, a trust
or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit
plan (other than a Multiemployer Plan) which is covered by Title
IV of ERISA or subject to the minimum funding standards under
Section 412 of the Internal Revenue Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained, or
contributed to, by any Person which was at such time a member of
the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly
announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York in New
York City from time to time as its Prime Rate.
"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and
"Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing
which, after application of the proceeds thereof, results in no
net increase in the outstanding principal amount of Committed
Loans made by any Bank.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time
to time.
11
"Required Banks" means at any time Banks having at
least 2/3 of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding Notes evidencing
at least 2/3 of the aggregate unpaid principal amount of the
Loans.
"Restricted Subsidiary" means any Subsidiary except an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation.
"Subsidiary" means any corporation or other entity of
which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time
directly or indirectly owned by the Borrower; provided that a
limited partnership in which one or more Unrestricted
Subsidiaries are limited partners shall not be a "Subsidiary" if
neither the Borrower nor any Restricted Subsidiary has a direct
partnership interest in such limited partnership.
"Temporary Cash Investment" means any Investment
maturing (except as set forth in clauses (v) and (vi) below)
within one year from the date of acquisition thereof by the
Borrower or a Subsidiary in (i) direct obligations of the United
States or any agency thereof, or obligations guaranteed by the
United States or any agency thereof, (ii) commercial paper rated
at least A-1 by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates of deposit issued by, any office located
in the United States of any bank or trust company which is
organized under the laws of the United States or any state
thereof and has capital, surplus and undivided profits
aggregating at least $500,000,000, (iv) repurchase agreements
with any office located in the United States of any bank which is
organized under the laws of the United States or any state
thereof and has capital, surplus and undivided profits
aggregating at least $500,000,000 or of any member of the
National Association of Securities Dealers which has total
capital aggregating at least $200,000,000 if such repurchase
agreements relate to obligations of the United States or any
agency thereof, or commercial paper rated A-1 by S&P or P-1 by
Moody's; provided that the aggregate principal amount of all
repurchase agreements relating to commercial paper outstanding at
any time does not exceed $10,000,000, (v) obligations, regardless
of their maturity, rated not less than "A" or equivalent by S&P
or Moody's issued or guaranteed by any state of the United States
or the District of Columbia, or by any political subdivision,
agency or instrumentality of any such state or District, and
12
obligations of a public housing authority fully secured by
contracts with the United States; provided that any such
obligation which matures in more than one year from the date of
acquisition thereof by the Borrower or a Subsidiary shall permit
the holder thereof at least annually to sell back such security
to the issuer at no less than par plus accrued interest, or (vi)
any "money market" fund comprised principally of any of the above
securities provided the average maturity of the securities held
by such fund is not more than one year.
"Termination Date" means October 23, 2001, or, if such
day is not a Euro-Dollar Business Day, the next succeeding Euro-
Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case the Termination Date shall
be the next preceding Euro-Dollar Business Day.
"Unfunded Liabilities" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value
of all benefits under such Plan exceeds (ii) the fair market
value of all Plan assets allocable to such benefits (excluding
any accrued but unpaid contributions), all determined as of the
then most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.
"Unrestricted Subsidiary" means (i) Central ▇▇▇▇▇▇
Enterprises Corporation, a New York corporation, (ii) Central
▇▇▇▇▇▇ Cogeneration, Inc., a New York corporation, (iii) CH
Resources, Inc., a New York corporation, (iv) any Subsidiary
designated as an Unrestricted Subsidiary pursuant to Section
6.03, and (v) any other Subsidiary in which shares of capital
stock or other equity interests are directly or indirectly owned
by one or more Unrestricted Subsidiaries and no such shares or
equity interests are directly owned by the Borrower or any
Restricted Subsidiary.
"Wholly-Owned Restricted Subsidiary" means any
Restricted Subsidiary all of the shares of capital stock or other
ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the
Borrower.
SECTION 1.02. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time
13
to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants)
with the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to the
Banks.
SECTION 1.03. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more Banks
to be made to the Borrower pursuant to Article II on a single
date and for a single Interest Period. Borrowings are classified
for purposes of this Agreement either by reference to the pricing
of Loans comprising such Borrowing (e.g., a "Euro-Dollar
Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which
participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all Banks
participate in proportion to their Commitments, while a "Money
Market Borrowing" is a Borrowing under Section 2.03 in which the
Bank participants are determined on the basis of their bids in
accordance therewith).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank
severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower pursuant to this Section
from time to time prior to the Termination Date; provided that
the aggregate principal amount of Committed Loans by such Bank at
any one time outstanding shall not exceed its Commitment. Each
Borrowing under this Section shall be in an aggregate principal
amount of $5,000,000 or any larger multiple of $1,000,000 (except
that any such Borrowing may be in the aggregate amount available
in accordance with Section 3.02(b)) and shall be made from the
several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may
borrow under this Section, repay, or to the extent permitted by
Section 2.11, prepay Loans and reborrow at any time prior to the
Termination Date under this Section.
SECTION 2.02. Notice of Committed Borrowings. (a) The
Borrower shall give the Agent notice (a "Notice of Committed
Borrowing") not later than 10:00 A.M. (Wilmington, Delaware time)
on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
14
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or
a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to
be CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period.
(b) The provisions of subsection (a) above
notwithstanding, if the Borrower shall not have given a Notice of
Borrowing not later than 10:00 A.M. (Wilmington, Delaware time)
on the last day of the Interest Period applicable to an
outstanding Committed Borrowing, then, unless the Borrower
notifies the Agent before such time that it elects not to borrow
on such date, the Agent shall be deemed to have received a Notice
of Committed Borrowing specifying that (i) the date of the
proposed Borrowing shall be the last day of the Interest Period
applicable to such outstanding Borrowing, (ii) the aggregate
amount of the proposed Borrowing shall be the amount of such
outstanding Borrowing and (iii) the Loans comprising the proposed
Borrowing are to be Base Rate Loans.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set
forth in this Section, request the Banks from time to time prior
to the Termination Date to make offers to make Money Market Loans
to the Borrower. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in
this Section.
(b) Money Market Quote Request. When the Borrower
wishes to request offers to make Money Market Loans under this
Section, it shall transmit to the Agent by telex or facsimile
transmission a Money Market Quote Request substantially in the
form of Exhibit B hereto so as to be received no later than 10:00
A.M. (Wilmington, Delaware time) on (x) the fifth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in
the case of a LIBOR Auction or (y) the Domestic Business Day next
preceding the date of Borrowing proposed therein, in the case of
an Absolute Rate Auction (or, in either case, any other time or
date as to which the Borrower and the Agent shall have mutually
15
agreed and the Agent shall have notified the Banks not later than
the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be
effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate
Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of
Interest Period, and
(iv) whether the Money Market Quotes requested are to
set forth a Money Market Margin or a Money Market Absolute
Rate.
The Borrower may request offers to make Money Market Loans for
more than one Interest Period in a single Money Market Quote
Request. No Money Market Quote Request shall be given within
five Euro-Dollar Business Days (or such other number of days as
the Borrower and the Agent may agree) of any other Money Market
Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Agent shall send to
the Banks by telex or facsimile transmission an Invitation for
Money Market Quotes substantially in the form of Exhibit C
hereto, which shall constitute an invitation by the Borrower to
each Bank to submit Money Market Quotes offering to make the
Money Market Loans to which such Money Market Quote Request
relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes.
