EXHIBIT 10.59
AMENDMENT NO. 1 TO CREDIT AGREEMENT
This Amendment No. 1 to Credit Agreement ("AMENDMENT NO. 1") is
dated as of November 5, 1996, and is by and among LOUISVILLE GAS AND ELECTRIC
COMPANY, (the "BORROWER"), the banks set forth herein (collectively, the
"BANKS"), and PNC BANK, KENTUCKY, INC. as agent for the Banks (the "AGENT").
WHEREAS, the Borrower, the Banks set forth therein and the Agent are
parties to that certain Credit Agreement dated as of December 18, 1995 (the
"CREDIT AGREEMENT");
WHEREAS, capitalized terms used herein and not otherwise defined
herein shall have the same meanings given to them in the Credit Agreement; and
WHEREAS, simultaneously with the execution and delivery of this
Amendment No. 1, Bank of Louisville and Trust Co., as assignor ("ASSIGNOR"), and
PNC Bank, Kentucky, Inc., as assignee ("ASSIGNEE"), are entering into an
Assignment and Assumption Agreement pursuant to which Assignor is assigning all
of its right, title and interest in the Commitments, the Notes and the Loan
Documents to Assignee.
WHEREAS, Union Bank of Switzerland ("UBS") and The First National
Bank of Chicago ("FIRST CHICAGO"), by executing this Amendment No. 1, are
joining the Credit Agreement as Banks with the respective Commitments set forth
on Schedule 1.01(B) hereto.
WHEREAS, the Borrower, the Banks and the Agent wish to amend the
Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto, intending to be legally bound,
agree as follows:
1. The first recital clause of the Credit Agreement is hereby amended by
deleting the number "$160,000,000" in the third line thereof and inserting in
lieu thereof "$200,000,000."
2. Section 1.1 of the Credit Agreement is hereby amended by deleting
therefrom the definitions of "EXPIRATION DATE," "FOURTH-LEVEL DEBT RATING,"
"SECOND-LEVEL DEBT RATING" and "THIRD-LEVEL DEBT RATING" and inserting in lieu
thereof the following:
"EXPIRATION DATE" shall mean, with respect to the Commitments,
November 5, 2001.
"FOURTH-LEVEL DEBT RATING" shall mean a Borrower Debt Rating
of BBB+ if the rating is provided by Standard & Poor's or
equal to Baa1 if the rating is provided by ▇▇▇▇▇'▇.
"SECOND-LEVEL DEBT RATING" shall mean a Borrower Debt Rating
equal to or better than A but less than AA- if the rating is
provided by Standard & Poor's or equal to or better than A2
but less than Aa3 if the rating is provided by ▇▇▇▇▇'▇.
"THIRD-LEVEL DEBT RATING" shall mean a Borrower Debt Rating
equal to A- if the rating is provided by Standard & Poor's or
equal to A3 if the rating is provided by ▇▇▇▇▇'▇.
3. Section 1.1 of the Credit Agreement is hereby amended by inserting a
new definition of "Fifth-Level Debt Rating" as follows:
"FIFTH-LEVEL DEBT RATING" shall mean a Borrower Debt Rating of
BBB or lower if the rating is provided by Standard & Poor's or
Baa2 or lower if the rating is provided by ▇▇▇▇▇'▇.
4. Section 2.03 of the Credit Agreement is hereby amended by deleting the
chart setting forth the Borrower Debt Rating and Facility Fee Rate at the end of
the first sentence thereof in its entirety and inserting in lieu thereof the
following:
Borrower Debt Rating Facility Fee Rate
-------------------- -----------------
First-Level Debt Rating .06%
Second-Level Debt Rating .075%
Third-Level Debt Rating .09%
Fourth-Level Debt Rating .10%
Fifth-Level Debt Rating .15%
5. Section 4.01(a)(ii) of the Credit Agreement is hereby amended by
deleting the chart setting forth the Borrower Debt Rating and the Euro-Rate
Spread at the end of the first sentence thereof in its entirety and inserting in
lieu thereof the following:
Borrower Debt Rating Euro-Rate Spread
-------------------- ----------------
First-Level Debt Rating .115%
Second-Level Debt Rating .15%
Third-Level Debt Rating .16%
Fourth-Level Debt Rating .20%
Fifth-Level Debt Rating .225%
6. Section 8.02(c) of the Credit Agreement is hereby amended by inserting
immediately preceding the parenthetical in the third line thereof the following
words "any of its properties or assets, tangible or intangible."
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7. Schedule 1.01(B) of the Credit Agreement is hereby deleted in its
entirety and Schedule 1.01(B) attached hereto is inserted in lieu thereof.
8. Exhibit 1.01(B) to the Credit Agreement is hereby deleted in its
entirety and Exhibit 1.01(B) attached hereto is hereby inserted in lieu thereof.
