REVOLVING CREDIT AGREEMENT
This Agreement is made and entered into on the 28th day of August,
2001, but effective as of the 13th of August, 2001, by and between Aquila, Inc.,
a Delaware corporation (the BORROWER), and UtiliCorp United Inc., a Delaware
corporation (the LENDER).
WITNESSESS:
WHEREAS, the Borrower is a direct, 80%-owned subsidiary of the Lender;
WHEREAS, the Borrower desires to enter into a revolving loan agreement
with the Lender and the Lender is willing to extend and make credit available to
the Borrower upon the terms and conditions set forth herein; and
WHEREAS, the parties agree and acknowledge that the terms and
conditions in this Agreement are commercially reasonable, having been negotiated
at "arm's length";
NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
ARTICLE I
SECTION 1.01. DEFINED TERMS.
Unless otherwise defined herein, capitalized terms used herein have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
ADVANCE means an advance by the Lender to the Borrower under
this Agreement, as such Advance bears interest pursuant to Section
2.06.
AFFILIATE means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
APPLICABLE MARGIN means, at all times during which any
Applicable Rating Level set forth below is in effect, the interest rate
PER ANNUM set forth below:
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Applicable Applicable Margin
Rating Level
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1 0.40%
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2 0.50%
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3 0.85%
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4 0.925%
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5 1.15%
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6 1.60%
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PROVIDED, that the Applicable Margins shall be increased (for
each Applicable Rating Level) by (a) if on any day the principal amount
of the Advances then outstanding equals or exceeds $100,000,000 in the
aggregate, 0.125% PER ANNUM and (b) 2% PER ANNUM upon the occurrence
and during the continuance of any Event of Default.
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Any change in the Applicable Margins will be effective as of
the interest period immediately following the interest period during
which S&P or Moody's announces any change in the S&P Rating or the
Xxxxx'x Rating, as the case may be, that results in a change in the
Applicable Rating Level. The Borrower agrees to notify the Lender
promptly upon any change in the S&P Rating or the Xxxxx'x Rating.
APPLICABLE RATING LEVEL at any time shall be determined in
accordance with the then-applicable S&P Rating and the then-applicable
Xxxxx'x Rating as follows:
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S&P Rating/Xxxxx'x Rating Applicable Rating Level
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S&P Rating A-/Xxxxx'x Rating A3 1
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S&P Rating BBB+/Xxxxx'x Rating Baa1 2
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S&P Rating BBB/Xxxxx'x Rating Baa2 3
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S&P Rating BBB-/Xxxxx'x Rating Baa3 4
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S&P Rating BB+/Xxxxx'x Rating Ba1 5
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S&P Rating below BB+/Xxxxx'x Rating below Ba1, or no 6
S&P Rating or Xxxxx'x Rating
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For purposes of the foregoing, if the S&P Rating and the Xxxxx'x Rating
are not comparable (I.E., a "split rating"), the higher of such two
ratings shall control, unless either rating is below BBB- (in the case
of the S&P Rating) or Baa3 (in the case of the Xxxxx'x Rating), in
which case the lower of the two ratings shall apply.
BASE RATE means, for any date in question, the interest rate
PER ANNUM appearing on the display shown as LIBOR 1M on the Bloomberg
Screen Page BTMM at approximately 11 a.m. and, if such rate is not
published on such page at such time, then the one-month LIBOR rate
quoted by a reputable lending institution in the Kansas City bank
market (as determined in the sole discretion of the Lender).
BUSINESS DAY means a day of the year on which banks are not
required or authorized to close in Kansas City,
Missouri.
COMMITMENT means $150,000,000, as such amount may be reduced
pursuant to Section 2.4.
DEBT means (without duplication) all liabilities, obligations
and indebtedness (whether contingent or otherwise) of the Borrower and
its consolidated subsidiaries (i) for borrowed money or evidenced by
bonds, indentures, notes, or other similar instruments, (ii) to pay the
deferred purchase price of property or services, (iii) as lessee under
leases which shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases, (iv) as
lessee under operating leases for electrical generating units,
aircraft, fleet vehicles or real property or any other operating lease
having aggregate lease payment obligations of more than $5,000,000, (v)
under reimbursement agreements or similar agreements with respect to
the issuance of letters of credit (other than obligations in respect of
letters of credit opened to provide for the payment of goods or
services purchased in the ordinary course of business), (vi) to pay
rent or other amounts under leveraged leases entered into in connection
with sale and leaseback transactions, (vii) under direct or indirect
guaranties in respect of, and to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, liabilities,
obligations or indebtedness of others of the kinds referred to in
clauses (i) through (vi) above, and (viii) liabilities in respect of
unfunded vested benefits under plans covered by Title IV of the
Employee Retirement Income Security Act of 1974, as amended from time
to time; PROVIDED, that in determining aggregate lease payment
obligations for purposes of clause (iv) above and in determining the
aggregate amount of Debt outstanding at any time for purposes of
Section 5.01(b) (including, without limitation, the aggregate amount of
Debt included in the calculation of "Total Capitalization"), such lease
payment obligations and the liabilities, obligations and indebtedness
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described in clauses (iv) and (vi) above shall be calculated in
accordance with Financial Accounting Standards Board Statement No. 13,
as amended and interpreted from time to time, as though such lease
payment obligations and such liabilities, obligations and indebtedness
were recorded as arising under capital leases.