(i) Each Bank may submit a Money Market Quote containing an offer
or offers to make Money Market Loans in response to any
Invitation for Money Market Quotes. Each Money Market Quote must
comply with the requirements of this subsection (d) and must be
submitted to the Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.01 not later than
(x) 2:00 P.M. (Wilmington, Delaware time) on the fourth Euro-
Dollar Business Day prior to the proposed date of Borrowing, in
the case of a LIBOR Auction or (y) 9:00 A.M. (Wilmington,
Delaware time) on the proposed date of Borrowing, in the case of
an Absolute Rate Auction (or, in either case, any other time or
16
date as to which the Borrower and the Agent shall have mutually
agreed and the Agent shall have notified the Banks not later than
the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the
Agent (or any affiliate of the Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Agent or such
affiliate notifies the Borrower of the terms of the offer or
offers contained therein (x) at least one hour before the
deadline applicable to other Banks, in the case of a LIBOR
Auction or (y) at least 15 minutes before the deadline applicable
to other Banks, in the case of an Absolute Rate Auction. Subject
to Articles III and VI, any Money Market Quote so made shall be
irrevocable except with the written consent of the Agent given on
the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially
the form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount
(w) may be greater than or less than the Commitment of the
quoting Bank, (x) must be $5,000,000 or a larger multiple of
$1,000,000, (y) may not exceed the principal amount of Money
Market Loans for which offers were requested and (z) may be
subject to an aggregate limitation as to the principal
amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above
or below the applicable London Interbank Offered Rate (the
"Money Market Margin") offered for each such Money Market
Loan, expressed as a percentage (specified to the nearest
1/10,000th of 1%) to be added to or subtracted from such
base rate,
(D) in the case of an Absolute Rate Auction, the rate
of interest per annum (specified to the nearest 1/10,000th
of 1%) (the "Money Market Absolute Rate") offered for each
such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by
the quoting Bank with respect to each Interest Period specified
in the related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if
it:
17
(a) is not substantially in conformity with Exhibit D
hereto or does not specify all of the information required
by subsection (d)(ii);
(b) contains qualifying, conditional or similar
language;
(c) proposes terms other than or in addition to those
set forth in the applicable Invitation for Money Market
Quotes; or
(d) arrives after the time set forth in subsection
(d)(i).
(e) Notice to Borrower. The Agent shall promptly
notify the Borrower of the terms (x) of any Money Market Quote
submitted by a Bank that is in accordance with subsection (d) and
(y) of any Money Market Quote that amends, modifies or is
otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such
former Money Market Quote. The Agent's notice to the Borrower
shall specify (A) the aggregate principal amount of Money Market
Loans for which offers have been received for each Interest
Period specified in the related Money Market Quote Request, (B)
the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and
(C) if applicable, limitations on the aggregate principal amount
of Money Market Loans for which offers in any single Money Market
Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than
10:00 A.M. (Wilmington, Delaware time) on (x) the third Euro-
Dollar Business Day prior to the proposed date of Borrowing, in
the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either
case, such other time or date as the Borrower and the Agent shall
have mutually agreed and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective), the Borrower shall notify the Agent
of its acceptance or non-acceptance of the offers so notified to
it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the
aggregate principal amount of offers for each Interest Period
that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
18
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $5,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the basis
of ascending Money Market Margins or Money Market Absolute
Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to
comply with the requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or
more Banks with the same Money Market Margins or Money Market
Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers
are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Banks as
nearly as possible (in such multiples, not greater than
$1,000,000, as the Agent may deem appropriate) in proportion to
the aggregate principal amounts of such offers. Determinations
by the Agent of the amounts of Money Market Loans shall be
conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent
shall promptly notify each Bank of the contents thereof and of
such Bank's share (if any) of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (Wilmington, Delaware
time) on the date of each Borrowing, each Bank participating
therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing, in Federal
or other funds immediately available in New York City, to the
Agent at its address specified in or pursuant to Section 9.01.
Unless the Agent determines that any applicable condition
specified in Article III has not been satisfied, the Agent will
make the funds so received from the Banks available to the
Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on
which the Borrower is to repay all or any part of an outstanding
Loan from such Bank, such Bank shall apply the proceeds of its
19
new Loan to make such repayment and only an amount equal to the
difference (if any) between the amount being borrowed and the
amount being repaid shall be made available by such Bank to the
Agent as provided in subsection (b), or remitted by the Borrower
to the Agent as provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not
make available to the Agent such Bank's share of such Borrowing,
the Agent may assume that such Bank has made such share available
to the Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that
such Bank shall not have so made such share available to the
Agent, such Bank and the Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to
the Agent, at (i) in the case of the Borrower, a rate per annum
equal to the higher of the Federal Funds Rate and the interest
rate applicable thereto pursuant to Section 2.07 and (ii) in the
case of such Bank, the Federal Funds Rate. If such Bank shall
repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement. No payment by the
Borrower to the Agent pursuant to this subsection (d) shall
prevent the Borrower from enforcing its rights under this
Agreement against a defaulting Bank or release a defaulting Bank
from its obligations to the Borrower hereunder.
SECTION 2.05. Notes. (a) The Loans of each Bank
shall be evidenced by a single Note payable to the order of such
Bank for the account of its Applicable Lending Office in an
amount equal to the aggregate unpaid principal amount of such
Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the
Agent, request that its Loans of a particular type be evidenced
by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans
of the relevant type. Each reference in this Agreement to the
"Note" of such Bank shall be deemed to refer to and include any
or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01(b), the Agent shall mail such Note to such Bank.
Each Bank shall record the date, amount and maturity of each Loan
20
made by it and the date and amount of each payment of principal
made by the Borrower with respect thereto, and prior to any
transfer of its Note shall endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding;
provided that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Note and
to attach to and make a part of its Note a continuation of any
such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included
in any Borrowing shall mature, and the principal amount thereof
shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate
Loan shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to (i) the Base Rate for
such day, for any day on which Level I Status, Level II Status
or Level III Status exists and (ii) the sum of 0.25 of 1% plus
the Base Rate for such day, for any day on which Level IV Status
exists. Such interest shall be payable for each Interest Period
on the last day thereof. Any overdue principal of or interest
on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 1%
plus the rate otherwise applicable to Base Rate Loans for such
day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the
CD Margin plus the applicable Adjusted CD Rate; provided that if
any CD Loan or any portion thereof shall, as a result of clause
(2)(b) of the definition of Interest Period, have an Interest
Period of less than 30 days, such portion shall bear interest
during such Interest Period at the rate applicable to Base Rate
Loans during such period. Such interest shall be payable for
each Interest Period on the last day thereof and, if such
Interest Period is longer than 90 days, 90 days after the first
day thereof. Any overdue principal of or interest on any CD Loan
shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 1% plus the higher of (i)
the sum of the CD Margin plus the Adjusted CD Rate applicable to
such Loan or (ii) the rate applicable to Base Rate Loans for such
day.