9. Exhibit 1.01(G)(2) of the Credit Agreement is hereby deleted in its
entirety and Exhibit 1.01(G)(2) attached hereto is inserted in lieu thereof.
10. This Amendment No. 1 shall become effective on the first date on which
the following conditions have been satisfied:
(a) The Agent on behalf of each Bank shall have received
replacement Bid Loan Notes and Revolving Credit Notes
reflecting the changes in Schedule 1.01(B).
(b) The Agent on behalf of the Banks shall have received a
certificate signed by the Secretary or Assistant Secretary of
the Borrower certifying as to all action taken by the Borrower
to authorize the execution, delivery and performance of this
Amendment No. 1 by the Borrower and attaching thereto such
resolutions.
(c) The Agent shall have received a written opinion from in-house
counsel for the Borrower, addressed to the Agent for the
benefit of the Banks, opining as to such matters with respect
to the transactions contemplated herein as the Agent may
reasonably request, in form and substance satisfactory to the
Agent and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation, as
special counsel for the Agent and the Banks.
11. The Borrower hereby represents to the Agent and the Banks that: except
as disclosed on Schedule 7.02 (as previously delivered to the Agent and the
Banks and accepted by the Required Banks), the representations and warranties of
the Borrower contained in Article VI of the Credit Agreement remain true and
accurate on and as of the date hereof (except for representations and warranties
which relate solely to an earlier date or time, which representations and
warranties were true and correct on and as of the specific dates or times
referred to therein); the Borrower has performed and is in compliance with all
covenants contained in Article VIII or elsewhere in the Credit Agreement; no
Event of Default or Potential Default has occurred and is continuing.
12. The Borrower hereby agrees to reimburse the Agent on demand for all
costs, expenses and disbursements relating to this Amendment No. 1 which are
payable by the Borrower as provided in Sections 10.05 and 11.03 of the Credit
Agreement.
13. The Borrower and the Banks intend and agree that, except as provided
herein, the Credit Agreement shall remain in full force and effect without
modification.
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14. This Amendment No. 1 shall be governed by and construed and enforced
in accordance with the internal laws of the Commonwealth of Kentucky without
reference to its principles of conflicts of law.
15. Each of UBS and First Chicago (i) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial statements (if
any) referred to in Sections 6.01(i), 8.03(a) and 8.03(b) of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into the Credit Agreement;
(ii) agrees 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 action under the Credit Agreement; (iii) appoints and authorizes the
Agent to take such actions on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Agent by the terms thereof; (iv) agrees
that it will become a party to and be bound by the Credit Agreement, as amended
by Amendment No. 1, on the date hereof (including without limitation the
provisions of Section 11.11) as if it were an original Bank thereunder and will
have the rights and obligations of a Bank thereunder and will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank; and (v) has
previously provided the Agent its address for notices.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE 1 OF 3 TO AMENDMENT NO. 1 TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto by their officers thereunto
duly authorized, have executed this Amendment No. 1 to Credit Agreement as of
the date first above written.
LOUISVILLE GAS AND ELECTRIC COMPANY
By: _______________________________________
Title: ____________________________________
PNC BANK, KENTUCKY, INC., individually and
as Agent
By: _______________________________________
Title: ____________________________________
BANK OF MONTREAL, individually and as Co-
Agent
By: _______________________________________
Title: ____________________________________
CHASE MANHATTAN BANK, N.A.
By: _______________________________________
Title: ____________________________________
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[SIGNATURE PAGE 2 OF 3 TO AMENDMENT NO. 1 TO CREDIT AGREEMENT]
THE BANK OF NEW YORK
By: _______________________________________
Title: ____________________________________
CITIBANK, N.A.
By: _______________________________________
Title: ____________________________________
NATIONAL CITY BANK, KENTUCKY
By: _______________________________________
Title: ____________________________________
BANK OF LOUISVILLE AND TRUST CO.
By: _______________________________________
Title: ____________________________________
BANK ONE, KENTUCKY, N.A.
By: _______________________________________
Title: ____________________________________
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[SIGNATURE PAGE 3 OF 3 TO AMENDMENT NO. 1 TO CREDIT AGREEMENT]
FIFTH THIRD BANK OF KENTUCKY, INC.
