EXHIBIT 13(a)
-------------
Letter of Credit Agreement
dated as of October 1, 1995
between
Central Power and Light Company
and
ABN AMRO Bank N.V.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS1
Section 1.1. Definitions 1
ARTICLE II
LETTER OF CREDIT
Section 2.1. Issuance of Letter of Credit 7
Section 2.2. Letter of Credit Drawings 8
Section 2.3. Reimbursement of Liquidity Drawings under
the Letter of Credit; Interest 8
Section 2.4. Reimbursement of Drawings Other than Liquidity
Drawings under the Letter of Credit 8
Section 2.5. Conversion and Continuation Options 8
Section 2.6. Interest Rates and Payment Dates 9
Section 2.7. Payments 9
Section 2.8. Fees 10
Section 2.9. Method of Payment 10
Section 2.10. Lending Offices and Funding 10
Section 2.11. Computation of Interest 11
Section 2.12. Payment Due on Non-Business Day to be made on
Next Business Day 11
Section 2.13. Late Payments 11
Section 2.14. Source of Funds 11
Section 2.15. Extension of Stated Expiration Date 11
Section 2.16. Funding Losses 12
Section 2.17. Basis for Determining Interest Rate
Unavailable 12
Section 2.18. Illegality 12
Section 2.19. Maximum Interest Rate 12
Section 2.20. Bank Rating 13
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Issuance of Letter
of Credit 13
Section 3.2. Conditions Precedent to Liquidity Advances 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Company's Representations 15
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TABLE OF CONTENTS
CONTINUED
Page
ARTICLE V
COVENANTS
Section 5.1. Information 18
Section 5.2. Payment of Obligations 19
Section 5.3. Maintenance of Property; Insurance 19
Section 5.4. Conduct of Business and Maintenance of
Existence 20
Section 5.5. Compliance with Laws 20
Section 5.6. Inspection of Property, Books and Records 20
Section 5.7. Use of Proceeds 21
Section 5.8. Negative Pledge 21
Section 5.9. Prohibition of Fundamental Changes 21
Section 5.10. Minimum Consolidated Net Worth 21
Section 5.11. Bond Documents 21
Section 5.12. Official Statement 21
Section 5.13. Optional Redemptions 21
ARTICLE VI
EVENTS OF DEFAULT
Section 6.1. Events of Default 22
Section 6.2. Remedies 23
ARTICLE VII
MISCELLANEOUS
Section 7.1. Taxes 24
Section 7.2. Increased Costs 25
Section 7.3. Right of Setoff; Other Collateral 27
Section 7.4. Indemnity, Costs and Expenses 28
Section 7.5. Obligations Absolute 28
Section 7.6. Liability of the Bank 28
Section 7.7. Participants, Etc 29
Section 7.8. Survival of this Agreement 30
Section 7.9. Modification of this Agreement 30
Section 7.10. Waiver of Rights by the Bank 30
Section 7.11. Severability 30
Section 7.12. Governing Law; Submission to Jurisdiction 30
Section 7.13. Notices 31
Section 7.14. Survival of Certain Obligations 32
Section 7.15. Taxes and Expenses 32
Section 7.16. Headings 32
Section 7.17. Counterparts 32
Section 7.18. Waiver of Jury Trial 32
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TABLE OF CONTENTS
CONTINUED
Page
Signature 33
Appendix I
iii
LETTER OF CREDIT AGREEMENT
Dated as of October 1, 1995
Central Power and Light Company
x/x Xxxxxxx xxx Xxxxx Xxxx Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Central Power and Light Company (the "Company") desires to secure a
source of funds to be devoted exclusively to the payment by The Bank of New
York, as trustee (together with its successors in such capacity under the
Indenture, the "Trustee"), when and as due, of the principal of and certain
interest on the Bonds, and has applied to ABN AMRO Bank N.V., acting through
its Houston Agency (the "Bank"), for issuance by the Bank of the Letter of
Credit in an Original Stated Amount of $43,411,550. Furthermore, the Bank has
been requested by the Company to provide the Company with a liquidity facility
by extending credit to the Company in the form of Liquidity Drawings under the
Letter of Credit. The Bank has agreed to issue such Letter of Credit and to
provide such liquidity facility in the following manner and subject to the
following terms and conditions. Accordingly, the Company and the Bank hereby
agree as follows:
.c.ARTICLE I
DEFINITIONS
.c2.Section 1.1. Definitions;. As used in this Agreement:
"Acceleration Drawing" - means a drawing under the Letter of Credit resulting
from the presentation of a certificate in the form of "Exhibit F" to the
Letter of Credit.
"Agreement" - means this Letter of Credit Agreement, as amended or
supplemented from time to time.
"Available Amount" - shall have the same meaning herein as in the
Letter of Credit.
"Bank" - means ABN AMRO Bank N.V., a banking institution organized
and existing under the laws of The Netherlands, acting through its Houston
Agency, as issuer of the Letter of Credit.
"Bank Bonds" - shall have the same meaning herein as in the
Indenture.
"Base Rate" - means for any day the greater of:
(i)the rate of interest announced by the Bank from time to time as its prime
commercial rate for U.S. dollar loans as in effect on such day, with any
change in the Base Rate resulting from a change in said prime commercial rate
to be effective as of the date of the relevant change in said prime commercial
rate; or
(ii) the sum of (x) the rate determined by the Bank to be the
average (rounded upwards, if necessary, to the next higher 1/100 of
1%) of the rates per annum quoted to the Bank at approximately 10:00
a.m. (Houston, Texas time) (or as soon thereafter as is practicable)
on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds
brokers selected by the Bank for the sale to the Bank at face value
of Federal funds in an amount equal or comparable to the principal
amount owed to the Bank for which such rate is being determined,
plus (y) 1/2 of 1% (0.50%).
"Base Rate Loan" - means a Liquidity Advance which is accruing
interest based on the Base Rate.
"Bond Documents" - means the Indenture, the Installment Payment
Agreement and the Bonds.
"Bond Owner," "Bondowner," "Owner" and "Bondholder" - shall have the
same meaning herein as in the Indenture.
"Bonds" means the $40,890,000 aggregate principal amount of
Xxxxxxxxx-Xxxxxx River Authority Pollution Control Revenue Refunding Bonds
(Central Power and Light Company Project) Series 1995.
"Business Day" - shall have the same meaning herein as in the Letter
of Credit and, if the applicable Business Day relates to the borrowing or
payment of a Eurodollar Loan, means any day on which banks are dealing in U.S.
dollar deposits in the interbank market in London, England.
"Cap Interest Rate" - means a rate per annum of 12% calculated on
the basis of a year of 360 days for the actual days elapsed.
"Code" - means the Internal Revenue Code of 1986, as amended, and
the regulations, rulings and proclamations promulgated and proposed thereunder
or under the predecessor Code.
"Commission" - means the Securities and Exchange Commission, or any
entity succeeding to its responsibilities under the Public Utility Holding
Company Act of 1935, as amended.
"Company" - means Central Power and Light Company, a public utility
and corporation duly organized and validly existing under the laws of the
State of Texas, and its lawful successors and assigns, to the extent permitted
by the Installment Payment Agreement and this Agreement.
"Company Held Bonds" - shall have the same meaning herein as in the
Indenture.
"Consolidated Net Worth" - means at any date the consolidated common
stock equity of the Company and its Consolidated Subsidiaries determined as of
such date.
"Consolidated Subsidiary" - means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Company in consolidated financial statements if such statements were prepared
as of such date.
"Controlled Group" - means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company or any Subsidiary, are treated
as a single employer under Section 414 of the Code.
"Date of Issuance" - means the date on which all conditions
precedent under Article III hereof have been met or waived by the Bank and on
which the Letter of Credit is issued.
"Environmental Laws" - means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof, in each case as in effect
and applicable to the Company and its Subsidiaries at the time the
representation in Section 4.1(m) is made or deemed made or compliance with
Section 5.5 is determined.
"ERISA" - shall mean the U.S. Employee Retirement Income Security
Act of 1974, as amended from time to time, and the rules and regulations
issued thereunder, as from time to time in effect.
"Eurodollar Loan" - means a Liquidity Advance which is accruing
interest based on LIBOR plus the LIBOR Margin.
"Event of Default" - shall have the meaning specified in Section
6.1.
"Governmental Body" - shall mean any government, foreign, or
domestic, any court or any foreign or domestic, federal, state, municipal or
other governmental department, commission, board, bureau, agency, public
authority or instrumentality.
"Hazardous Substances" - means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indenture" - means that certain Indenture of Trust, dated as of
October 1, 1995, between the Issuer and the Trustee, relating to the Bonds, as
amended or supplemented in accordance with the terms hereof and thereof.
"Installment Payment Agreement" - means the Installment Payment
Agreement, dated as of October 1, 1995, between the Issuer and the Company,
relating to the Bonds, as amended or supplemented in accordance with the terms
thereof.
"Interest Period" - means with respect to each Eurodollar Loan, the
period commencing on the date of such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the Company provided, however,
that:
(i) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding
Business Day unless with respect to a Eurodollar Loan such Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day; and
(ii) any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Issuer" - means the Xxxxxxxxx-Xxxxxx River Authority, a
governmental agency and body politic and corporate organized and validly
existing under the laws of the State of Texas.
"Letter of Credit" - means the irrevocable transferable letter of
credit issued by the Bank for the account of the Company in favor of the
Trustee for the benefit of the owners from time to time of the Bonds pursuant
to this Agreement in the form of Appendix I with appropriate insertions, as
amended.
"Letter of Credit Fee" - means any fee payable by the Company under
Section 2.8.
"Level I Status" - means the S&P Rating is BBB+ or higher and the
Xxxxx'x Rating is Baa1 or higher.
"Level II Status" - means Level I Status does not exist, but the S&P
Rating is BBB or higher and the Xxxxx'x Rating is Baa2 or higher.
"Level III Status" - means neither Level I Status or Level II Status
exists, but the S&P Rating is BBB- or higher and the Xxxxx'x Rating is Baa3 or
higher.
"Level IV Status" - means none of Level I Status, Level II Status
and Level III Status exists.
"LIBOR" means, for an Interest Period for a Eurodollar Loan, the
rate of interest per annum, as determined by the Bank (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%), at which deposits of
U.S. dollars in immediately available and freely transferable funds are
offered by the Bank at 11:00 a.m. (London, England time) two Business Days
before the commencement of such Interest Period to major banks in the London
interbank market for a period equal to such Interest Period and in an amount
equal or comparable to the principal amount of such Eurodollar Loan.
"LIBOR Margin" - means, for the first 3 months any Liquidity Advance
bears interest based on LIBOR, 0.375% per annum and thereafter 0.50% per
annum.
"Lien" - means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other
type of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this
Agreement, the Company or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Liquidity Advance" - shall have the meaning specified in Section
2.3.
"Liquidity Drawing" - means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of "Exhibit E" to
the Letter of Credit.
"Material Adverse Effect" - means a material adverse effect on the
financial condition, business or operations of the Company.
"Material Subsidiary" - means any Subsidiary of the Company that has
assets that constitute more than 10% of the consolidated assets of the Company
and its Subsidiaries as shown on the most recent financial statements
delivered to the Bank pursuant to Section 5.1 hereof.
"Xxxxx'x Rating" - means the rating assigned by Xxxxx'x Investors
Service, Inc. and any successor thereto that is a nationally recognized rating
agency to the outstanding senior unsecured non-credit enhanced long-term
indebtedness of the Company (or if neither Xxxxx'x Investors Service, Inc. nor
any such successor shall be in the business of rating long-term indebtedness,
a nationally recognized rating agency in the U.S. as mutually agreed between
the Bank and the Company). Any reference in this Agreement to any specific
rating is a reference to such rating as currently defined by Xxxxx'x Investors
Service, Inc. (or such a successor) and shall be deemed to refer to the
equivalent rating if such rating system changes.
"Multiemployer Plan" - means a plan described in Section 4001(a)(3)
of ERISA to which the Company or any member of the Controlled Group
contributed or has contributed during the last five years of such plan.
