Exhibit 4B
SUPPORT AGREEMENT
BETWEEN
AMERICAN WATER WORKS COMPANY, INC.
AND
AMERICAN WATER CAPITAL CORP.
This Agreement is made the 22nd day of June 2000, by and between
AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation ("Parent") and
AMERICAN WATER CAPITAL CORP., a Delaware corporation ("Subsidiary").
BACKGROUND
Parent is the owner of 100% of the outstanding common stock of
Subsidiary:
From time to time Subsidiary intends to borrow from, and issue debt
securities or other obligations to, and incur other obligations and liabilities
to, parties other than Parent ("Debt"), so that Subsidiary will be in a position
to provide financing for Parent and some or all of Parent's directly and
indirectly owned, water utility subsidiaries;
Parent and Subsidiary desire to take certain actions to enhance and
maintain the financial condition of Subsidiary as set forth below in order to
enable the Subsidiary to issue the Debt on more advantageous and reasonable
terms; and
Third party creditors will rely upon this Agreement in making loans or
extending credit to Subsidiary;
AGREEMENT
THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
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terms have the respective meanings set forth below.
(a) "Debt", means (a) all indebtedness for borrowed money; (b)
all obligations evidenced by notes, bonds, debentures or
other similar instruments; (c) all obligations as lessee
under leases that have been or should be, in accordance
with generally accepted accounting principles, recorded as
capital leases; (d) all obligations contingent or
otherwise under letter of credit or similar facilities;
(e) all obligations to purchase, redeem, retire, defease
or otherwise make any payment in respect of any capital
stock of or other ownership or profit inter est of any
warrants, rights or options to
acquire such capital stock; (f) all obligations in respect
of hedge agreements (including, without limitation,
interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar
currency agreements); (g) any other obligations or
liabilities involving financial or monetary payment; and
(h) guarantees of any of the foregoing.
(b) "Lender", means any person, firm, corporation or other
entity to which Subsidiary is indebted for money borrowed
or to which Subsidiary otherwise owes any Debt or that is
acting as trustee or authorized representative on behalf
of such person, firm, corporation or other entity.
2. Stock Ownership. Parent owns and, during the term of this
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Agreement shall continue to own, all of the voting stock of
Subsidiary, free and clear of any lien, security interest or
other charge or encumbrance.
3. Net Worth. Parent agrees that it will cause Subsidiary to have at
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all times a positive tangible net worth (total assets less
liabilities less intangible assets), as determined in accordance
with generally accepted accounting principles.
4. Liquidity Provision. If, during the term of this Agreement,
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Subsidiary is unable to make timely payment of interest,
principal or premium, if any, on any Debt issued by it, Parent
promptly shall provide to Subsidiary, at its request or at the
request of any Lender, such funds (in the form of cash or liquid
assets) as equity or if Parent and Subsidiary shall agree as a
loan. If such funds are advanced to Subsidiary as a loan, that
loan will be on such terms and conditions, including maturity and
rate of interest, as Parent and Subsidiary will agree.
Notwithstanding the foregoing, any such loan will be subordinated
in all respects to any and all Debt of Subsidiary, whether or not
such Debt is outstanding at the time of such loan.
5. Waivers; Subrogation. Parent hereby waives any failure or delay
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on the part of Subsidiary in asserting or enforcing any of its
rights or in making any claims or demands hereunder. Subsidiary
or any Lender may at any time, without Parent's consent, without
notice to Parent and without affecting or impairing Subsidiary's
or such Lender's rights or Parent's obligations hereunder, do any
of the following with respect to any Debt: (a) make changes,
modifications, amendments or alterations, by operation of law or
otherwise, (b) grant renewals and extensions of time, for payment
or otherwise, (c) accept new or additional documents, instruments
or agreements relating to or in substitution of said Debt, or
(d) otherwise handle the enforcement of their respective rights
and remedies in accordance with their business judgment. To the
extent any rights of subrogation exist, the Parent shall not be
entitled to be subrogated to any rights of any Lender against the
Subsidiary for the payment of the Debt until all Debt is
indefeasibly paid in full.
6. Termination; Amendment. This Agreement may be terminated by
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written agreement signed by both parties or, at any time no Debt
is outstanding or committed to, by Parent upon three days' prior
written notice to Subsidiary. This Agreement may be amended at
any time by written amendment signed by both parties. However, no
amendment to the Agreement that adversely affects the rights of
any Lender and no termination of this Agreement shall be
effective until such time as all Debt shall have been irrevocably
paid in full and all commitments for Debt have been terminated,
unless the Lenders holding a majority of the aggregate principal
amount of Debt outstanding and (to the extent not outstanding)
committed to consent in writing thereto. Notwithstanding the
foregoing,
(a) any amendment to this Agreement for the purpose of (i)
increasing the minimum tangible net worth as provided in paragraph 3 of this
Agreement; (ii) establishing or increasing a minimum interest coverage ratio;
(iii) establishing or reducing a maximum amount of debt leverage; (iv)
increasing the aggregate principal amount of debt outstanding whose holders are
required to consent to the termination or amendment of this agreement; or, (v)
any combination of (i), (ii), (iii) and (iv) above, shall be effective without
the consent of any Lender or the holder of any Debt, and
(b) nothing in this Section 6 shall derogate from, or override,
any provision in an instrument, indenture, agreement or other document pursuant
to which Debt is or will be issued that requires the written consent of the
holders of a specified amount or percentage of such Debt to consent to an
amendment or termination of this Agreement.