By: _______________________________________
Title: ____________________________________
UNION BANK OF SWITZERLAND
By: _______________________________________
Title: ____________________________________
THE FIRST NATIONAL BANK OF CHICAGO
By: _______________________________________
Title: ____________________________________
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SCHEDULE 1.01(B)
Ratable
Bank Commitment Share
---- ---------- -----
PNC Bank, Kentucky, Inc. $ 42,500,000 21.25%
Bank of Montreal $ 26,250,000 13.125%
Chase Manhattan Bank, N.A. $ 26,250,000 13.125%
The Bank of New York $ 21,000,000 10.5%
Citibank, N.A. $ 15,750,000 7.875%
National City Bank, Kentucky $ 15,750,000 7.875%
Bank One, Kentucky, N.A. $ 10,500,000 5.25%
Fifth Third Bank of Kentucky, Inc. $ 10,500,000 5.25%
Union Bank of Switzerland $ 15,750,000 7.875%
The First National Bank of Chicago $ 15,750,000 7.875%
------------ -----
Total $200,000,000 100.0%
EXHIBIT 1.01(B)
FORM OF
BID LOAN NOTE
$200,000,000 Louisville, Kentucky
________________, 1996
FOR VALUE RECEIVED, the undersigned, LOUISVILLE GAS AND ELECTRIC
COMPANY, a Kentucky corporation (herein called the "BORROWER"), hereby promises
to pay to the order of ____________________ (the "BANK") the lesser of (i) the
principal sum of Two Hundred Million U.S. Dollars (U.S. $200,000,000), or (ii)
the aggregate unpaid principal balance of all Bid Loans made by the Bank to the
Borrower pursuant to Sections 3.01 and 3.02 of the Credit Agreement dated as of
December 18, 1995 among the Borrower, PNC BANK, KENTUCKY, INC., as agent
("AGENT"), BANK OF MONTREAL, as Co-Agent, the Bank, and the other banks party
thereto (as amended, restated, supplemented or modified from time to time, the
"CREDIT AGREEMENT"), whichever is less, payable on the Expiration Date or at
such other times specified in the Credit Agreement.
The Borrower shall pay interest on the unpaid principal balance hereof
from time to time outstanding from the date hereof at the rate or rates per
annum specified by the Borrower pursuant to Sections 3.01 and 3.02 of, or as
otherwise provided in, the Credit Agreement.
To the extent permitted by Law, upon the declaration of an Event of
Default by the Agent, and until such time as such Event of Default shall have
been cured or waived, the Borrower shall pay interest on the entire principal
amount of the then outstanding Bid Loans evidenced by this Bid Loan Note at a
rate per annum equal to two hundred basis points (2% per annum) above the rate
of interest otherwise applicable with respect to such Bid Loans. Such interest
rate will accrue before and after any judgment has been entered.
Subject to the provisions of the Credit Agreement, interest on this
Note will be payable at the times specified in Section 5.03 of the Credit
Agreement or as otherwise provided therein.
If any payment or action to be made or taken hereunder shall be stated
to be or become due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day and such extension of
time shall be included in computing interest or fees, if any, in connection with
such payment or action.
Subject to the provisions of the Credit Agreement, payments of both
principal and interest shall be made without setoff, counterclaim or other
deduction of any nature at the office of the Agent located at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of
America in immediately available funds.
This Note is a Bid Loan Note referred to in, and is entitled to the
benefits of, the Credit Agreement and other Loan Documents, including the
representations, warranties, covenants, conditions or Liens contained or granted
therein. The Credit Agreement among other things contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayment, in certain circumstances, on account of principal
hereof prior to maturity upon the terms and conditions therein specified.
All capitalized terms used herein shall, unless otherwise defined
herein, have the same meanings given to such terms in the Credit Agreement.
Except as otherwise provided in the Credit Agreement, the Borrower
waives presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Credit Agreement.
This Note shall bind the Borrower and its successors and assigns, and
the benefits hereof shall inure to the benefit of the Bank and its successors
and assigns. All references herein to the "Borrower" and the "Bank" shall be
deemed to apply to the Borrower and the Bank, respectively, and their respective
successors and assigns.
This Note and any other documents delivered in connection herewith and
the rights and obligations of the parties hereto and thereto shall for all
purposes be governed by and construed and enforced in accordance with the
internal laws of the Commonwealth of Kentucky without giving effect to its
conflicts of law principles.
IN WITNESS WHEREOF, the undersigned has executed this Note by its duly
authorized officers with the intention that it constitute a sealed instrument.
ATTEST: LOUISVILLE GAS AND ELECTRIC COMPANY
__________________________________ By: ________________________________
Title: ___________________________ Name: ______________________________
Title: _____________________________
[Seal]
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EXHIBIT 1.01(G)(2)
FORM OF
GUARANTY AND SURETYSHIP AGREEMENT
This Agreement (the "Agreement") dated as of _______________, 199__, is
made and given by the undersigned signatories, each a Subsidiary of Louisville
Gas and Electric Company, a Kentucky corporation ("Borrower"), identified in
Schedule 1 attached hereto and made a part hereof (each a "Guarantor" and
collectively, the "Guarantors"), in favor of the Banks (as defined in that
certain Credit Agreement dated December 18, 1995 among PNC Bank, Kentucky, Inc.,
a Kentucky banking corporation, as agent (the "Agent"), the Banks party thereto
and the Borrower, as it may from time to time be amended, restated, modified or
supplemented, the "Credit Agreement").