21
"CD Margin" means (i) 0.325 of 1% for any day on which
Level I Status exists, (ii) 0.40 of 1% for any day on which Level
II Status exists, and (iii) 0.625 of 1% for any day on which
Level III Status exists and (iii) 0.875 of 1% for any day on
which Level IV Status exists.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is
the rate of interest determined by the Agent to be the average
(rounded upward, if necessary, to the next higher 1/100 of 1%) of
the prevailing rates per annum bid at 10:00 A.M. (Wilmington,
Delaware time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the
purchase at face value from each CD Reference Bank of its
certificates of deposit in an amount comparable to the principal
amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such
Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding
five billion dollars in respect of new non-personal time deposits
in dollars in New York City having a maturity comparable to the
related Interest Period and in an amount of $100,000 or more.
The Adjusted CD Rate shall be adjusted automatically on and as of
the effective date of any change in the Domestic Reserve
Percentage.
22
"Assessment Rate" means for any Interest Period the net
annual assessment rate (rounded upward, if necessary, to the next
higher 1/100 of 1%) actually incurred by ▇▇▇▇▇▇ Guaranty Trust
Company of New York to the Federal Deposit Insurance Corporation
(or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of ▇▇▇▇▇▇ Guaranty Trust
Company of New York in the United States during the most recent
period for which such rate has been determined prior to the
commencement of such Interest Period.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the
Euro-Dollar Margin plus the applicable Adjusted London Interbank
Offered Rate. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is
longer than three months, three months after the first day
thereof.
"Euro-Dollar Margin" means (i) 0.20 of 1% for any day
on which Level I Status exists, (ii) 0.275% of 1% for any day on
which Level II Status exists, (iii) 0.50 of 1% for any day on
which Level III Status exists and (iii) 0.75 of 1% for any day on
which Level IV Status exists.
The "Adjusted London Interbank Offered Rate" applicable
to any Interest Period means a rate per annum equal to the
quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any
Interest Period means the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum
at which deposits in dollars are offered to each of the Euro-
Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business
Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Euro-Dollar
Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such
Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve
23
System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect
of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any
Bank to United States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve
Percentage.
(d) Any overdue principal of or interest on any Euro-
Dollar Loan shall bear interest, payable on demand, for each day
from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal
to the sum of 1% plus the higher of (i) the sum of the Euro-
Dollar Margin plus the Adjusted London Interbank Offered Rate
applicable to such Loan or (ii) the Euro-Dollar Margin plus the
quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded upward,
if necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which one day (or, if such amount due remains
unpaid more than three Euro-Dollar Business Days, then for such
other period of time not longer than six months as the Agent may
select) deposits in dollars in an amount approximately equal to
such overdue payment due to each of the Euro-Dollar Reference
Banks are offered to such Euro-Dollar Reference Bank in the
London interbank market for the applicable period determined as
provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or
(b) of Section 8.01 shall exist, at a rate per annum equal to the
sum of 1% plus the rate applicable to Base Rate Loans for such
day).
(e) Subject to Section 8.01(a), each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the London Interbank Offered
Rate for such Interest Period (determined in accordance with
Section 2.07(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money
Market Margin quoted by the Bank making such Loan in accordance
with Section 2.03. Each Money Market Absolute Rate Loan shall
bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the last day thereof and, if
24
such Interest Period is longer than three months, at intervals of
three months after the first day thereof. Any overdue principal
of or interest on any Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum
equal to the sum of 1% plus the Prime Rate for such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt
notice to the Borrower and the participating Banks by telex or
cable of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of
manifest error.
(g) Each Reference Bank agrees to use its best efforts
to furnish quotations to the Agent as contemplated by this
Section. If any Reference Bank does not furnish a timely
quotation, the Agent shall determine the relevant interest rate
on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations
is available on a timely basis, the provisions of Section 8.01
shall apply.
SECTION 2.08. Fees.
(a) Facility Fee. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the per
annum rate of (i) 0.10 of 1% for any day on which Level I Status
exists, (ii) 0.125% of 1% for any day on which Level II Status
exists, (iii) 0.25 of 1% for any day on which Level III Status
exists and (iv) 0.50 of 1% for any day on which Level IV Status
exists. Such facility fee shall accrue (i) from and including
October 23, 1996 to but excluding the Termination Date, on the
daily average aggregate amount of the Commitments (whether used
or unused) and (ii) from and including the Termination Date to
but excluding the date the Loans shall be repaid in their
entirety, on the daily average aggregate outstanding principal
amount of the Loans.
(b) Payments. Accrued fees under this Section shall
be payable quarterly on each January 23, April 23, July 23 and
October 23 and upon the date of termination of the Commitments in
their entirety (and, if later, the date the Loans shall be repaid
in their entirety).
SECTION 2.09. Optional Termination or Reduction of
Commitments. The Borrower may, upon at least three Domestic
Business Days' notice to the Agent, (i) terminate the Commitments
at any time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of
$5,000,000 or any larger multiple thereof, the aggregate amount
25
of the Commitments in excess of the aggregate outstanding
principal amount of the Loans.
SECTION 2.10. Mandatory Termination of Commitments.
The Commitments shall terminate on the Termination Date, and any
Loans then outstanding (together with accrued interest thereon)
shall be due and payable on such date.
SECTION 2.11. Optional Prepayments. (a) The Borrower
may, upon at least three Domestic Business Days' notice to the
Agent, prepay any Base Rate Borrowing (or any Money Market
Borrowing bearing interest at the Prime Rate pursuant to Section
8.01(a)) in whole at any time, or from time to time in part in
amounts aggregating $5,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the
Loans of the several Banks included in such Borrowing.
(b) Except as provided in Section 8.02, the Borrower
may not prepay all or any portion of the principal amount of any
Fixed Rate Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to
this Section, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share (if any) of
such prepayment and such notice shall not thereafter be revocable
by the Borrower.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and
interest on, the Loans and of fees hereunder, not later than
11:00 A.M. (Wilmington, Delaware time) on the date when due, in
Federal or other immediately available funds to the Agent at its
address referred to in Section 9.01. The Agent will promptly
distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, the Domestic Loans or of
fees shall be due on a day which is not a Domestic Business Day,
the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-
Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the Money
26
Market Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Dollar Business Day. If the date for
any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended
time.
(b) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such
Bank. If and to the extent that the Borrower shall not have so
made such payment, each Bank shall repay to the Agent forthwith
on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes
any payment of principal with respect to any Fixed Rate Loan
(pursuant to Article VI or VIII or otherwise) on any day other
than the last day of the Interest Period applicable thereto, or
the end of an applicable period fixed pursuant to Section
2.07(d), or if the Borrower fails to borrow any Fixed Rate Loans
after notice has been given to any Bank in accordance with
Section 2.04(a), the Borrower shall reimburse each Bank within 15
days after demand for any resulting loss or expense incurred by
it (or by an existing or prospective Participant in the related
Loan), including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties,
but excluding loss of margin for the period after any such
payment or failure to borrow, provided that such Bank shall have
delivered to the Borrower a certificate as to the amount of such
loss or expense (showing in reasonable detail how such amount was
calculated), which certificate shall be conclusive in the absence
of manifest error.
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed on
the basis of a year of 365 days (or 366 days in a leap year) and
paid for the actual number of days elapsed (including the first
day but excluding the last day). All other interest and fees
shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but
excluding the last day).
27
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall
become effective on the date that each of the following
conditions shall have been satisfied (or waived in accordance
with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed
by each of the parties hereto (or, in the case of any party
as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank
of a duly executed Note dated on or before the Effective
Date complying with the provisions of Section 2.05;
(c) receipt by the Agent of an opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇, counsel for the Borrower, substantially in the form
of Exhibit E hereto and covering such additional matters
relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(d) receipt by the Agent of evidence reasonably
satisfactory to it that the approval of the New York State
Public Service Commission with respect to the execution,
delivery and performance by the Borrower of this Agreement
and the Notes has been obtained and is in full force and
effect;
(e) the commitments of the banks under the 1990 Credit
Agreement shall have terminated and all amounts due and
payable thereunder shall have been paid; and
(f) receipt by the Agent of all documents it may
reasonably request relating to the existence of the
Borrower, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the Agent;
provided that this Agreement shall not become effective or be
binding on any party hereto unless all of the foregoing
conditions are satisfied not later than October 31, 1996. The
Agent shall promptly notify the Borrower and the Banks of the
Effective Date, and such notice shall be conclusive and binding
on all parties hereto.
28
SECTION 3.02. Borrowings. The obligation of any Bank
to make a Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing,
the aggregate outstanding principal amount of the Loans will
not exceed the aggregate amount of the Commitments;
(c) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
and
(d) the fact that the representations and warranties
of the Borrower contained in this Agreement (except, in the
case of a Refunding Borrowing, the representations and
warranties set forth in Sections 4.04(c) and 4.05 as to any
matter which has theretofore been disclosed in writing by
the Borrower to the Banks) shall be true on and as of the
date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation
and warranty by the Borrower on the date of such Borrowing as to
the facts specified in clauses (b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of New York and has all corporate
powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery and
performance by the Borrower of this Agreement and the Notes are
within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official (other than approval of the New York State Public
Service Commission, which approval has been obtained and is in
29
full force and effect) and do not contravene, or constitute a
default under, any provision of applicable law or regulation or
of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or result in the creation or
imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower and the
Notes, when executed and delivered in accordance with this
Agreement, will constitute valid and binding obligations of the
Borrower.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of December 31, 1995 and the
related consolidated statements of income, retained earnings and
cash flows for the fiscal year then ended, reported on by Price
Waterhouse and set forth in the Borrower's 1995 Form 10-K, a copy
of which has been delivered to each of the Banks, fairly present,
in conformity with generally accepted accounting principles, the
consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of June 30, 1996
and the related unaudited consolidated statements of income and
cash flows for the nine months then ended, set forth in the
Borrower's quarterly report for the fiscal quarter ended June 30,
1996 as filed with the Securities and Exchange Commission on Form
10-Q, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the
consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such nine month period
(subject to normal year-end adjustments).
(c) Except as disclosed in the Disclosure Documents,
there has been no material adverse change since June 30, 1996 in
the business, financial position, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
SECTION 4.05. Litigation. Except as disclosed in the
Disclosure Documents, there is no action, suit or proceeding
30
pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries
before any court or arbitrator or any governmental body, agency
or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results
of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or which in any manner draws into question
the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of
the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and
the Internal Revenue Code with respect to each Plan. No member
of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code in
respect of any Plan, (ii) failed to make any contribution or
payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA
or the Internal Revenue Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary
course of its business, the Borrower from time to time conducts a
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 seeks to identify and evaluate
associated liabilities and costs (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 law
or as a condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of
or change in the nature of operations conducted thereat and any
actual or potential liabilities to third parties, including
employees, and any related costs and expenses). On the basis of
such reviews, the Borrower has reasonably concluded that, except
as disclosed in the Disclosure Statements, Environmental Laws are
unlikely to have a material adverse effect on the business,
financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a
whole.
31
SECTION 4.08. Taxes. United States Federal income tax
returns of the Borrower and its Subsidiaries have been examined
and closed through the fiscal year ended December 31, 1986. The
Borrower and its Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes
due pursuant to such returns or pursuant to any assessment
received by the Borrower or any Subsidiary, other than taxes
which the Borrower or any Subsidiary is contesting in good faith
and by proper proceedings and as to which no Lien has attached
and no foreclosure, distraint, sale or similar proceedings have
been commenced. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower,
adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's
material corporate Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.
SECTION 4.10. Full Disclosure. All information
heretofore furnished by the Borrower to the Agent or any Bank for
purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information
hereafter furnished by the Borrower to the Agent or any Bank will
be, true and accurate in all material respects on the date as of
which such information is stated or certified. The Borrower has
disclosed to the Banks in writing any and all facts which
materially and adversely affect or may affect (to the extent the
Borrower can now reasonably foresee) the business, operations or
financial condition of the Borrower and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Borrower to
perform its obligations under this Agreement.
SECTION 4.11. Equity Capitalization Ratio.
Consolidated Shareholders' Equity is not less than 30% of
Consolidated Total Capitalization.
SECTION 4.12. Fixed Charge Coverage. As of the end of
the most recently ended fiscal quarter of the Borrower (or, if
the requisite financial information for such quarter is not
available to the Borrower when this representation and warranty
is made or deemed made, then as of the end of any calendar month
ended within 45 days before this representation and warranty is
made or deemed made), Consolidated Earnings Available for Fixed
Charges for the twelve months then ended was more than 150% of
Consolidated Fixed Charges for the twelve months then ended.
32
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains
unpaid:
SECTION 5.01. Information. The Borrower will deliver
to each of the Banks:
(a) as soon as available and in any event within 90
days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income, retained
earnings and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the
previous fiscal year, all reported on in a manner acceptable
to the Securities and Exchange Commission by Price
Waterhouse or other independent public accountants of
nationally recognized standing; provided that delivery of a
copy of Borrower's annual report on Form 10K (excluding the
exhibits thereto, unless such exhibits are requested under
clause (i) of this Section) or any successor form and a
manually executed copy of the accompanying report of the
Borrower's independent public accountant, as filed with the
Securities and Exchange Commission, shall satisfy the
requirements of this clause (a);
(b) as soon as available and in any event within 45
days after the end of each of the first three quarters of
each fiscal year of the Borrower, (x) a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter, (y) the related consolidated
statements of income for such quarter and for the portion of
the Borrower's fiscal year ended at the end of such quarter
and (z) the related consolidated statement of cash flows for
the portion of the Borrower's fiscal year ended at the end
of such quarter, setting forth in each case in comparative
form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal
year, all certified (subject to normal year-end adjustments)
as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
provided that delivery of a copy of Borrower's Quarterly
Report on Form 10-Q (excluding the exhibits thereto, unless
such exhibits are requested under clause (i) of this
Section) or any successor form, as filed with the Securities
and Exchange Commission, shall satisfy the requirements of
this clause (b);
33
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b)
above, a certificate of the chief financial officer or the
chief accounting officer of the Borrower (i) setting forth
in reasonable detail the calculations or other appropriate
details required to establish whether the Borrower was in
compliance with the requirements of Sections 5.07(d),
5.08(k) and 5.09 on the date of such financial statements
and whether or not the Borrower could have made the
representations and warranties set forth in Sections 4.11
and 4.12 on the date of such financial statements and (ii)
stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a
statement of the firm of independent public accountants
which reported on such statements (i) whether anything has
come to their attention to cause them to believe that any
Default existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to
clause (c) above;
(e) within five days after any officer of the Borrower
obtains knowledge of any Default, if such Default is then
continuing, a certificate of the chief financial officer or
the chief accounting officer of the Borrower setting forth
the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed;
(g) 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 (excluding the exhibits thereto, unless such
exhibits are requested under clause (i) of this Section) on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the
Borrower shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the ERISA Group (i)
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
34
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 or is
required to give notice of any such reportable event, a copy
of the notice of such reportable event given or required to
be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, 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 in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the
chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and
action, if any, which the Borrower or applicable member of
the ERISA Group is required or proposes to take; and
(i) from time to time such additional information
regarding the financial position or business of the Borrower
and its Subsidiaries as the Agent, at the request of any
Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower
(i) will pay and discharge, and will cause each Restricted
Subsidiary to pay and discharge, at or before maturity, all their
respective material obligations and liabilities, including,
without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings, and will
maintain, and will cause each Restricted Subsidiary to maintain,
in accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of the same and (ii)
will cause each Unrestricted Subsidiary to pay and discharge, at
or before maturity, its material obligations and liabilities for
which the Borrower or any Restricted Subsidiary is jointly or
severally liable (such as certain tax liabilities and liabilities
under ERISA), except where the same may be contested in good
faith by appropriate proceedings.
35
SECTION 5.03. Maintenance of Property; Insurance. (a)
The Borrower will keep, and will cause each Restricted Subsidiary
to keep, all property useful and necessary in its business in
good working order and condition, ordinary wear and tear
excepted, provided that nothing in this subsection (a) shall
prevent the Borrower or any Restricted Subsidiary from ceasing to
operate, or consenting to cessation of operation of, any of its
plants or any other property, if the Borrower in good faith
determines that it is advisable not to operate the same, that the
operation thereof will not be essential to the maintenance and
continued operation of the rest of its properties and that such
cessation of operation is in the best interest of the Borrower
and is not materially disadvantageous to the Banks.
(b) The Borrower will, and will cause each of its
Restricted Subsidiaries to, maintain (either in the name of the
Borrower or in such Restricted Subsidiary's own name) with
financially sound and responsible insurance companies, insurance
on all their respective properties in at least such amounts and
against at least such risks (and with such risk retention) as are
usually insured against in the same general area by companies of
established repute engaged in the same or a similar business; and
will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so
carried.
SECTION 5.04. Conduct of Business and Maintenance of
Existence. The Borrower (i) will continue, and will cause each
Restricted Subsidiary to continue, to engage in business of the
same general type as now conducted by the Borrower and its
Restricted Subsidiaries, except as it may be prevented from doing
so by accidents, fires, explosions, strikes, lock-outs,
combinations of workmen, flood, drought, embargo, riot, war,
governmental requirements, acts of God or the public enemy and
other causes beyond its control, and (ii) will preserve, renew
and keep in full force and effect, and will cause each Restricted
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 5.04
shall prohibit (x) the merger of a Restricted Subsidiary into the
Borrower or the merger or consolidation of a Restricted
Subsidiary with or into another Person if the corporation
surviving such consolidation or merger is a Wholly-Owned
Restricted Subsidiary and if, in each case, after giving effect
thereto, no Default shall have occurred and be continuing or (y)
the termination of the corporate existence of any Restricted
Subsidiary or the cessation of all or any part of its business or
a change of its business to include any business closely related
36
to the generation of electricity or the transmission or
distribution of electricity or gas, if the Borrower in good faith
determines that such termination, cessation or change is in the
best interest of the Borrower and is not materially
disadvantageous to the Banks.
SECTION 5.05. Compliance with Laws. The Borrower will
use its best efforts to comply, and will cause each Restricted
Subsidiary to use its best efforts 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
of compliance therewith is contested in good faith by appropriate
proceedings.
SECTION 5.06. Inspection of Property, Books and
Records. The Borrower 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 any Bank at such Bank's expense (i) to visit and inspect any
of their respective properties, to the extent permitted by
applicable law and applicable safety and security policies of the
Borrower and subject to proprietary and confidentiality policies
and agreements of or binding upon the Borrower or the relevant
Subsidiary, (ii) to examine and make abstracts from any of their
respective books and records and (iii) 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.
SECTION 5.07. Investments. Neither the Borrower nor
any Restricted Subsidiary will make or acquire any Investment in
any Person other than:
(a) Investments in the Borrower or any Restricted
Subsidiary;
(b) Investments in Unrestricted Subsidiaries existing
on the date hereof;
(c) Temporary Cash Investments; and
(d) any Investment not otherwise permitted by the
foregoing clauses of this Section, provided that the
aggregate book value of such Investments under this
subsection (d) does not exceed 10% of the total assets of
the Borrower and its Restricted Subsidiaries as reflected in
37
the most recent financial statements of the Borrower
required to be delivered by Section 5.01(a).
SECTION 5.08. Negative Pledge. Neither the Borrower
nor any Restricted Subsidiary will create, assume or suffer to
exist any Lien on any asset now or hereafter owned by it, except:
(a) any Lien created or to be created by the First
Mortgage Indenture of the Borrower;
(b) any Lien existing on any asset of any corporation
at the time such corporation becomes a Subsidiary and not
created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the
cost of acquiring such asset, provided that such Lien
attaches to such asset concurrently with or within 90 days
after the acquisition thereof;
(d) any Lien on any asset of any corporation existing
at the time such corporation is merged or consolidated with
or into the Borrower or a Subsidiary and not created in
contemplation of such event;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Subsidiary and not
created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any
Lien permitted by any of the foregoing clauses of this
Section, provided that such Debt is not increased and is not
secured by any additional assets except as permitted in
clause (a) above;
(g) any Lien arising pursuant to any order of
attachment, distraint or similar legal process arising in
connection with court proceedings so long as (i) the amount
of the claims secured by such Lien does not exceed
$25,000,000 and (ii) the execution or other enforcement of
such Lien is effectively stayed and the claims secured
thereby are being contested in good faith by appropriate
proceedings;
(h) any Lien on any asset in favor of the United
States of America, any state, or any department, agency,
instrumentality, or political subdivision of any such
jurisdiction, securing Industrial Revenue bonds the interest
38
on which is exempt from federal income tax under Section 103
of the Internal Revenue Code if such bonds shall be issued
for the purpose of financing the construction or improvement
of such asset;
(i) Liens arising in the ordinary course of its
business which (i) do not secure Debt, (ii) do not secure
any obligation in an amount exceeding $25,000,000 and (iii)
do not in the aggregate materially detract from the value of
its assets or materially impair the use thereof in the
operation of its business;
(j) easements, rights of way, restrictions, exceptions
or reservations in or affecting any property of the Borrower
or any Restricted Subsidiary for the purpose of roads, pipe
lines, transmission, distribution or communication lines or
for the joint or common use of real property and equipment
and other like purposes, of real property and other like
purposes, and minor defects and irregularities of title in
any property which do not materially impair the use of such
property in the operation of the business of the Borrower or
any Restricted Subsidiary; and
(k) Liens not otherwise permitted by the foregoing
clauses of this Section securing Debt in an aggregate
principal amount at any time outstanding not to exceed
$10,000,000.
SECTION 5.09. Limitations on Restricted Subsidiaries.
(a) The Borrower will not permit the aggregate outstanding
principal amount of all Debt of its Restricted Subsidiaries
(excluding Debt owing to the Borrower or another Restricted
Subsidiary) to exceed $10,000,000 at any time.
(b) The Borrower will not permit a Restricted
Subsidiary to become an Unrestricted Subsidiary unless the
representations and warranties set forth in Sections 4.11 and
4.12 would be true at the time of such change in status after
giving effect thereto (retroactively for the relevant period in
the case of Section 4.12).
SECTION 5.10. Consolidations, Mergers and Sales of
Assets. The Borrower will not (a) consolidate with or merge into
any other Person or (b) sell, lease or otherwise transfer all or
any substantial part of its assets (other than receivables) to
any other Person. The Borrower will not permit any Restricted
Subsidiary to consolidate with, merge into or transfer all or any
substantial part of its assets (other than receivables) to any
Person other than the Borrower or a Wholly-Owned Restricted
Subsidiary; provided that any Restricted Subsidiary may sell all
39
or any part of its assets and distribute the proceeds of such
sale to its parent in connection with a cessation of all or any
part of its business permitted by Section 5.04.
SECTION 5.11. Use of Proceeds. The proceeds of the
Loans made under this Agreement will be used by the Borrower for
its general corporate purposes, including the repayment of its
maturing commercial paper. None of such proceeds 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.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of
the following events ("Events of Default") shall have occurred
and be continuing:
(a) the Borrower shall fail to pay when due any
principal of any Loan, or shall fail to pay within five days
of the due date thereof any interest, fees or other amount
payable hereunder;
(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.07 to 5.11, inclusive;
(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other
than those covered by clause (a) or (b) above) for 15 days
after written notice thereof has been given to the Borrower
by the Agent at the request of any Bank;
(d) any representation and warranty set forth in
Section 4.11 or 4.12 shall prove to have been incorrect when
made on the date hereof or when deemed made on the date of
any Borrowing or when made with respect to a designation
under Section 6.03; it being understood that this clause (d)
shall not apply to certificates pursuant to Section 5.01(c)
as to whether or not the representations and warranties set
forth in Sections 4.11 and 4.12 could have been made on the
dates of specified financial statements;
(e) any representation or warranty (other than those
set forth in Sections 4.11 and 4.12) or any certification or
statement, made by the Borrower in this Agreement or in any
40
certificate, financial statement or other document delivered
pursuant to this Agreement, shall prove to have been
incorrect in any material respect when made (or deemed
made);
(f) the Borrower shall fail to make any payment in
respect of any of its Debt (other than the Loans) when due
or within any applicable grace period;
(g) any event or condition shall occur which results
in the acceleration of the maturity of any Debt (other than
the Loans) of the Borrower or enables (or, with the giving
of notice or lapse of time or both, would enable) the holder
of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(h) the Borrower (or, subject to Section 6.03, any
Restricted Subsidiary) shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action
to authorize any of the foregoing;
(i) an involuntary case or other proceeding shall be
commenced against the Borrower (or, subject to Section 6.03,
any Restricted Subsidiary) seeking liquidation,
reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an
order for relief shall be entered against the Borrower or
any Restricted Subsidiary under the federal bankruptcy laws
as now or hereafter in effect;
(j) any member of the ERISA Group shall fail to pay
when due an amount or amounts aggregating in excess of
$5,000,000 which it shall have become liable to pay under
Title IV of ERISA; or notice of intent to terminate a
41
Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed
to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of
the ERISA Group to incur a current payment obligation in
excess of $5,000,000;
(k) a judgment or order for the payment of money in
excess of $5,000,000 shall be rendered against the Borrower
(or, subject to Section 6.03, any Restricted Subsidiary) and
such judgment or order shall continue unsatisfied and
unstayed for a period of 15 days; or
(l) any person or group of persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act of 1934,
as amended) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 30% or more of the
outstanding shares of common stock of the Borrower; or,
during any period of 15 consecutive calendar months,
individuals who were directors of the Borrower on the first
day of such period shall cease to constitute a majority of
the board of directors of the Borrower; then, and in every
such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by
notice to the Borrower terminate the Commitments and they
shall thereupon terminate, and (ii) if requested by Banks
holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower
declare the Notes (together with accrued interest thereon)
to be, and the Notes 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
Borrower; provided that in the case of any of the Events of
Default specified in clause (h) or (i) above with respect to
the Borrower, without any notice to the Borrower or any
other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
42
SECTION 6.02. Notice of Default. The Agent shall give
notice to the Borrower under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the
Banks thereof.
SECTION 6.03. Exclusion of Restricted Subsidiaries
from Certain Events of Default. If an event specified in clause
(h), (i) or (k) of Section 6.01 occurs with respect to a
Restricted Subsidiary, such event shall not constitute an Event
of Default if (i) the Borrower promptly, by notice to the Agent,
designates such Subsidiary as an Unrestricted Subsidiary, (ii)
the representations and warranties set forth in Sections 4.11 and
4.12 are true at the time of such designation after giving effect
thereto (retroactively for the relevant period in the case of
Section 4.12) and (iii) the Borrower delivers to the Agent a
certificate representing and warranting that the condition set
forth in clause (ii) is satisfied.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each
Bank irrevocably appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement and the Notes as are delegated to the Agent by the
terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. ▇▇▇▇▇▇ Guaranty
Trust Company of New York shall have the same rights and powers
under this Agreement as any other Bank and may exercise or
refrain from exercising the same as though it were not the Agent,
and ▇▇▇▇▇▇ Guaranty Trust Company of New York and its affiliates
may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or
affiliate of the Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the
Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Default,
except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent
may consult with legal counsel (who may be counsel for the
Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
43
SECTION 7.05. Liability of Agent. Neither the Agent
nor any of its directors, officers, agents, or employees shall be
liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement
or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article III, except
receipt of items required to be delivered to the Agent; or (iv)
the validity, effectiveness or genuineness of this Agreement, the
Notes or any other instrument or writing furnished in connection
herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex or similar
writing) believed by it to be genuine or to be signed by the
proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the Agent
(to the extent not reimbursed by the Borrower) against any cost,
expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from the
Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that
it will, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this
Agreement.
SECTION 7.08. Successor Agent. The Agent may resign
at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall
have the right, after consultation with the Borrower, to appoint
a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent gives notice
of resignation, then the retiring Agent may, on behalf of the
44
Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Agent.
SECTION 7.09. Agent's Fees. The Borrower shall pay to
the Agent for its own account fees in the amounts and at the
times previously agreed upon between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any
Interest Period for any Fixed Rate Borrowing:
(a) the Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not
being offered to the Reference Banks in the relevant market
for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having
50% or more of the aggregate amount of the Commitments
advise the Agent that the Adjusted CD Rate or the Adjusted
London Interbank Offered Rate, as the case may be, as
determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their CD Loans or
Euro-Dollar Loans, as the case may be, for such Interest
Period, the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such
45
date, (i) if such Fixed Rate Borrowing is a Committed
Borrowing, such Borrowing shall instead be made as a Base
Rate Borrowing and (ii) if such Fixed Rate Borrowing is a
Money Market LIBOR Borrowing, the Money Market LIBOR Loans
comprising such Borrowing shall bear interest for each day
from and including the first day to but excluding the last
day of the Interest Period applicable thereto at the Prime
Rate for such day.