DEMAND OPTION has the meaning specified in Section 7.01.
EVENTS OF DEFAULT has the meaning specified in Section 6.01.
EXCHANGE ACT means the Securities Exchange Act of 1934, and
the regulations promulgated thereunder, in each case as amended and in
effect from time to time.
INDEMNIFIED PERSON has the meaning specified in Section
9.04(b).
INTEREST PERIOD means the period commencing on the date of an
Advance and ending on the maturity date of such Advance (as set forth
in the applicable Note), PROVIDED that (a) no Interest Period shall end
after the Termination Date and (b) whenever the last day of any
Interest Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on
the next succeeding Business Day.
MATERIAL ADVERSE CHANGE means any material adverse change (i)
in the business or condition (financial or otherwise) of the Borrower
and its subsidiaries, taken as a whole, or (ii) that is reasonably
likely to affect the legality, validity or enforceability of this
Agreement against the Borrower or the ability of the Borrower to
perform its obligations under this Agreement.
MATERIAL ADVERSE EFFECT means a material adverse effect (i) on
the business or condition (financial or otherwise) of the Borrower and
its subsidiaries, taken as a whole, or (ii) that is reasonably likely
to affect the legality, validity or enforceability of this Agreement
against the Borrower or the ability of the Borrower to perform its
obligations under this Agreement.
MOODY'S means Xxxxx'x Investors Service, Inc. or any successor
thereto.
XXXXX'X RATING means, on any date of determination, the rating
of the Borrower's long-term senior unsecured indebtedness most recently
announced by Moody's.
NOTE has the meaning specified in Section 2.02(b).
PERSON means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
S&P means Standard & Poor's Ratings Group or any successor
thereto.
S&P RATING means, on any date of determination, the rating of
the Borrower's long-term senior unsecured indebtedness most recently
announced by S&P.
SIGNIFICANT SUBSIDIARY means any direct or indirect subsidiary
of the Borrower having, on any date of determination or on any date
during the 12-month period prior to such date of determination, total
assets in excess of $100,000,000 (with such determination to be made in
accordance with generally accepted accounting principles consistent
with those applied in the preparation of the financial statements
referred to in Section 4.01(e) hereof) or in excess of 10% of Total
Capitalization.
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SUBSIDIARY means, with respect to any Person, any corporation
or unincorporated entity of which more than 50% of the outstanding
capital stock (or comparable interest) having ordinary voting power
(irrespective of whether at the time capital stock (or comparable
interest) of any other class or classes of such corporation or entity
shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by said Person
(whether directly or through one or more other subsidiaries). In the
case of an unincorporated entity, a Person shall be deemed to have more
than 50% of interests having ordinary voting power only if such
Person's vote in respect of such interests comprises more than 50% of
the total voting power of all such interests in the unincorporated
entity.
TERMINATION DATE means the 364th day following the date of
this Agreement or if the Commitment is extended pursuant to Section
2.9, such later date that may be established pursuant to Section 2.9,
or, in either case, the earlier date of termination in whole of the
Commitment pursuant to Section 2.04, Section 6.01 or Section 7.01
hereof.
TOTAL CAPITALIZATION means the sum of (i) Debt of the Borrower
and its consolidated subsidiaries, PLUS (ii) the sum of the capital
stock (excluding treasury stock and capital stock subscribed for and
unissued) and surplus (including earned surplus, capital surplus,
translation adjustment and the balance of the current profit and loss
account not transferred to surplus) accounts of the Borrower and its
subsidiaries appearing on a consolidated balance sheet of the Borrower
and its subsidiaries, in each case prepared as of the date of
determination in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e), after eliminating
all intercompany transactions and all amounts properly attributable to
minority interests, if any, in the stock and surplus of subsidiaries.