W I T N E S S E T H:
WHEREAS, Borrower has entered into the Credit Agreement with the Agent
and the Banks; and
WHEREAS, this Agreement is made by the Guarantors among other things to
comply with the requirements of the Credit Agreement; and
WHEREAS, the respective businesses and investments of the Guarantors
are interdependent and loans made to the Borrower under the Credit Agreement are
with the expectation that the profits and other opportunities from such loans
will directly or indirectly inure to the benefit of each Guarantor and to all of
them taken as an affiliated group.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound, the Guarantors hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. Capitalized terms used herein and not otherwise
defined herein shall have such meanings as given to them in the Credit
Agreement. In addition to the other terms defined elsewhere in this Agreement,
the following terms shall have the following meanings:
"Guaranteed Obligations" shall mean all obligations from time
to time of the Borrower to the Agent and the Banks under or in
connection with the Credit Agreement, the Notes issued in connection
therewith in the maximum aggregate principal amount of $200,000,000 or
any other Loan Document or which arise in any other manner, whether for
principal, interest, fees, indemnities, expenses or otherwise, and all
refinancings or refundings thereof, whether such obligations are direct
or indirect, otherwise secured or unsecured, joint or several, absolute
or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (specifically including
but not
limited to Obligations arising or accruing after the commencement of
any bankruptcy, insolvency, reorganization or similar proceeding with
respect to the Borrower or any other individual or entity (a "Person")
including any Guarantor or which would have arisen or accrued but for
the commencement of such proceeding, even if the claim for such
Obligation is not enforceable or allowable in such proceeding). Without
limitation of the foregoing, such obligations include all obligations
arising from any extensions of credit under or in connection with the
Loan Documents from time to time, regardless of whether any such
extensions of credit are in excess of the amount committed under or
contemplated by the Loan Documents or are made in circumstances in
which any condition to extension of credit is not satisfied. Without
limitation of the foregoing, the Agent and the Banks (or any successive
assignee or transferee) from time to time may, subject to the
provisions of the Credit Agreement, assign or otherwise transfer all of
their respective rights and obligations under the Loan Documents
(including, without limitation, all of any commitment to extend
credit), or any other Guaranteed Obligations, to any other Person, and
such Guaranteed Obligations (including, without limitation, any
Guaranteed Obligations resulting from extension of credit by such other
Person under or in connection with the Loan Documents) assigned or
otherwise transferred in accordance with the terms of the Credit
Agreement shall be and remain Guaranteed Obligations entitled to the
benefit of this Agreement.
ARTICLE II
GUARANTY AND SURETYSHIP
2.01 Guaranty and Suretyship. The Guarantors jointly and severally
hereby absolutely, unconditionally and irrevocably guarantee and become surety
for the full and punctual payment and performance of the Guaranteed Obligations
as and when such payment or performance shall become due (at scheduled maturity,
by acceleration or otherwise) in accordance with the terms of the Loan
Documents. This Agreement is an agreement of suretyship as well as of guaranty,
is a guarantee of payment and performance and not merely of collectibility, and
is in no way conditioned upon any attempt to collect from or proceed against the
Borrower or any other Person or any other event or circumstance. The obligations
of the Guarantors under this Agreement are direct and primary obligations of
each Guarantor and are independent of the Guaranteed Obligations, and a separate
action or actions may be brought against any one or more of the Guarantors
regardless of whether action is brought against the Borrower, any other
Guarantor or any other Person or whether the Borrower, any other Guarantor or
any other Person is joined in any such action or actions.
2.02 Obligations Absolute. The Guarantors agree that the Guaranteed
Obligations will be paid and performed strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting the Guaranteed Obligations, any of the
terms of the Loan Documents or the rights of the Agent and the Banks or any
other Person with respect thereto. The obligations of the Guarantors under this
Agreement shall be absolute, unconditional and irrevocable, irrespective of any
of the following:
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(a) Any lack of genuineness, legality, validity, enforceability or
allowability (in a bankruptcy, insolvency, reorganization or
similar proceeding, or otherwise), or any avoidance or
subordination, in whole or in part, of any Loan Document or
any of the Guaranteed Obligations.
(b) Any increase, decrease or change in the amount, nature, type
or purpose of any of the Guaranteed Obligations (whether or
not contemplated by the Loan Documents as presently
constituted); any change in the time, manner, method or place
of payment or performance of, or in any other term of, any of
the Guaranteed Obligations; any execution or delivery of any
additional Loan Documents; or any amendment, modification or
supplement to, or refinancing or refunding of, any Loan
Document or any of the Guaranteed Obligations.
