THIRD AMENDMENT
TO CREDIT AGREEMENT
THIRD AMENDMENT, dated as of October 5, 1998 (this
"Amendment"), to the Credit Agreement referred to below by
and among CENTRAL VERMONT PUBLIC SERVICE CORPORATION, a
Vermont corporation ("Borrower"), each of the lenders that
is a signatory to the Credit Agreement or which, pursuant to
Section 10.6 thereof shall become a "Lender" thereunder (the
"Lenders"), FLEET NATIONAL BANK, as syndication agent (the
"Syndication Agent"), and TORONTO DOMINION (TEXAS), INC., as
agent for the Lenders hereunder (the "Agent"; Lenders,
Syndication Agent and Agent are sometimes collectively
referred to herein as the "Lending Group").
WITNESSETH
WHEREAS, the Borrower and the Lending Group are parties
to that certain Credit Agreement, dated as of November 5,
1997 (as heretofore amended, supplemented or otherwise
modified, the "Credit Agreement"); and
WHEREAS, the Borrower and the Lending Group have agreed
to amend the Credit Agreement in the manner, and on the
terms and conditions, provided for herein.
NOW THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt, adequacy
and sufficiency of which are hereby acknowledged, the
Borrower and the Lending Group hereby agree as follows:
1. Definitions. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in
the Credit Agreement, as amended hereby (the "Amended Credit
Agreement").
2. Amendments to the Credit Agreement.
(a) Section 1.1 of the Credit Agreement is hereby
amended as of the Amendment Effective Date (as hereinafter
defined) by deleting in its entirety the definition of
"Existing Letter of Credit Agreements" appearing therein and
inserting in lieu thereof a new definition to read as
follows:
'"Existing Letter of Credit Agreements" shall mean (i)
that certain Letter of Credit and Reimbursement Agreement
dated as of November 1, 1994 between the Borrower and The
Toronto-Dominion Bank, Houston Agency, as amended; (ii) that
certain Amended and Restated Reimbursement Agreement, dated
as of September 24, 1992 between the Borrower and The
Toronto-Dominion Bank, Houston Agency, as amended; and (iii)
that certain Reimbursement Agreement dated as of April 29,
1993 between East Barnet and The Toronto-Dominion Bank,
Houston Agency, as amended."
(b) Section 1.1 of the Credit Agreement is hereby
further amended as of the Amendment Effective Date by
deleting in its entirety the definition of "Loan Documents"
appearing therein and inserting in lieu thereof a new
definition to read as follows:
'"Loan Documents" shall mean this Agreement, the Notes,
the Loan Borrowing Certificates, the Fee Letter, the
Security Agreement, the Mortgage, the Collateral Agency
Agreement and any other document or agreement executed in
connection herewith or contemplated hereby."
(c) Section 1.1 of the Credit Agreement is hereby
further amended as of the Amendment Effective Date by
deleting in its entirety paragraph (f) of the definition of
"Permitted Liens" appearing therein and inserting in lieu
thereof a new paragraph (f) to read as follows:
"(f) Liens granted in favor of the Collateral Agent
pursuant to the Security Agreement and the Mortgage."
(d) Section 1.1 of the Credit Agreement is hereby
further amended as of the Amendment Effective Date by
inserting in appropriate alphabetical order new definitions
to read as follows:
'"Collateral Agency Agreement" shall mean that certain
Collateral Agency Agreement, dated as of October 5, 1998,
among the Borrower, the Agent, The Toronto-Dominion Bank,
Houston Agency, and the Collateral Agent.
"Collateral Agent" shall mean Toronto Dominion (Texas),
Inc., as collateral agent for the Secured Parties.
"East Barnet" shall mean Central Vermont Service
Corporation - East Barnet Hydroelectric, Inc., a wholly-
owned Subsidiary of the Borrower.
"Indenture" shall mean the Indenture, dated as of
October 1, 1929, as amended, supplemented or otherwise
modified from time to time, between the Borrower and the
Indenture Trustee.
"Indenture Trustee" shall mean State Street Bank and
Trust Company, as successor trustee to The First National
Bank of Boston, as successor trustee to Old Colony Trust
Company, and its successors and assigns.
"Mortgage" shall mean that certain Open-End Mortgage,
Security Agreement, Assignment of Rents and Leases, Fixture
Filing and Financing Statement, dated as of October 5, 1998,
made by the Borrower in favor of the Collateral Agent.