"Obligations" - means the Liquidity Advances, fees relating to the Letter of
Credit, any and all obligations of the Company to reimburse the Bank for any
drawings under the Letter of Credit, and all other obligations of the Company
to the Bank arising under or in relation to this Agreement.
"Official Statement" - means the Official Statement relating to the
Bonds, dated November 2, 1995.
"Original Stated Amount" - shall have the meaning specified in
Section 2.1.
"Outstanding," "Bonds Outstanding" or "Bonds then Outstanding" -
shall have the same meaning herein as in the Indenture.
"Parent" - means Central and South West Corporation, a Delaware
corporation.
"PBGC" - shall mean the Pension Benefit Guaranty Corporation or any
Governmental Body succeeding to the functions thereof.
"Person" - means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality thereof.
"Plan" - means, with respect to the Company and each Subsidiary
thereof at any time, an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and either (i) is or has been maintained or contributed to by
a member of the Controlled Group for employees of any member of the Controlled
Group or (ii) has at any time within the preceding five years been maintained,
or contributed to, by any Person which was at such time a member of the
Controlled Group for employees of any Person which was at such time a member
of the Controlled Group.
"Potential Default" - means an event which but for the lapse of time
or the giving of notice, or both, would constitute an Event of Default.
"Projects" - shall have the meaning set forth in the Installment
Payment Agreement.
"Regulation U" - means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" - means the Bond Documents, this Agreement, the
Letter of Credit and any other agreement or instrument relating thereto.
"Remarketing Agent" - means Xxxxxx Xxxxxxx & Co. Incorporated, as
remarketing agent under the Indenture, and any successor remarketing agent.
"Reportable Event" - means any of the events set forth in Section
4043(b) of ERISA.
"S&P Rating" - means the rating assigned by Standard & Poor's
Ratings Group, a division of The XxXxxx-Xxxx Companies, Inc. and any successor
thereto that is a nationally recognized rating agency to the outstanding
senior unsecured non-credit enhanced long-term indebtedness of the Company
(or, if neither such division nor any successor shall be in the business of
rating long-term indebtedness, a nationally recognized rating agency in the
U.S. as mutually agreed between the Bank and the Company). Any reference in
this Agreement to any specific rating is a reference to such rating as
currently defined by Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc. (or such a successor) and shall be deemed to refer
to the equivalent rating if such rating system changes.
"State" - means the State of Texas.
"Stated Expiration Date" - means November 2, 2000, or such later
date to which the Stated Expiration Date may be extended from time to time
pursuant to the Letter of Credit and Section 2.15.
"Subsidiary" shall mean any corporation organized under the laws of
one of the States of the United States of America of which more than 50% of
the voting stock (except directors qualifying shares) is owned or controlled,
directly or indirectly, by the Company and/or one or more of its Subsidiaries.
"Termination Date" - shall have the meaning set forth in the Letter
of Credit.
"U.S." - means the United States of America.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms. Any capitalized terms used herein which
are not specifically defined herein shall have the same meaning herein as in
the Indenture. All references in this Agreement to times of day shall be
references to Houston, Texas time unless otherwise expressly provided herein.
.c.ARTICLE II
LETTER OF CREDIT
.c2.Section 2.1. Issuance of Letter of Credit;. The Bank agrees to
issue on the Date of Issuance, upon the terms, subject to the conditions and
relying upon the representations and warranties set forth in this Agreement,
the Letter of Credit substantially in the form of Appendix I. The Letter of
Credit shall be in the Original Stated Amount of $43,411,550 (the "Original
Stated Amount"), which is the sum of (i) the principal amount of the Bonds on
the Date of Issuance, plus (ii) interest thereon at the Cap Interest Rate for
a period of One Hundred Eighty-Five (185) days.
.c2.Section 2.2. Letter of Credit Drawings;. The Trustee is
authorized to make drawings under the Letter of Credit in accordance with the
terms thereof. The Company hereby directs the Bank to make payments under the
Letter of Credit in the manner therein provided. The Company hereby
irrevocably approves reductions and reinstatements of the Available Amount as
provided in the Letter of Credit.
.c2.'Section 2.3. Reimbursement of Liquidity Drawings under the
Letter of Credit; Interest';. If the conditions precedent contained in
Section 3.2 are satisfied at the time of payment by the Bank of any Liquidity
Drawing, such Liquidity Drawing made under the Letter of Credit shall
constitute an advance ("Liquidity Advance") to the Company. The Company
promises to repay to the Bank each Liquidity Advance on the earliest of (i)
the Termination Date, (ii) the date on which the related Bank Bonds are
redeemed or canceled pursuant to the Indenture, (iii) the date on which the
related Bank Bonds are remarketed pursuant to the Indenture, (iv) the date on
which the Letter of Credit is replaced by an Alternate Letter of Credit in
accordance with the terms of the Indenture or otherwise terminated pursuant to
Section 10.05 of the Indenture, or (v) the date which is one year from the
date of payment by the Bank of the related Liquidity Drawing. The Company
also promises to pay to the Bank interest on the unpaid principal amount of
each Liquidity Advance from the date such Liquidity Advance is made until it
is paid in full as provided herein, at a rate per annum equal to the Base
Rate, except to the extent the Company has timely elected as provided in
Section 2.5 hereof. Notwithstanding anything herein to the contrary no
Liquidity Advance which has been outstanding longer than 6 months may be a
Eurodollar Loan. The Company may prepay Liquidity Advances at any time
without premium or penalty (but subject, in the case of Eurodollar Loans, to
Section 2.16 hereof).
.c2.Section 2.4. Reimbursement of Drawings Other than Liquidity
Drawings under the Letter of Credit;. The Company agrees to reimburse the
Bank for the full amount of any drawing made under the Letter of Credit, other
than a Liquidity Drawing creating a Liquidity Advance, on the date of each
such drawing. If the Company does not make such reimbursement on such date,
such reimbursement obligation shall bear interest at the rate per annum
specified in Section 2.13.
.c2.Section 2.5. Conversion and Continuation Options;. (a) Subject
to Section 2.16, the Company may elect to convert Eurodollar Loans to Base
Rate Loans at any time and from time to time by giving notice thereof to the
Bank. The Company may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Bank at least three Business Days' prior
irrevocable notice of such election and specifying the applicable Interest
Period. All or any part of outstanding Eurodollar Loans and Base Rate Loans
may be converted as provided herein, provided that (i) no Base Rate Loan may
be converted into a Eurodollar Loan when any Potential Default or Event of
Default has occurred and is continuing and (ii) no Base Rate Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
Stated Expiration Date.
(b) Subject to the terms and conditions hereof, any Eurodollar Loan
may be continued as such upon the expiration of the then current Interest
Period with respect thereto by the Company giving the Bank at least three
Business Days' prior irrevocable notice of such election and specifying the
applicable Interest Period, provided that no Eurodollar Loan may be continued
as such (i) when any Potential Default or Event of Default has occurred and is
continuing or (ii) after the date that is one month prior to the Stated
Expiration Date and provided, further, that if the Company shall fail to give
such notice such Eurodollar Loans shall be automatically converted to Base
Rate Loans on the last day of such then expiring Interest Period.
(c) No Eurodollar Loan may be created or continued if the Liquidity
Advance relating thereto is less than $250,000.
.c2.Section 2.6. Interest Rates and Payment Dates;. (a) Each
Eurodollar Loan shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to LIBOR determined for such
day plus the LIBOR Margin payable on the last day of its Interest Period and,
if earlier, on the date the related Liquidity Advance is payable as provided
in Section 2.3 hereof.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus 2% payable in arrears on the last day of each
calendar quarter and, if earlier, on the date the related Liquidity Advance is
payable as provided in Section 2.3 hereof and on the date such Base Rate Loan
is converted to a Eurodollar Loan as provided in Section 2.5(a) hereof.
.c2.Section 2.7. Payments;. (a)To the extent the Bank actually
receives payment in respect of principal or interest on any Bank Bond, the
Liquidity Advance made in connection with the purchase of such Bank Bond shall
be deemed to have been reduced pro tanto, with the Bank crediting any interest
payment on the Bank Bond received by it to the payment of interest on the
related Liquidity Advance (and, after payment of all interest accrued on the
related Liquidity Advance, to the payment of principal of the related
Liquidity Advance) and crediting any principal repayment received to the
principal thereof (and, after payment of all principal of the related
Liquidity Advance, to the payment of interest accrued on the related Liquidity
Advance). Prior to the occurrence of an Event of Default the Bank agrees that
any amount actually received by it in respect of principal or interest on such
Bank Bonds and not credited to the payment of principal of or interest on the
related Liquidity Advances as provided in the preceding sentence shall be paid
promptly to the Company. After the occurrence and during the continuance of
an Event of Default any such excess shall be held as collateral for the
Obligations pursuant to the terms of Section 6.2(a). Any such payment of a
Liquidity Advance will be subject, in the case of Eurodollar Loans, to Section
2.16 hereof.
(b) The Bank agrees that upon any payment of principal by the
Company on a Liquidity Advance (other than a payment deemed made pursuant to
Section 2.7(a) above) the Bank will promptly thereafter direct the Trustee to
transfer to the Company a corresponding amount of Bank Bonds provided that the
Bank shall only be obligated to transfer Bank Bonds in an amount equal to
Authorized Denominations.
.c2.Section 2.8. Fees;. The Company hereby agrees to pay, or cause
to be paid, to the Bank:
(a) on the Issuance Date a non-refundable up-front issuance fee as
set forth in the letter agreement dated November 2, 1995 between the Company
and the Bank.
(b) the Company shall pay to the Bank a letter of credit fee on the
average daily Available Amount at a rate of: (i) 0.325% per annum for any day
Level I Status exists; (ii) 0.45% per annum for any day Level II Status
exists; (iii) 0.55% per annum for any day Level III Status exists, and (iv)
0.85% per annum for any day Level IV Status exists. Such fee shall be payable
in arrears on the last day of each calendar quarter commencing December 31,
1995 and on the Termination Date, unless the Letter of Credit is terminated in
whole on any earlier date, in which event the letter of credit fee for the
period to the date of such termination shall be paid on the date of such
termination. If Xxxxx'x Investors Service, Inc. (or any successor thereto
that is a nationally recognized rating agency) or Standard & Poor's Ratings
Group, a division of The XxXxxx-Xxxx Companies, Inc. (or any successor thereto
that is a nationally recognized rating agency) shall cease to be in the
business of rating long-term indebtedness and the Company and the Bank shall
not agree on a successor rating agency in the manner specified in the
definition of "Xxxxx'x Rating" or "S&P Rating," as the case may be, the Letter
of Credit Fee payable under this Section 2.8(b), until the Company and the
Bank so agree on a successor rating agency, shall be determined by reference
to the rating provided by the remaining rating agency for the first four (4)
months after the date such rating agency ceases to be in the business of
rating long-term indebtedness and thereafter (until a successor rating agency
so chosen shall have in effect a rating on the senior, unsecured non-credit
enhanced long-term indebtedness of the Company) Level IV Status shall be
deemed to exist.
(c) on the date of each drawing under the Letter of Credit, a
drawing fee of $200.
(d) on the date of each transfer of the Letter of Credit to a
successor Trustee, a transfer fee in an amount equal to the Bank's then
standard out-of-pocket fee for transfers in effect on such date.
.c2.Section 2.9. Method of Payment;. All payments to be made by
the Company under this Agreement shall be made to the Bank at ABN AMRO Bank
N.V., New York, ABA No. 000000000 for further credit to ABN AMRO Bank N.V.,
Houston Agency Account No. 651-0-010715-41, not later than 2:00 p.m., Houston,
Texas time, on the date when due and shall be made in lawful money of the
United States of America (in freely transferable U.S. dollars) and in
immediately available funds.