(c) Any failure to assert any breach of or default under any Loan
Document or any of the Guaranteed Obligations; any extensions
of credit in excess of the amount committed under or
contemplated by the Loan Documents, or in circumstances in
which any condition to such extensions of credit has not been
satisfied; any other exercise or non-exercise, or any other
failure, omission, breach, default, delay or wrongful action
in connection with any exercise or non-exercise, of any right
or remedy against the Borrower or any other Person under or in
connection with any Loan Document or any of the Guaranteed
Obligations; any refusal of payment or performance of any of
the Guaranteed Obligations, whether or not with any
reservation of rights against any Guarantor; or any
application of collections (including but not limited to
collections resulting from realization upon any direct or
indirect security for the Guaranteed Obligations) to other
obligations, if any, not entitled to the benefits of this
Agreement, in preference to Guaranteed Obligations entitled to
the benefits of this Agreement, or if any collections are
applied to Guaranteed Obligations, any application to
particular Guaranteed Obligations.
(d) Any taking, exchange, amendment, modification, supplement,
termination, subordination, release, loss or impairment of, OR
any failure to protect, perfect, or preserve the value of,
OR any enforcement of, realization upon, or exercise of
rights, or remedies under or in connection with, OR any
failure, omission, breach, default, delay or wrongful action
by the Agent and the Banks, or any of them, or any other
Person in connection with the enforcement of, realization
upon, or exercise of rights or remedies under or in connection
with, OR any other action or inaction by the Agent and the
Banks, or any of them, or any other Person in respect of, any
direct or indirect security for any of the Guaranteed
Obligations. As used in this Agreement, "direct or indirect
security" for the Guaranteed Obligations, and similar phrases,
includes but is not limited to any collateral security,
guaranty, suretyship, letter of credit, capital maintenance
agreement, put option, subordination agreement or other right
or arrangement of any nature providing direct or indirect
assurance of payment or performance of any of the Guaranteed
Obligations, made by or on behalf of any Person.
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(e) Any merger, consolidation, liquidation, dissolution,
winding-up, charter revocation or forfeiture, or other change
in, restructuring or termination of the corporate structure or
existence of, the Borrower or any other Person; any
bankruptcy, insolvency, reorganization or similar proceeding
with respect to the Borrower or any other Person; or any
action taken or election made by the Agent and the Banks, or
any of them (including but not limited to any election under
Section 1111(b)(2) of the United States Bankruptcy Code), the
Borrower or any other Person in connection with any such
proceeding.
(f) Any defense, setoff or counterclaim (excluding only the
defense of full, strict and indefeasible payment and
performance), which may at any time be available to or be
asserted by the Borrower, any Guarantor or any other Person
with respect to any Loan Document or any of the Guaranteed
Obligations; or any discharge by operation of law or release
of the Borrower, any Guarantor or any other Person from the
performance or observance of any Loan Document or any of the
Guaranteed Obligations.
(g) Any other event or circumstance, whether similar or dissimilar
to the foregoing, and whether known or unknown, which might
otherwise constitute a defense available to, or limit the
liability of or discharge, any Guarantor, a guarantor or a
surety, excepting only full, strict and indefeasible payment
and performance of the Guaranteed Obligations in full.
2.03. Waivers, etc. The Guarantors hereby waive any defense to or
limitation on their obligations under this Agreement arising out of or based on
any event or circumstance referred to in Section 2.02 hereof. Without limitation
and to the full extent permitted by applicable law, the Guarantors waive each of
the following:
(a) All notices, disclosures and demand of any nature which
otherwise might be required from time to time to preserve
intact any rights against any Guarantor, including without
limitation the following: any notice of any event or
circumstance described in Section 2.02 hereof; any notice
required by any law, regulation or order now or hereafter in
effect in any jurisdiction; any presentment, notice of
nonpayment, nonperformance, dishonor, or protest under any
Loan Document or any of the Guaranteed Obligations; any notice
of the incurrence of any Guaranteed Obligation; any notice of
any default or any failure on the part of the Borrower or any
other Person to comply with any Loan Document or any of the
Guaranteed Obligations or any direct or indirect security for
any of the Guaranteed Obligations; and any notice of any
information pertaining to the business, operations, condition
(financial or otherwise) or prospects of the Borrower or any
other Person.
(b) Any right to any marshalling of assets, to the filing of any
claim against the Borrower or any other Person in the event of
any bankruptcy, insolvency, reorganization or similar
proceeding, or to the exercise against the Borrower or
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any other Person of any other right or remedy under or in
connection with any Loan Document or any of the Guaranteed
Obligations or any direct or indirect security for any of the
Guaranteed Obligations; any requirement of promptness or
diligence on the part of the Agent and the Banks, or any of
them, or any other Person; any requirement to exhaust any
remedies under or in connection with, or to mitigate the
damages resulting from default under, any Loan Document or any
of the Guaranteed Obligations or any direct or indirect
security for any of the Guaranteed Obligations; any benefit of
any statute of limitations; and any requirement of acceptance
of this Agreement, and any requirement that any Guarantor
receive notice of such acceptance.