7. Rights of Lenders. Any Lender to Subsidiary shall have the right
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to demand that Subsidiary enforce Subsidiary's rights under
paragraphs 2, 3 4 and 5 of this Agreement, and, if Subsidiary
fails or refuses to take timely action to enforce its rights
under paragraphs 2, 3, 4 and 5 of this Agreement or if Subsidiary
defaults in the timely payment of interest, principal or premium,
if any, on any Debt owed to Lender when due, that Lender may
proceed directly against Parent to enforce Subsidiary's rights
under paragraphs 2, 3, 4 and 5 of this Agreement or to obtain
payment of such defaulted interest, principal or premium, if any,
owed to such Lender.
8. Notices. Any notice, instruction, request, consent, demand or
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other communication required or contemplated by this Agreement
shall be in writing, shall be given or made or communicated by
United States first
class mail, telex, facsimile transmission or hand delivery,
addressed as follows:
If to Parent: If to Subsidiary:
American Water Works Company, Inc. American Water Capital Corp.
0000 Xxxxxx Xxx Xxxx 0000 Xxxxxx Xxx Xxxx
X.X. Xxx 0000 X.X. Xxx 0000
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
ATTN: Treasurer ATTN: Treasurer
9. Successors. This Agreement will be binding upon the parties
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hereto and their respective successors and assigns and is also
intended for the benefit of the holders from time to time of the
Debt and, notwithstanding that such holders are not parties
hereto, each such holder shall be entitled to the full benefits
of this Agreement and to enforce the covenants and agreements
contained herein. This Agreement is not intended for the benefit
of any person other than holders of Debt, and will not confer or
be deemed to confer upon any other such person any benefits,
rights or remedies hereunder.
10. Governing Law. The laws of the State of New York shall govern
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this Agreement.
11. Remedies. The parties to this Agreement acknowledge and agree
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that breach of any of the covenants of Parent set forth herein
may not be compensable by payment of money damages and,
therefore, that the covenants of Parent set forth herein may be
enforced in equity by a decree requiring specific performance.
Such remedies shall be cumulative and non-exclusive and shall be
in addition to any other rights and remedies Subsidiary may have
under this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and
affixed their corporate seals as of the last day and year above written.
[SEAL] AMERICAN WATER WORKS COMPANY,
INC.
Attest: /s/ By: /s/
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W. Xxxxxxx Xxxx, Esq. Xxxxx X. Xxxx
Secretary Vice President and Chief Financial Officer
[SEAL] AMERICAN WATER CAPITAL CORP.
Attest: /s/ By: /s/
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W. Xxxxxxx Xxxx, Esq. Xxxxxx X. Xxxxxxxx, Xx.
Secretary Vice President and Treasurer
FIRST AMENDMENT TO
SUPPORT AGREEMENT
BETWEEN
AMERICAN WATER WORKS COMPANY, INC.
AND
AMERICAN WATER CAPITAL CORP.
This agreement, made as of the 26/th/ day of July, 2000, is an
amendment to that certain Support Agreement made the 22/nd/ day of June 2000
(The "Support Agreement"), by and between AMERICAN WATER WORKS COMPANY, INC., a
Delaware corporation ("parent") and AMERICAN WATER CAPITAL CORP., a Delaware
corporation ("Subsidiary").
BACKGROUND
On June 22, 2000 Parent and Subsidiary entered into a Support
Agreement to maintain the financial condition of Subsidiary in order to enhance
the Subsidiary's ability to issue "Debt" (as that term is defined in therein).
The Support Agreement provides that it cannot be terminated while the
Subsidiary's Debt securities are outstanding, or amended in a manner that
adversely affects the rights of any Lender (as that term is defined therein),
unless the Lenders holding a majority of the aggregate principal amount of Debt
outstanding and, (to the extent not outstanding) committed to, consent in
writing thereto.
The Support Agreement also provides that, without the consent of any
Lender, the Parent and Subsidiary may amend the Support Agreement to increase
the aggregate principal amount of debt outstanding whose holders are required to
consent to such a termination or amendment.
The Parent and Subsidiary have determined that it is in their best
interests to amend the Support Agreement to require that that it may not be
terminated while Debt is outstanding, nor amended in a manner that adversely
affects the rights of any Lender, unless the Lenders holding all of the
aggregate principal amount of Debt outstanding and, (to the extent not
outstanding) committed to, consent in writing thereto.
AGREEMENT
THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows.
The third sentence of Section 6 of the Support Agreement, which
formerly read:
However, no amendment to the Agreement that adversely affects the
rights of any Lender and no termination of this Agreement shall
be effective until such time as all Debt shall have been
irrevocably paid in full and all commitments for Debt have been
terminated, unless the Lenders holding a majority of the
aggregate principal amount of Debt outstanding and (to the extent
not outstanding) committed to consent in writing thereto.
is amended to read:
However, no amendment to the Agreement that adversely affects the
rights of any Lender and no termination of this Agreement shall
be effective until such time as all Debt shall have been
irrevocably paid in full and all commitments for Debt have been
terminated, unless the Lenders holding all of the aggregate
principal amount of Debt outstanding and (to the extent not
outstanding) committed to consent in writing thereto.
In all other respects the Support Agreement is unchanged.
IN WITNESS WHEREOF, the parties hereto have set their hands and
affixed their corporate seals as of the last day and year above written.
[SEAL] AMERICAN WATER WORKS COMPANY, INC.
Attest: /s/ W.Xxxxxxx Xxxx By: /s/ Xxxxx X. Xxxx
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Secretary Vice President and Chief Financial Officer
[SEAL] AMERICAN WATER CAPITAL CORP.
Attest: /s/ W. Xxxxxxx Xxxx By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Secretary Vice President and Chief Financial Officer
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