VOTING STOCK means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
SECTION 1.02. COMPUTATION OF TIME PERIODS.
In this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding". All
times referred to herein reference Central Standard Time.
SECTION 1.03. ACCOUNTING TERMS.
All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements referred to in
Section 4.01(e) hereof.
ARTICLE II
SECTION 2.01. THE ADVANCES.
Subject to the terms and conditions set forth herein, the Lender agrees
to make Advances to the Borrower from time to time on any Business Day during
the period from the date hereof until the 30th day immediately preceding the
Termination Date in an aggregate amount not to exceed at any time the
Commitment. Each Advance shall be in an amount not less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof. Within the limits of the
Commitment, the Borrower may from time to time borrow, repay pursuant to Section
2.05 and reborrow under this Section 2.01.
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SECTION 2.02. MAKING ADVANCES.
(a) Each Advance shall be made on notice, given not later than 10 a.m.
on the day of the proposed borrowing, by the Borrower to the Lender. Each notice
of a borrowing shall specify the requested date and aggregate amount of such
Advance. Subject to the fulfillment of all applicable conditions set forth in
Article III, the Lender shall, by noon on the date of such Advance, make
available said funds to the Borrower.
(b) Any Advances made by the Lender shall be evidenced by one or more
promissory notes payable to the order of the Lender (or, if requested by the
Lender, its assignees) in substantially the form of Exhibit A hereto (each, a
NOTE).
SECTION 2.03. FEES.
The Borrower agrees to pay to the Lender an arrangement fee equal to
$56,250, an upfront fee equal to $150,000, a commitment fee equal to $225,000,
and an administrative fee equal to $5,625. The commitment and administrative
fees are annual fees payable quarterly on the last day of each March, June,
September and December.
SECTION 2.04. REDUCTION OF THE COMMITMENT.
(a) The Borrower shall have the right, upon at least three Business
Days' notice to the Lender, to terminate in whole or reduce in part the unused
portions of the Commitment, PROVIDED that the aggregate amount of the Commitment
shall not be reduced to an amount that is less than the aggregate principal
amount of the Advances then outstanding and PROVIDED, FURTHER, that each partial
reduction of the Commitment shall be in the aggregate amount of $10,000,000 or
any whole multiple of $1,000,000 in excess thereof.
(b) The Commitment shall automatically be terminated on the
Termination Date.
(c) Once terminated or reduced, the Commitment may not be
reinstated.
SECTION 2.05. REPAYMENT OF ADVANCES.
The Borrower shall repay to the Lender the principal amount of each
Advance on the maturity date of such Advance (as set forth in the relevant
Note). Notwithstanding anything to the contrary herein, each Advance shall be
due and payable no sooner than the 7th day following the date of the Advance and
no later than the 30th day following the date of the Advance.
SECTION 2.06. INTEREST ON ADVANCES.
The Borrower shall pay interest on the unpaid principal amount of each
Advance made by the Lender from the date of such Advance until such principal
amount shall be paid in full, at a rate PER ANNUM equal at all times to the sum
of the Base Rate in effect from time to time PLUS the Applicable Margin for such
Base Rate in effect from time to time, payable on the last day of the applicable
Interest Period.
SECTION 2.07. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder without condition or
deduction for any counterclaim, defense, recoupment or setoff, not later than 2
p.m. on the day when due in U.S. dollars to the Lender in same day funds.
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(b) The Borrower hereby authorizes the Lender, if and to the extent
payment owed to the Lender is not made when due hereunder, to charge from time
to time against any or all of the Borrower's accounts with the Lender any amount
so due.
(c) All computations of interest hereunder shall be made on the basis
of a 365-day or 366-day calendar year, as the case may be, and all computations
of the fees referred to in Section 2.03 shall be made by the Lender on the basis
of a 360-day calendar year. Each determination by the Lender shall be conclusive
and binding for all purposes, absent manifest error.
SECTION 2.08. TAXES.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.07, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING, in the case
of the Lender, taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction under the laws of which the Lender is organized or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to the Lender, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.08) the Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies, if any, which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "OTHER TAXES").
(c) The Borrower will indemnify the Lender for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.09) paid by the
Lender and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date the Lender makes written demand therefor.