(c) Any defense or other right arising by reason of any law now or
hereafter in effect in any jurisdiction pertaining to election
of remedies (including but not limited to anti-deficiency
laws, "one action" laws or the like), or by reason of any
election of remedies or other action or inaction by the Agent
and the Banks, or any of them (including but not limited to
commencement or completion of any judicial proceeding or
nonjudicial sale or other action in respect of collateral
security for any of the Guaranteed Obligations), which results
in denial or impairment of the right of the Agent and the
Banks, or any of them, to seek a deficiency against the
Borrower or any other Person or which otherwise discharges or
impairs any of the Guaranteed Obligations.
(d) Notwithstanding any payment or payments made by each Guarantor
hereunder, or any set-off or application of funds of such
Guarantor by the Agent or any Bank, such Guarantor shall not
be entitled to be subrogated to any of the rights of the Agent
or any Bank against the Borrower or against any collateral
security or guarantee or right of offset held by the Agent or
any Bank for the payment of the Guaranteed Obligations, nor
shall such Guarantor seek any reimbursement from the Borrower
in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Agent and the Banks by the Borrower
on account of the Guaranteed Obligations are paid in full and
the Commitments are terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any
time when all of the Obligations shall not have been paid in
full, such amount shall be held by such Guarantor in trust for
the Agent and the Banks, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Agent in the exact form
received by such Guarantor (duly endorsed by such Guarantor to
the Agent, if required), to be applied against the Guaranteed
Obligations, whether matured or unmatured, in such order as
the Agent may determine.
2.04. Reinstatement. This Agreement shall continue to be effective, or
be automatically reinstated, as the case may be, if at any time payment of any
of the Guaranteed Obligations is avoided, rescinded or must otherwise be
returned by the Agent and the Banks, or any of them, for any reason (including,
without limitation, by reason of such payment being a
5
preference, fraudulent transfer or fraudulent conveyance), all as though such
payment had not been made.
2.05. No Stay. Without limitation of any other provision of this
Agreement, if any declaration of default or acceleration or other exercise or
condition to exercise of rights or remedies under or with respect to any
Guaranteed Obligation shall at any time be stayed, enjoined or prevented for any
reason (including but not limited to stay or injunction resulting from the
pendency against the Borrower or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantors agree that, for the
purposes of this Agreement and their obligations hereunder, the Guaranteed
Obligations shall be deemed to have been declared in default or accelerated, and
such other exercise or conditions to exercise shall be deemed to have been taken
or met.
2.06. Payments. All payments to be made by any Guarantor pursuant to
this Agreement shall be made without setoff, counterclaim, or other deduction of
any nature (other than deductions for the withholding of United States federal
income tax which is due and payable by a Bank in connection with the income it
receives under the Loan Documents, provided that the Agent has elected not to
make such withholdings).
2.07. Continuing Guaranty. This Agreement is a continuing agreement and
shall continue in full force and effect (notwithstanding that no Guaranteed
Obligations may be outstanding from time to time, or any other event or
circumstance) until all Guaranteed Obligations and all other amounts payable
under this Agreement have been paid and performed in full, and all commitments
to extend credit under the Loan Documents have terminated, subject in any event
to reinstatement in accordance with Section 2.04 hereof. Any purported
termination, revocation or discharge of this Agreement (other than in accordance
with the preceding sentence) shall be void and of no effect. For purposes of
this Agreement the Guaranteed Obligations shall not be deemed to have been paid
in full until the Agent and the Banks shall have indefeasibly received payment
of the Guaranteed Obligations in full and in cash and all commitments to extend
credit under the Loan Documents have terminated. Anything contained in this
Agreement to the contrary notwithstanding, this Agreement shall terminate on
November 5, 2001 except that such termination shall not effect the liability of
Guarantors with respect to (i) obligations created or incurred prior to such
date, or (ii) extensions or renewals of, interest accruing on, or fees, costs or
expenses, including reasonable attorney's fees, incurred with respect to, such
obligations on or after such date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Guarantor hereby represents and warrants to the Agent and the
Banks with respect to itself as follows:
3.01. No Conditions Precedent. There are no conditions precedent to the
effectiveness of this Guaranty that have not been satisfied or waived.
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3.02. No Reliance. Each Guarantor has, independently and without
reliance upon the Agent and the Banks, or any of them, and based upon such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.
3.03. Representations and Warranties Remade at Each Extension of
Credit. Each request (including any deemed request) by the Borrower for any
extension of credit under the Credit Agreement shall be deemed to constitute a
representation and warranty by each Guarantor to the Agent and the Banks that
the representations and warranties made by each Guarantor in this Agreement are
true and correct on and as of the date of such request with the same effect as
though made on and as of such date. Failure by the Agent and the Banks to
receive notice from any Guarantor to the contrary before the Agent and the Banks
make any extension of credit under any Loan Document shall constitute a further
representation and warranty by such Guarantor to the Agent and the Banks that
the representations and warranties made by the Borrower are true and correct on
and as of the date of such extension of credit with the same effect as though
made on and as of such date.