.c2.Section 2. 10.Lending Offices and Funding;. The Bank may, at
its option, elect to fund its Liquidity Advances hereunder at the branch,
office or affiliate specified in Section 7.13 (each a "Lending Office") or at
such other of its branches, offices or affiliates as it may from time to time
elect and designate in a written notice to the Company. Notwithstanding any
other provision of this Agreement, the Bank shall be entitled to fund and
maintain its funding of all or any part of the Liquidity Advances in any
manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if each Bank had
actually funded and maintained each Eurodollar Loan through the purchase of
deposits in the eurodollar interbank market having a maturity corresponding to
such Eurodollar Loan's Interest Period and bearing an interest rate equal to
LIBOR for such Interest Period.
.c2.Section 2.11. Computation of Interest;. All computations of
interest and fees payable by the Company under this Agreement shall be made on
the basis of a three hundred sixty (360) day year and actual days elapsed
except where interest is computed using the Base Rate in which case a year of
365 or 366 days and actual days elapsed shall be used. Interest shall accrue
during each period during which interest is computed from and including the
first day thereof to but excluding the last day thereof.
.c2.Section 2.12. Payment Due on Non-Business Day to be made on
Next Business Day;. If any sum becomes payable pursuant to this Agreement on
a day which is not a Business Day, the date for payment thereof shall be
extended, without penalty, to the next succeeding Business Day, and such
extended time shall be included in the computation of interest and fees. If
the date for any payment of principal is extended by operation of law or
otherwise, interest shall be payable for such extended time.
.c2.Section 2.13. Late Payments;. If the principal amount of any
Obligation is not paid when due, such Obligation shall bear interest (computed
on the basis of a 365 or 366 day year and actual days elapsed) from the due
date thereof until paid in full at a rate per annum equal to the Base Rate
from time to time in effect plus two percent (2%) payable on demand.
.c2.Section 2.14. Source of Funds;. All payments made by the Bank
pursuant to the Letter of Credit shall be made from funds of the Bank and not
from funds obtained from any other Person.
.c2.Section 2.15. Extension of Stated Expiration Date;. Within 90
days prior to each anniversary date of the Date of issuance (or at such other
times as the Bank and Company may mutually agree), the Company may request the
Bank to extend the then current Stated Expiration Date for a period of not
less than one additional year. If the Bank, in its sole discretion, elects to
extend the Stated Expiration Date then in effect, it shall deliver to the
Trustee a Notice of Amendment in the form of Exhibit K to the Letter of Credit
(herein referred to as a "Notice of Extension") designating the date to which
the Stated Expiration Date is being extended. Such extension of the Stated
Expiration Date shall be effective, after receipt of such notice, on the
Business Day following the date of delivery of such Notice of Extension, and
thereafter all references in this Agreement to the Stated Expiration Date
shall be deemed to be references to the date designated as such in the most
recent Notice of Extension delivered to the Trustee. Any date to which the
Stated Expiration Date has been extended in accordance with this Section 2.15
may be extended in like manner. Failure of the Bank to consent to such
extension request as herein provided within thirty (30) days of a request by
the Company to extend the then applicable Stated Expiration Date shall
constitute an election by the Bank not to extend the Stated Expiration Date.
No later than 120 days prior to the then current Stated Expiration Date the
Company shall notify the Bank as to whether it will provide the Trustee with
an Alternate Letter of Credit or no credit enhancement.
.c2.Section 2.16. Funding Losses;. If the Company makes any
payment or prepayment of principal with respect to any Eurodollar Loan on any
day other than the last day of an Interest Period applicable to such
Eurodollar Loan, or if the Company fails to borrow any Eurodollar Loan after
notice has been given to the Bank in accordance with Section 2.5, the Company
shall reimburse the Bank within fifteen (15) days after demand for any
resulting loss or expense incurred by it (or by any existing or prospective
participant in the related Eurodollar Loan) including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after such payment or
conversion or failure to borrow, convert or prepay, provided, however, that
the Bank shall have delivered to the Company a certificate as to the amount of
such loss or expense, which certificate shall be conclusive in the absence of
manifest error.
.c2.Section 2.17. Basis for Determining Interest Rate Unavailable;.
If on or prior to the first day of any Interest Period deposits in dollars (in
the applicable amounts) are not being offered to the Bank in the London
interbank market for such Interest Period, the Bank shall forthwith give
notice thereof to the Company, whereupon the obligation of the Bank to make a
Eurodollar Loan shall be suspended until the Bank notifies the Company that
the circumstances giving rise to such suspension no longer exist. The Bank
shall instead make such Liquidity Advance as a Base Rate Loan.
.c2.Section 2.18. Illegality;. If after the Date of Issuance the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Bank with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Bank to make, maintain or fund its Eurodollar Loans, the Bank shall forthwith
so notify the Company, whereupon the Bank's obligation to make Eurodollar
Loans shall be suspended. If the Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Eurodollar Loans
to maturity and shall so specify in such notice, the Company shall immediately
prepay in full the then outstanding principal amount of each such Eurodollar
Loan, together with accrued interest thereon. Concurrently with prepaying
each such Eurodollar Loan, the Company may borrow a Base Rate Loan in an equal
principal amount for a period coincident with the remaining term of the
Interest Period applicable to such Eurodollar Loan, and the Bank shall make
such Base Rate Loan.
.c2.Section 2.19. Maximum Interest Rate;. Notwithstanding anything
in this Agreement to the contrary (including, without limitation, Sections 2.6
and 2.13), the maximum rate of interest payable by the Company under this
Agreement shall not exceed the Maximum Rate. For purposes hereof, "Maximum
Rate" means the maximum rate of nonusurious interest permitted from day to day
by applicable law, including as to Article 5069-1.04, Vernon's Texas Civil
Statutes (and as the same may be incorporated by reference in other Texas
statutes), but otherwise without limitation, that rate based upon the
"indicated rate ceiling" and calculated after taking into account any and all
relevant fees, payments, and other charges contracted for, charged or received
in connection with this Agreement which are deemed to be interest under
applicable law. On each day, if any, that the interest rate (the "Stated
Rate") called for under this Agreement exceeds the Maximum Rate, the rate at
which interest shall accrue shall automatically be fixed by operation of this
sentence at the Maximum Rate for that day, and shall remain fixed at the
Maximum Rate for each day thereafter until the total amount of interest
accrued equals the total amount of interest which would have accrued if there
were no such Maximum Rate imposed by this Section 2.19.
.c2.Section 2.20. Bank Rating;. The Bank agrees to use its best
efforts to notify the Company of any downgrade in the rating assigned to the
unsecured long-term indebtedness of the Bank by either Xxxxx'x Investors
Service, Inc. or Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc. promptly after the Bank has knowledge thereof,
provided that failure of the Bank to provide such notice shall not result in
any liability to the Bank.
.c.ARTICLE III
CONDITIONS PRECEDENT
.c2.Section 3.1. Conditions Precedent to Issuance of Letter of
Credit;. As conditions precedent to the obligation of the Bank to issue the
Letter of Credit (a) the Company shall provide to the Bank on or before the
Date of Issuance, in form and substance satisfactory to the Bank and its
counsel:
(i) a written opinion of counsel to the Company dated the Date
of Issuance, in form and substance satisfactory to the Bank's
counsel;
(ii) the written opinion or opinions of XxXxxx, Xxxxxxxxx &
Xxxxxx L.L.P., bond counsel, dated the Date of Issuance, in form and
substance satisfactory to the Bank's counsel;
(iii) a certificate signed by an authorized officer of the
Company, dated the Date of Issuance and stating that:
(1)the representations and warranties of the Company contained in Article IV
are correct on and as of the Date of Issuance as though made on such date; and
(2)none of the Events of Default has occurred and is continuing, or would
result from the issuance of the Letter of Credit or the execution and delivery
of this Agreement, and no event has occurred and is continuing which would
constitute an Event of Default or a Potential Default;
(iv)a copy of resolutions of the board of directors (or a committee thereof)
of the Company certified as of the Date of Issuance by the Secretary or an
Assistant Secretary of the Company, authorizing, among other things, the
execution, delivery and performance by the Company of this Agreement and
authorizing the Company to obtain the issuance of the Letter of Credit;
(v)certified copies of the Company's by-laws and articles of incorporation;
(vi)a certificate of the Secretary or any Assistant Secretary of the Company
certifying the name and true signatures of the officers of the Company
authorized to sign this Agreement;
(vii) evidence of the status of the Company as a duly
organized and validly existing corporation under the laws of the
State of Texas;
(viii) evidence that the Remarketing Agent has acknowledged
and accepted in writing its appointment as Remarketing Agent under
the Indenture and its duties and obligations thereunder;
(ix) true and correct copies of the Related Documents;
(x) reliance letters with respect to the opinion delivered in
connection with (ii) above;
(xi) a copy of the order of the Commission referred to in
Section 4.1(b);
(xii) the receipt of such other documents, certificates and
opinions as the Bank or its counsel may reasonably request;
(b) no law, regulation or ruling of the United States or any
political subdivision or authority therein or thereof shall be in effect or
shall have occurred, the effect of which would be to prevent the Bank from
fulfilling its obligations under this Agreement; and
(c) all legal requirements provided herein incident to the
execution, delivery and performance of this Agreement and the Related
Documents and the transaction contemplated hereby and thereby, shall be
reasonably satisfactory to the Bank and its counsel.
.c2.Section 3.2. Conditions Precedent to Liquidity Advances;. Upon
payment by the Bank of a Liquidity Drawing under the Letter of Credit, such
Liquidity Drawing shall constitute a Liquidity Advance to the Company only if
on the date of payment of such drawing by the Bank the following statements
shall be true:
(a) the representations and warranties of the Company contained in
Article IV are correct in all material respects on and as of the date of such
payment as though made on and as of such date; and
(b) no event has occurred and is continuing, or would result from
such payment, which constitutes a Potential Default or Event of Default.
Unless the Company shall have previously advised the Bank in writing that one
or both of the above statements is no longer true, the Company shall be deemed
to have represented and warranted on the date of such payment that both of the
above statements are true and correct.
.c.ARTICLE IV
REPRESENTATIONS AND WARRANTIES
.c2.Section 4.1. Company's Representations;. In order to induce
the Bank to enter into this Agreement, the Company represents and warrants as
of the Date of Issuance that:
(a) The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Texas, has all requisite power and
authority to own its property and to carry on its business as now conducted,
and is in good standing and authorized to do business in each jurisdiction in
which the character of the property owned or leased by it therein or the
transaction of its business makes such qualification necessary and where
failure to so qualify would (either individually or in the aggregate) have a
Material Adverse Effect.
(b) The Company has full corporate power and authority to enter
into, execute, deliver and carry out its obligations under this Agreement and
the Related Documents to which the Company is a party, and to incur the
obligations provided for herein and therein, all of which have been duly
authorized by all proper and necessary corporate action and are in full
compliance with the Company's articles of incorporation and by-laws. The
Commission has issued an order under the Public Utility Holding Company Act of
1935, as amended, authorizing the Company, among other things, to enter into
this Agreement and each of the Related Documents to which the Company is a
party, and such order is in full force and effect in the form issued. No
other consent or approval of, or exemption by, or notice to or filing with any
Person is required in respect of the Company to authorize the execution,
delivery and performance of, or as a condition to the validity or
enforceability of, this Agreement, the Related Documents to which the Company
is a party or any other agreement of the Company delivered in connection
herewith or therewith, except those which have been obtained and except those
which are required under the securities or blue sky laws of any jurisdiction.
(c) The officer of the Company who has executed this Agreement, who
has requested the issuance of the Letter of Credit and who has executed or
will execute the Related Documents to which the Company is a party and all
other documents, instruments and agreements required to be delivered or
contemplated hereunder or thereunder was and is properly in office and was and
is duly authorized to execute the same.
(d) This Agreement and the Related Documents to which the Company
is a party each constitutes the valid and legally binding obligations of the
Company enforceable in accordance with their respective terms except that the
enforceability thereof may be limited by applicable bankruptcy, insolvency, or
other laws affecting the enforcement of creditors' rights generally and by
equitable principles.
(e) Except as disclosed in the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 and the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995, there are no actions, suits or
arbitration proceedings pending or, to the knowledge of the Company,
threatened against the Company, at law or in equity, before any Governmental
Body which individually or in the aggregate, if adversely determined, would
materially and adversely affect the financial condition of the Company or
materially impair the ability of the Company to perform its obligations under
this Agreement, the Related Documents to which the Company is a party, or any
other document, instrument or agreement required to be delivered or
contemplated hereunder or thereunder. There are no proceedings pending or, to
the knowledge of the Company, threatened against the Company which call into
question the validity or enforceability of this Agreement, the Related
Documents to which the Company is a party or any agreement of the Company
delivered in connection herewith or therewith.
(f) The execution, delivery and performance by the Company of this
Agreement and the Related Documents to which the Company is a party (i) do not
violate any provision of the articles of incorporation or by-laws of the
Company, (ii) do not violate any order, decree or judgment, or any provision
of any statute, rule or regulation applicable to or binding on the Company or
affecting any of its property, (iii) do not violate or conflict with, result
in a breach of or constitute (with notice or lapse of time, or both) a default
under any shareholder agreement or stock preference agreement or under any
material mortgage, indenture, contract or other agreement to which the Company
is a party or by which any of its property is bound and (iv) do not result in
the creation or imposition of any lien upon any material property of the
Company.
(g) The Company has filed all material United States tax returns
and all other material tax returns, if any, which are required to be filed by
the Company, and has paid all taxes due, if any, as shown on said returns, or
pursuant to any assessment received by the Company, except such taxes, if any,
as are being contested in good faith and by appropriate proceedings.
(h) The consolidated financial statements of the Company and its
consolidated subsidiaries as of December 31, 1993 and 1994 contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 a
copy of which has been furnished to the Bank, present fairly the consolidated
financial position of the Company and its Consolidated Subsidiaries as of
December 31, 1993 and December 31 1994 and the results of their operations for
the two years ended December 31, 1994 in conformity with generally accepted
accounting principles consistently applied. The consolidated financial
statements contained in the Company's Quarterly Reports on Form 10-Q for the
quarter ended June 30, 1995, copies of which have been furnished to the Bank,
present fairly the consolidated financial position of the Company and its
Consolidated Subsidiaries as of the dates thereof and have been prepared in
conformity with generally accepted accounting principles applied on the basis
consistent with that used in the audited consolidated financial statements for
the year ended December 31, 1994 (subject to normal year-end and audit
adjustments). The Company has no contingent liabilities which are required by
generally accepted accounting principles to be shown on the financial
statements of the Company other than as indicated on said financial statements
and since December 31, 1994, there have been no material adverse changes in
the financial condition or operations of the Company.
(i) To the best knowledge of the Company, after appropriate
investigation, the Company is not in default with respect to any judgment,
order, writ, injunction, decree or decision of any Governmental Body which
default would have a Material Adverse Effect.
(j) The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U.
No part of the proceeds of the Bonds or any Liquidity Advance will be used,
directly or indirectly, by the Company for a purpose which violates any law,
rule, or regulation of any Governmental Body, including, without limitation,
the provisions of Regulation U or X of the Board of Governors of the Federal
Reserve System, as amended.
(k) No Potential Default or Event of Default has occurred and is
continuing or would result from the obligations incurred by the Company
hereunder or by the actions contemplated hereby.
(l) The representations and warranties of the Company in the
Related Documents to which it is a party are true and correct in every
material respect, and the Company has furnished the Bank a true and correct
copy of all the Related Documents as in effect on the date hereof.
(m) In the ordinary course of its business, the Company conducts an
ongoing review of the effect of Environmental Laws on the business, operations
and properties of the Company and its Subsidiaries, in the course of which it
identifies and evaluates liabilities and costs arising under or imposed by
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by
Environmental Law, any related constraints on operating activities, including
any periodic or permanent shutdown of any facility or reduction in the level
of or change in the nature of operations conducted thereat, any costs or
liabilities in connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third parties,
including employees). On the basis of this review, the Company has no reason
to conclude that such liabilities and costs arising under, including the costs
of compliance with, Environmental Laws, are likely to have a Material Adverse
Effect.
(n) No Plan has been terminated nor have any proceedings been
instituted to terminate any Plan; the Company has not withdrawn from any
Multiemployer Plan in a complete or partial withdrawal nor has a condition
occurred which if continued would result in a complete or partial withdrawal;
the Company has not incurred any withdrawal liability under Section 4201 or
4204 of ERISA with respect to any Multiemployer Plan; the Company has not
incurred any liability to PBGC other than for required insurance premiums
which have been paid when due; no Reportable Event with respect to any Plan
has occurred; and no Plan has an accumulated funding deficiency under Section
302 of ERISA or Section 412 of the Code. Each employee benefit plan as
defined in Section 3(3) of ERISA maintained by the Company is in compliance
with ERISA; except where the failure so to comply would not have a Material
Adverse Effect.
.c.ARTICLE V
COVENANTS
The Company covenants and agrees with the Bank that it will do the
following so long as any amounts may be drawn under the Letter of Credit, and
thereafter, so long as any amounts remain outstanding or Obligations remain
unfulfilled under this Agreement, unless the Bank shall otherwise consent in
writing:
.c2.Section 5.1. Information;. The Company will deliver to the
Bank:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Company, the annual report of the Company and
its Subsidiaries filed with the Commission on Form 10-K for such year;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Company,
the quarterly report of the Company and its Subsidiaries filed with the
Commission on Form 10-Q for such quarter;
(c) within five days after any officer of the Company obtains
knowledge of any Potential Default or Event of Default, if such Potential
Default or Event of Default is then continuing, a certificate of the treasurer
or the controller of the Company setting forth the details thereof and the
action which the Company is taking or proposes to take with respect thereto;
(d) promptly upon the mailing thereof to the preferred shareholders
of the Company, copies of all financial statements, reports and proxy
statements so mailed;
(e) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Form 8-K (or its equivalent) which
the Parent or Company shall have filed with the Commission;
(f) if and when any member of the Controlled Group (i) gives notice
to the PBGC of any "Reportable Event" with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given notice of any such
Reportable Event, a copy of the notice of such Reportable Event given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Section 4201 or 4204 of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated under Section 4241, 4245
or 4041A of ERISA, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Code, a copy
of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed
with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Plan or Multiemployer Plan or makes any
amendment to any Plan which has resulted or which may reasonably be expected
to result in the imposition of a lien or the posting of a bond or other
security under Section 401(a)(29) or 412(n) of the Code, or Section 302(f) or
307 of ERISA, a certificate of the chief financial officer or the chief
accounting officer of the Company setting forth details as to such occurrence
and action, if any, which the Company or applicable member of the Controlled
Group is required or proposes to take;
(g) from time to time such additional information regarding the
financial position or business of the Company and its Subsidiaries as the Bank
may reasonably request.
(h) (i) copies of each of the notices, reports and certificates
which are required to be given to the Trustee by the Company under any of the
Bond Documents and (ii) upon request of the Bank, copies of each of the
notices, reports and certificates which are required to be given to the
holders of the Bonds by the Trustee under the Indenture to the extent (A)
received by the Company and (B) not delivered to the Bank by the Trustee; and
(i)as promptly as possible and in any event within ten Business Days after the
Company has knowledge thereof, notice of any downgrade in the S&P Rating or
the Xxxxx'x Rating.
.c2.Section 5.2. Payment of Obligations;. The Company will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all their respective material obligations and liabilities, except
where the same may be contested in good faith by appropriate proceedings, and
will maintain, and will cause each Subsidiary to maintain, in accordance with
and to the extent required by generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
.c2.'Section 5.3.Maintenance of Property; Insurance';. (a) The
Company will keep, and will cause each of its Subsidiaries to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) The Company will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Company or in such Subsidiary's own name)
with financially sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts, against at least such
risks and with no greater than such risk retention as are customarily
maintained, insured against or retained, as the case may be, in the same
general area by companies of established repute engaged in the same or a
similar business; and will furnish to the Bank, upon reasonable request from
the Bank, information presented in reasonable detail as to the insurance so
carried.
.c2.Section 5.4. Conduct of Business and Maintenance of Existence;.
The Company will continue, and will cause each Material Subsidiary to
continue, to engage in business of the same general type as now conducted by
the Company and its Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Material Subsidiary to preserve, renew
and keep in full force and effect their respective corporate existence and
their respective rights, privileges and franchises necessary or desirable in
the normal conduct of business; provided that neither the Company not any
Material Subsidiary shall be required to preserve any such right, privilege or
franchise if the Company's or such Subsidiary's Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company or such Subsidiary; and provided further that
nothing in this Section 5.4 shall prohibit (i) any transaction expressly
permitted under Section 5.9, (ii) the merger of a Subsidiary into the Company
or the merger or consolidation of a Subsidiary with or into another Person if
the corporation surviving such consolidation or merger is a Subsidiary and if,
in each case, after giving effect thereto, no Event of Default shall have
occurred and be continuing, (iii) the transfer of assets, rights, privileges,
licenses, franchises or businesses from one Subsidiary to another Subsidiary
or (iv) the termination of the corporate existence of any Subsidiary if the
Company in good faith determines that such termination is in the best interest
of the Company and is not materially disadvantageous to the Bank.
.c2.Section 5.5. Compliance with Laws;. The Company will comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) except where the necessity
or fact of compliance therewith is contested in good faith by appropriate
proceedings.
.c2.Section 5.6. Inspection of Property, Books and Records;. The
Company will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities; and
will permit, and will cause each Subsidiary to permit, representatives of the
Bank at the Bank's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books
and records and to discuss their respective affairs, finances and accounts
with their respective officers, employees and independent public accountants,
all at such reasonable times and as often as may reasonably be desired.
.c2.Section 5.7. Use of Proceeds;. None of the proceeds of any
drawing under the Letter of Credit will be used, directly or indirectly, by
the Company for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U.
.c2.Section 5.8. Negative Pledge;. The Company will not create,
assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except: (i) Liens in existence on the date hereof and (ii)
Liens that would not result in a default under the Indenture dated November 1,
1943 between the Company and The First National Bank of Chicago and X.X.
Xxxxxxx, as successor trustees, as amended by the indentures supplemental
thereto through the date hereof.
.c2.Section 5.9. Prohibition of Fundamental Changes;. The Company
shall not:
(a) enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); or
(b) convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or a substantial portion all of
its business or property.
Notwithstanding the foregoing provisions of this Section 5.11, the
Company may merge or consolidate with any other Person if the Company is the
surviving corporation or the surviving corporation assumes the liabilities of
the Company by operation of law or otherwise.
.c2.Section 5.10. Minimum Consolidated Net Worth;. The Company
shall not permit its Consolidated Net Worth to be less than $950,000,000 at
any time.
.c2.Section 5.11. Bond Documents;. The Company will perform and
comply in all material respects all terms, covenants and conditions of each of
the Related Documents to which it is a party.
.c2.Section 5.12. Official Statement;. The Company will not refer
to the Bank in any official statement or offering memorandum (other than the
Preliminary Official Statement relating to the Bonds dated October 26, 1995 or
the Official Statement) or make any changes in reference to the Bank in any
revision of the Official Statement.
.c2.Section 5.13. Optional Redemptions;. The Company will not
permit an optional redemption or purchase for purposes of cancellation of the
Bonds; provided, however, that if the Company has deposited with the Bank or
the Trustee an amount equal to the principal amount of the Bonds to be
redeemed or purchased, the Bank shall consent to such optional redemption or
purchase to the extent of such amounts.
Article VI
.c.Article VIEvents of Default
.c2.Section 6.1. Events of Default;. If any of the following
events shall occur and be continuing, each such event shall be an "Event of
Default":
(a) any material representation or warranty made by the Company in
this Agreement or the Bond Documents or in any certificate, agreement,
instrument or statement contemplated by or made or delivered pursuant to or in
connection herewith or therewith, shall prove to have been false or misleading
in any material respect when made;
(b) any "event of default" shall have occurred under any of the
Bond Documents (as defined respectively therein);
(c) default in payment by the Company of (i) any Obligations (other
than interest or any Letter of Credit Fee) required to be paid or reimbursed
under this Agreement to the Bank when and as the same shall become due and
payable as herein provided or (ii) any interest or Letter of Credit Fee within
5 days after the same is due;
(d) default in any material respect in the due observance or
performance by the Company of any covenant set forth in Section 5.8, 5.9, 5.10
or 5.13;
(e) default in any material respect in the due observance or
performance by the Company of any other term, covenant or agreement set forth
in this Agreement and such default has not been remedied within thirty (30)
days after receiving notice from the Bank;
(f) any material provision of this Agreement, or any of the Bond
Documents shall cease to be valid and binding, or the Company or any
governmental authority shall contest the validity or binding effect of any
such provision, or the Company, or any agent or trustee on behalf of the
Company, shall deny that the Company has any or further liability under this
Agreement or any of the Bond Documents;
(g) the Company makes an assignment for the benefit of creditors,
files a petition in bankruptcy, is unable generally to pay its debts as they
come due, is adjudicated insolvent or bankrupt or there is entered any order
or decree granting relief in any involuntary case commenced against the
Company under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or if the Company petitions or applies to any tribunal
for any receiver, trustee, liquidator, assignee or custodian or other similar
official of the Company, or commences any proceeding in a court of law for a
reorganization, arrangement, dissolution, liquidation or other similar
procedure under any bankruptcy law or laws for the relief of debtors, whether
now or hereafter in effect, or if there is commenced against the Company any
such proceeding in a court of law which remains undismissed or shall not be
discharged, vacated or stayed, or such jurisdiction shall not be relinquished,
within sixty (60) days after commencement, or the Company by any act,
indicates its consent to, approval of, or acquiescence in any such proceeding
in a court of law, or to an order for relief in an involuntary case commenced
against the Company under any such law, or the appointment of any receiver,
trustee, liquidator, assignee, custodian or other similar official for the
Company, or if the Company suffers any such receivership, trusteeship,
liquidation, assignment or custodianship or other similar procedure to
continue undischarged for a period of sixty (60) days after commencement or if
the Company takes any action for the purposes of effecting the foregoing;
(h) the maturity of any indebtedness of the Company under any
agreement or obligation in an aggregate principal amount exceeding $25,000,000
shall be accelerated;
(i) judgments or orders for the payment of money in excess of
$25,000,000 shall be rendered against the Company and such judgments or orders
shall continue unsatisfied and unstayed for a period of 30 days; or
(j) the Parent at any time shall fail to directly or indirectly own
and control beneficially and of record 51% of the outstanding voting stock of
the Company; or
(k) the Trustee shall fail to have a valid and enforceable pledge
and assignment of the Trust Estate.
.c2.Section 6.2. Remedies;. Upon the occurrence of any Event of
Default the Bank may exercise any one or more of the following rights and
remedies in addition to any other remedies herein or by law provided:
(a) by written notice to the Company and the Trustee, require that
the Company immediately prepay to the Bank in immediately available funds an
amount equal to the Available Amount of the Letter of Credit (such amount to
be held by the Bank as collateral security for the Obligations and applied by
the Bank to reimburse the Bank for subsequent drawings with respect to the
Letter of Credit); provided, however, that in the case of an Event of Default
described in Section 6.1(g), such prepayment of Obligations shall
automatically become due and payable without any notice;
(b) declare the principal of and interest on the Obligations owing
hereunder immediately due and payable, notwithstanding the provisions of
Section 2.3 and such amounts shall thereupon become immediately due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Company, provided, however, that upon the
occurrence of an Event of Default under Section 6.1(g) such acceleration shall
automatically occur;
(c) give notice of the occurrence of an Event of Default to the
Trustee and instruct the Trustee to accelerate the Bonds, thereby causing the
Letter of Credit to expire fifteen (15) days thereafter;
(d) pursue any rights and remedies it may have under the Related
Documents; or
(e) pursue any other remedy available at law or in equity.
.c.ARTICLE VII
MISCELLANEOUS
.c2.Section 7.1. Taxes;. (a) For the purposes of this Section 7.1,
the following terms have the following meanings:
"Taxes" - means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by
the Company pursuant to this Agreement and all penalties and interest with
respect thereto, excluding (i) taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the laws of which the
Bank is organized or in which its principal executive office is located, in
which its Lending Office is located or in which it would be subject to tax due
to some connection other than that created by this Agreement and (ii) any
United States withholding tax imposed on such payments but only to the extent
that the Bank is subject to United States withholding tax on the Date of
Issuance.
"Other Taxes" - means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies and
all penalties and interest with respect thereto, which arise from the making
of any payment pursuant to this Agreement or from the execution or delivery of
this Agreement or the Letter of Credit.
(b) Any and all payments by the Company to or for the account of
the Bank hereunder shall be made without deduction for any Taxes or Other
Taxes; provided that, if the Company shall be required by law to deduct any
Taxes or Other Taxes from any such payments, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Bank
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Company
shall furnish to the Bank, the original or a certified copy of a receipt
evidencing payment thereof.
(c) The Company agrees to indemnify the Bank for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
on amounts payable under this Section) paid by the Bank. This indemnification
shall be paid within 15 days after the Bank makes appropriate demand therefor.
(d) On or prior to the date of its execution and delivery of this
Agreement, and from time to time thereafter if requested in writing by the
Company (but only so long as the Bank remains lawfully able to do so), the
Bank shall provide the Company with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that the Bank is entitled to benefits under an income tax
treaty to which the United States is a party which exempts the Bank from
United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of the Bank or certifying that the income
receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States.
(e) For any period with respect to which the Bank has failed to
provide the Company with the appropriate form pursuant to Section 7.1(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), the Bank shall not be entitled to indemnification under Section
7.1(b) or (c) with respect to Taxes imposed by the United States; provided
that, if the Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, becomes subject to Taxes because of its failure to deliver
a form required hereunder, the Company shall take such steps (at the expense
of the Bank) as the Bank shall reasonably request to assist the Bank to
recover such Taxes.
(f) If the Company is required to pay additional amounts to or for
the account of the Bank pursuant to this Section, then the Bank will change
the jurisdiction of its Lending Office if, in the judgment of the Bank, such
change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is nor otherwise disadvantageous to the Bank in its
sole judgment.
.c2.Section 7.2. Increased Costs;. (a)If after the Date of
Issuance any change in any applicable law, treaty, regulation, guideline or
directive (including, without limitation, regulations and guidelines with
respect to capital adequacy and Regulation D promulgated by the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect) or any new law, treaty, regulation, guideline or directive, or any
interpretation of any of the foregoing by any authority charged with the
administration or interpretation thereof or any central bank of other fiscal,
monetary or other authority having jurisdiction over the Bank or the
transactions contemplated by this Agreement (whether or not having the force
of law) (all of the foregoing being referred to as a "Regulatory Change")
shall:
(i) subject the Bank to any tax, deduction or withholding
with respect to the Bonds, the Letter of Credit or this
Agreement, or any amount paid or to be paid by the Bank as the
issuer of the Letter of Credit (other than any tax measured by
or based upon the overall net income of the Bank imposed by any
jurisdiction having control over the Bank);
(ii) impose, modify, require, make or deem applicable to
the Bank any reserve requirement (other than reserves against
"Eurocurrency liabilities" under paragraph (b) below, capital
requirement, special deposit requirement, insurance assessment
or similar requirement against any assets held by, deposits
with or for the account of, or loans, letters of credit or
commitments by, an office of the Bank;
(iii) change the basis of taxation of payments due the
Bank under this Agreement or the Bonds (other than by a change
in taxation of the overall net income of the Bank);
(iv) cause or deem letters of credit to be assets held by
the Bank and/or as deposits on its books; or
(v) impose upon the Bank any other condition with respect
to such amount paid or payable to or by the Bank or with
respect to this Agreement, the Letter of Credit or the Bonds;
and the result of any of the foregoing is to increase the cost to the Bank of
making any payment or maintaining the Letter of Credit, or to reduce the
amount of any payment (whether of principal, interest or otherwise) receivable
by the Bank, or to reduce the rate of return on the capital of the Bank
(taking into consideration the Bank's policies with respect to capital
adequacy) or to require the Bank to make any payment on or calculated by
reference to the gross amount of any sum received by it, or to increase the
cost to the Bank of making or maintaining any Eurodollar Loan, or to reduce
the amount of any sum received or receivable by the Bank under this Agreement
with respect thereto, in each case by an amount which the Bank in its
reasonable judgment deems material, then:
(1) the Bank shall promptly notify the Company in writing of the
happening of such event and will designate a different Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of the Bank, be otherwise
disadvantageous to the Bank;
(2) the Bank shall promptly deliver to the Company a certificate
stating the change which has occurred or the reserve requirements or other
costs or conditions which have been imposed on the Bank or the request,
direction or requirement with which it has complied, together with the date
thereof, the amount of such increased cost, reduction or payment and a
reasonably detailed description of the way in which such amount has been
calculated, and the Bank's determination of such amounts, absent fraud or
manifest error, shall be conclusive (in determining such amount, the Bank may
use any reasonable averaging and attribution methods); and
(3) the Company shall pay to the Bank, from time to time as
specified by the Bank, such amount as will compensate the Bank for such
additional cost, reduction or payment.
The protection of this paragraph shall be available to the Bank
regardless of any possible contention of invalidity or inapplicability of the
law, regulation or condition which has been imposed; provided, however, that
if it shall later be determined by the Bank that any amount so paid by the
Company pursuant to this Section 7.1 is in excess of the amount payable under
the provisions hereof, the Bank shall refund such excess amount to the
Company.
Notwithstanding the foregoing Section 7.2(a), the Company shall only
be obligated to compensate the Bank for any amount arising or accruing during
(i) any time or period commencing not more than 90 days prior to the date on
which the Bank notifies the Company that it proposes to demand such
compensation and identifies to the Company the statute, regulation or other
basis upon which the claimed compensation is or will be based and (ii) any
time or period during which, because of the retroactive application of such
statute, regulation or other basis, the Bank did not know that such amount
would arise or accrue.
(b) Without limiting the effect of the foregoing, the Company shall
pay to the Bank on the last day of each Interest Period so long as the Bank is
maintaining reserves against "Eurocurrency liabilities" under Regulation D (or
so long as the Bank is, by reason of any Regulatory Change, maintaining
reserves against any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Loans is determined as
provided in this Agreement or against any category of extensions of credit or
other assets of the Bank that includes any Eurodollar Loans) an additional
amount (determined by the Bank and notified to the Company) equal to the
product of the following for each Eurodollar Loan for each day during such
Interest Period.
(i) the principal amount of such Eurodollar Loan
outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest
accrues on such Eurodollar Loan for such Interest Period as
provided in this Agreement (less the LIBOR Margin) and the
denominator of which is one minus the effective rate (expressed
as a decimal) at which such reserve requirements are imposed on
the Bank on such day minus (y) such numerator; and
(iii) 1/360.
.c2.'Section 7.3.Right of Setoff; Other Collateral';. (a) Upon the
occurrence and during the continuance of an Event of Default, the Bank is
hereby authorized at any time and from time to time without notice to the
Company (any such notice being expressly waived by the Company), and to the
fullest extent permitted by law, to setoff, to exercise any banker's lien or
any right of attachment and apply any and all balances, credits, deposits
(general or special, time or demand, provisional or final), accounts or monies
at any time held and other indebtedness at any time owing by the Bank to or
for the account of the Company (irrespective of the currency in which such
accounts, monies or indebtedness may be denominated and the Bank is authorized
to convert such accounts, monies and indebtedness into U.S. dollars) against
any and all of the Obligations of the Company, whether or not the Bank shall
have made any demand for any amount owing to the Bank by the Company.
(b)The rights of the Bank under this Section 7.3 are in addition to, in
augmentation of, and, except as specifically provided in this Section 7.3, do
not derogate from or impair other rights and remedies (including, without
limitation, other rights of setoff) which the Bank may have.
.c2.Section 7.4. Indemnity, Costs and Expenses;. (a) The Company
to indemnify the Bank, its affiliates and the respective directors, officers,
agents and employees of the foregoing (each and "Indemnitee") and hold each
Indemnitee harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind, including, without limitation, the reasonable
fees and disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought
or threatened relating to this Agreement, the Letter of Credit, the Liquidity
Advances, any drawing under the Letter of Credit or any actual or proposed use
of proceeds of the drawings under the Letter of Credit; except, only if, and
to the extent that any such claim, damage, loss, liability, cost or expense
shall be caused by the willful misconduct or gross negligence of such
Indemnitee in performing or failing to perform its obligations under this
Agreement or in making payment against a drawing presented under the Letter of
Credit which does not comply with the terms thereof (it being understood and
agreed by the parties hereto that in making such payment the Bank's exclusive
reliance on the documents presented to the Bank in accordance with the terms
of the Letter of Credit as to any and all matters set forth therein, whether
or not any statement or any document presented pursuant to the Letter of
Credit proves to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein proves to be untrue or inaccurate in any respect
whatsoever shall not be deemed willful misconduct or gross negligence of the
Bank).
(b) The Company shall pay (i) all reasonable out-of-pocket expenses
of the Bank, including reasonable fees and disbursements of special counsel
for the Bank, in connection with any waiver or consent hereunder or any
amendment hereof or any Potential Default or Event of Default hereunder and
(ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Bank, including (without duplication) the reasonable fees and
disbursements of outside counsel and the allocated cost of inside counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.
.c2.Section 7.5. Obligations Absolute;. The obligations of the
Company under this Agreement shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement
under all circumstances whatsoever.
.c2.Section 7.6. Liability of the Bank;. The Company assumes all
risks of the acts or omissions of the Trustee, the Remarketing Agent, the
Paying Agent or any agent of the Trustee, the Remarketing Agent or the Paying
Agent and any transferee of the Letter of Credit with respect to their use of
the Letter of Credit. Neither the Bank nor any of its officers or directors
shall be liable or responsible for (a) the use of the Letter of Credit or for
any acts or omissions of the Trustee and any transferee in connection
therewith, (b) the validity or genuineness of documents, or of any endorsement
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, (c) payment by the Bank against
presentation of documents which do not comply with the terms of the Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit, or (d) any other circumstances whatsoever
in making or failing to make payment under the Letter of Credit; provided,
however, that the Company shall have a claim against the Bank, and the Bank
shall be liable to the Company, to the extent of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by (i) the Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit comply with the terms
of the Letter of Credit or (ii) the Bank's wrongful failure to make lawful
payment under the Letter of Credit after the presentation to the Bank by the
Trustee or a successor trustee under the Indenture of a draft and certificate
strictly complying with the terms and conditions of the Letter of Credit (it
being understood that in making such payment the Bank's exclusive reliance on
the documents presented to the Bank in accordance with the terms of the Letter
of Credit as to any and all matters set forth therein, whether or not any
statement or any document presented pursuant to the Letter of Credit proves to
forged, fraudulent, invalid or insufficient in any respect or any statement
whatsoever, shall not be deemed willful misconduct or gross negligence of the
Bank). The Bank is hereby expressly authorized and directed to honor any
demand for payment which is made under the Letter of Credit without regard to,
and without any duty on its part to inquire into the existence of, any
disputes or controversies between the Issuer, the Company, the Remarketing
Agent, the Trustee, the Paying Agent, or any other person or the respective
rights, duties or liabilities of any of them, or whether any facts or
occurrences represented in any of the documents presented under the Letter of
Credit are true and correct.
.c2.Section 7.7. Participants, Etc;. The Bank shall have the right
to grant participations in the Letter of Credit to one or more other
commercial banking institutions with the prior written consent of the Company
(which consent shall not be unreasonably withheld), and such participants
shall be entitled to the benefits of this Agreement, including, without
limitation, Sections 2.15, 7.1, 7.2, 7.3, 7.4 and 7.15 hereof, to the same
extent as if they were a direct party hereto; provided, however, that no such
participation by any such participant shall in any way affect the obligation
of the Bank under the Letter of Credit; and provided further that no such
participant shall be entitled to receive payment hereunder of any amount
greater than the amount which would have been payable had the Bank not granted
a participation to such participant. Except as expressly provided in this
Agreement, the Bank may not assign or otherwise transfer all or any part of
its rights or obligations under this Agreement, the Letter of Credit or the
other Related Documents without the prior written consent of the Company. Any
agreement pursuant to which the Bank may grant such a participating interest
shall provide that the Bank shall retain the sole right and responsibility to
take or refrain from taking any action hereunder or under the other Related
Documents or to enforce the obligations of the Company hereunder including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement or any other Related Document; provided
that such participation agreement may provide that the Bank will not, without
the consent of the participating banks, agree to any modification, amendment
or waiver of this Agreement, which would (i) increase the Original Stated
Amount of the Letter of Credit (other than automatic reinstatements as
provided in the Letter of Credit), (ii) reduce the principal of or rate of
interest on any Obligation, (iii) postpone the date fixed for any payment of
principal of or interest on any Obligation, or (iv) extend the Stated
Expiration Date of the Letter of Credit; and provided further that such
participation agreement may provide that the Bank will not consent to any
other amendment to this Agreement without the consent of participating banks
then holding at least 51% of the risk incident to the Letter of Credit.
.c2.Section 7.8. Survival of this Agreement;. All covenants,
agreements, representations and warranties made in this Agreement shall
survive the issuance by the Bank of the Letter of Credit and shall continue in
full force and effect so long as the Letter of Credit shall be unexpired or
any sums drawn or due hereunder shall be outstanding and unpaid, regardless of
any investigation made by any person. Wherever in this Agreement the Bank is
referred to, such reference shall be deemed to include the successors and
assigns of the Bank and all covenants, promises and agreements by or on behalf
of the Company which are contained in this Agreement shall inure to the
benefit of the successors and assigns of the Bank. The rights and duties of
the Company, however, may not be assigned or transferred, except as
specifically provided in this Agreement or with the prior written consent of
the Bank, and all obligations of the Company hereunder shall continue in full
force and effect notwithstanding any assignment by the Company of any of its
rights or obligations under any of the Bond Documents or any entering into, or
consent by the Company, to any supplement or amendment to any of the Bond
Documents.
.c2.Section 7.9. Modification of this Agreement;. No amendment,
modification or waiver of any provision of this Agreement or the Letter of
Credit shall be effective unless the same shall be in writing and signed by
the Bank, and no consent to any departure by the Company therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Bank. Any such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Company in any case shall entitle the Company to any other or further notice
or demand in the same, similar or other circumstances.
.c2.Section 7.10. Waiver of Rights by the Bank;. No course of
dealing or failure or delay on the part of the Bank in exercising any right,
power or privilege hereunder or under the Letter of Credit shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise, or the exercise of any other right or privilege.
The rights of the Bank under this Agreement and the Letter of Credit are
cumulative and not exclusive of any rights or remedies which the Bank would
otherwise have.
.c2.Section 7.11. Severability;. In case any one or more of the
provisions contained in this Agreement shall be held or deemed to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby. The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
.c2.'Section 7.12.Governing Law; Submission to Jurisdiction';. This
Agreement shall be governed by and construed in accordance with the laws of
the State of Texas. The Company hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
Texas and of any Texas State court sitting in Houston for purposes of all
legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
.c2.Section 7.13. Notices;. (a) Except as otherwise specified
herein, all notices hereunder shall be given by United States certified or
registered mail, by telegram or by other telecommunication device capable of
creating written record of such notice and its receipt. Notices hereunder
shall be effective when received and shall be addressed:
If to the Bank, to:
ABN AMRO Bank N.V.
Houston Agency
Xxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
ABN AMRO North America
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxx and Xxxxx XxXxxxxx,
Utilities Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to:
Central Power and Light Company
x/x Xxxxxxx xxx Xxxxx Xxxx Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Director, Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Issuer, to:
Xxxxxxxxx-Xxxxxx River Authority
000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Director of Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Remarketing Agent, to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee, to:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address for purposes hereof by notice to
the other parties.
(b) The Bank agrees to give immediate notice, promptly confirmed in
writing, to the Remarketing Agent of any notice of an Event of Default given
to the Trustee by the Bank.
.c2.Section 7.14. Survival of Certain Obligations;. The obligation
of the Company to reimburse the Bank pursuant to Sections 7.1, 7.3 and 7.14
shall survive the payment of the Bonds and the termination of this Agreement.
.c2.Section 7.15. Taxes and Expenses;. Any transfer, stamp,
documentary or other similar taxes payable or ruled payable by any
Governmental Body in respect of this Agreement, the Letter of Credit or the
Bonds shall be paid by the Company, together with interest and penalties, if
any; provided, however, that the Company may reasonably contest any such taxes
with the prior written consent of the Bank which consent shall not be
unreasonably withheld.
.c2.Section 7.16. Headings;. The table of contents and captions in
this Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.
.c2.Section 7.17. Counterparts;. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but both
or all of which, when taken together, shall constitute one instrument, and
shall become effective when copies hereof bearing the signatures of each of
the parties hereto shall be delivered to the Company and the Bank.
.c2.Section 7.18. Waiver of Jury Trial;. Each of the Company and
the Bank hereby irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
Please signify your agreement and acceptance of the foregoing by
executing this Letter of Credit Agreement in the space provided below.
.c4.Signature;Very truly yours,
ABN AMRO Bank N.V., acting
through its Houston Agency
By:__________________________
Title:_______________________
By:__________________________
Title:_______________________
Accepted and agreed to:
Central Power and Light Company
By:___________________________
Title:________________________
APPENDIX I
IRREVOCABLE TRANSFERABLE LETTER OF CREDIT
November 2, 1995
**U.S. $43,411,550
No. S601662
The Bank of New York, as trustee (the "Trustee")
under the Indenture of Trust dated as of October 1,
1995 (the "Indenture"), between Xxxxxxxxx-Xxxxxx
River Authority (the "Issuer"), and the Trustee
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Ladies and Gentlemen:
We hereby establish in your favor as Trustee for the benefit of the
holders of the Bonds (as hereinafter defined), our irrevocable transferable
Letter of Credit No. ________ for the account of Central Power and Light
Company (the "Company"), whereby we hereby irrevocably authorize you to draw
on us from time to time, from and after the date hereof to and including the
earliest to occur of our close of business on: (i) November 2, 2000 (as
extended from time to time, the "Stated Expiration Date"), (ii) the earlier of
(A) the date which is fifteen (15) days following the conversion of all of the
Bonds to either the Multiannual Mode or Fixed Rate Mode (as each term is
defined in the Indenture) as such date is specified in a certificate in the
form of Exhibit A hereto (the "Conversion Date") or (B) the date on which the
Bank honors a drawing under the Letter of Credit on or after the conversion of
all of the Bonds to either the Multiannual Mode or Fixed Rate Mode, (iii) the
date which is fifteen (15) days following receipt from you of a certificate in
the form set forth as Exhibit B hereto, (iv) the date on which an Acceleration
Drawing is honored by us, and (v) the date which is fifteen (15) days
following receipt by you of a written notice from us specifying the occurrence
of an Event of Default under the Letter of Credit Agreement dated as of
October 1, 1995, between the Company and us (the "Letter of Credit Agreement")
and directing you to accelerate the Bonds (the "Termination Date"), a maximum
aggregate amount not exceeding Forty Three Million Four Hundred Eleven
Thousand Five Hundred Fifty United States Dollars (U.S. $43,411,550 - the
"Original Stated Amount") to pay principal of and accrued interest on, or the
purchase price of, the $40,890,000 Pollution Control Revenue Refunding Bonds
(Central Power and Light Company Project) Series 1995 issued by the Issuer
(the "Bonds"), in accordance with the terms hereof (said $43,411,550 having
been calculated to be equal to $40,890,000, the original principal amount of
the Bonds, plus $2,521,550 which is at least 185 days' accrued interest on
said principal amount of the Bonds at the rate of twelve percent (12%) per
annum (the "Cap Interest Rate")). This credit is available to you against
presentation of the following documents (the "Payment Documents") presented to
ABN AMRO Bank N.V., acting through its Houston Agency (the "Bank"), as
described below:
A certificate (with all blanks appropriately completed)
(i) in the form attached as Exhibit C hereto to pay
accrued interest on the Bonds as provided for under
Section 4.03(e) of the Indenture (an "Interest Drawing"),
(ii) in the form attached as Exhibit D hereto to pay the
principal amount of and accrued interest on the Bonds in
respect of any redemption of the Bonds as provided for in
Section 4.03(e) of the Indenture (a "Redemption Drawing"),
provided that in the event the date of redemption or
purchase coincides with an Interest Payment Date (as
defined in the Indenture) the Redemption Drawing shall not
include any accrued interest on the Bonds (which interest
is payable pursuant to an Interest Drawing), (iii) in the
form attached as Exhibit E hereto, to allow The Bank of
New York, as Paying Agent (together with its permitted
successors and assigns, the "Paying Agent"), to pay the
purchase price of Bonds tendered for purchase as provided
for in Section 2.10(b)(ii) of the Indenture which have not
been successfully remarketed or for which the purchase
price has not been received by the Paying Agent by 10:00
a.m., Houston time, on the purchase date (a "Liquidity
Drawing"), provided that in the event the purchase date
coincides with an Interest Payment Date, the Liquidity
Drawing shall not include any accrued interest on the
Bonds (which interest is payable pursuant to an Interest
Drawing), (iv) in the form attached as Exhibit F hereto,
to pay the principal of and accrued interest in respect of
Bonds the payment of which has been accelerated pursuant
to Section 6.02 of the Indenture (an "Acceleration
Drawing"), or (v) in the form attached as Exhibit G hereto
to pay the principal amount of Bonds maturing on July 1,
2017 (a "Stated Maturity Drawing"), each certificate to
state therein that it is given by your duly authorized
officer and dated the date such certificate is presented
hereunder. No drawings shall be made under this Letter of
Credit for Company Held Bonds or Bank Bonds (as each term
is defined in the Indenture).
All drawings shall be made by presentation of each Payment Document
at our xxxxxx xx Xxxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 as
aforesaid, by tested telex (at telex number 6868916 Answerback: ABN INTL HOU)
or by telecopier (at telecopier number (000) 000-0000), Attention: Trade
Services, without further need of documentation, including the original of
this Letter of Credit, it being understood that each Payment Document so
submitted is to be the sole operative instrument of drawing. You shall use
your best efforts to give telephonic notice of a drawing to the Bank at its
Houston Agency, ((000) 000-0000) on the Business Day preceding the day of such
drawing (but such notice shall not be a condition to drawing hereunder and you
shall have no liability for not doing so).
We agree to honor and pay the amount of any Interest, Redemption,
Liquidity, Acceleration or Stated Maturity Drawing if presented in compliance
with all of the terms of this Letter of Credit. If such drawing, other than a
Liquidity Drawing, is presented prior to 4:00 P.M., New York time, on a
Business Day, payment shall be made to the account number or address
designated by you of the amount specified, in immediately available funds, by
11:00 A.M., New York time, on the following Business Day. If any such
drawing, other than a Liquidity Drawing, is presented at or after 4:00 P.M.,
New York time, on a Business Day, payment shall be made to the account number
or address designated by you of the amount specified, in immediately available
funds, by 2:30 P.M., New York time, on the following Business Day. If a
Liquidity Drawing is presented prior to 12:00 Noon, New York time, on a
Business Day, payment shall be made to the account number or address
designated by you of the amount specified, in immediately available funds, by
3:00 P.M., New York time, on the same Business Day. If a Liquidity Drawing is
presented at or after 12:00 Noon, New York time, payment shall be made to the
account number or address designated by you of the amount specified, in
immediately available funds, by 11:00 A.M., New York time, on the following
Business Day. Payments made hereunder shall be made by wire transfer to you
or by deposit into your account with us in accordance with the instructions
specified by the Trustee in the drawing certificate relating to a particular
drawing hereunder. "Business Day" means any day other than a day on which
banking institutions in the city in which the principal corporate trust office
of the Trustee or the principal corporate trust office of the Paying Agent or
the principal office of the Remarketing Agent (as defined in the Indenture) is
located, or in the City of Houston, Texas, are required or authorized by law
or regulation to remain closed, or other than a day on which the New York
Stock Exchange is closed.
The Available Amount (as hereinafter defined) will be reduced
automatically by the amount of any drawing hereunder; provided, however, that
the amount of any Interest Drawing hereunder, less the amount of the reduction
in the Available Amount attributable to interest as specified in a certificate
in the form of Exhibit D or H hereto, shall be automatically reinstated
immediately upon payment by us of such drawing. After payment by us of a
Liquidity Drawing, the obligation of the Bank to honor drawings under this
Letter of Credit will be automatically reduced by an amount equal to the
Original Purchase Price of any Bonds (or portions thereof) purchased pursuant
to said drawing. In addition, prior to the conversion of all of the Bonds to
either the Multiannual Mode or Fixed Rate Mode, in the event of the
remarketing of the Bonds (or portions thereof) previously purchased with the
proceeds of a Liquidity Drawing, our obligation to honor drawings hereunder
will be automatically reinstated concurrently upon receipt by us, or the
Trustee or the Paying Agent on our behalf, of an amount equal to the Original
Purchase Price of such Bonds (or portion thereof); the amount of such
reinstatement shall be equal to the Original Purchase Price of such Bonds (or
portions thereof). "Original Purchase Price" shall mean the principal amount
of any Bond purchased with the proceeds of a Liquidity Drawing plus the amount
of accrued interest on such Bond paid with the proceeds of a Liquidity Drawing
(and not pursuant to an Interest Drawing) upon such purchase.
Upon receipt by us of a certificate of the Trustee in the form of
Exhibit D or H hereto, the Letter of Credit will automatically and permanently
reduce the amount available to be drawn hereunder by the amount specified in
such certificate. Such reduction shall be effective as of the next Business
Day following the date of delivery of such certificate.
Upon any permanent reduction of the amounts available to be drawn
under this Letter of Credit, as provided herein, we may deliver to you a
substitute Letter of Credit in exchange for this Letter of Credit or an
amendment to this Letter of Credit substantially in the form of Exhibit I
hereto to reflect any such reduction. If we deliver to you such a substitute
Letter of Credit you shall simultaneously surrender to us for cancellation the
Letter of Credit then in your possession. The "Available Amount" shall mean
the Original Stated Amount (i) less the amount of all prior reductions
pursuant to Interest, Redemption, Liquidity, Acceleration or Stated Maturity
Drawings, (ii) less the amount of any reduction thereof pursuant to a
reduction certificate in the form of Exhibit D or H hereto to the extent such
reduction is not already accounted for by a reduction in the Available Amount
pursuant to (i) above, (iii) plus the amount of all reinstatements as above
provided.
Prior to the Termination Date, we may extend the Stated Expiration
Date from time to time at the request of the Company by delivering to you an
amendment to this Letter of Credit in the form of Exhibit K hereto designating
the date to which the Stated Expiration Date is being extended. Each such
extension of the Stated Expiration Date shall become effective on the Business
Day following delivery of such notice to you and thereafter all references in
this Letter of Credit to the Stated Expiration Date shall be deemed to be
references to the date designated as such in such notice. Any date to which
the Stated Expiration Date has been extended as herein provided may be
extended in a like manner.
Upon the Termination Date this Letter of Credit shall automatically
terminate and be delivered to the Bank for cancellation.
This Letter of Credit is transferable in whole only to your
successor as Trustee. Any such transfer (including any successive transfer)
shall be effective upon receipt by us (which receipt shall be subsequently
confirmed in writing to the transferor and the transferee by the Bank) of a
signed copy of the instrument effecting each such transfer signed by the
transferor and by the transferee in the form of Exhibit J hereto (which shall
be conclusive evidence of such transfer) and, in such case, the transferee
instead of the transferor shall, without the necessity of further action, be
entitled to all the benefits of and rights under this Letter of Credit in the
transferor's place; provided that, in such case, any certificates of the
Trustee to be provided hereunder shall be signed by one who states therein
that he is a duly authorized officer or agent of the transferee.
Communications with respect to this Letter of Credit shall be
addressed to us at ABN AMRO Bank N.V., Houston Agency, Three Riverway, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, Attention: Trade Services, specifically
referring to the number of this Letter of Credit.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by, and construed in accordance with, the
terms of the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (the "Uniform
Customs"), except for Article 41 and Article 48(g) thereof. As to matters not
governed by the Uniform Customs, this Letter of Credit shall be governed by
and construed in accordance with the laws of the State of Texas, including
without limitation the Uniform Commercial Code as in effect in the State of
Texas.
All payments made by us hereunder shall be made from our funds
and not with the funds of any other person.
This Letter of Credit sets forth in full the terms of our
undertaking, and such undertaking shall not in any way be modified or amended
by reference to any other document whatsoever.
ABN AMRO Bank N.V., acting
through its Houston Agency
By:_______________________
Its
By:________________________
Its
EXHIBIT A
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
NOTICE OF CONVERSION DATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. S601662 dated November 2, 1995 (the "Letter of Credit"),
which has been established by you for the account of Central Power and Light
Company, in favor of the Trustee.
The undersigned hereby certifies and confirms that the conversion of
all of the Bonds to either the Multiannual Mode or Fixed Rate Mode has
occurred on [insert date], and, accordingly, the Letter of Credit shall
terminate 15 days after such conversion in accordance with its terms.
All defined terms used herein which are not otherwise defined herein
shall have the same meaning as in the Letter of Credit.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
EXHIBIT B
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
NOTICE OF TERMINATION
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. S601662 dated November 2, 1995 (the "Letter of Credit"),
which has been established by you for the account of Central Power and Light
Company in favor of the Trustee.
The undersigned hereby certifies and confirms that [(i) no Bonds (as
defined in the Letter of Credit) remain Outstanding within the meaning of the
Indenture, (ii) all drawings required to be made under the Indenture and
available under the Letter of Credit have been made and honored, or (iii) an
Alternate Letter of Credit has been issued to replace the Letter of Credit
pursuant to the Indenture and the Installment Payment Agreement dated as of
October 1, 1995, between the Issuer and the Company, or (iv) the Company has
complied with the provisions of Section 10.05 of the Indenture to provide
other credit enhancement or no credit enhancement as security for the Bonds]
[1] and, accordingly, the Letter of Credit shall be terminated in accordance
with its terms.
All defined terms used herein which are not otherwise defined shall
have the same meaning as in the Letter of Credit.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
_______________________
[1] Insert appropriate subsection.
By Telecopy or Tested Telex
EXHIBIT C
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
INTEREST DRAWING CERTIFICATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
The undersigned individual, a duly authorized representative of
__________________ (the "Beneficiary"), hereby Certifies on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable
Transferable Letter of Credit No. S601662 dated November 2, 1995 (the "Letter
of Credit"), issued by ABN AMRO Bank N.V. (the "Bank") in favor of the
Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit);
and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of
Credit) under the Indenture.
2. The Beneficiary is entitled to make this drawing in the amount
of $_____________ under the Letter of Credit pursuant to the Indenture with
respect to the payment of interest due on all Bonds in the [Daily Mode]
[Weekly Mode] [Flexible Mode] [Monthly Mode] [Quarterly Mode] [Semiannual
Mode][1] outstanding on the Interest Payment Date (as defined in the
Indenture) occurring on [insert applicable date], other than Bank Bonds and
Company Held Bonds (as each term is defined in the Letter of Credit).
3. The amount of the drawing is equal to the amount required to be
drawn by the Trustee pursuant to Section 4.03(e) of the Indenture.
4. The amount of the drawing made by this Certificate was computed
in compliance with the terms of the Indenture and, when added to the amount of
any other drawing under the Letter of Credit made simultaneously herewith,
does not exceed the Available Amount (as defined in the Letter of Credit).
______________________
[1] Insert appropriate phrase.
5. Payment by the Bank pursuant to this drawing shall be made to
______________________________, ABA Number ________________________, Account
Number ___________________, Attention: ___________________________________,
Re: _________________________.
In Witness Whereof, this Certificate has been executed this ____ day
of ____________________, ______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy or Tested Telex
EXHIBIT D
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
REDEMPTION DRAWING AND REDUCTION CERTIFICATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
The undersigned individual, a duly authorized representative of
_____________ _____________________ (the "Beneficiary"), hereby Certifies on
behalf of the Beneficiary as follows with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. S601662 dated November 2, 1995
(the "Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank") in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee (as defined in the Letter of
Credit) under the Indenture.
2. The Beneficiary is entitled to make this drawing in the amount
of $____________ under the Letter of Credit pursuant to Section 4.03(e) of the
Indenture.
3. (a) The amount of this drawing is equal to (i) the principal
amount of Bonds to be redeemed by the Issuer (as defined in the Letter of
Credit) pursuant to Section 2.06[(a)][(b)[(c)][1] of the Indenture on [insert
applicable date] (the "Redemption Date") other than Bank Bonds and Company
Held Bonds (as each term is defined in the Letter of Credit), plus (ii)
interest on such Bonds accrued from the immediately preceding Interest Payment
Date (as defined in the Indenture) to the Redemption Date, provided that in
the event the Redemption Date coincides with an Interest Payment Date this
drawing does not include any accrued interest on such Bonds.
(b) Of the amount stated in paragraph 2 above:
(i) $______________ is demanded in respect of the
principal amount of the Bonds referred to in subparagraph (a)
above; and
_________________
[1] Insert appropriate subsection.
(ii) $_____________ is
demanded in respect of accrued
interest on such Bonds.
4. Payment by the Bank pursuant to this drawing shall be made to
_________________________, ABA Number _____________________________, Account
Number ____________________________, Attention: _____________________________,
Re: _________________________________.
5. The amount of the drawing made by this Certificate was computed
in compliance with the terms and conditions of the Indenture and, when added
to the amount of any other drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount (as defined in
the Letter of Credit).
6. Upon payment of the amount drawn hereunder, the Bank is hereby
directed to permanently reduce the Available Amount by $[insert amount of
reduction] and the Available Amount shall thereupon equal $[insert new
Available Amount]. The Available Amount has been reduced by an amount equal
to the principal of Bonds paid with this drawing and an amount equal to 185
days' interest thereon at the Cap Interest Rate (as defined in the Letter of
Credit).
7. Of the amount of the reduction stated in paragraph 6 above:
(i) $____________ is attributable to the principal amount
of Bonds redeemed; and
(ii) $___________ is attributable to interest on such
Bonds (i.e., 185 days' interest thereon at the Cap Interest
Rate).
8. The amount of the reduction in the Available Amount has been
computed in accordance with the provisions of the Letter of Credit.
9. Following the reduction, the Available Amount shall be at least
equal to the aggregate principal amount of the Bonds outstanding (to the
extent such Bonds are not Bank Bonds or Company Held Bonds (as each term is
defined in the Letter of Credit)) plus 185 days' interest thereon at the Cap
Interest Rate.
In Witness Whereof, this Certificate has been executed this ______
day of _______________, ______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy or Tested Telex
EXHIBIT E
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
LIQUIDITY DRAWING CERTIFICATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
The undersigned individual, a duly authorized representative of
___________ (the "Beneficiary") hereby Certifies as follows with respect to
(i) that certain Irrevocable Transferable Letter of Credit No. S601662 dated
November 2, 1995 (the "Letter of Credit"), issued by ABN AMRO Bank N.V. (the
"Bank") in favor of the Beneficiary; (ii) those certain Bonds (as defined in
the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make this drawing under the
Letter of Credit in the amount of $_____________ with respect to the payment
of the purchase price of Bonds tendered for purchase in accordance with
Section 2.10(b)(ii) of the Indenture and to be purchased on [insert applicable
date] (the "Purchase Date") which Bonds have not been remarketed as provided
in the Indenture or the purchase price of which has not been received by the
Paying Agent (as defined in the Letter of Credit) by 10:00 a.m., Houston time,
on said Purchase Date.
3. (a) The amount of the drawing is equal to (i) the principal
amount of Bonds to be purchased pursuant to the Indenture on the Purchase Date
other than Bank Bonds and Company Held Bonds (as each term is defined in the
Letter of Credit), plus (ii) interest on such Bonds accrued from the
immediately preceding Interest Payment Date (as defined in the Indenture) (or
if none, the date of issuance of the Bonds) to the Purchase Date, provided
that in the event the Purchase Date coincides with an Interest Payment Date
this drawing does not include any accrued interest on such Bonds.
(b) Of the amount stated in paragraph (2) above:
(i) $_________________ is demanded in respect of the
principal portion of the purchase price of the Bonds referred
to in subparagraph (2) above; and
(ii) $________________ is demanded in respect of payment
of the interest portion of the purchase price of such Bonds.
4. The amount of the drawing made by this Certificate was computed
in compliance with the terms and conditions of the Indenture and, when added
to the amount of any other drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount (as defined in
the Letter of Credit).
5. Payment by the Bank pursuant to this drawing shall be made to
_________________________, ABA Number ___________________________, Account
Number _____________________, Attention: _______________________________, Re:
_____________________________.
In Witness Whereof, this Certificate has been executed this _____
day of _____________________, ______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy or Tested Telex
EXHIBIT F
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
ACCELERATION DRAWING CERTIFICATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
The undersigned individual, a duly authorized representative of
_________________ (the "Beneficiary"), hereby Certifies on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable
Transferable Letter of Credit No. S601662 dated November 2, 1995 (the "Letter
of Credit"), issued by ABN AMRO Bank N.V. (the "Bank") in favor of the
Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit);
and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. An Event of Default has occurred under subsection [insert
subsection] of Section 6.01 of the Indenture and the Trustee has declared the
principal of and accrued interest on all Bonds then outstanding immediately
due and payable. The Beneficiary is entitled to make this drawing in the
amount of $_____________ under the Letter of Credit pursuant to Section 6.02
of the Indenture in order to pay the principal of and interest accrued on the
Bonds due to an acceleration thereof in accordance with Section 6.02 of the
Indenture.
3. (a) The amount of this drawing is equal to (i) the principal
amount of Bonds outstanding on [insert date of acceleration] (the
"Acceleration Date") other than Bank Bonds and Company Held Bonds (as each
term is defined in the Letter of Credit), plus (ii) interest on such Bonds
accrued from the immediately preceding Interest Payment Date (as defined in
the Indenture) to the Acceleration Date.
(b) Of the amount stated in paragraph 2 above:
(i) $______________ is demanded in respect of the
principal portion of the Bonds referred to in subparagraph (a)
above; and
(ii) $______________ is demanded in respect of accrued
interest on such Bonds.
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount (as defined in
the Letter of Credit).
5. Payment by the Bank pursuant to this drawing shall be made to
_______________________, ABA Number ________________________, Account Number
_________________, Attention: ______________________, Re:
_____________________.
In Witness Whereof, this Certificate has been executed this ____ day
of ______________________, _____.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
By Telecopy or Tested Telex
EXHIBIT G
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
STATED MATURITY DRAWING CERTIFICATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
The undersigned individual, a duly authorized representative of
_______________ (the "Beneficiary"), hereby Certifies on behalf of the
Beneficiary as follows with respect to (i) that certain Irrevocable
Transferable Letter of Credit No. S601662 dated November 2, 1995 (the "Letter
of Credit"), issued by ABN AMRO Bank N.V. (the "Bank") in favor of the
Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit);
and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make this drawing in the amount
of $___________ under the Letter of Credit pursuant to Section 4.03(e) of the
Indenture.
3. The amount of this drawing is equal to the principal amount of
Bonds outstanding on July 1, 2017 the maturity date thereof as specified in
Section 2.01 of the Indenture, other than Bank Bonds and Company Held Bonds
(as each term is defined in the Letter of Credit).
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any other drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount (as defined in
the Letter of Credit) .
5. Payment by the Bank pursuant to this drawing shall be made to
____________________, ABA Number __________________, Account Number
______________, Attention: __________________________, Re:
_____________________.
In Witness Whereof, this Certificate has been executed this _____
day of ___________, _______.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
EXHIBIT H
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
REDUCTION CERTIFICATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
The undersigned hereby Certifies with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. S601662 dated November 2, 1995
(the "Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank") in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. Upon receipt by the Bank of this Certificate, the Available
Amount (as defined in the Letter of Credit) shall be reduced by $__________
and the Available Amount shall thereupon equal $______________.
$__________________ of the new Available Amount is attributable to interest.
3. The amount of the reduction in the Available Amount has been
computed in accordance with the provisions of the Letter of Credit.
4. Following the reduction, the Available Amount shall be at least
equal to the aggregate principal amount of the Bonds outstanding (other than
Bank Bonds and Company Held Bonds (as each term is defined in the Letter of
Credit)) plus 185 days' interest thereon at the Cap Interest Rate (as defined
in the Letter of Credit).
In Witness Whereof, this Certificate has been executed this ______
day of ___________________, _____.
____________________________
as Trustee
By__________________________
[Title of Authorized
Representative]
EXHIBIT I
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
NOTICE OF AMENDMENT
[Trustee]
________________________
________________________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. S601662 dated November 2, 1995 (the "Letter of Credit"),
established by us in your favor as Beneficiary. We hereby notify you that, in
accordance with the terms of the Letter of Credit and that certain Letter of
Credit Agreement dated as of October 1, 1995, between Central Power and Light
Company and us, the Available Amount (as defined in the Letter of Credit) has
been reduced to $_____________.
This letter should be attached to the Letter of Credit and made a
part thereof.
ABN AMRO Bank N.V.
By_________________________
Its_______________________
By_________________________
Its_______________________
EXHIBIT J
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
TRANSFER CERTIFICATE
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Trade Services
Ladies and Gentlemen:
Reference is made to that certain Irrevocable Transferable Letter of
Credit No. S601662 dated November 2, 1995 (the "Letter of Credit"), which has
been established by the Bank in favor of ______________________________.
The undersigned, a duly authorized officer or agent of [Name of
Transferor], has transferred and assigned (and hereby confirms to you said
transfer and assignment) all of its rights in and under said Letter of Credit
to [Name of Transferee] and confirms that [Name of Transferor] no longer has
any rights under or interest in said Letter of Credit.
Transferor and Transferee have indicated on the face of said Letter
of Credit that it has been transferred and assigned to Transferee.
The undersigned, a duly authorized officer or agent of the
Transferee, hereby certifies that the Transferee is a duly authorized
Transferee under the terms of said Letter of Credit and is accordingly
entitled, upon presentation of the documents called for therein, to receive
payment thereunder.
_____________________________
Name of Transferor
By____________________________
[Title of Authorized Officer
of Transferor]
______________________________
Name of Transferee
By____________________________
[Title of Authorized Officer
of Transferor]
EXHIBIT K
to
ABN AMRO Bank N.V.
Letter of Credit
No. S601662
NOTICE OF EXTENSION
[Trustee]
_____________________
_____________________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable
Letter of Credit No. S601662 dated November 2, 1995 (the "Letter of Credit"),
established by us in your favor as Beneficiary. We hereby notify you that, in
accordance with the terms of the Letter of Credit and that certain Letter of
Credit Agreement dated as of October 1, 1995, between Central Power and Light
Company and us, the Stated Expiration Date (as defined in the Letter of
Credit) has been extended to ___________, ______.
This letter should be attached to the Letter of Credit and made a
part thereof.
ABN AMRO Bank N.V.
By_________________________
Its_______________________
By_________________________
Its_______________________