(d) If the Borrower makes any additional payment to any Lender pursuant
to this Section 2.08 in respect of any Taxes or Other Taxes, and the Lender
determines that it has received (i) a refund of such Taxes or Other Taxes or
(ii) a credit against or relief or remission for, or a reduction in the amount
of, any tax or other governmental charge solely as a result of any deduction or
credit for any Taxes or Other Taxes with respect to which it has received
payments under this Section 2.08, the Lender shall, to the extent that it can do
so without prejudice to the retention of such refund, credit, relief, remission
or reduction, pay to the Borrower such amount as the Lender shall have
determined to be attributable to the deduction or withholding of such Taxes of
Other Taxes. If the Lender later determines that it was not entitled to such
refund, credit, relief, remission or reduction to the full extent of any payment
made pursuant to the first sentence of this Section 2.08(d), the Borrower shall
upon demand of the Lender promptly repay the amount of such overpayment. Any
determination made by the Lender pursuant to this Section 2.08(d) shall in the
absence of bad faith or manifest error be conclusive, and nothing in this
Section 2.08(d) shall be construed as requiring the Lender to conduct its
business or to arrange or alter in any respect its tax or financial affairs so
that it is entitled to receive such a refund, credit or reduction or as allowing
any Person to inspect any records, including tax returns, of the Lender.
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(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.08 shall survive the payment in full of principal and interest
hereunder.
SECTION 2.09. EXTENSION OF TERMINATION DATE.
(a) So long as no Event of Default has occurred and is continuing, the
Borrower may, at least 60 days but not more than 90 days before the Termination
Date then in effect, request, by delivering a written request to the Lender
(such request being irrevocable), that the Lender extend for 364 days such
Termination Date with respect to the Commitment.
(b) Upon receipt of such request from the Borrower, the Lender may (but
is not obligated to), in its sole and absolute discretion, agree to extend the
Termination Date with respect to the Commitment and any of its outstanding
Advances for a 364-day period, and shall (should it determine to do so), no
earlier than 30 days (but in any event no later than 15 days prior to such
then-scheduled Termination Date) following its receipt of such request, notify
the Borrower of its consent to the extension request.
(c) If the Lender agrees to the Borrower's extension request, the
Commitment shall be extended for a period of 364 days, commencing on the
then-scheduled Termination Date; PROVIDED, HOWEVER, that any such extension is
subject to the condition precedent that, on or prior to the date of such
extension, the Lender shall have received the following, each dated such date in
form and substance satisfactory to the Lender: (i) a certificate of a duly
authorized officer of the Borrower to the effect that as of the date of
extension (A) no event has occurred and is continuing, or would result from such
extension of the Termination Date, that constitutes an Event of Default or
would, with the giving of notice or the lapse of time, or both, constitute an
Event of Default and (B) the representations and warranties contained in Section
4.01 are correct in all material respects on and as of the date of the extension
of the Termination Date, before and after giving effect to the extension; and
(ii) such other information as the Lender may reasonably request.
ARTICLE III
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL ADVANCE.
The obligation of the Lender to make its initial Advance is subject to
the satisfaction, prior to or concurrently with the making of the initial
Advance, of each of the following conditions precedent:
(a) DOCUMENTS AND OTHER AGREEMENTS. The Lender shall have received on
or before the day of the initial Advance the following, in form and substance
satisfactory to the Lender:
(i) A Note or Notes payable to the order of the Lender
requesting same;
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement, and of all
documents evidencing other necessary corporate action with respect to
this Agreement; and
(iii) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying (A) the names and true signatures of the
officers of the Borrower authorized to sign this Agreement and the
other documents to be delivered hereunder; (B) that attached thereto
are true and correct copies of the Certificate of Incorporation and the
By-laws of the Borrower, in each case in effect on such date; and (C)
that attached thereto are true and correct copies of all governmental
and regulatory authorizations and approvals, if any, required for the
due execution, delivery and performance of this Agreement.
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(b) PAYMENT OF FEES. The Borrower shall have paid all fees payable
under or referenced in Section 2.03 and any arrangement fees payable to the
Lender, to the extent then due and payable.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH ADVANCE.
The obligation of the Lender to make advance funds on the occasion of
each Advance (including the initial Advance) shall be subject to the further
conditions precedent that on the date of such Advance:
(i) the following statements shall be true (and each of notice of
borrowing and the acceptance by the Borrower of the proceeds of such Advance
shall constitute a representation and warranty by the Borrower that on the date
of such Advance such statements are true):
(A) The representations and warranties contained in
Section 4.01 are correct in all material respects on and as of
the date of such Advance, before and after giving effect to
such borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(B) No event has occurred and is continuing, or would
result from such borrowing or from the application of the
proceeds therefrom, that constitutes an Event of Default or
that would constitute an Event of Default but for the
requirement that notice be given or time elapse or both; and
(ii) the Lender shall have received such other approvals, opinions or
documents as it may reasonably request.