ARTICLE IV
MISCELLANEOUS
4.01. Amendments, etc. No amendment to or waiver of any provision of
this Agreement, and no consent to any departure by any Guarantor herefrom, shall
in any event be effective unless in a writing manually signed by or on behalf of
the Agent and, in the case of an amendment, each of the Guarantors. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
4.02. No Implied Waiver; Remedies Cumulative. No delay or failure of
the Agent and the Banks, or any of them, in exercising any right or remedy under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right or remedy preclude any other or further
exercise thereof or the exercise of any other right or remedy. The rights and
remedies of the Agent and the Banks under this Agreement are cumulative and not
exclusive of any other rights or remedies available hereunder, under any other
agreement or instrument, by law, or otherwise.
4.03. Notices. Each Guarantor agrees that all notices, statements,
requests, demands and other communications under this Agreement shall be given
to such Guarantor at the address set forth on the signature page hereof in the
manner provided in Section 11.06 of the Credit Agreement. The Agent and the
Banks may rely on any notice (whether or not made in a manner contemplated by
this Agreement) purportedly made by or on behalf of a Guarantor, and the Agent
and the Banks shall have no duty to verify the identity or authority of the
Person giving such notice.
4.04. Expenses. Each Guarantor unconditionally agrees to pay all costs
and expenses, including reasonable attorney's fees, incurred by the Agent and
any of the Banks in enforcing this Agreement against any Guarantor.
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4.05. Prior Understandings. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous understandings and agreements.
4.06. Survival. All representations and warranties of the Guarantors
contained in or made in connection with this Agreement shall survive, and shall
not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Agent and the Banks, or any of them, any
extension of credit, or any other event or circumstance whatsoever.
4.07. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
4.08. Setoff. In the event that at any time any obligation of the
Guarantors now or hereafter existing under this Agreement shall have become due
and payable, the Agent and the Banks, or any of them, shall have the right from
time to time, without notice to any Guarantor, to set off against and apply to
such due and payable amount any obligation of any nature of the Agent and the
Banks to any Guarantor, including but not limited to all deposits (whether time
or demand, general or special, provisionally credited or finally credited,
however evidenced) now or hereafter maintained by any Guarantor with the Agent
or the Banks. Such right shall be absolute and unconditional in all
circumstances and, without limitation, shall exist whether or not the Agent
and/or the Banks, or any of them, shall have given any notice or made any demand
under this Agreement or under such obligation to such Guarantor, whether such
obligation of such Guarantor is absolute or contingent, matured or unmatured (it
being agreed that the Agent and the Banks, or any of them, may deem such
obligation to be then due and payable at the time of such setoff), and
regardless of the existence or adequacy of any guaranty or other direct or
indirect security, right or remedy available to the Agent and the Banks. The
rights of the Agent and the Banks under this Section are in addition to such
other rights and remedies (including, without limitation, other rights of setoff
and banker's lien) which the Agent and the Banks, or any of them, may have, and
nothing in this Agreement or in any other Loan Document shall be deemed a waiver
of or restriction on the right of setoff or banker's lien of the Agent and the
Banks, or any of them. The Guarantors hereby agree that, to the fullest extent
permitted by law, any affiliate of the Agent and the Banks, or any of them, and
any holder of a participation in any obligation of any Guarantor under this
Agreement, shall have the same rights of setoff as the Agent and the Banks as
provided in this Section 4.08 (regardless of whether such affiliate or
participant otherwise would be deemed a creditor of any Guarantor).
4.09. Construction. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect interpretation of
this Agreement in any respect. This Agreement has been fully negotiated between
the applicable parties, each party having the benefit of legal counsel, and
accordingly neither any doctrine of construction of guaranties or suretyships in
favor of the guarantor or surety, nor any doctrine of construction of
ambiguities in agreements or instruments against the party controlling the
drafting thereof, shall apply to this Agreement.
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4.10. Successors and Assigns. This Agreement shall be binding upon each
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Agent and the Banks, or any of them, and their successors and
permitted assigns (as provided in the Credit Agreement). Without limitation of
the foregoing, the Agent and the Banks, or any of them (and any successive
assignee or transferee), from time to time may, subject to the applicable
provisions of the Credit Agreement, assign or otherwise transfer all or any
portion of its rights or obligations under the Loan Documents (including,
without limitation, all or any portion of any commitment to extend credit), or
any other Guaranteed Obligations, to any other Person and such Guaranteed
Obligations (including, without limitation, any Guaranteed Obligations resulting
from extension of credit by such other Person under or in connection with the
Loan Documents) assigned or otherwise transferred in accordance with the terms
of the Credit Agreement shall be and remain Guaranteed Obligations entitled to
the benefit of this Agreement, and to the extent of its interest in such
Guaranteed Obligations such other Person shall be vested with all the benefits
in respect thereof granted to the Agent and the Banks in this Agreement or
otherwise.