"Secured Obligations" shall mean all loans, advances,
debts, liabilities and obligations for the performance of
covenants, tasks or duties or for payment of monetary
amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable)
owing by the Borrower or East Barnet to any Secured Party,
and all covenants and duties regarding such amounts, of any
kind or nature, present or future, whether evidenced by any
note, agreement or other instrument, arising under the
Transaction Documents. This term includes all principal,
interest (including all interest which accrues after the
commencement of any case or proceeding in bankruptcy after
the insolvency of, or for the reorganization, of the
Borrower or East Barnet, whether or not allowed in such
proceeding), Fees, charges, expenses, attorneys' fees and
any sum chargeable to the Borrower or East Barnet under the
Transaction Documents.
"Secured Parties" shall mean the Collateral Agent, the
Agent, the Syndication Agent, the Lenders, The Toronto-Dominion
Bank, Houston Agency, and their respective
successors and assigns.
"Security Agreement" shall mean that certain Security
Agreement, dated as of October 5, 1998, between the
Collateral Agent and the Borrower.
"Transaction Documents" shall mean the Loan Documents,
the Existing Letter of Credit Agreements and the Guaranty,
dated April 29, 1993, made by the Borrower in favor of The
Toronto-Dominion Bank, Houston Agency."
(e) Article II of the Credit Agreement is hereby
amended as of the Amendment Effective Date by inserting
immediately following Section 2.9 thereof a new Section 2.9A
to read as follows:
"SECTION 2.9A Mandatory Prepayments. (a) If the
Borrower issues First Mortgage Bonds at any time after
October 5, 1998, no later than the Business Day following
the date of receipt of the proceeds thereof, the Borrower
shall prepay the Loans in an amount equal to all such
proceeds, net of commissions and other reasonable costs paid
in connection therewith. In addition, each Lender's
Commitment shall be reduced permanently by an amount equal
to its Commitment Percentage multiplied by the amount of
such net proceeds.
(b) Any prepayments made by the Borrower pursuant to
Section 2.9A(a) above shall be applied as follows: first, to
Fees, reimbursable expenses of the Agent and any indemnity
amounts to which any Secured Party is entitled then due and
payable by the Borrower pursuant to any of the Loan
Documents; second, to all interest then due and payable on
any outstanding Loans; and third, to the principal balance
of any outstanding Loans; provided that outstanding ABR
Loans shall be prepaid in full prior to the prepayment of
any outstanding Eurodollar Loans.
(c) Notwithstanding the foregoing provisions of this
Section 2.9A, if at any time the mandatory prepayment of
Loans required above would result in the Borrower incurring
breakage costs under Section 2.15 as a result of Eurodollar
Loans or Auction Advances being prepaid other than on the
last day of an Interest Period applicable thereto (the
"Affected Loans"), then the Borrower may in its sole
discretion initially deposit a portion (up to 100%) of the
amounts that otherwise would have been paid in respect of
the Affected Loans with the Agent (which deposit, after
giving effect to interest to be earned on such deposit prior
to the last day of the relevant Interest Periods, must be
equal in an amount to the amount of Affected Loans not
immediately prepaid) to be held as security for the
obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and
substance reasonably satisfactory to the Agent, with such
cash collateral to be directly applied upon the first
occurrence (or occurrences) thereafter of the last day of an
Interest Period applicable to the relevant Loans that are
Eurodollar Loans or Auction Advances (or such earlier date
or dates as shall be requested by the Borrower), to repay an
aggregate principal amount of such Loans equal to the
Affected Loan not initially repaid pursuant to this
sentence. Notwithstanding anything to the contrary
contained in the immediately preceding sentence, all amounts
deposited as cash collateral pursuant to the immediately
preceding sentence shall be held for the sole benefit of the
Lenders whose Loans would have been immediately repaid with
the amounts deposited and upon the taking of any action by
the Agent or the Lenders pursuant to the remedial provisions
of Section 8.1, any amounts held as cash collateral pursuant
to this Section 2.9A(c) shall, subject to the requirements
of applicable law, be immediately applied to the relevant
Loans. Following repayment of the relevant Loans, any
remaining cash collateral will be returned to the Borrower."
(f) Section 6.2 of the Credit Agreement is hereby
amended as of the Amendment Effective Date by inserting at
the end of Section 6.2 the following:
"The Borrower shall deliver to the Collateral Agent
endorsements to all of its (i) "All Risk", fire, casualty
and other hazard insurance policies on its real and personal
property naming the Collateral Agent as loss payee. All
policies of insurance on real and personal property will
contain an endorsement, in form and substance acceptable to
the Collateral Agent, showing, subject to the rights of the
Indenture Trustee, loss payable to the Collateral Agent
(Form 438 BFU or equivalent). Such endorsement, or an
independent instrument furnished to the Collateral Agent,
will provide that the insurance companies will give the
Collateral Agent at least 30 days' prior written notice
before any such policy or policies of insurance shall be
altered or canceled and that no act or default of the
Borrower or any other Person shall affect the right of the
Collateral Agent to recover under such policy or policies of
insurance in case of loss or damage."
(g) Article VI of the Credit Agreement is hereby
amended as of the Amendment Effective Date by inserting
immediately following Section 6.8 thereof a new Section 6.9
to read as follows:
"SECTION 6.9 Additional Collateral. The Borrower shall
promptly advise the Collateral Agent of any amendment,
supplement or modification of the Indenture and shall
provide the Collateral Agent with a copy of all agreements,
instruments or other documents executed in connection
therewith. With respect to any property, real, personal or
mixed, in which the Borrower now has or hereafter acquires
ownership rights and which becomes subject to the Lien in
favor of the Indenture Trustee, the Borrower shall, upon the
Collateral Agent's request, execute and deliver any and all
such instruments and documents and take such actions as the
Collateral Agent may deem desirable to obtain the full
benefits of the Security Agreement and the Mortgage."
(h) Section 8.1(d) of the Credit Agreement is hereby
amended as of the Amendment Effective Date by inserting the
text "or the other Loan Documents" after the word
"Agreement" where it appears therein.
(i) Section 10.1 of the Credit Agreement is hereby
amended as of the Amendment Effective Date by deleting the
text "or Majority Lenders" appearing in clause (ii) thereof.
(j) Article X of the Credit Agreement is hereby
amended as of the Amendment Effective Date by inserting
immediately following Section 10.14 thereof a new Section
10.15 and Section 10.16 to read as follows:
"SECTION 10.15 Collateral Agency Agreement. Each
Lender hereby authorizes the Agent to execute, deliver and
perform the Collateral Agency Agreement for all purposes
thereof, and, without limiting the foregoing, each Lender
hereby acknowledges and agrees that (a) pursuant to the
terms thereof the Agent shall, on behalf of the Lenders,
appoint Toronto Dominion (Texas), Inc. as Collateral Agent
for all purposes thereof, the Security Agreement and the
Mortgage and (b) such Lender, to the extent set forth in the
Collateral Agency Agreement, shall be bound and obligated
(including with respect to indemnity obligations) by the
terms thereof as if such Lender were directly a party
thereto.
SECTION 10.16 Mortgage Encumbering New York Real
Property. Notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document
(including, without limitation, the Mortgage), the parties
agree as follows with respect to the Mortgage solely to the
extent it encumbers real property and fixtures located in
the State of New York (the "NY Real Property"):
(a) The maximum aggregate principal amount of
indebtedness that is, or under any contingency may be,
secured by the NY Real Property pursuant to the Mortgage,
either at execution or at any time thereafter (the "NY
Secured Amount"), is $906,266.25, plus amounts that the
Collateral Agent expends after a declaration of default
under the Mortgage to the extent that any such amounts shall
constitute payment of (i) taxes, charges or assessments that
may be imposed by law upon any NY Real Property; (ii)
premiums on insurance policies covering any NY Real
Property; (iii) expenses incurred in upholding the lien of
the Mortgage on the NY Real Property, including the expenses
of any litigation to prosecute or defend the rights and lien
created by the Mortgage on the NY Real Property; or (iv) any
amount, cost or charge to which the Collateral Agent becomes
subrogated, upon payment, whether under recognized
principles of law or equity, or under express statutory
authority; then, and in each such event, such amounts or
costs, together with interest thereon, shall be added to the
indebtedness secured by the Mortgage and shall be secured
by, among other things, the NY Real Property pursuant to the
Mortgage.
(b) Pursuant to the terms of this Agreement and the
Existing Letter of Credit Agreements, the amount of the
Secured Obligations may increase and decrease from time to
time as the Lenders make advances under this Agreement or
drawings are made under the Letters of Credit (as defined in
the Existing Letter of Credit Agreements), the Borrower
repays, and the Lenders readvance sums on account of the
Loans or additional drawings are made under the Letters of
Credit, all in accordance with the terms of this Agreement
or the Existing Letter of Credit Agreements, as the case may
be. Solely for purposes of the NY Real Property, so long as
the balance of the Loans and the Letter of Credit
Obligations (as hereinafter defined) equals or exceeds the
NY Secured Amount, the amount of the Loans and the Letter of
Credit Obligations secured by the NY Real Property shall at
all times equal only the NY Secured Amount, subject to and
as more fully described in Section 10.16(a) hereof. Such NY
Secured Amount represents only a portion of the first sums
advanced by the Lenders with respect to the Loans and the
first sums drawn under the Letters of Credit. For purposes
of this Section 10.16, "Letter of Credit Obligations" shall
mean all outstanding obligations incurred by The Toronto-
Dominion Bank, Houston Agency, whether direct or indirect,
contingent or otherwise, due or not due, with respect to any
Letter of Credit.
(c) The NY Secured Amount shall be reduced only by the
last and final sums that the Borrower or East Barnet repays
with respect to the Loans and the Letter of Credit
Obligations and shall not be reduced by any intervening
repayments of the Loans or the Letter of Credit Obligations
by the Borrower or East Barnet. As of October 5, 1998, the
total amount of the Loans and the Letter of Credit
Obligations exceeds the NY Secured Amount, so that the NY
Secured Amount represents only a portion of the Secured
Obligations actually outstanding.
(d) So long as the balance of the Loans and the Letter
of Credit Obligations exceeds the NY Secured Amount, any
payments and repayments of the Loans and the Letter of
Credit Obligations by the Borrower or East Barnet shall not
be deemed to be applied against, or to reduce, the portion
of the Secured Obligations secured by the NY Real Property,
as more fully described in Section 10.16(a) hereof. Such
payments shall instead be deemed to reduce only such portion
of the Secured Obligations as are secured by the Mortgage
solely to the extent it encumbers real property and fixtures
located outside the State of New York, which real property
and fixtures secure the entire Secured Obligations."
(k) Schedule 2 and Schedule 7 to the Credit Agreement
are hereby amended as of the Amendment Effective Date by
deleting such schedules in their entirety and inserting in
lieu thereof new schedules in the forms attached hereto as
Exhibit A and B, respectively.
3. Representations and Warranties. To induce the
Lending Group to enter into this Amendment, the Borrower
hereby represents and warrants that:
(a) The execution, delivery and performance by the
Borrower of this Amendment, the amended notes referred to in
Section 5(c) hereof (the "Amended Notes"), the Collateral
Agency Agreement, the Security Agreement and the Mortgage,
and the performance of the Amended Credit Agreement hereby
have been duly authorized by all necessary corporate and
shareholder action and (i) do not violate any Requirement of
Law, (ii) do not breach or result in an event of default
under, or otherwise violate the terms of, any indenture
(including, without limitation, the Indenture) or material
agreement to which the Borrower is a party or by which it or
its property is bound, (iii) will not result in or require
the creation of any Lien upon or with respect to any of its
properties (other than as expressly contemplated by the
Security Agreement and the Mortgage), and (iv) do not
require any consent or approval of any creditor of the
Borrower (including, without limitation, the Indenture
Trustee and the holders of the First Mortgage Bonds).
(b) Each of this Amendment, the Amended Notes, the
Security Agreement, the Mortgage and the Collateral Agency
Agreement has been duly executed and delivered by the
Borrower.
(c) Each of this Amendment, the Amended Credit
Agreement, the Amended Notes, the Security Agreement, the
Mortgage and the Collateral Agency Agreement are legal,
valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective
terms, subject to (i) the effect of applicable bankruptcy,
insolvency, reorganization or moratorium or other similar
laws affecting the enforcement of creditors' rights
generally, and (ii) the application of general principles of
equity (regardless of whether considered in a proceeding in
equity or at law).
(d) No Governmental Approvals are required for the due
execution, delivery and performance by the Borrower of this
Amendment, the Amended Credit Agreement, the Amended Notes,
the Security Agreement, the Mortgage or the Collateral
Agency Agreement other than the approval or consent of the
Vermont Public Service Board and the approval of or waiver
by the Connecticut Department of Public Utility Control with
respect to the granting by the Borrower of the Lien of the
Security Agreement and the Mortgage.
(e) There is no pending, or to the best of the
Borrower's knowledge, threatened action or proceeding
against the Borrower before any court, governmental agency
or arbitrator, which if adversely determined, could
reasonably be expected to materially adversely affect the
financial condition or results of operations of the Borrower
or that could otherwise materially adversely affect the
Borrower's ability to perform its obligations under any of
this Amendment, the Amended Credit Agreement, the Amended
Notes, the Security Agreement, the Mortgage or the
Collateral Agency Agreement other than as described in the
Borrower's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 and Form 10-Qs for the fiscal
quarters ended March 31, 1998 and June 30, 1998.
(f) No Default or Event of Default has occurred and is
continuing, both before and after giving effect to the
execution and delivery of this Amendment, the Amended Notes,
the Security Agreement, the Mortgage and the Collateral
Agency Agreement.
4. No Other Amendments. Except as expressly
amended herein, each of the Credit Agreement and the other
Loan Documents shall be unmodified and shall continue to be
in full force and effect in accordance with its terms.
5. Effectiveness. This Amendment shall become
effective as of the date (the "Amendment Effective Date")
upon which the Agent confirms to the Borrower that each of
the following conditions, in the judgment of the Agent, has
been satisfied in full:
(a) Amendment. The Agent shall have received four (4)
original copies of this Amendment duly executed and
delivered by the Borrower, the Agent, the Syndication Agent
and the Lenders.
(b) Security Documents. The Agent shall have received
duly executed copies of the Security Agreement, the
Mortgage, the Collateral Agency Agreement and all additional
documents or instruments, including, without limitation,
UCC-1 financing statements, necessary to provide the
Collateral Agent with a duly perfected second priority
security interest in all the properties and other assets
that secure the First Mortgage Bonds. Additionally, the
Agent shall have received evidence satisfactory to it and
its counsel that all other actions necessary or, in the
opinion of the Agent and its counsel, desirable to perfect
and protect the security interest purported to be created by
the Security Agreement and the Mortgage have been taken.
(c) Notes. Each Lender shall have received an
original Amended and Restated Revolving Loan Note and
Amended and Restated Auction Note, payable to such Lender,
duly executed by the Borrower, substantially in the form of
Schedule 2 and Schedule 7, respectively, to the Amended
Credit Agreement and duly completed in accordance with the
Amended Credit Agreement.
(d) Legal Opinions. The Agent shall have received
such legal opinions addressed to each of the Secured
Creditors and other certificates as the Agent may reasonably
request relating to this Amendment, the Amended Credit
Agreement, the Collateral Agency Agreement, the Security
Agreement and the Mortgage, including, without limitation,
legal opinions, in form and substance, and from counsel,
reasonably acceptable to the Agent and its counsel, to the
effect that the execution and delivery by the Borrower of
this Amendment, the Collateral Agency Agreement, the
Security Agreement and the Mortgage, and the performance by
the Borrower of its obligations thereunder, under the
Amended Credit Agreement and under the Existing Letter of
Credit Agreements, do not contravene any provision of the
Indenture.
(e) Approval. The Agent shall have received evidence
satisfactory to it and its counsel that the Borrower has
received the approval or consent of the Vermont Public
Service Board and the approval of or waiver by any other
state regulatory body with jurisdiction, in each case
required for (x) (A) the 0.25% increase in the ABR and the
Applicable Margin and (B) the extensions of the Maturity
Date, in each case effected by the Second Amendment to
Credit Agreement, dated as of June 2, 1998, among the
Borrower and the Lending Group, and (y) the grant of the
security interest to the Collateral Agent pursuant to the
Security Agreement and the Mortgage in all the properties
and other assets of the Borrower that secure the First
Mortgage Bonds.
(f) Representations and Warranties. All
representations and warranties of the Borrower in this
Amendment and all the other Loan Documents shall be true and
correct in all material respects with the same effect as
though such representations and warranties had been made on
and as of the date hereof and on and as of the date that the
other conditions precedent in this Section 5 have been
satisfied.
6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.
7. Counterparts. This Amendment may be executed by
the parties hereto on any number of separate counterparts
and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
(SIGNATURE PAGE FOLLOWS)
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day
and year first above written.
Borrower:
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
Agent:
TORONTO DOMINION (TEXAS), INC.
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Title: Vice President
Lenders:
TORONTO DOMINION (NEW YORK), INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxxxxx Xxxx
Name: Xxxxxxxx Xxxx
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CITIZENS BANK NEW HAMPSHIRE
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