ARTICLE IV
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Borrower represents and warrants as follows:
(a) Each of the Borrower and each of its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business as a
foreign corporation in each jurisdiction in which the nature of the business
conducted or the property owned, operated or leased by it requires such
qualification, except where failure to so qualify would not have a Material
Adverse Effect.
(b) The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) the Borrower's
charter or by-laws, (ii) law or (iii) any contractual or legal restriction
binding on or affecting the Borrower or its properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Borrower of this Agreement.
(d) This Agreement is the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms.
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(e) The unaudited balance sheet of the Borrower and its subsidiaries as
at June 30, 2001 and the related unaudited statements of income, retained
earnings and cash flows for the six-month period then ended, copies of which
have been furnished to the Lender, fairly present (subject, in the case of such
balance sheet and statements of income for the six-month period ended June 30,
2001, to year-end adjustments) the financial condition of the Borrower and its
subsidiaries as at such dates and the results of the operations of the Borrower
and its subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles consistently applied, and since June
30, 2001, there has been no Material Adverse Change.
(f) No written statement, information, report, financial statement,
exhibit or schedule furnished by or on behalf of the Borrower to the Agent or
any Lender in connection with the negotiation of this Agreement or included
herein or delivered pursuant hereto contained, contains, or will contain any
material misstatement of fact or intentionally omitted, omits, or will omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were, are, or will be made, not
misleading.
(g) The Borrower and each Significant Subsidiary is in material
compliance with all laws, rules, regulations and orders of any governmental
authority applicable to it.
(h) There is no pending or threatened action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its Significant
Subsidiaries before any court, governmental agency or arbitrator that could
reasonably be expected to have a Material Adverse Effect.
(i) No proceeds of any Advance have been or will be used directly or
indirectly in connection with (i) the acquisition of in excess of 5% of any
class of equity securities that is registered pursuant to Section 12 of the
Exchange Act, (ii) any transaction subject to the requirements of Section 13 of
the Exchange Act or (iii) any transaction subject to the requirements of Section
14 of the Exchange Act.
ARTICLE V
SECTION 5.01. AFFIRMATIVE COVENANTS.
So long as any amount payable by the Borrower hereunder shall remain
unpaid or the Commitment remains outstanding, the Borrower will, and, in the
case of Sections 5.01(a) and 5.01(c), will cause its subsidiaries to, unless the
Lender otherwise consents in writing:
(a) KEEP BOOKS; CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES;
COMPLIANCE WITH LAWS; INSURANCE; TAXES; INSPECTION RIGHTS.
(i) keep proper books of record and account, all in
accordance with generally accepted accounting principles;
(ii) preserve and keep in full force and effect its existence
and preserve and keep in full force and effect its licenses, rights
(charter and statutory) and franchises to the extent necessary to carry
on its business;
(iii) maintain and keep, or cause to be maintained and kept,
its properties in good repair, working order and condition, and from
time to time make or cause to be made all needful and proper repairs,
renewals, replacements and improvements, in each case to the extent
such properties are not obsolete and are necessary to carry on its
business;
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(iv) comply in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, paying before the same become delinquent all taxes,
assessments and governmental charges imposed upon it or its property,
except to the extent being contested in good faith by appropriate
proceedings;
(v) maintain insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which it
operates; and
(vi) at any reasonable time and from time to time, permit the
Lender or any agents or representatives thereof, to examine and make
copies of and abstracts from the records and books of account of, and
visit the properties of, the Borrower and its subsidiaries and to
discuss the affairs, finances and accounts of the Borrower and its
subsidiaries with any of its officers or directors and with their
independent certified public accountants.
(b) DEBT TO TOTAL CAPITALIZATION RATIO. Maintain at all times a ratio
of Debt to Total Capitalization of not more than .65 to 1.0.
(c) USE OF PROCEEDS. Use the proceeds of any Borrowings hereunder (i)
exclusively for general corporate purposes (including to refinance short-term
Debt of the Borrower) and (ii) in strict compliance with all applicable laws and
governmental and regulatory approvals.