SECTION 8.02. 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 any
Bank (or its Euro-Dollar Lending Office) 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 any Bank (or its Euro-Dollar Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Agent, the Agent shall forthwith give
notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant to
this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall
determine that it may not lawfully continue to maintain and fund
any of its outstanding Euro-Dollar Loans to maturity and shall so
specify in such notice, the Borrower shall immediately prepay in
full the then outstanding principal amount of each such Euro-
Dollar Loan, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the
Borrower shall borrow a Base Rate Loan in an equal principal
amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of
the other Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a)
If on or after (x) the date hereof, in the case of any Committed
Loan or any obligation to make Committed Loans or (y) the date of
the related Money Market Quote, in the case of any Money Market
Loan, 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
46
administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether
or not having the force of law) of any such authority, central
bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its
Fixed Rate Loans, its Note or its obligation to make Fixed
Rate Loans, or shall change the basis of taxation of
payments to any Bank (or its Applicable Lending Office) of
the principal of or interest on its Fixed Rate Loans or any
other amounts due under this Agreement in respect of its
Fixed Rate Loans or its obligation to make Fixed Rate Loans
(except for changes in the rate of tax on the overall net
income of such Bank or its Applicable Lending Office imposed
by the jurisdiction in which such Bank's principal executive
office or Applicable Lending Office is located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding (A) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve
Percentage and (B) with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar
Reserve Percentage) against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans; and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of
any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank
to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the
date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, 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 any request
47
or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for
such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time to
time, within 15 days after demand by such Bank (with a copy to
the Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will (after taking into account any
compensation payable under subsection (a) of this Section)
compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different
Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in
the judgment of such Bank, be otherwise disadvantageous to such
Bank. A certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts to be
paid to it hereunder (showing in reasonable detail how such
amount or amounts were calculated) shall be conclusive in the
absence of manifest error. In determining such amount, such Bank
may use any reasonable averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected
Fixed Rate Loans. If (i) the obligation of any Bank to make
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section 8.03(a) and
the Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Agent, have elected that
the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Loans which would otherwise be made by such
Bank as CD Loans or Euro-Dollar Loans, as the case may be,
shall be made instead as Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans,
as the case may be, has been repaid, all payments of
principal which would otherwise be applied to repay such
Fixed Rate Loans shall be applied to repay its Base Rate
Loans instead.
48
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (x) in the case of
the Borrower or the Agent, at its address or telex number set
forth on the signature pages hereof, (y) in the case of any Bank,
at its address or telex number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other address
or telex number as such party may hereafter specify for the
purpose by notice to the Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback
is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Agent under Article II or Article
VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the
Agent or any Bank in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes;
Indemnification. (a) The Borrower shall pay (i) all out-of-
pocket expenses of the Agent, including reasonable fees and
disbursements of counsel (including internal counsel) for the
Agent, in connection with the preparation of this Agreement, any
waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Agent
and each Bank, including reasonable fees and disbursements of
counsel (including internal counsel), in connection with such
Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom. The Borrower shall
indemnify each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any governmental authority
by reason of the execution and delivery of this Agreement or the
Notes.
49
(b) The Borrower agrees to indemnify each Bank and
hold each Bank harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including,
without limitation, the reasonable fees and disbursements of
counsel (including internal counsel), which may be incurred by
any Bank (or by the Agent in connection with its actions as Agent
hereunder) in connection with any investigative, administrative
or judicial proceeding (whether or not such Bank shall be
designated a party thereto) relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Loans
hereunder; provided that no Bank shall have the right to be
indemnified hereunder (i) for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction or
(ii) except as provided in subsection (a) of this Section, for
any amount incurred as a result of actions taken to enforce the
contractual rights and obligations of the parties hereto under
this Agreement.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees
that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest due with respect to
any Note held by it which is greater than the proportion received
by any other Bank in respect of the aggregate amount of principal
and interest due with respect to any Note held by such other
Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Notes held by the other
Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with
respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other
than its indebtedness under the Notes. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect
to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the
amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision
of this Agreement or the Notes may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by
the Borrower and the Required Banks (and, if the rights or duties
of the Agent are affected thereby, by the Agent); provided that
no such amendment or waiver shall, unless signed by all the
50
Banks, (i) increase or decrease the Commitment of any Bank
(except for a ratable decrease in the Commitments of all Banks)
or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees
hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for
any reduction or termination of any Commitment or (iv) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement.
SECTION 9.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns, except that the Borrower may not assign or otherwise
transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant") participating
interests in its Commitment or any or all of its Loans. In the
event of any such grant by a Bank of a participating interest to
a Participant, whether or not upon notice to the Borrower and the
Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of
the Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such participation agreement may
provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the
Participant. The Borrower agrees that each Participant shall, to
the extent provided in its participation agreement, be entitled
to the benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect
for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection
(b).
(c) Any Bank may at any time assign to one or more
banks or other institutions (each an "Assignee") all, or a
proportionate part of all, of its rights and obligations under
51
this Agreement and the Notes, and such Assignee shall assume such
rights and obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit F hereto executed
by such Assignee and such transferor Bank, with (and subject to)
the subscribed consent of the Borrower and the Agent; provided
that, if an Assignee directly or indirectly controls, is
controlled by or is under common control with such transferor
Bank, no such consent shall be required; and provided further
that such assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market Loans.
Upon execution and delivery of such instrument and payment by
such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder
to a corresponding extent, and no further consent or action by
any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor Bank,
the Agent and the Borrower shall make appropriate arrangements so
that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall
pay to the Agent an administrative fee for processing such
assignment in the amount of $2,000.
(d) Any Bank may at any time assign all or any portion
of its rights under this Agreement and its Note to a Federal
Reserve Bank. No such assignment shall release the transferor
Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of
any Bank's rights shall be entitled to receive any greater
payment under Section 8.03 than such Bank would have been
entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02 or 8.03
requiring such Bank to designate a different Applicable Lending
Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it in
good faith is not relying upon any "margin stock" (as defined in
Regulation U) as collateral in the extension or maintenance of
the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be governed by
52
and construed in accordance with the laws of the State of New
York. The Borrower hereby submits to the jurisdiction of the
courts of the State of New York in New York County for purposes
of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower
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 court and any claim
that any such proceeding brought in such court has been brought
in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. This
Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Except as provided in Section 7.09, this Agreement constitutes
the entire agreement and understanding among the parties hereto
and supersedes any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof.
SECTION 9.10. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION
By _________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Title: Treasurer
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
53
Commitments
$20,000,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
By __________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
$15,000,000 THE BANK OF NEW YORK
By __________________________
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
$10,000,000 MARINE MIDLAND BANK N.A.
By ___________________________
▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
$5,000,000 UNION BANK OF SWITZERLAND,
New York Branch
By ___________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
By ___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
_________________
Total Commitments
$50,000,000
=================
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Agent
By __________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Department
54
EXHIBIT A
NOTE
New York, New York
October 23, 1996
For value received, Central ▇▇▇▇▇▇ Gas & Electric
Corporation, a New York corporation (the "Borrower"), promises to
pay to the order of Marine Midland Bank N.A. (the "Bank"), for
the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower
pursuant to the Credit Agreement referred to below on the last
day of the Interest Period relating to such Loan. The Borrower
promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in
the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of
▇▇▇▇▇▇ Guaranty Trust Company of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof,
appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding shall be endorsed by
the Bank on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of October 23, 1996 among the Borrower, the
banks listed on the signature pages thereof and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Agent (as the same may be amended
from time to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof.
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION
By __________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Title: Treasurer
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
2
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York
(the "Agent")
From: Central ▇▇▇▇▇▇ Gas & Electric Corporation
Re: Credit Agreement (the "Credit Agreement") dated as
of October 23, 1996 among the Borrower, the Banks
listed on the signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the
London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them
in the Credit Agreement.
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC CORPORATION
By________________________
Title:
______________________
* Amount must be $5,000,000 or a larger multiple of
$1,000,000.
** Not less than one month (LIBOR Auction) or not less than
7 days (Absolute Rate Auction), subject to the provisions of the
definition of Interest Period.
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to Central ▇▇▇▇▇▇ Gas & Electric Corporation
(the "Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated
as of October 23, 1996 among the Borrower, the Banks parties
thereto and the undersigned, as Agent, we are pleased on behalf
of the Borrower to invite you to submit Money Market Quotes to
the Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the
London Interbank Offered Rate.]
Please respond to this invitation by no later than
[2:00 P.M.] [9:00 A.M.] (Wilmington, Delaware time) on [date].
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Agent
By______________________
Authorized Officer
EXHIBIT D
Form of Money Market Quote
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Re: Money Market Quote to
Central ▇▇▇▇▇▇ Gas & Electric
Corporation (the "Borrower")
In response to your invitation on behalf of the
Borrower dated _____________, 19__, we hereby make the following
Money Market Quote on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
provided, that the aggregate principal amount of Money Market
Loans for which the above offers may be accepted shall not exceed
$____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the
sum of the individual offers exceeds the amount the Bank is
willing to lend. Bids must be made for $5,000,000 or a larger
multiple of $1,000,000.
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions
set forth in the Credit Agreement dated as of October 23, 1996
among the Borrower, the Banks listed on the signature pages
thereof and yourselves, as Agent, irrevocably obligates us to
make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 7 days, as specified
in the related Invitation. No more than five bids are permitted
for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify whether
"PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).
2
EXHIBIT E
OPINION OF ▇▇▇▇▇ & ▇▇▇▇▇▇,
COUNSEL FOR THE BORROWER
October 23, 1996
To the Banks and the Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have acted as counsel for Central ▇▇▇▇▇▇ Gas &
Electric Corporation (the "Borrower") in connection with the
Credit Agreement (the "Credit Agreement") dated as of October 23,
1996 among the Borrower, the banks listed on the signature pages
thereof and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent.
Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact
and law as we have deemed necessary or advisable for purposes of
this opinion.
Upon the basis of the foregoing, we are of the opinion
that:
1. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of New York,
and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official
(other than approval of the New York State Public Service
Commission, which approval has been obtained and is in full force
and effect) and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Borrower, or to
the best of our knowledge, of any agreement, judgment,
injunction, order, decree or other instrument binding upon the
Borrower or result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries.
3. The Credit Agreement (assuming the due and valid
execution thereof by the other parties thereto) constitutes a
valid and binding agreement of the Borrower and the Notes
constitute valid and binding obligations of the Borrower.
4. Except as disclosed in the Disclosure Documents,
there is no action, suit or proceeding pending against, or to the
best of our knowledge threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, in which
there is a reasonable possibility of an adverse decision which
could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole
or which in any manner draws into question the validity of the
Credit Agreement or the Notes.
Our opinion expressed above is limited to the present
law of the State of New York and, to the extent applicable, the
present Federal law of the United States, and we do not express
any opinion herein concerning any other law.
This opinion is solely for the benefit of the named
addressees hereof and is not to be quoted in whole or in part or
otherwise referred to in any oral or written statement, document
or other communication, nor is it to be filed with any government
agency or delivered to any person without our prior written
consent.
Very truly yours,
▇▇▇▇▇ & ▇▇▇▇▇▇
2
EXHIBIT F
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR]
(the "Assignor"), [ASSIGNEE] (the "Assignee"), CENTRAL ▇▇▇▇▇▇ GAS
& ELECTRIC CORPORATION (the "Borrower") and ▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Credit Agreement dated as of October
23, 1996 among the Borrower, the Assignor and the other Banks
party thereto, as Banks, and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the
Assignor has a Commitment to make Loans to the Borrower in an
aggregate principal amount at any time outstanding not to exceed
$__________;
WHEREAS, Committed Loans made to the Borrower by the
Assignor under the Credit Agreement in the aggregate principal
amount of $__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment thereunder in
an amount equal to $__________ (the "Assigned Amount"), together
with a corresponding portion of its outstanding Committed Loans,
and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such
terms;
NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements contained herein, the parties hereto agree
as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings set
forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns
and sells to the Assignee all of the rights of the Assignor under
the Credit Agreement to the extent of the Assigned Amount, and
the Assignee hereby accepts such assignment from the Assignor and
assumes all of the obligations of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee, the Borrower and the Agent
and the payment of the amounts specified in Section 3 required to
be paid on the date hereof (i) the Assignee shall, as of the date
hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a
Commitment in an amount equal to the Assigned Amount, and (ii)
the Commitment of the Assignor shall, as of the date hereof, be
reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such
obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in Federal
funds an amount equal to $_________.*** It is understood that
commitment and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee.
Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the
account of the other party hereto, it shall receive the same for
the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such
other party.
SECTION 4. Consent of the Borrower and the Agent.
This Agreement is conditioned upon the consent of the Borrower
and the Agent pursuant to Section 9.06(c) of the Credit
Agreement. The execution of this Agreement by the Borrower and
the Agent is evidence of this consent. Pursuant to Section
9.06(c) the Borrower agrees to execute and deliver a Note payable
to the order of the Assignee to evidence the assignment and
assumption provided for herein.
__________________
*** Amount should combine principal together with accrued
interest and breakage compensation, if any, to be paid by the
Assignee, net of any portion of any upfront fee to be paid by the
Assignor to the Assignee. It may be preferable in an appropriate
case to specify these amounts generically or by formula rather
than as a fixed sum.
2
SECTION 5. Non-Reliance on Assignor. The Assignor
makes no representation or warranty in connection with, and shall
have no responsibility with respect to, the solvency, financial
condition, or statements of the Borrower, or the validity and
enforceability of the obligations of the Borrower in respect of
the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and
financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 7. Counterparts. This Agreement may be signed
in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
CENTRAL ▇▇▇▇▇▇ GAS & ELECTRIC
CORPORATION
By__________________________
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Agent
By__________________________
Title:
3