4.11. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
(a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH
OF KENTUCKY, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
(b) Certain Waivers. EACH GUARANTOR HEREBY IRREVOCABLY:
(i) CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE
CIRCUIT COURT OF JEFFERSON COUNTY, KENTUCKY AND THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT
OF KENTUCKY, AND WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED
MAIL DIRECTED TO SUCH GUARANTOR AT THE ADDRESS
PROVIDED FOR IN SECTION 4.03 HEREOF AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL
RECEIPT THEREOF;
(ii) WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY
ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND
AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED ON INCONVENIENT FORUM;
AND
(iii) WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING
OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED
TO THIS AGREEMENT, THE CREDIT AGREEMENT OR
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ANY OTHER LOAN DOCUMENT TO THE FULL EXTENT PERMITTED
BY LAW.
(c) Limitation of Liability. TO THE FULLEST EXTENT PERMITTED BY
LAW, NO CLAIM MAY BE MADE BY ANY GUARANTOR OR ANY OTHER PERSON
AGAINST THE AGENT AND THE BANKS, OR ANY OF THEM, OR ANY
AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF
THE AGENT AND THE BANKS FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY STATEMENT,
COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN
CONNECTION HEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR
ANY OTHER THEORY OF LIABILITY); AND EACH GUARANTOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO ▇▇▇ UPON ANY CLAIM FOR ANY
SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR.
4.12. Severability; Modification to Conform to Law.
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(a) It is the intention of the parties that this Agreement be
enforceable to the fullest extent permissible under applicable
law, but that the unenforceability (or modification to conform
to such Law) of any provision or provisions hereof shall not
render unenforceable, or impair, the remainder hereof. If any
provision in this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, this
Agreement shall, as to such jurisdiction, be deemed amended to
modify or delete, as necessary, the offending provision or
provisions and to alter the bounds thereof in order to render
it or them valid and enforceable to the maximum extent
permitted by applicable Law, without in any manner affecting
the validity or enforceability of such provision or provisions
in any other jurisdiction or the remaining provisions hereof
in any jurisdiction.
(b) Without limitation of the preceding subsection (a), to the
extent that mandatory applicable law (including but not
limited to applicable laws pertaining to fraudulent conveyance
or fraudulent transfer) otherwise would render the full amount
of any Guarantor's obligations hereunder invalid or
unenforceable, such Guarantor's obligations hereunder shall be
limited to the maximum amount which does not result in such
invalidity or unenforceability.
(c) Notwithstanding anything to the contrary in this Section 4.12
or elsewhere in this Agreement, this Agreement shall be
presumptively valid and enforceable to its full extent in
accordance with its terms, as if this Section 4.12 (and
references elsewhere in this Agreement to enforceability to
the fullest extent permitted by Law) were not a part of this
Agreement, and in any related litigation the burden of proof
shall be on the party asserting the invalidity or
unenforceability of any provision hereof or asserting any
limitation on any Guarantor's obligations hereunder as to each
element of such assertion.
4.13. Additional Guarantors. At any time after the initial execution
and delivery of this Agreement to the Agent and the Banks, additional Persons
may become parties to this Agreement and thereby acquire the duties and rights
of being Guarantors hereunder by executing and delivering to the Agent and the
Banks a counterpart signature page for attachment hereto. No notice of the
addition of any Guarantor shall be required to be given to any pre-existing
Guarantor.
4.14. Joint and Several Obligations. The obligations of each Guarantor
under this Agreement are joint and several.
4.15 Receipt of Credit Agreement and Other Loan Documents. Each
Guarantor hereby acknowledges that it has received a copy of the Credit
Agreement and the other Loan Documents and each Guarantor certifies that the
representations and warranties made therein with respect to such Guarantor are
true and correct. Further, each Guarantor acknowledges and agrees to perform,
comply with and be bound by all of the provisions of the Credit Agreement and
the other Loan Documents including, without limitation, those covenants
contained in Sections 8.01 and 8.02 of the Credit Agreement.
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[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE 1 OF 1 TO THE GUARANTY AND SURETYSHIP AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered as of the date first above written.
GUARANTORS:
ATTEST: EACH GUARANTOR LISTED ON SCHEDULE 1
By: _______________________________ By: _____________________________________
Address for notices to each Guarantor:
_________________________________________
_________________________________________
_________________________________________
Telecopier No. __________________________
Attention: ______________________________
Telephone No. ___________________________
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SCHEDULE 1
TO THE GUARANTY AND SURETYSHIP AGREEMENT
PNC BANK, KENTUCKY, INC., AS AGENT
LOUISVILLE GAS AND ELECTRIC COMPANY, AS BORROWER
Subsidiary and State of Formation
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