(d) REPORTING REQUIREMENTS. Furnish to the Lender:
(i) 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, (A) consolidated balance sheet of the Borrower and its
subsidiaries as of the end of such quarter and (B) consolidated
statements of income, retained earnings and cash flows of the Borrower
and its subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, each
certified by the chief financial officer of the Borrower;
(ii) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a copy of the annual
report for such year for the Borrower and its subsidiaries, containing
unqualified consolidated financial statements for such year, certified
by Xxxxxx Xxxxxxxx or another nationally recognized firm of independent
public accountants;
(iii) as soon as possible and in any event within five days
after the occurrence of each Event of Default and each event that, with
the giving of notice or lapse of time or both, would constitute an
Event of Default, continuing on the date of such statement, a statement
of the chief financial officer of the Borrower setting forth details of
such Event of Default or event and the actions that the Borrower has
taken and proposes to take with respect thereto;
(iv) as soon as possible and in any event within five days
after the commencement of litigation against the Borrower or any of its
subsidiaries, or the receipt of a notice of default by the Borrower or
any of its subsidiaries, that could reasonably be expected to have a
Material Adverse Effect on the Borrower or any of its subsidiaries,
notice of such litigation or notice of default describing in reasonable
detail the facts and circumstances concerning such litigation or
default and the Borrower's or such subsidiary's proposed actions in
connection therewith;
(v) promptly after the sending or filing thereof, copies of
all reports that the Borrower sends to any of its securities holders,
and copies of all reports and registration statements which the
Borrower or any subsidiary files with the Securities and Exchange
Commission or any national securities exchange; and
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(vi) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
subsidiaries as the Lender may from time to time reasonably request.
SECTION 5.02. NEGATIVE COVENANTS.
So long as any amount payable by the Borrower hereunder shall remain
unpaid or the Commitment remains outstanding, the Borrower will not, without the
written consent of the Lender:
(a) MERGERS AND CONSOLIDATIONS. Merge or consolidate with or into any
Person, or permit any of its subsidiaries to do so, except (i) any subsidiary of
the Borrower may merge or consolidate with or into any other subsidiary of the
Borrower and (ii) any subsidiary of the Borrower may merge with the Borrower and
(iii) the Borrower or any subsidiary of the Borrower may merge with any other
Person, PROVIDED in each case that, immediately after giving effect to such
proposed transaction, (A) no Event of Default or event that, with the giving of
notice or lapse of time, or both, would constitute an Event of Default would
exist, (B) in the case of any such transaction to which the Borrower is a party,
the Borrower is the surviving corporation, (C) the ratings assigned by S&P or
Xxxxx'x to the Borrower's senior unsecured indebtedness shall not be lower than
the ratings assigned by S&P or Xxxxx'x to the Borrower's senior unsecured
indebtedness immediately prior to giving effect to such proposed transaction,
(D) in the case of any such transaction to which any subsidiary of the Borrower
is a party, the surviving corporation is a subsidiary of the Borrower, and (E)
no Person (other than the Borrower) and its Affiliates, collectively, shall have
the ability to elect a majority of the board of directors of the Borrower or any
such subsidiary or surviving corporation.
(b) DISPOSITION OF ASSETS. In any 12-month period, (i) sell, lease,
transfer, convey or otherwise dispose of (whether in one transaction or in a
series of transactions) in excess of 7.5% of the total assets (whether now owned
or hereafter acquired, EXCLUDING, HOWEVER, accounts receivable) of the Borrower
and its subsidiaries (with such determination to be made in accordance with
generally accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(e)), or
permit any subsidiary to do so, or (ii) sell or otherwise dispose of (whether in
one transaction or in a series of transactions) in excess of 51% of the shares
of capital stock of any Significant Subsidiary, or permit any Significant
Subsidiary to issue, sell or otherwise dispose of in excess of 51% of its shares
of capital stock or the capital stock of any other Significant Subsidiary,
except to the Borrower or another subsidiary, unless in either case described in
clauses (i) and (ii) above, the consideration (as hereinafter defined) received
for such assets or capital stock, as the case may be, is at least equal to the
higher of the book value and the fair value (as determined in good faith by the
board of directors of the Borrower) thereof. As used in this Section 5.02(b),
the term "consideration" shall mean cash consideration or the fair value of
non-cash consideration (as determined in good faith by the board of directors of
the Borrower).
(c) NATURE OF BUSINESS. Fail to continue it's primary business as
conducted on the date hereof without material reduction or change in nature.
ARTICLE VI
SECTION 6.01. EVENTS OF DEFAULT.
If any of the following events ("EVENTS OF DEFAULT") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable, or interest thereon or any other amount
payable under this Agreement within three Business Days after the same becomes
due and payable; or
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(b) Any representation or warranty made by the Borrower herein or by
the Borrower (or any of its officers) in connection with this Agreement shall
prove to have been incorrect or misleading in any material respect when made; or
(c) The Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.01(b) or (c) or Section 5.02 or
(ii) any other term, covenant or agreement contained in this Agreement on its
part to be performed or observed if the failure to perform or observe such other
term, covenant or agreement shall remain unremedied for 30 days after written
notice thereof shall have been given to the Borrower by the Lender; or
(d) The Borrower or any Significant Subsidiary shall fail to pay any
principal of or premium or interest on any Debt which is outstanding in a
principal amount in excess of $10,000,000 in the aggregate (but excluding Debt
evidenced by this Agreement) of the Borrower or such Significant Subsidiary (as
the case may be) when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof; or
(e) The Borrower or any Significant Subsidiary shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any Significant Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or for any substantial part of its property) shall occur; or the Borrower or any
Significant Subsidiary shall take any corporate action to authorize or to
consent to any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any of its Significant
Subsidiaries and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(g) (i) Any entity, person (within the meaning of Section 14(d) of the
Exchange Act) or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) that theretofore was beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of less than 50% of the Borrower's Voting Stock
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the SEC under the Exchange Act), directly or indirectly, of Voting Stock of the
Borrower (or other securities convertible into such Voting Stock) representing
50% or more of the combined voting power of all Voting Stock of the Borrower; or
(ii) during any period of up to 24 consecutive months, commencing after the date
hereof, individuals who at the beginning of such 24-month period were directors
of the Borrower shall cease for any reason to constitute a majority of the board
of directors of the Borrower, PROVIDED that any person becoming a director
subsequent to the date hereof, whose election, or nomination for election by the
Borrower's shareholders, was approved by a vote of at least a majority of the
directors of the board of directors of the Borrower as comprised as of the date
hereof (other than the election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the
13
directors of the Borrower) shall be, for purposes of this provision,
considered as though such person were a member of the board as of the date
hereof;
then, and in any such event, the Lender may by notice to the Borrower (i)
declare the obligation of the Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) declare the Advances, all
interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; PROVIDED, HOWEVER, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower or any of its
subsidiaries under the Federal Bankruptcy Code, (A) the obligation of the Lender
to make Advances shall automatically be terminated and (B) the Advances, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
ARTICLE VII
SECTION 7.01. DEMAND OPTION.
Notwithstanding any other provision contrary herein, at any and all
times, the Lender may upon notice to the Borrower demand the repayment of all or
any Advances then outstanding (the DEMAND OPTION) upon the occurrence of any of
the following events: (a) the sale, conveyance, transfer, assignment, lease or
other disposition, or securitization or monetization of all or substantially all
of the Lender's assets; (b) the occurrence of any default by the Lender on any
of its outstanding debt obligations; (c) the occurrence of a spin-off by the
Lender to its shareholders of the Lender's outstanding voting shares of Aquila,
Inc; or (d) the Borrower obtains a committed credit facility in an aggregate
principal amount equal to or exceeding the aggregate principal amount of the
Commitment at such time. All obligations, amounts, indebtedness, and interest
owing to the Lender by the Borrower shall be immediately due and payable by the
Borrower upon the exercise of the Demand Option by the Lender, and thereafter
the Commitment shall be terminated.
ARTICLE VIII
SECTION 8.01. SUBORDINATION.
All payments by the Borrower under this Agreement are subordinate and
junior in right of payment to the prior payment in full of all senior debt of
the Borrower, whether outstanding at the date hereof or thereafter occurred.
ARTICLE IX
SECTION 9.01. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 9.02. NOTICES, ETC.
All notices and other communications provided for hereunder shall be in
writing (including telecopier, telegraphic, telex or cable communication) and
mailed, telecopied, telegraphed, telexed, cabled or delivered, if to the
Borrower, at its address at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx,
Xxxxxxxx 00000; Attention: Senior Vice President, Finance; telecopy: (816)
527-1195; if to the Lender, at its address at 00 Xxxx Xxxxx Xxxxxx, Xxxxxx Xxxx,
00
Xxxxxxxx 00000, Attention: Chief Financial Officer, telecopy: (000) 000-0000;
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party. All such notices and communications
shall not be effective until received.
SECTION 9.03. NO WAIVER; REMEDIES.
No failure on the part of the Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS AND EXPENSES; INDEMNIFICATION.
(a) Except to the extent limited by written agreement between the
Borrower and the Lender on or prior to the date hereof, the Borrower agrees to
pay on demand all reasonable costs and expenses incurred by the Lender in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Agreement and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Lender with respect thereto and with
respect to advising the Lender as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses,
if any (including, without limitation, counsel fees and expenses of outside
counsel and of internal counsel), incurred by the Lender in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement and the other documents to be delivered hereunder, including,
without limitation, counsel fees and expenses in connection with the enforcement
of rights under this Section 8.04(a).
(b) The Borrower hereby agrees to indemnify and hold the Lender and its
respective officers, directors, employees and professional advisors (each, an
"INDEMNIFIED PERSON") harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses (including, without limitation,
reasonable counsel fees and expenses of outside counsel and of internal counsel,
whether or not such Indemnified Person is named as a party to any proceeding or
is otherwise subjected to judicial or legal process arising from any such
proceeding) that any of them may incur or which may be claimed against any of
them by any Person by reason of or in connection with the execution, delivery or
performance of this Agreement or any transaction contemplated thereby, or the
use by the Borrower or any of its subsidiaries of the proceeds of any Advance.
The Borrower's obligations under this Section 9.04(b) shall survive the
repayment of all amounts owing to the Lender hereunder and the termination of
the Commitment. If and to the extent that the obligations of the Borrower under
this Section 9.04(b) are unenforceable for any reason, the Borrower agrees to
make the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
SECTION 9.05. RIGHT OF SET-OFF.
Upon (i) the failure of the Borrower to make any payment when due
hereunder and (ii) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Lender to declare the Advances due
and payable pursuant to the provisions of Section 6.01, the Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Lender to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
hereunder held by the Lender, whether or not the Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
Lender agrees promptly to notify the Borrower after any such set-off and
application made by it, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Lender
under this Section 9.05 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that it may have.
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SECTION 9.06. BINDING EFFECT; ASSIGNMENT.
This Agreement shall become effective when it shall have been executed
by the Borrower and the Lender and shall be binding upon and inure to the
benefit of the Borrower and the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein.
SECTION 9.07. SUBMISSION TO JURISDICTION.
Each of the Borrower and the Lender (i) irrevocably submits to the
non-exclusive jurisdiction of any
Missouri State court or Federal court sitting
in Kansas City in any action arising out of this Agreement, (ii) agrees that all
claims in such action may be decided in such court, (iii) waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum and (iv)
consents to the service of process by mail. A final judgment in any such action
shall be conclusive and may be enforced in other jurisdictions. Nothing herein
shall affect the right of any party to serve legal process in any manner
permitted by law or affect its right to bring any action in any other court.
SECTION 9.08. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF
MISSOURI.
SECTION 9.09. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 9.10. EFFECTIVE DATE.
This Agreement shall be effective from, on and after August 13, 2001.
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
UTILICORP UNITED INC.
By /s/ Xxxx Xxxx
------------------------------------
Name: Xxxx Xxxx
Title: Vice President/Finance
AQUILA, INC.
By /s/ Xxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
Title: Chief Financial Officer
EXHIBIT A
FORM OF NOTE
$_____________________ _______________, 20__
FOR VALUE RECEIVED, the undersigned, AQUILA, INC., a Delaware
corporation (the BORROWER), hereby promises to pay to the order of UTILICORP
UNITED INC. (the LENDER), on the ___ day following the date hereof, the
principal sum of _________________________ DOLLARS ($_____________), in lawful
money of the United States of America in immediately available funds, and to pay
interest on such principal amount from time to time outstanding, in like funds,
at a rate or rates per annum and payable with respect to such periods and on
such dates as determined pursuant to the Credit Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and overdue interest from their due dates at a rate or rates
determined as set forth in the Credit Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The non-exercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments of the principal
hereof and interest hereon and the respective dates thereof shall be endorsed by
the holder hereof; PROVIDED, HOWEVER, that any failure of the holder hereof to
make such a notation or any error in such notation shall not in any manner
affect the obligation of the Borrower to make payments of principal and interest
in accordance with the terms of this Note and the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of August 28, 2001, among the Borrower and the Lender (as amended from
time to time in accordance with its terms, the CREDIT AGREEMENT; capitalized
terms used but not defined herein having the meanings set forth therein) and is
subject to the terms and conditions contained in the Credit Agreement and is
entitled to the benefits thereof. The Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof upon the
happening of certain events, for prepayment of the principal hereof prior to the
maturity thereof and for the amendment or waiver of certain provisions of the
Credit Agreement, all upon the terms and conditions therein specified.
This Note shall be construed in accordance with and governed by the
laws of the State of
Missouri and any applicable laws of the United States of
America.
AQUILA, INC.
By:
--------------------------------
Name:
Title:
