<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995 Commission file number 1-5663
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Central Louisiana Electric Company, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 72-0244480
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (318) 484-7400
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes x No
As of August 1, 1995 there were 22,421,608 shares outstanding of the
Registrant's Common Stock, par value $2.00 per share.
<PAGE>
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 1
Report of Independent Accountants. . . . . . . . . 2
Consolidated Statements of Income. . . . . . . . . 3
Consolidated Balance Sheets. . . . . . . . . . . . 5
Consolidated Statements of Cash Flows. . . . . . . 7
Note to Consolidated Financial Statements. . . . . 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations. . . . . . . . . . . . . . . 9
Financial Condition. . . . . . . . . . . . . . . . 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . . 11
Item 5. Other Information
LPSC Earnings Review. . . . . . . . . . . . . . . 11
Activities With Respect to Cooperatives . . . . . 12
Changes in Corporate Structure. . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 13
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The consolidated financial statements for Central Louisiana Electric
Company, Inc. (the Company) included herein are unaudited but reflect, in the
Company's opinion, all adjustments, consisting only of normal recurring
adjustments, that are necessary for a fair presentation of its financial
position and the results of its operations for the interim periods presented.
Because of the seasonal nature of the Company's business, the results of
operations for the six months ended June 30, 1995 are not necessarily
indicative of the results that may be expected for the full fiscal year. The
financial statements included herein should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1994.
The consolidated financial statements included herein have been subjected to a
limited review by Coopers & Lybrand L.L.P., independent accountants for the
Company, whose report is included herein.
1
<PAGE>
Coopers Coopers & Lybrand L.L.P.
& Lybrand a professional services firm
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Central Louisiana Electric Company, Inc.:
We have made a review of the consolidated balance sheet of Central Louisiana
Electric Company, Inc. as of June 30, 1995, and the related consolidated
statements of income and cash flows for the three-month and six-month periods
ended June 30, 1995 and 1994, in accordance with standards established by the
American Institute of Certified Public Accountants. These financial statements
are the responsibility of the Company's management.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1994 and the
related consolidated statements of income, cash flows and changes in common
shareholders' equity for the year then ended (not present herein); and in our
report dated January 27, 1995, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 1994, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.
Coopers & Lybrand L.L.P
New Orleans, Louisiana
July 26,1995
2
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended June 30
(Unaudited)
<CAPTION>
(In thousands, except share and
per share amounts)
1995 1994
---------- ----------
<S> <C> <C>
OPERATING REVENUES $ 100,599 $ 100,940
---------- ----------
OPERATING EXPENSES
Fuel used for electric generation 25,248 31,295
Power purchased 8,500 7,356
Other operation 15,310 13,841
Maintenance 5,541 5,974
Depreciation 10,168 9,824
Taxes other than income taxes 7,211 7,110
Federal and state income taxes 8,326 6,264
---------- ----------
80,304 81,664
---------- ----------
OPERATING INCOME 20,295 19,276
Allowance for other funds used during
construction 487 301
Other income and expenses, net 353 (264)
---------- ----------
INCOME BEFORE INTEREST CHARGES 21,135 19,313
Interest charges, including amortization of
debt expense, premium and discount 7,528 6,680
Allowance for borrowed funds used during
construction (395) (138)
---------- ----------
NET INCOME 14,002 12,771
Preferred dividend requirements, net 512 503
---------- ----------
NET INCOME APPLICABLE TO COMMON STOCK $ 13,490 $ 12,268
========== ==========
WEIGHTED AVERAGE COMMON SHARES
Primary 22,430,706 22,420,647
Fully diluted 23,846,221 23,847,149
EARNINGS PER SHARE
Primary $0.60 $0.55
Fully diluted $0.58 $0.53
CASH DIVIDENDS PAID PER SHARE $0.375 $0.365
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30
(Unaudited)
<CAPTION>
(In thousands, except share and
per share amounts)
1995 1994
---------- ----------
<S> <C> <C>
OPERATING REVENUES $ 180,471 $ 185,087
---------- ----------
OPERATING EXPENSES
Fuel used for electric generation 47,895 59,234
Power purchased 12,844 10,638
Other operation 28,841 26,668
Maintenance 9,937 10,945
Depreciation 20,492 19,619
Taxes other than income taxes 14,639 14,214
Federal and state income taxes 10,939 9,714
---------- ----------
145,587 151,032
---------- ----------
OPERATING INCOME 34,884 34,055
Allowance for other funds used during
construction 898 566
Other income and expenses, net 418 (145)
---------- ----------
INCOME BEFORE INTEREST CHARGES 36,200 34,476
Interest charges, including amortization of
debt expense, premium and discount 14,795 13,402
Allowance for borrowed funds used during
construction (687) (276)
---------- ----------
NET INCOME 22,092 21,350
Preferred dividend requirements, net 1,020 1,001
---------- ----------
NET INCOME APPLICABLE TO COMMON STOCK $ 21,072 $ 20,349
========== ==========
WEIGHTED AVERAGE COMMON SHARES
Primary 22,425,283 22,417,934
Fully diluted 23,842,418 23,846,336
EARNINGS PER SHARE
Primary $0.94 $0.91
Fully diluted $0.91 $0.88
CASH DIVIDENDS PAID PER SHARE $0.74 $0.72
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
(In thousands)
June 30, 1995 December 31, 1994
------------- -----------------
ASSETS
<S> <C> <C>
Utility plant
Property, plant and equipment $ 1,292,808 $ 1,276,266
Accumulated depreciation (428,031) (410,513)
------------- ----------------
864,777 865,753
Construction work-in-progress 53,960 46,379
------------- ----------------
Total utility plant, net 918,737 912,132
------------- ----------------
Investments and other assets 11,081 20,327
------------- ----------------
Current assets
Cash and cash equivalents 22,304 7,440
Accounts receivable, net 15,178 11,147
Unbilled revenues 3,998 573
Fuel inventory, at average cost 13,016 10,184
Materials and supplies, at average cost 15,585 14,945
Prepayments and other current assets 2,864 2,374
------------- ----------------
Total current assets 72,945 46,663
------------- ----------------
Accumulated deferred federal and
state income taxes 41,684 39,377
Prepayments 8,128 7,861
Deferred charges 154,156 151,831
------------- ----------------
TOTAL ASSETS $ 1,206,731 $ 1,178,191
============= ================
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
( Continued on Next Page )
</TABLE>
5
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
<CAPTION>
(In thousands)
June 30, 1995 December 31, 1994
------------- -----------------
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Common shareholders' equity
Common stock, $2 par value, authorized
50,000,000 shares, issued 22,737,554
and 22,720,074 shares at June 30, 1995
and December 31, 1994,respectively $ 45,475 $ 45,440
Premium on capital stock 113,308 113,070
Retained earnings 215,926 211,198
Treasury stock at cost, 318,446 and
329,433 shares at June 30, 1995
and December 31, 1994, respectively (6,459) (6,681)
------------- -----------------
368,250 363,027
------------- -----------------
Preferred stock, cumulative, $100 par value
Not subject to mandatory redemption 30,519 30,748
Deferred compensation related to
preferred stock held by ESOP (23,232) (24,404)
------------- -----------------
7,287 6,344
Subject to mandatory redemption 6,880 6,920
------------- -----------------
14,167 13,264
------------- -----------------
Long-term debt, net 360,803 336,589
------------- -----------------
Total capitalization 743,220 712,880
------------- -----------------
Current liabilities
Short-term debt 26,240 28,977
Long-term debt due within one year 14,805 14,676
Accounts payable 31,107 43,466
Customer deposits 19,728 19,513
Taxes accrued 13,793 3,262
Interest accrued 8,842 8,298
Accumulated deferred fuel 4,540 6,114
Other current liabilities 2,744 2,618
------------ ----------------
Total current liabilities 121,799 126,924
------------ ----------------
Deferred credits
Accumulated deferred federal and state
income taxes 230,786 228,803
Accumulated deferred investment tax
credits 34,080 34,987
Other deferred credits 76,846 74,597
------------ -----------------
Total deferred credits 341,712 338,387
------------ -----------------
TOTAL CAPITALIZATION AND LIABILITIES $ 1,206,731 $ 1,178,191
============ =================
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
</TABLE>
6
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30
(Unaudited)
<CAPTION>
(In thousands)
1995 1994
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 22,092 $ 21,350
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 21,101 19,883
Allowance for funds used during construction (1,585) (842)
Amortization of investment tax credits (907) (910)
Deferred income taxes 1,555 1,538
Deferred fuel costs (1,574) (195)
(Gain)/Loss on disposition of utility plant, net (1) 4
Changes in assets and liabilities
Accounts receivable (4,031) (4,697)
Unbilled revenues (3,425) (2,190)
Inventory, materials and supplies (3,472) 425
Accounts payable (12,359) (11,923)
Customer deposits 215 581
Other deferred accounts (3,298) (588)
Taxes accrued 10,531 7,761
Interest accrued 544 578
Other, net (952) 329
---------- ----------
Net cash provided by operating activities 24,434 31,104
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to utility plant (25,996) (20,528)
Allowance for funds used during construction 1,585 842
Sale of utility plant 405 107
Purchase of investments (2,413) (81,316)
Sale of investments 12,632 82,348
--------- ----------
Net cash used in investing activities (13,787) (18,547)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 273 160
Repurchase of common stock (29)
Retirement of long-term debt (676) (595)
Issuance of long-term debt 25,000
Increase/(Decrease)of short-term debt (2,737) 7,161
Redemption of preferred stock (40) (12)
Dividends paid on common and preferred stock, net (17,603) (17,126)
--------- ---------
Net cash provided by (used in) financing
activities 4,217 (10,441)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 14,864 2,116
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,440 5,802
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,304 $ 7,918
========= =========
Supplementary cash flow information
Interest paid (net of amount capitalized) $3,205 $12,444
Income taxes paid $8,108 $10,172
<FN>
The accompanying note is an integral part of the consolidated financial
statements.
</FN>
</TABLE>
7
<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note A. Contingencies
An audit of the Company's 1991 and 1992 tax returns was completed by agents of
the Internal Revenue Service (IRS) in January 1995. A number of assessments
were proposed that would substantially increase federal and Louisiana taxable
income for those years. The Company is contesting most of these assessments.
Deferred federal taxes have been provided for all temporary differences, and
reserves have been provided for other issues. If the IRS is completely
successful on all of the contested issues, an additional liability in excess
of current reserves would exist for interest and, if assessed, penalties.
In July 1995, agents of the IRS announced that an audit of the Company's
1993 and 1994 tax returns would commence in 1995.
In February 1995 the Company and Teche Electric Cooperative, Inc. (Teche)
executed a purchase and sale agreement regarding the purchase of all of the
assets of Teche by the Company for a purchase price, including the Company's
assumption or other discharge of Teche's liabilities, of approximately $22.4
million. Teche serves about 8,600 customers and its service area, which
comprises parts of Iberia, St. Martin and St. Mary parishes, is adjacent to
the Company's service area. Teche members approved the purchase and sale
agreement at their annual meeting on March 11, 1995. Consummation of the
acquisition is subject to a number of conditions, including approval by the
Louisiana Public Service Commission (LPSC), the Rural Utilities Service (RUS)
and other governmental agencies, successful resolution of Teche's power supply
contract with Cajun Electric Power Cooperative (Cajun) and certain other
conditions. See "Item 5. Other Information" in Part II of this report for more
information regarding the Company's efforts to acquire Teche and
Washington-St.Tammany Electric Cooperative, Inc. (WST).
8
<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net income applicable to common stock totaled $13.5 million and $21.1
million, respectively, for the three- and six-month periods ended June 30,
1995, as compared to $12.3 million and $20.3 million, respectively, for the
corresponding periods in 1994. Net income per primary average common share
was $0.60 and $0.94, respectively, for the three- and six-month periods ended
June 30, 1995, as compared to $0.55 and $0.91, respectively, for the same
periods in 1994. The following principal factors contributed to these
results:
Operating revenues decreased $0.3 million, or 0.3%, and $4.6 million, or 2.5%,
respectively, for the quarter and six months ended June 30, 1995, as compared
to the corresponding periods in 1994, primarily due to decreases in fuel cost
recovery revenues. Second quarter 1995 fuel cost recovery revenues were $4.6
million lower than the second quarter 1994, while such revenues for the
six-months ended June 30, 1995 were $9.0 million lower than the same period in
1994. Lower fuel cost revenues continue to be attributable to lower natural
gas prices in 1995 than in 1994. Changes in fuel cost recovery revenues have
historically had no effect on net income, as fuel costs are generally
recovered through a fuel cost adjustment clause which enables the Company to
pass on to customers substantially all changes in the cost of generating fuel
and purchased power. The adjustments regulated by the LPSC (about 99% of the
total fuel cost adjustment) are audited by the LPSC staff monthly and the
remaining portion, regulated by the Federal Energy Regulatory Commission
(FERC), is audited periodically for several years at a time. Until approval
is received, the adjustments are subject to refund.
Base revenues increased $4.3 million and $4.4 million, respectively, for the
three- and six-month periods ended June 30, 1995, as compared to the
corresponding periods in 1994. Base revenue increases are primarily the
result of a warmer-than-normal second quarter 1995 and wholesale power sales
to the city of St. Martinville, which began in May. These factors contributed
to a 10.7% increase in kilowatt-hour sales during the second quarter compared
to the second quarter 1994. For the six months ended June 30, 1995,
kilowatt-hour sales increased 7.4% over the same period in 1994.
Operating expenses decreased $1.4 million, or 1.7%, and $5.4 million, or 3.6%,
respectively, for the three- and six-month periods of 1995, compared to the
same periods in 1994, primarily due to lower fuel costs which were partially
offset by an increase in other operation expenses. Fuel costs decreased
$4.9 million, or 12.7%, for the three-month period, and $9.1 million, or
13.1%, for the six-month period, resulting from lower natural gas prices. The
increase in purchased power resulted from the Company's scheduled outage of
Rodemacher Power Station Unit 2. For the quarter and six months ended June
30, 1995, other operation expenses increased $1.5 million, or 10.6%, and $2.2
million, or 8.1%, respectively, compared to the corresponding periods in 1994,
primarily due to the start-up of the Company's 24-hour call center (while
customer service offices remained open until full implementation of the call
center), and costs associated with the Company's efforts to acquire Teche and
WST. In late July 1995, 15 customer service offices were closed and their
operations were consolidated into 10 regional offices.
Interest expenses increased $0.8 million, or 12.7%, and $1.4 million, or
9
<PAGE>
10.4%, respectively, for the three- and six-months ended June 30, 1995,
compared to the same periods in 1994, primarily due to higher short-term
interest rates and higher average balances of short-term debt.
FINANCIAL CONDITION
Liquidity and Capital Resources
At June 30, 1995 and 1994, the Company had $26.2 million and $35.5
million, respectively, of short-term debt outstanding in the form of
commercial paper borrowings and bank loans. On June 15, 1995 the Company
replaced its $100 million revolving credit agreement with Citibank, N.A. as
agent, with a new $100 million revolving credit agreement with The Bank of New
York as agent. The new agreement provides support for the issuance of
commercial paper and is scheduled to continue through June 15, 2000.
Uncommitted lines of credit with banks totaling $23 million are also available
to meet short-term working capital needs. Additionally, at June 30, 1995, an
unregulated subsidiary of the Company had $16.0 million of cash and temporary
cash investments in securities with original maturities of 90 days or less.
During June 1995, the Company issued $25 million of medium-term notes in two
tranches: one issue of $15 million, 6-year notes was sold at an interest rate
of 6.42%; and a second issue of $10 million, 11-year notes was sold at an
interest rate of 6.95%. Neither issue can be called before its scheduled
maturity date. The proceeds from the sale of these medium-term notes were
used to reduce the amount of commercial paper outstanding. In May, Standard &
Poor's upgraded the credit rating on the Company's unsecured medium-term notes
from A- to A, the same rating as the Company's first mortgage bonds. Moody's
maintained its rating on the Company's medium-term notes as A3, one notch below
the rating assigned to the Company's first mortgage bonds.
Since 1990 the Company has participated in a program where up to $35 million
of receivables can be sold on an ongoing basis. The amount of receivables
that may be sold at any time depends upon seasonal fluctuations in the amount
of eligible receivables. The program was extended in March 1995 to allow for
continuation until the year 2000.
The Company has an effective shelf registration statement and all regulatory
approvals necessary to issue up to $25 million of debt and $50 million of
preferred stock.
Regulatory Matters
The citizens of Leesville voted to approve a 20-year franchise with the
Company in April 1995. The Company continued to serve the city after the
previous franchise expired on December 31, 1994. The nonexclusive municipal
franchise commenced on June 1, and affects approximately 5,000 customers.
On March 29, 1995, the FERC issued a Notice of Proposed Rulemaking (NOPR)
addressing two key issues: open transmission access and recovery of stranded
cost. The open access provisions of the NOPR propose to require FERC-
regulated electric utilities to offer third parties open access to
transmission for comparable service under the same or comparable terms and
conditions as the utility's own use of its system. Providing unbundled
transmission services to firm-requirements customers may have significant
financial consequences to the utility industry. While providing open access
for non-requirements sales should not have the same financial impact, it may
nonetheless have a significant impact on utility operations.
The stranded-cost proposal would allow utilities to recover investments
stranded by customers departing as a result of opening the transmission
10
<PAGE>
systems. This proposal could mitigate the financial consequences of
unbundling transmission services to firm-requirements customers. The Company
does not expect to lose any significant load in the event that access to its
transmission service is opened and, therefore, should not have significant
stranded investments.
Comments on the NOPR are due 120 days after its publication, and reply
comments will be due 60 days later. At this time, it is not possible to
predict whether the NOPR will become a final rule, and if it does become a
final rule, the form of such final rule and its effect on the Company. If
adopted, generic tariffs will be available to all buyers and sellers of
electric energy at wholesale rates and will become effective 60 days after the
date of adoption of the final rule. After 60 days from the date of adoption,
utilities and customers may propose changes to the tariffs.
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
(SFAS 121) was issued in March 1995 and is effective for fiscal years beginning
after December 15, 1995. SFAS 121 establishes accounting standards for
determining if long-lived assets are impaired, and when losses, if any, should
be recognized and how any such losses should be recognized. In addition the
Company has recorded regulatory assets and liabilities as a result of past
rate actions of the Company's regulators, pursuant to Statement of Financial
Accounting Standards No. 71, "Accounting for the Effects of Certain Types of
Regulation" (SFAS 71). The effects of potential deregulation of the industry
or possible future changes in the method of rate regulation of the Company
could require that the Company discontinue the application of SFAS 71,
pursuant to Statement of Financial Accounting Standards No. 101, "Regulated
Enterprises--Accounting for the Discontinuation of Application of FASB
Statement No. 71". The effects of these standards, on future statements of
position and results of operation will be determined by the facts and
circumstances at that time.
PART II
OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The information regarding matters voted upon by security holders at the
Annual Meeting of Shareholders of the Company held on April 21, 1995 was
previously reported in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995.
Item 5. OTHER INFORMATION
LPSC EARNINGS REVIEW
The Company, along with three other investor-owned electric utility
companies operating within Louisiana, was named by consultants in a
preliminary report provided to the LPSC at its regularly scheduled June 1993
meeting as having a current return on equity which may be higher than a return
which would be awarded if rates were established currently. The LPSC offered
all four utility companies the opportunity to respond to the consultants'
comments and considered the responses of all four companies at its August 1993
meeting. The LPSC subsequently elected to review the earnings of all
electric, gas, water and telecommunication utilities regulated by it to
11
<PAGE>
determine if the returns on equity earned by these companies may be higher
than returns that might be awarded in the current economic environment.
Earnings reviews of two of the four electric utilities have been completed and
resulted in small rate decreases. At its regularly scheduled July 1995
meeting, the LPSC opened a docket which formally commences the earnings review
of the Company.
ACTIVITIES WITH RESPECT TO COOPERATIVES
In February 1995 the Company and Teche executed a purchase and sale
agreement regarding the purchase of all of the assets of Teche by the Company
for a purchase price, including the Company's assumption or other discharge of
Teche's liabilities, of approximately $22.4 million. Teche serves about 8,600
customers and its service area, which comprises parts of Iberia, St. Martin
and St. Mary parishes, is adjacent to the Company's service area. Teche
members approved the purchase and sale agreement at their annual meeting on
March 11, 1995. Consummation of the acquisition is subject to a number of
conditions, including approval by the LPSC, the RUS and other governmental
agencies, successful resolution of Teche's power supply contract with Cajun
and certain other conditions.
Cajun, which provides power to all of the state's electric distribution
cooperatives, including WST and Teche, is in bankruptcy and is acting as
debtor-in-possession of its assets, rights and interests. In March 1995 Cajun
filed a motion in bankruptcy court to stay the Company's acquisition of Teche.
A hearing on the motion has been postponed indefinitely by the court with the
agreement of the Company, Teche and Cajun. Cajun has also moved the
bankruptcy court to stay certain of the Company's actions in attempting to
purchase the assets and business of WST. No date has been set for a hearing
on that motion.
In April and May 1995, the Company, Teche and the RUS filed motions with the
bankruptcy court to appoint an independent trustee to replace Cajun as
debtor-in-possession and to oversee the Cajun bankruptcy, including the
disposition of Teche and its all-requirements contract with Cajun. On
August 1, 1995, the court ordered the U.S. Trustee's office to appoint a
trustee. Cajun and other parties have filed motions in the U.S. Fifth Circuit
Court of Appeals to stay the appointment of a trustee until it can hear an
appeal of the lower court's decision.
In December 1994 the Company announced its interest in acquiring WST. WST
serves approximately 30,600 customers in an area adjacent to the Company's
Northlake Division in Washington, St. Tammany and Tangipahoa parishes. Three
WST board candidates who were endorsed by the Company and were supportive of
pursuing a Company proposal to acquire WST were not elected to WST's board at
their annual meeting held on May 6, 1995. The Company's proposal to acquire
WST, submitted to WST's board on February 14, 1995, has expired without any
action from the WST board. The Company did not renew its proposal to acquire
WST.
The Antitrust Division of the U.S. Department of Justice has submitted to the
Company a civil investigative demand dated August 7, 1995, seeking information
with respect to whether there is, has been or may be a violation of Section 7
of the Clayton Anti-Trust Act by conduct, activities or proposed action
associated with the Company's acquisition of competitor rural electric
cooperatives, including Teche and WST. The information sought also concerns
the Company's involvement in the Cajun bankruptcy proceedings.
CHANGES IN CORPORATE STRUCTURE
On July 24, 1995, the Company announced changes in its management
structure effective July 21, 1995. David M. Eppler, formerly vice president
of finance and chief financial officer, was named vice president of power
supply and energy transmission, replacing Leonard G. Fontenot, who will remain
a vice president until his retirement in December 1995. David K. Warner,
formerly vice president of administrative services, was named vice president
of finance and chief financial officer.
12
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4 $100,000,000 Revolving Credit Agreement dated as of June 15,
1995, among the Company, certain Banks parties thereto, and
The Bank of New York, as Agent
11 Computation of Net Income Per Common Share for the three-
and six-months ended June 30, 1995 and June 30, 1994
12 Computation of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends for
the twelve months ended June 30, 1995
15 Awareness letter, dated August 11, 1995, from Coopers &
Lybrand L.L.P. regarding review of the unaudited interim
financial statements
27 Financial Data Schedule
(b) Reports on Form 8-K
During the three-month period ended June 30, 1995, the Company
filed no Current Reports on Form 8-K.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
under-signed thereunto duly authorized.
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
(Registrant)
BY: ______________________________
David K. Warner
Vice President - Finance
(Principal Financial Officer)
Date: August 14, 1995
14
=======================================================================
=======================================================================
REVOLVING CREDIT AGREEMENT
by and among
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
THE LENDERS PARTY HERETO,
AND
THE BANK OF NEW YORK, AS AGENT
----------------
$100,000,000
----------------
Dated as of June 15, 1995
======================================================================
======================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION . . . . . . . . . . . 1
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Principles of Construction . . . . . . . . . . . . . . . 14
2. AMOUNT AND TERMS OF LOANS . . . . . . . . . . . . . . . . . . . 15
2.1. Revolving Credit Loans . . . . . . . . . . . . . . . . . 15
2.2. Revolving Credit Notes . . . . . . . . . . . . . . . . . 15
2.3. Procedure for Borrowing Revolving Credit Loans . . . . . 15
2.4. Competitive Bid Loans; Procedure . . . . . . . . . . . . 17
2.5. Voluntary Reduction or Termination of Aggregate
Commitments . . . . . . . . . . . . . . . . . . . . . . 19
2.6. Prepayments of the Loans . . . . . . . . . . . . . . . . 19
2.7. Conversions and Continuations . . . . . . . . . . . . . 20
2.8. Interest Rate and Payment Dates . . . . . . . . . . . . 21
2.9. Substituted Interest Rate . . . . . . . . . . . . . . . 22
2.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.11. Illegality . . . . . . . . . . . . . . . . . . . . . . 24
2.12. Increased Costs . . . . . . . . . . . . . . . . . . . . 25
2.13. Indemnification for Loss . . . . . . . . . . . . . . . 27
2.14. Survival of Certain Obligations . . . . . . . . . . . . 28
2.15. Use of Proceeds . . . . . . . . . . . . . . . . . . . . 28
2.16. Capital Adequacy . . . . . . . . . . . . . . . . . . . 28
2.17. Lenders' Records . . . . . . . . . . . . . . . . . . . 29
2.18. Substitution of Lender. . . . . . . . . . . . . . . . . 29
3. FEES; PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 29
3.1. Facility Fee . . . . . . . . . . . . . . . . . . . . . . 29
3.2. Agent's Fees . . . . . . . . . . . . . . . . . . . . . . 29
3.3. Pro Rata Treatment and Application of Principal
Payments . . . . . . . . . . . . . . . . . . . . . . . . 30
4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 30
4.1. Subsidiaries; Capitalization . . . . . . . . . . . . . . 30
4.2. Existence and Power . . . . . . . . . . . . . . . . . . 30
4.3. Authority . . . . . . . . . . . . . . . . . . . . . . . 30
4.4. Binding Agreement . . . . . . . . . . . . . . . . . . . 31
4.5. Litigation and Regulatory Proceedings . . . . . . . . . 31
4.6. Required Consents . . . . . . . . . . . . . . . . . . . 31
4.7. No Conflicting Agreements, Compliance with Laws . . . . 31
4.8. Governmental Regulations . . . . . . . . . . . . . . . . 32
4.9. Federal Reserve Regulations; Use of Loan
Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 32
4.10. Plans . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.11. Financial Statements . . . . . . . . . . . . . . . . . 33
4.12. Property . . . . . . . . . . . . . . . . . . . . . . . 33
4.13. Environmental Matters . . . . . . . . . . . . . . . . . 33
<PAGE>
5. CONDITIONS TO FIRST LOANS . . . . . . . . . . . . . . . . . . 34
5.1. Evidence of Action . . . . . . . . . . . . . . . . . . . 34
5.2. Loan Documents . . . . . . . . . . . . . . . . . . . . . 34
5.3. Existing Indebtedness . . . . . . . . . . . . . . . . . 34
5.4. Approvals . . . . . . . . . . . . . . . . . . . . . . . 34
5.5. Certain Agreements . . . . . . . . . . . . . . . . . . . 35
5.6. Opinion of Counsel to the Borrower . . . . . . . . . . . 35
5.7. Opinion of Special Counsel . . . . . . . . . . . . . . . 35
5.8. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6. CONDITIONS OF LENDING - ALL LOANS . . . . . . . . . . . . . . . 35
6.1. Compliance . . . . . . . . . . . . . . . . . . . . . . . 35
6.2. Borrowing Request; Competitive Bid Request . . . . . . . 36
6.3. Other Documents . . . . . . . . . . . . . . . . . . . . 36
7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 36
7.1. Financial Statements . . . . . . . . . . . . . . . . . . 36
7.2. Certificates; Other Information . . . . . . . . . . . . 37
7.3. Legal Existence . . . . . . . . . . . . . . . . . . . . 37
7.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . 38
7.6. Payment of Indebtedness and Performance of
Obligations . . . . . . . . . . . . . . . . . . . . . . 38
7.7. Condition of Property . . . . . . . . . . . . . . . . . 38
7.8. Observance of Legal Requirements . . . . . . . . . . . . 38
7.9. Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . . . . 39
7.10. Licenses, Intellectual Property . . . . . . . . . . . . 39
7.11. Capitalization . . . . . . . . . . . . . . . . . . . . 39
8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 39
8.1. Liens . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.2. Merger, Consolidation, Purchase or Sale of
Assets, Etc. . . . . . . . . . . . . . . . . . . . . . . 41
8.3. Loans, Advances, Etc. . . . . . . . . . . . . . . . . . 42
8.4. Amendments, etc. of Certain Agreements . . . . . . . . . 42
9. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.1. Events of Default . . . . . . . . . . . . . . . . . . . 43
10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . 45
10.2. Delegation of Duties . . . . . . . . . . . . . . . . . 46
10.3. Exculpatory Provisions . . . . . . . . . . . . . . . . 46
10.4. Reliance by Agent . . . . . . . . . . . . . . . . . . . 46
10.5. Notice of Default . . . . . . . . . . . . . . . . . . . 47
10.6. Non-Reliance on Agent and Other Lenders . . . . . . . . 47
10.7. Indemnification . . . . . . . . . . . . . . . . . . . . 47
10.8. Agent in Its Individual Capacity . . . . . . . . . . . 48
10.9. Successor Agent . . . . . . . . . . . . . . . . . . . . 48
-2-
<PAGE>
11. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 49
11.1. Amendments and Waivers . . . . . . . . . . . . . . . . 49
11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . 49
11.3. No Waiver; Cumulative Remedies . . . . . . . . . . . . 50
11.4. Survival of Representations and Warranties . . . . . . 51
11.5. Payment of Expenses and Taxes . . . . . . . . . . . . . 51
11.6. Lending Offices . . . . . . . . . . . . . . . . . . . . 51
11.7. Assignments and Participations . . . . . . . . . . . . 52
11.8. Counterparts . . . . . . . . . . . . . . . . . . . . . 53
11.9. Adjustments; Set-off . . . . . . . . . . . . . . . . . 53
11.10. Construction . . . . . . . . . . . . . . . . . . . . . 54
11.11. Indemnity . . . . . . . . . . . . . . . . . . . . . . 54
11.12. Governing Law . . . . . . . . . . . . . . . . . . . . 55
11.13. Headings Descriptive . . . . . . . . . . . . . . . . . 55
11.14. Severability . . . . . . . . . . . . . . . . . . . . . 55
11.15. Integration . . . . . . . . . . . . . . . . . . . . . 55
11.16. Consent to Jurisdiction . . . . . . . . . . . . . . . 56
11.17. Service of Process . . . . . . . . . . . . . . . . . . 56
11.18. No Limitation on Service or Suit . . . . . . . . . . . 56
11.19. WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . 56
EXHIBITS
Exhibit A List of Commitments
Exhibit B Form of Revolving Credit Note
Exhibit B-1 Form of Competitive Bid Note
Exhibit C Form of Borrowing Request
Exhibit D Form of Competitive Bid Request
Exhibit E Form of Invitation to Bid
Exhibit F Form of Competitive Bid
Exhibit G Form of Competitive Bid Accept/Reject Letter
Exhibit H Form of Competitive Bid Loan Confirmation
Exhibit I Form of Notice of Conversion/Continuation
Exhibit J Form of Assignment and Acceptance Agreement
Exhibit K Form of Opinion of Counsel to the Borrower
Exhibit L Form of Opinion of Special Counsel
SCHEDULES
Schedule 1.1 List of Lending Offices
Schedule 4.1 List of Subsidiaries
Schedule 4.5 List of Litigation Not Otherwise Disclosed
Schedule 4.13 List of Environmental Matters
Schedule 8.1 List of Existing Liens
-3-
</TABLE>
<PAGE>
REVOLVING CREDIT AGREEMENT, dated as of June 15, 1995, by and among
CENTRAL LOUISIANA ELECTRIC COMPANY, INC., a Louisiana corporation (the
"Borrower"), the lenders party hereto (together with their respective assigns
pursuant to Section 11.7, the "Lenders", each a "Lender") and THE BANK OF NEW
YORK, as agent for the Lenders (in such capacity, the "Agent").
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1. Definitions
As used in this Agreement, terms defined in the preamble have the
meanings therein indicated, and the following terms have the following meanings:
"ABR Advances": the Revolving Credit Loans (or any portions
thereof) at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Alternate Base Rate.
"Accountants": Coopers & Lybrand, L.L.P. (or any successor
thereto), or such other firm of certified public accountants of recognized
national standing selected by the Borrower and reasonably satisfactory to the
Agent.
"Accumulated Funding Deficiency": as defined in Section 302 of
ERISA.
"Advance": with respect to a Revolving Credit Loan, an ABR
Advance or a Eurodollar Advance, as the case may be.
"Affected Advance": as defined in Section 2.9.
"Affected Principal Amount": in the event that (i) the Borrower
shall fail for any reason to borrow, convert or continue after it shall have
notified the Agent of its intent to do so in any instance in which it shall
have requested a Eurodollar Advance or shall have accepted one or more offers
of Competitive Bid Loans, an amount equal to the principal amount of such
Eurodollar Advance or accepted Competitive Bid Loan; (ii) a Eurodollar
Advance or a Competitive Bid Loan shall terminate for any reason prior to the
last day of the Interest Period applicable thereto, an amount equal to the
principal amount of such Eurodollar Advance or Competitive Bid Loan; and (iii)
the Borrower shall prepay or repay all or any part of the principal amount of a
Eurodollar Advance or a Competitive Bid Loan prior to the last day of the
Interest Period applicable thereto, an amount equal to the principal amount
of such Eurodollar Advance or Competitive Bid Loan so prepaid or repaid.
"Aggregate Commitments": on any date, the sum of all Commitments
on such date.
"Agreement": this Revolving Credit Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per annum
equal to the higher of (i) the Federal Funds Rate in effect on such date plus
1/2 of 1% or (ii) the BNY Rate in effect on such date.
"Applicable Facility Fee Percentage": with respect to the amount
of the Aggregate Commitments, at all times during which the applicable Pricing
Level set forth below is in effect, the percentage set forth below next to
such Pricing Level, subject to the provisos set forth below:
<TABLE>
<CAPTION>
Pricing Level Applicable Facility
Fee Percentage
<S> <C>
Pricing Level I 0.1000%
Pricing Level II 0.1000%
Pricing Level III 0.1125%
Pricing Level IV 0.1250%
Pricing Level V 0.1500%
Pricing Level VI 0.2250%
</TABLE>
provided that (i) changes in the Applicable Facility Fee Percentage resulting
from a change in the Pricing Level shall become effective on the effective date
of any change in the rating by Moody's or S&P of the Borrower's first mortgage
bonds and (ii) in the event of a split in ratings resulting in the ratings on
the Borrower's first mortgage bonds by each of S&P and Moody's falling within
different Pricing Levels, the Applicable Facility Fee Percentage shall
be the higher percentage.
"Applicable Lending Office": in respect of any Lender, (i) in the
case of such Lender's ABR Advances and Competitive Bid Loans, its Domestic
Lending Office and (ii) in the case of such Lender's Eurodollar Advances, its
Eurodollar Lending Office.
"Applicable Margin": with respect to the unpaid principal amount
of Eurodollar Advances, at all times during which the applicable Pricing Level
set forth below is in effect, the percentage set forth below next to such
Pricing Level, subject to the provisos set forth below:
<TABLE>
<CAPTION>
Pricing Level Applicable Margin
<S> <C>
Pricing Level I 0.1500%
Pricing Level II 0.1750%
Pricing Level III 0.1875%
Pricing Level IV 0.2250%
Pricing Level V 0.2250%
Pricing Level VI 0.3500%
</TABLE>
provided that (i) changes in the Applicable Margin resulting from a change in
the Pricing Level shall become effective on the effective date of any change in
the rating by Moody's or S&P of the Borrower's first mortgage bonds and (ii) in
the event of a split in ratings resulting in the ratings on the Borrower's
first mortgage bonds by each of S&P and Moody's falling within different
Pricing Levels, the Applicable Margin shall be the higher percentage.
"Asset Sale": any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or
any of its wholly-owned Subsidiaries of any Property (including, without
limitation, any Stock or other securities of another Person) of the Borrower or
-2-
<PAGE>
any of its Subsidiaries, other than inventory or accounts receivables or other
receivables sold, transferred or otherwise disposed of in the ordinary course
of business.
"Assignment and Acceptance Agreement": an assignment and
acceptance agreement executed by an assignor and an assignee pursuant to which
the assignor assigns to the assignee all or any portion of such assignor's
Loans, Notes and Commitment, substantially in the form of Exhibit J.
"Assignment Fee": as defined in Section 11.7(b).
"Authorized Signatory": as to (i) any Person which is a
corporation, the chairman of the board, the president, any vice president, the
chief financial officer or any other Person delegated in writing by such
officer (acceptable to the Agent) of such Person and (ii) any Person which is
not a corporation, the general partner or other managing Person thereof.
"Benefited Lender": as defined in Section 11.9.
"Bid Rate": as defined in Section 2.4(b).
"BNY": The Bank of New York.
"BNY Rate": a rate of interest per annum equal to the rate of
interest publicly announced in New York City by BNY from time to time as its
prime commercial lending rate, such rate to be adjusted automatically (without
notice) on the effective date of any change in such publicly announced rate.
"Borrowing Date": any Business Day on which the Lenders make
Revolving Credit Loans in accordance with a Borrowing Request or one or more
Lenders make Competitive Bid Loans pursuant to Competitive Bids which have
been accepted by the Borrower.
"Borrowing Request": a request for Revolving Credit Loans in the
form of Exhibit C.
"Business Day": for all purposes other than as set forth in
clause (ii) below, (i) any day other than a Saturday, a Sunday or a day on
which commercial banks located in New York City are authorized or required by
law or other governmental action to close and (ii) with respect to all notices
and determinations in connection with, and payments of principal and interest
on, Eurodollar Advances, any day which is a Business Day described in clause
(i) above and which is also a day on which dealings in foreign currency and
exchange and Eurodollar funding between banks may be carried on in London,
England.
"Capital Lease Obligations": with respect to any Person,
obligations of such Person with respect to leases which, in accordance with
GAAP, are required to be capitalized on the financial statements of such
Person.
"CLECO Mortgage": the Indenture of Mortgage, dated as of July 1,
1950, as supplemented and amended through the date hereof, made by the Borrower
to First National Bank of Commerce (formerly The National Bank of Commerce in
-3-
<PAGE>
New Orleans), as Trustee, as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with Section 8.4.
"Code": the Internal Revenue Code of 1986, as the same may be
amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"Commitment": in respect of any Lender, such Lender's undertaking
during the Commitment Period to make Revolving Credit Loans, subject to the
terms and conditions hereof, in an aggregate outstanding principal amount not
exceeding the amount set forth next to the name of such Lender in Exhibit A
under the heading "Commitment", as the same may be reduced pursuant to Section
2.5.
"Commitment Percentage": as to any Lender, the percentage set
forth opposite the name of such Lender in Exhibit A under the heading
"Commitment Percentage".
"Commitment Period": the period from the Effective Date until the
day before the Maturity Date.
"Common Equity": as of any date of determination, an amount equal
to the sum of (i) common Stock of the Borrower, (ii) premium on capital Stock
of the Borrower (as such term is used in the Financial Statements) and (iii)
retained earnings of the Borrower and its Subsidiaries, determined on a
Consolidated basis in accordance with GAAP.
"Competitive Bid": an offer by a Lender, in the form of Exhibit
F, to make a Competitive Bid Loan.
"Competitive Bid Accept/Reject Letter": a notification given by
the Borrower pursuant to Section 2.4 in the form of Exhibit G.
"Competitive Bid Loan": each Loan from a Lender to the Borrower
pursuant to Section 2.4.
"Competitive Bid Loan Confirmation": a confirmation by the Agent
to a Lender of the acceptance by the Borrower of any Competitive Bid (or
Portion thereof) made by such Lender, substantially in the form of Exhibit H.
"Competitive Bid Note" and "Competitive Bid Notes": as defined in
Section 2.4(g).
"Competitive Bid Request": a request by the Borrower, in the form
of Exhibit D, for Competitive Bids.
"Competitive Interest Period": as to any Competitive Bid Loan,
the period commencing on the date of such Competitive Bid Loan and ending on
the date requested in the Competitive Bid Request with respect to such
Competitive Bid Loan, which date shall not be earlier than 7 days after the
date of such Competitive Bid Loan or later than 180 days after the date of such
Competitive Bid Loan; provided, however, that if any Competitive Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day, unless such next succeeding
Business Day would be a date on or after the Maturity Date, in which case such
-4-
<PAGE>
Competitive Interest Period shall end on the next preceding Business Day, and
provided further that no Competitive Interest Period shall end after the
Maturity Date. Interest shall accrue from and including the first day of a
Competitive Interest Period to but excluding the last day of such Competitive
Interest Period.
"Consolidated": the Borrower and its Subsidiaries which are
consolidated for financial reporting purposes.
"Contingent Obligation": as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any return on any investment made
by another Person or any Indebtedness, lease, dividend or other obligation of
any other Person in any manner, whether contingent or whether directly or
indirectly, including, without limitation, any obligation in respect of the
liabilities of any partnership in which such other Person is a general partner,
except to the extent that such liabilities of such partnership are nonrecourse
to such other Person and its separate Property. The amount of any Contingent
Obligation of a Person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such
Person in good faith.
"Control Person": as defined in Section 2.16.
"Conversion/Continuation Date": the date on which (i) a
Eurodollar Advance is converted to an ABR Advance, (ii) the date on which an
ABR Advance is converted to a Eurodollar Advance or (iii) the date on which a
Eurodollar Advance is continued as a new Eurodollar Advance.
"Corporate Officer": with respect to the Borrower, the chairman
of the board, the president, any vice president, the chief executive officer,
the chief financial officer, the secretary, the treasurer or the controller
thereof.
"Default": any of the events specified in Section 9.1, whether or
not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Lending Office": in respect of any Lender, initially,
the office or offices of such Lender designated as such on Schedule 1.1;
thereafter, such other office of such Lender through which it shall be making
or maintaining ABR Advances or Competitive Bid Loans, as reported by such
Lender to the Agent and the Borrower, provided that any Lender may so report
different Domestic Lending Offices for all of its ABR Advances and all of its
Competitive Bid Loans, whereupon references to the Domestic Lending Office of
such Lender shall mean either or both of such offices, as applicable.
"Effective Date": June 15, 1995.
"Eligible Assignee": any of the following: (i) commercial banks,
finance companies, insurance companies and other financial institutions and
funds (whether a corporation, partnership or other entity) engaged generally in
-5-
<PAGE>
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business; provided that any such entity shall have combined
capital and surplus of at least $250,000,000 and shall be entitled, as of the
date such entity becomes a Lender, to receive payments under the Notes without
deduction or withholding with respect to Tax on the Overall Net Income, (ii)
each of the Lenders and (iii) any affiliate of a Lender.
"Employee Benefit Plan": an employee benefit plan within the
meaning of Section 3(3) of ERISA maintained, sponsored or contributed to by the
Borrower, any of its Subsidiaries or any ERISA Affiliate.
"Employee Stock Ownership Plan": The Central Louisiana Electric
Company, Inc. 401(k) Savings and Investment Plan ESOP Trust, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with Section 8.4.
"Environmental Laws": any and all federal, state and local laws
relating to the use, storage, transporting, manufacturing, handling, discharge,
disposal or recycling of Hazardous Substances or pollutants and including,
without limitation, (i) the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 USCA section 9601 et seq.; (ii) the Resource
Conservation and Recovery Act of 1976, as amended, 42 USCA section 6901 et seq.;
(iii) the Toxic Substance Control Act, as amended, 15 USCA section 2601 et.
seq.; (iv) the Water Pollution Control Act, as amended, 33 USCA section 1251
et. seq.; (v) the Clean Air Act, as amended, 42 USCA section 7401 et seq.;
(vi) the Hazardous Materials Transportation Authorization Act of 1994, as
amended, 49 USCA section 5101 et seq. and (viii) all rules and regulations
under any of the foregoing and under any analogous state laws, judgments,
decrees and injunctions and any analogous state laws applicable to the Borrower.
"ERISA": the 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.
"ERISA Affiliate": when used with respect to an Employee Benefit
Plan, ERISA, the PBGC or a provision of the Code pertaining to employee benefit
plans, any Person that is a member of any group of organizations within the
meaning of Sections 414(b), (c), (m) or (o) of the Code of which the Borrower
or any of its Subsidiaries is a member.
"Eurodollar Advances": collectively, the Revolving Credit Loans
(or any portions thereof) at such time as they (or such portions) are made and/
or being maintained at a rate of interest based upon the Eurodollar Rate.
"Eurodollar Interest Period": with respect to any Eurodollar
Advance requested by the Borrower, the period commencing on, as the case may
be, the Borrowing Date or Conversion/Continuation Date with respect to such
Eurodollar Advance and ending one, two, three or six months thereafter, as
selected by the Borrower in its irrevocable Borrowing Request or its
irrevocable Notice of Conversion/Continuation, provided, however, that (i) if
any Eurodollar Interest Period would otherwise end on a day which is not a
Business Day, such Eurodollar Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month or beyond the Maturity Date,
-6-
<PAGE>
in which event such Eurodollar Interest Period shall end on the immediately
preceding Business Day, (ii) any Eurodollar Interest Period that 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
Eurodollar Interest Period) shall end on the last Business Day of a calendar
month and (iii) the Borrower shall select Interest Periods so as not to have
more than five different Eurodollar Interest Periods outstanding at any one
time for all Eurodollar Advances.
"Eurodollar Lending Office": in respect of any Lender, initially,
the office, branch or affiliate of such Lender designated as such on Schedule
1.1 (or, if no such office branch or affiliate is specified, its Domestic
Lending Office); thereafter, such other office, branch or affiliate of such
Lender through which it shall be making or maintaining Eurodollar Advances, as
reported by such Lender to the Agent and the Borrower.
"Eurodollar Rate": with respect to the Eurodollar Interest Period
applicable to any Eurodollar Advance, a rate of interest per annum, as
determined by the Agent and then rounded to the nearest 1/16 of 1% or, if there
is no nearest 1/16 of 1%, then to the next higher 1/16 of 1%, equal to the
rate, as reported by BNY to the Agent, quoted by BNY to leading banks in the
interbank eurodollar market as the rate at which BNY is offering Dollar
deposits in an amount equal approximately to the Eurodollar Advance of BNY to
which such Interest Period shall apply for a period equal to such Interest
Period, as quoted at approximately 11:00 a.m. two Business Days prior to the
first day of such Interest Period.
"Event of Default": any of the events specified in Section 9.1,
provided that any requirement specified in Section 9.1 for the giving of
notice, the lapse of time, or both, or any other condition specified in Section
9.1, has been satisfied.
"Existing Credit Agreement": the Credit Agreement, dated as of
April 30, 1992, among the Borrower, the banks named therein and Citibank, N.A.,
as agent, as amended.
"Existing Indebtedness": collectively, the Indebtedness of the
Borrower under the Existing Credit Agreement, including, without limitation,
all outstanding principal, unpaid and accrued interest, unpaid and accrued fees
and other unpaid sums thereunder.
"Facility Fee": as defined in Section 3.1.
"Federal Funds Rate": for any day, a rate per annum (expressed as
a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%),
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (i) if the day
for which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average of the quotations for such day on such
transactions received by BNY as determined by BNY and reported to the Agent.
-7-
<PAGE>
"FERC": the Federal Energy Regulatory Commission or any
Governmental Authority succeeding to the functions thereof.
"FERC Order": that certain letter order, dated June 6, 1995, in
Docket No. ES95-8-001, issued by FERC, or any renewal or replacement order
thereof, together with any supplemental order thereto, in each case authorizing
the Borrower to issue notes or drafts maturing not more than one year after the
date of issue or renewal thereof or assumption of liability thereon (in each
case as described in Section 204(e) of the Federal Power Act, as amended and in
effect from time to time) in an aggregate principal amount not less than the
sum of the Commitments hereunder plus the aggregate principal amount of any
such notes or drafts of the Borrower (other than the Notes) outstanding from
time to time.
"Financial Statements": as defined in Section 4.11.
"GAAP": generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statement by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination, consistently applied. If at any time any change in GAAP
would affect the computation of any financial requirement set forth in this
Agreement, the Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such requirement to reflect such change in GAAP (subject to the
approval of the Required Lenders), provided that, until so amended, (i) such
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such requirement made before and after giving effect to such
change in GAAP.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator.
"Hazardous Substance": (i) any hazardous or toxic substance,
material or waste listed in the United States Department of Transportation
Hazardous Materials Table (49 CFR section 172.101) or by the Environmental
Protection Agency as hazardous substances (40 CFR Part 302) and amendments
thereto and replacements therefor and (ii) any substance, pollutant or
material defined as, or designated in, any Environmental Law as a "hazardous
substance," "toxic substance," "hazardous material," "hazardous waste,"
"restricted hazardous waste," "pollutant," "toxic pollutant" or words of
similar import.
"Highest Lawful Rate": as to any Lender, the maximum rate of
interest, if any, that at any time or from time to time may be contracted for,
taken, charged or received by such Lender on the Notes held thereby or which
may be owing to such Lender pursuant to this Agreement and the other Loan
Documents under the laws applicable to such Lender and this transaction.
-8-
<PAGE>
"Indebtedness": as to any Person, at a particular time, all items
which constitute, without duplication, (i) indebtedness for borrowed money or
the deferred purchase price of Property (other than trade payables incurred in
the ordinary course of business), (ii) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (iii) obligations with respect to any
conditional sale or title retention agreement, (iv) indebtedness arising under
acceptance facilities and the amount available to be drawn under all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder to the extent such Person shall not have reimbursed the
issuer in respect of the issuer's payment of such drafts, (v) all liabilities
secured by any Lien on any Property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof
(other than carriers', warehousemen's, mechanics', repairmen's or other like
nonconsensual statutory Liens arising in the ordinary course of business), (vi)
obligations under Capital Lease Obligations and (vii) Contingent Obligations.
"Indemnified Person": as defined in Section 11.11.
"Intellectual Property": all copyrights, trademarks,
servicemarks, patents, trade names and service names.
"Interest Payment Date": (i) as to any ABR Advance, the last day
of each March, June, September and December commencing on the first of such
days to occur after such ABR Advance is made or any Eurodollar Advance is
converted to an ABR Advance, (ii) as to any Eurodollar Advance in respect of
which the Borrower has selected a Eurodollar Interest Period of one, two or
three months, the last day of such Interest Period, (iii) as to any Eurodollar
Advance in respect of which the Borrower has selected a Eurodollar Interest
Period of six months, the day which is three months after the first day of such
Interest Period and the last day of such Interest Period, (iv) as to any
Competitive Bid Loan as to which the Borrower has selected an Interest Period
of 90 days or less, the last day of such Competitive Interest Period, and (v)
as to any Competitive Bid Loan as to which the Borrower has selected a
Competitive Interest Period of more than 90 days, the day which is 90 days
after the first day of such Competitive Interest Period and the last day of
each subsequent 90-day period thereafter or, if sooner, the last day of such
Competitive Interest Period.
"Interest Period": a Eurodollar Interest Period or a Competitive
Interest Period, as the context may require.
"Invitation to Bid": an invitation to make Competitive Bids in
the form of Exhibit E.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
or preferential arrangement, encumbrance, lien (statutory or other), or other
security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing.
"Loan Documents": collectively, this Agreement and the Notes.
"Loans": the Revolving Credit Loans and/or the Competitive Bid
Loans, as the case may be.
-9-
<PAGE>
"LPSC": the Louisiana Public Service Commission or any
Governmental Authority succeeding to the functions thereof.
"LPSC Order": the order of the LPSC that authorizes the Borrower
to perform this Agreement and to issue and deliver Notes in an aggregate
principal amount not less than the Aggregate Commitments.
"LREC": the Louisiana Rural Electric Corporation, or any
Governmental Authority succeeding to the functions thereof.
"Margin Stock": any "margin stock", as defined in Regulation U of
the Board of Governors of the Federal Reserve System, as the same may be
amended or supplemented from time to time.
"Material Adverse Change": a material adverse change in (i) the
financial condition, operations, business, prospects or Property of (a) the
Borrower or (b) the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents or
(iii) the ability of the Agent and the Lenders to enforce their rights and
remedies under the Loan Documents.
"Material Adverse Effect": a material adverse effect on (i) the
financial condition, operations, business, prospects or Property of (a) the
Borrower or (b) the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents or
(iii) the ability of the Agent and the Lenders to enforce their rights and
remedies under the Loan Documents.
"Maturity Date": June 15, 2000, or such earlier date on which the
Notes shall become due and payable, whether by acceleration or otherwise.
"Maximum Offer": as defined in Section 2.4(b).
"Maximum Request": as defined in Section 2.4(a).
"Moody's": Moody's Investors Service, Inc., or any successor
thereto.
"Multiemployer Plan": a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Note": a Revolving Credit Note or a Competitive Bid Note, as the
case may be.
"Notes": the Revolving Credit Notes and/or the Competitive Bid
Notes, as the case may be.
"Notice of Conversion/Continuation": a notice substantially in
the form of Exhibit I.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any Governmental Authority
succeeding to the functions thereof.
-10-
<PAGE>
"Pension Plan": at any date of determination, any Employee
Benefit Plan (including a Multiemployer Plan), the funding requirements of
which (under Section 302 of ERISA or Section 412 of the Code) are, or at any
time within the six years immediately preceding such date, were in whole or in
part, the responsibility of the Borrower, any of its Subsidiaries or any ERISA
Affiliate.
"Permitted Liens": Liens permitted to exist under Section 8.1.
"Person": any individual, firm, partnership, joint venture,
corporation, association, business enterprise, limited liability company, joint
stock company, unincorporated association, trust, Governmental Authority or any
other entity, whether acting in an individual, fiduciary, or other capacity,
and for the purpose of the definition of "ERISA Affiliate", a trade or
business.
"Portion": as defined in Section 2.4(b).
"Pricing Level I": any time when the rating of the Borrower's
first mortgage bonds is (i) A+ or higher by S&P and (ii) A1 or higher by
Moody's.
"Pricing Level II": any time when (i) the rating of the
Borrower's first mortgage bonds is (a) A or higher by S&P and (b) A2 or higher
by Moody's and (ii) Pricing Level I does not apply.
"Pricing Level III": any time when (i) the rating of the
Borrower's first mortgage bonds is (a) A- or higher by S&P and (b) A3 or higher
by Moody's and (ii) Pricing Levels I and II do not apply.
"Pricing Level IV": any time when (i) the rating of the
Borrower's first mortgage bonds is (a) BBB+ or higher by S&P and (b) Baa1 or
higher by Moody's and (ii) Pricing Levels I, II and III do not apply.
"Pricing Level V": any time when (i) the rating of the Borrower's
first mortgage bonds is (a) BBB or higher by S&P and (b) Baa2 or higher by
Moody's and (ii) Pricing Levels I, II, III and IV do not apply.
"Pricing Level VI": any time when Pricing Levels I, II, III, IV
and V do not apply.
"Prohibited Transaction": a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.
"Property": all types of real, personal, tangible, intangible or
mixed property.
"Proposed Bid Rate": as applied to any Remaining Interest Period
with respect to a Lender's Competitive Bid Loan, the rate per annum that such
Lender in good faith would have quoted to the Borrower had the Borrower
requested that such Lender make a Competitive Bid Loan on the first day of such
Remaining Interest Period, assuming no Default or Event of Default existed on
-11-
<PAGE>
such day and that the Borrower had the right to borrow hereunder on such day,
such rate to be determined by such Lender in good faith in its sole discretion.
"Real Property": all real property owned or leased (or previously
owned or leased) by the Borrower or any of its Subsidiaries (or any of their
respective predecessors).
"Remaining Interest Period": (i) in the event that the Borrower
shall fail for any reason to borrow a Revolving Credit Loan in respect of which
it shall have requested a Eurodollar Advance or convert an Advance to, or
continue an Advance as, a Eurodollar Advance after it shall have notified the
Agent of its intent to do so, a period equal to the Eurodollar Interest Period
that the Borrower elected in respect of such Eurodollar Advance; or (ii) in the
event that the Borrower shall fail for any reason to borrow a Competitive Bid
Loan after it shall have accepted one or more offers of Competitive Bid Loans,
a period equal to the Competitive Interest Period that the Borrower elected in
respect of such Competitive Bid Loan; or (iii) in the event that a Eurodollar
Advance or a Competitive Bid Loan shall terminate for any reason prior to the
last day of the Interest Period applicable thereto, a period equal to the
remaining portion of such Interest Period if such Interest Period had not been
so terminated; or (iv) in the event that the Borrower shall prepay or repay all
or any part of the principal amount of a Eurodollar Advance or a Competitive
Bid Loan prior to the last day of the Interest Period applicable thereto, a
period equal to the period from and including the date of such prepayment or
repayment to but excluding the last day of such Interest Period.
"Reportable Event": with respect to any Pension Plan, (i) any
event set forth in Sections 4043(b) (other than a Reportable Event as to which
the 30 day notice requirement is waived by the PBGC under applicable
regulations), 4062(c) or 4063(a) or ERISA or the regulations thereunder, (ii)
an event requiring the Borrower, any of its Subsidiaries or any ERISA Affiliate
to provide security to a Pension Plan under Section 401(a)(29) of the Code,
or (iii) any failure to make any payment required by Section 412(m) of the
Code.
"Required Lenders": Lenders having Commitments equal to at least
66 2/3% of the Aggregate Commitments or, if the Commitments have been
terminated or otherwise no longer exist, Lenders having an unpaid principal
balance of Loans equal to at least 66 2/3% of the aggregate outstanding Loans.
"Revolving Credit Loan" and "Revolving Credit Loans": as defined
in Section 2.1.
"Revolving Credit Note" and "Revolving Credit Notes": as defined
in Section 2.2.
"RUS": Rural Utilities Service, or any Governmental Authority
succeeding to the functions thereof.
"RUS Indebtedness": the Indebtedness of LREC to RUS, the
liabilities in respect of which have been assumed by the Borrower, in an
aggregate principal amount equal to approximately $150,000.
-12-
<PAGE>
"S&P": Standard & Poor's Ratings Group, a division of McGraw-
Hill, Inc., or any successor thereto.
"SEC": the Securities and Exchange Commission or any Governmental
Authority succeeding to the functions thereof.
"Solvent": with respect to any Person on a particular date, the
condition that on such date, (i) the fair value of the Property of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (iv) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which such Person's Property would constitute an unreasonably small amount of
capital.
"Special Counsel": Emmet, Marvin & Martin, LLP, special counsel
to the Agent.
"Stock": any and all shares, rights, interests, participations,
warrants or other equivalents (however designated) of corporate stock.
"Submission Deadline": as defined in Section 2.4(b).
"Subsidiary": as to any Person, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which such Person or any Subsidiary of such Person, directly or indirectly,
either (i) in respect of a corporation, owns or controls more than 50% of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (ii) in respect of an association, partnership, joint venture
or other business entity, is entitled to share in more than 50% of the profits
and losses, however determined.
"Tax": any present or future tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature and whatever called, by a
Governmental Authority, on whomsoever and wherever imposed, levied, collected,
withheld or assessed.
"Tax on the Overall Net Income": as to any Person, a Tax imposed
by the jurisdiction in which that Person's principal office (and/or, in the
case of a Lender, its Domestic Lending Office) is located or by any political
subdivision or taxing authority thereof or in which that Person is deemed to be
doing business on all or part of the net income, profits or gains of that
Person (whether worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"Termination Event": with respect to any Pension Plan, (i) a
Reportable Event, (ii) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension
Plan amendment as a termination under Section 4041(c) of ERISA, (iii) the
-13-
<PAGE>
institution of proceedings to terminate a Pension Plan under Section 4042 of
ERISA, or (iv) the appointment of a trustee to administer any Pension Plan
under Section 4042 of ERISA.
"Total Assets": as of any date of determination, the total assets
of the Borrower determined in accordance with GAAP.
"Total Capitalization": the difference between (a) the sum of (i)
preferred Stock of the Borrower (less deferred compensation relating to
unallocated convertible preferred Stock of the Borrower held by the Employee
Stock Ownership Plan), plus (ii) common Stock of the Borrower and any premium
on capital Stock thereon (as such term is used in the Financial Statements),
plus (iii) retained earnings of the Borrower, plus (iv) all Indebtedness of the
Borrower (net of unamortized premium and discount (as such term is used in the
Financial Statements)), less (b) treasury Stock of the Borrower.
"United States": the United States of America (including the
States thereof and the District of Columbia).
1.2. Principles of Construction
(a) All terms defined in a Loan Document shall have the meanings
given such terms therein when used in the other Loan Documents or any
certificate or opinion made or delivered pursuant thereto, unless otherwise
defined therein.
(b) As used in the Loan Documents and in any certificate or
opinion made or delivered pursuant thereto, accounting terms not defined in
Section 1.1, and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in a Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
(d) The phrase "may not" is prohibitive and not permissive; the
word "including" is not limiting; and the word "or" is not exclusive.
(e) Unless the context otherwise requires, words in the singular
number include the plural, and words in the plural include the singular.
(f) Unless specifically provided in a Loan Document to the
contrary, references to a time shall refer to New York City time.
(g) Unless specifically provided in a Loan Document to the
contrary, in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
(h) References in any Loan Document to a fiscal period shall
refer to that fiscal period of the Borrower.
-14-
<PAGE>
2. AMOUNT AND TERMS OF LOANS
2.1. Revolving Credit Loans
Subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans (each a "Revolving Credit Loan" and, as
the context may require, collectively with all other Revolving Credit Loans of
such Lender and with the Revolving Credit Loans of all other Lenders, the
"Revolving Credit Loans") to the Borrower from time to time during the
Commitment Period, provided, however, that immediately after giving effect
thereto (i) the outstanding principal balance of such Lender's Revolving Credit
Loans would not exceed such Lender's Commitment, and (ii) the aggregate
outstanding principal balance of all Lenders' Revolving Credit Loans and
Competitive Bid Loans would not exceed the Aggregate Commitments. During the
Commitment Period, the Borrower may borrow, prepay in whole or in part and
reborrow under the Aggregate Commitments, all in accordance with the terms and
conditions of this Agreement.
2.2. Revolving Credit Notes
The Revolving Credit Loans made by a Lender shall be evidenced by
a promissory note of the Borrower, substantially in the form of Exhibit B-1,
with appropriate insertions therein as to date and principal amount (each, as
indorsed or modified from time to time, a "Revolving Credit Note" and,
collectively with the Notes of all other Lenders, the "Revolving Credit
Notes"), payable to the order of such Lender and representing the obligation of
the Borrower to pay the lesser of (i) the original amount of the Commitment of
such Lender and (ii) the aggregate unpaid principal balance of all Revolving
Credit Loans made by such Lender, with interest thereon as prescribed in
Section 2.8. Each Revolving Credit Note shall (a) be dated the first Borrowing
Date, (b) be stated to mature on the Maturity Date and (c) bear interest from
the date thereof on the unpaid principal balance thereof at the applicable
interest rate or rates per annum determined as provided in Section 2.8, payable
as specified in Section 2.8.
2.3. Procedure for Borrowing Revolving Credit Loans
(a) The Borrower may borrow Revolving Credit Loans under the
Aggregate Commitments on any Business Day during the Commitment Period,
provided, however, that the Borrower shall notify the Agent (by telephone or
fax) no later than (i) 11:00 a.m., three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Advances and (ii) 11:30 a.m., on the
requested Borrowing Date, in the case of ABR Advances, in each case specifying
(A) the aggregate principal amount to be borrowed under the Aggregate
Commitments, (B) the requested Borrowing Date, (C) whether such borrowing is
to consist of one or more Eurodollar Advances, ABR Advances, or a combination
thereof and (D) if the borrowing is to consist of one or more Eurodollar
Advances, the length of the Eurodollar Interest Period for each such Eurodollar
Advance, provided, however, that no Eurodollar Interest Period selected in
respect of any Revolving Credit Loan shall end after the Maturity Date. If the
Borrower fails to give timely notice in connection with a request for a
Eurodollar Advance, the Borrower shall be deemed to have elected that such
Advance shall be made as an ABR Advance. Each such notice shall be irrevocable
and confirmed promptly by delivery to the Agent of a Borrowing Request. Each
ABR Advance shall be in an aggregate principal amount equal to $5,000,000 or an
-15-
<PAGE>
integral multiple of $1,000,000 in excess thereof (or, if the unused amount of
the Aggregate Commitments is less than such amount, then such lesser amount of
the unused Aggregate Commitments), and each Eurodollar Advance shall be in an
aggregate principal amount equal to $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
(b) Upon receipt of each notice of borrowing from the Borrower,
the Agent shall promptly notify each Lender thereof. Subject to its receipt of
the notice referred to in the preceding sentence, each Lender will make the
amount of its Commitment Percentage of each borrowing available to the Agent
for the account of the Borrower at the office of the Agent set forth in Section
11.2 not later than 2:00 p.m. on the relevant Borrowing Date requested by the
Borrower, in funds immediately available to the Agent at such office. The
amounts so made available to the Agent on such Borrowing Date will then,
subject to the satisfaction of the terms and conditions of this Agreement, be
made available on such date to the Borrower by the Agent at the office of the
Agent specified in Section 11.2 by crediting the account of the Borrower on the
books of such office with the aggregate of said amounts received by the Agent.
(c) Unless the Agent shall have received prior notice from a
Lender (by telephone or otherwise, such notice to be promptly confirmed by fax
or other writing) that such Lender will not make available to the Agent such
Lender's Commitment Percentage of the Revolving Credit Loans requested by the
Borrower, the Agent may assume that such Lender has made such share available
to the Agent on the Borrowing Date in accordance with this Section, provided
that such Lender received notice of the proposed borrowing from the Agent, and
the Agent may, in reliance upon such assumption, make available to the Borrower
on the Borrowing Date a corresponding amount. If and to the extent such Lender
shall not have so made its Commitment Percentage of such Loans available to the
Agent, such Lender and the Borrower severally agree to pay to the Agent
forthwith on demand such corresponding amount (to the extent not previously
paid by the other), together with interest thereon for each day from the date
such amount is made available to the Borrower to the date such amount is
paid to the Agent, at a rate per annum equal to, in the case of the Borrower,
the applicable interest rate set forth in Section 2.8 for such Loans, and, in
the case of such Lender, the Federal Funds Rate in effect on each such day (as
determined by the Agent in accordance with the definition of "Federal Funds
Rate" set forth in Section 1.1). Such payment by the Borrower, however, shall
be without prejudice to its rights against such Lender. If such Lender shall
pay to the Agent such corresponding amount, such amount so paid shall
constitute such Lender's Revolving Credit Loan as part of the Revolving Credit
Loans for purposes of this Agreement, which Revolving Credit Loan shall be
deemed to have been made by such Lender on the Borrowing Date applicable to
such Revolving Credit Loans. The failure of any Lender to make its Commitment
Percentage of any requested Revolving Credit Loan available to the Agent
pursuant to this subsection shall not relieve any other Lender of such other
Lender's obligation to make its own Commitment Percentage of such Revolving
Credit Loan available to the Agent in accordance with this subsection,
provided, however, that no Lender shall be liable or responsible for the
failure by any other Lender to make any Revolving Credit Loans required to be
made by such other Lender.
(d) If a Lender makes a new Revolving Credit Loan on a Borrowing
Date on which the Borrower is to repay a Revolving Credit Loan from such
Lender, such Lender shall apply the proceeds of such new Revolving Credit Loan
to make such repayment, and only the excess of the proceeds of such new
-16-
<PAGE>
Revolving Credit Loan over the Revolving Credit Loan being repaid need be made
available to the Agent, for the Borrower's account.
(e) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice of borrowing given to the Agent,
the Agent may act without liability upon the basis of telephonic notice of such
borrowing believed by the Agent in good faith to be from an authorized officer
of the Borrower prior to receipt of written confirmation.
In each such case, the Agent's records with regard to any such telephone notice
shall be presumptively correct, absent manifest error.
2.4. Competitive Bid Loans; Procedure
(a) The Borrower may make Competitive Bid Requests by 11:00 a.m.
at least two Business Days prior to the proposed Borrowing Date for one or more
Competitive Bid Loans. Each Competitive Bid Request given to the Agent (which
shall promptly on the same day give notice thereof to each Lender by fax of an
Invitation to Bid if the Competitive Bid Request is not rejected pursuant to
this Section), shall be by telephone (confirmed by fax or other written
electronic means promptly on the same day by the delivery of a Competitive Bid
Request signed by the Borrower), and shall specify (i) the proposed Borrowing
Date, which shall be a Business Day, (ii) the aggregate amount of the requested
Competitive Bid Loans (the "Maximum Request") which amount (A) shall not exceed
an amount which, on the proposed Borrowing Date and after giving effect to the
requested Competitive Bid Loans, would cause the aggregate outstanding
principal balance of all Loans of all Lenders to exceed the Aggregate
Commitments and (B) shall be in a principal amount equal to $3,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) the Competitive
Interest Period(s) therefor and the last day of each such Competitive Interest
Period, and (iv) if more than one Competitive Interest Period is so specified,
the principal amount allocable to each such Competitive Interest Period (which
amount shall not be less than $3,000,000 or an integral multiple of $1,000,000
in excess thereof). A Competitive Bid Request that does not conform
substantially to the form of Exhibit D shall be rejected, and the Agent shall
promptly notify the Borrower of such rejection. Notwithstanding anything
contained herein to the contrary, (1) not more than three Competitive Interest
Periods may be requested pursuant to any Competitive Bid Request and (2) not
more than five Competitive Bid Loans may be outstanding at any one time.
(b) Each Lender in its sole discretion may (but is not obligated
to) submit one or more Competitive Bids to the Agent not later than 10:00 a.m.
at least one Business Day prior to the proposed Borrowing Date specified in
such Competitive Bid Request (such time being herein called the "Submission
Deadline"), by fax or other writing, and thereby irrevocably offer to make all
or any part (any such part referred to as a "Portion") of any Competitive Bid
Loan described in the relevant Competitive Bid Request at a rate of interest
per annum (each a "Bid Rate") specified therein in an aggregate principal
amount of not less than $3,000,000 or an integral multiple of $1,000,000 in
excess thereof, provided that Competitive Bids submitted by the Agent may only
be submitted if the Agent notifies the Borrower of the terms of its Competitive
Bid not later than thirty minutes prior to the Submission Deadline. Multiple
Competitive Bids may be delivered to and by the Agent. The aggregate Portions
of Competitive Bid Loans for any or all Competitive Interest Periods offered by
each Lender in its Competitive Bid may exceed the Maximum Request contained in
the relevant Competitive Bid Request, provided that each Competitive Bid shall
-17-
<PAGE>
set forth the maximum aggregate amount of the Competitive Bid Loans offered
thereby which the Borrower may accept (the "Maximum Offer"), which Maximum
Offer shall not exceed the Maximum Request. If any Lender shall elect not to
make a Competitive Bid, such Lender shall so notify the Agent by fax not later
than the Submission Deadline therefor, provided, however, that the failure by
any Lender to give any such notice shall not obligate such Lender to make any
Competitive Bid Loan.
(c) The Agent shall promptly give notice by telephone (promptly
confirmed by fax or other writing) to the Borrower of all Competitive Bids
received by the Agent prior to the Submission Deadline which comply in all
material respects with this Section. The Borrower shall, in its sole
discretion but subject to Section 2.4(d), irrevocably accept or reject any such
Competitive Bid (or any Portion thereof) not later than 12:00 noon on the day
of the Submission Deadline by notice to the Agent by telephone (confirmed by
fax or other writing in the form of a Competitive Bid Accept/Reject Letter
promptly the same day). Promptly upon receipt by the Agent of such a
Competitive Bid Accept/Reject Letter, the Agent will give notice to each Lender
that submitted a Competitive Bid as to the extent, if any, that such Lender's
Competitive Bid shall have been accepted. If the Agent fails to receive notice
from the Borrower of its acceptance or rejection of any Competitive Bids at or
prior to 1:00 p.m. on the day of the Submission Deadline, all such Competitive
Bids shall be deemed to have been rejected by the Borrower, and the Agent will
give to each Lender that submitted a Competitive Bid notice of such rejection
by telephone on such day. In due course following the acceptance of any
Competitive Bid, the Agent shall notify each Lender which submitted a
Competitive Bid, in the form of a Competitive Bid Loan Confirmation, of the
amount, maturity date and Bid Rate for each Competitive Bid Loan.
(d) If the Borrower accepts a Portion of a proposed Competitive
Bid Loan for a single Competitive Interest Period at the Bid Rate provided
therefor in a Lender's Competitive Bid, such Portion shall be in a principal
amount of $3,000,000 or an integral multiple of $1,000,000 in excess thereof
(subject to such lesser allocation as may be made pursuant to the provisions of
this Section 2.4(d)). The aggregate principal amount of Competitive Bid Loans
accepted by the Borrower following Competitive Bids responding to a Competitive
Bid Request shall not exceed the Maximum Request. The aggregate principal
amount of Competitive Bid Loans accepted by the Borrower pursuant to a Lender's
Competitive Bid shall not exceed the Maximum Offer therein contained. If the
Borrower accepts any Competitive Bid Loans or Portion offered in any
Competitive Bid, the Borrower must accept Competitive Bids (and Competitive Bid
Loans and Portions thereby offered) based exclusively upon the successively
lowest Bid Rates within each Competitive Interest Period and no other criteria.
If two or more Lenders submit Competitive Bids with identical Bid Rates for the
same Competitive Interest Period and the Borrower accepts any thereof, the
Borrower shall, subject to the first three sentences of this Section 2.4(d),
accept all such Competitive Bids as nearly as possible in proportion to the
amounts of such Lender's respective Competitive Bids with identical Bid Rates
for such Competitive Interest Period, provided, that if the amount of
Competitive Bid Loans to be so allocated is not sufficient to enable each such
Lender to make such Competitive Bid Loan (or Portions thereof) in an aggregate
principal amount of $3,000,000 or an integral multiple of $1,000,000 in excess
thereof, the Borrower shall round the Competitive Bid Loans (or Portions
thereof) allocated to such Lender or Lenders as the Borrower shall select as
necessary to a minimum of $1,000,000 or an integral multiple of $500,000 in
excess thereof.
-18-
<PAGE>
(e) Not later than 2:00 p.m. on the relevant Borrowing Date,
each Lender whose Competitive Bid was accepted by the Borrower shall make
available to the Agent at its office set forth in Section 11.2, in immediately
available funds, the proceeds of such Lender's Competitive Bid Loan(s). The
amounts so made available to the Agent on such Borrowing Date will then,
subject to the satisfaction of the terms and conditions of this Agreement, as
determined by the Agent, be made available on such date to the Borrower by the
Agent at the office of the Agent specified in Section 11.2 by crediting the
account of the Borrower on the books of such office with the aggregate of said
amounts received by the Agent.
(f) All notices required by this Section 2.4 shall be given in
accordance with Section 11.2.
(g) The Competitive Bid Loans made by each Lender shall be
evidenced by a promissory note of the Borrower, substantially in the form of
Exhibit B-2 (each, as indorsed or modified from time to time, a "Competitive
Bid Note" and, collectively with the Competitive Bid Notes of all other
Lenders, the "Competitive Bid Notes"), payable to the order of such Lender,
and dated the first Borrowing Date. Each Competitive Bid Loan shall be due
and payable on the last day of the Competitive Interest Period applicable
thereto.
2.5. Voluntary Reduction or Termination of Aggregate Commitments
The Borrower shall have the right, upon at least three Business Days' prior
written notice to the Agent, at any time to terminate the Aggregate Commitments
or from time to time to permanently reduce the Aggregate Commitments, provided,
however, that any such reduction shall be in the amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, and provided further that
the Borrower shall prepay the Loans by the amount, if any, by which the
aggregate unpaid principal balance of the Loans exceeds the amount of the
Aggregate Commitments as so reduced. Reductions of the Aggregate
Commitments shall be applied pro rata according to the Commitment of each
Lender. Simultaneously with each reduction of the Aggregate Commitments
under this Section, the Borrower shall pay the Facility Fee accrued on the
amount by which the Aggregate Commitments have been reduced and prepay the
Loans as required by Section 2.6.
2.6. Prepayments of the Loans
(a) Voluntary Prepayments. The Borrower may, at its option,
prepay the Loans without premium or penalty, in full at any time or in part
from time to time by notifying the Agent in writing at least one Business
Day prior to the proposed prepayment date, in the case of Revolving Credit
Loans consisting of ABR Advances and at least three Business Days prior to
the proposed prepayment date, in the case of Competitive Bid Loans or
Revolving Credit Loans consisting of Eurodollar Advances, specifying the
Loans to be prepaid, the amount to be prepaid and the date of prepayment.
Such notice shall be irrevocable and the amount specified in such notice
shall be due and payable on the date specified, together with accrued
interest to the date of such payment on the amount prepaid. Upon receipt of
such notice, the Agent shall promptly notify (i) in the case of a prepayment
of Revolving Credit Loans, each Lender or (ii) in the case of a prepayment
of Competitive Bid Loans, the applicable Lender thereof. Each partial
-19-
<PAGE>
prepayment shall be in an aggregate principal amount of (A) $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, in the case of Revolving
Credit Loans consisting of ABR Advances or Eurodollar Advances, (B)
$3,000,000 or an integral multiple of $1,000,000 in excess thereof, in the case
of Revolving Credit Loans consisting of Competitive Bid Loans or, (C) if the
outstanding principal balance of the Loans is less that the minimum amounts
set forth in clauses (A) and (B), then such lesser outstanding principal
balance, as the case may be. After giving effect to any partial prepayment with
respect to Eurodollar Advances which were made (whether as the result of a
borrowing or a conversion) on the same date and which had the same Interest
Period, the outstanding principal amount of such Eurodollar Advances shall
exceed (subject to Section 2.7) $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. If any prepayment is made in respect of any
Eurodollar Advance or Competitive Bid Loan, in whole or in part, prior to the
last day of the applicable Interest Period, the Borrower agrees to indemnify
the applicable Lenders in accordance with Section 2.13.
(b) Mandatory Prepayments Relating to Reductions of the Aggregate
Commitments. Simultaneously with each reduction of the Aggregate Commitments
under Section 2.5, the Borrower shall prepay the Loans by the amount, if any,
by which the aggregate unpaid principal balance of the Loans exceeds the amount
of the Aggregate Commitments as so reduced. Such prepayments shall be applied
between the Revolving Credit Loans and the Competitive Bid Loans at the
discretion of the Borrower, provided that any prepayments of Revolving Credit
Loans shall be applied pro rata according the Commitment of each Lender.
2.7. Conversions and Continuations
(a) The Borrower may elect from time to time to convert
Eurodollar Advances to ABR Advances by giving the Agent at least one Business
Day's prior irrevocable notice of such election (confirmed by the delivery of a
Notice of Conversion/Continuation), specifying the amount to be so converted,
provided, that any such conversion of Eurodollar Advances shall only be made
on the last day of the Interest Period applicable thereto. In addition, the
Borrower may elect from time to time to (i) convert ABR Advances to Eurodollar
Advances and (ii) to continue Eurodollar Advances by selecting a new Eurodollar
Interest Period therefor, in each case by giving the Agent at least three
Business Days' prior irrevocable notice of such election (confirmed by the
delivery of a Notice of Conversion/Continuation), in the case of a conversion
to, or continuation of, Eurodollar Advances, specifying the amount to be so
converted and the initial Eurodollar Interest Period relating thereto,
provided that any such conversion of ABR Advances to Eurodollar Advances
shall only be made on a Business Day and any such continuation of Eurodollar
Advances shall only be made on the last day of the Eurodollar Interest
Period applicable to the Eurodollar Advances which are to be continued as such
new Eurodollar Advances. The Agent shall promptly provide the Lenders with a
copy of each such Notice of Conversion/Continuation. ABR Advances and
Eurodollar Advances may be converted or continued pursuant to this Section in
whole or in part, provided that conversions of ABR Advances to Eurodollar
Advances, or continuations of Eurodollar Advances shall be in an aggregate
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) Notwithstanding anything in this Section to the contrary, no
ABR Advance may be converted to a Eurodollar Advance and no Eurodollar Advance
-20-
<PAGE>
may be continued, if a Default or Event of Default has occurred and is
continuing either (i) at the time the Borrower shall notify the Agent of its
election to convert or continue or (ii) on the requested
Conversion/Continuation Date. In such event, such ABR Advance shall be
automatically continued as an ABR Advance, or such Eurodollar Advance shall be
automatically converted to an ABR Advance on the last day of the Eurodollar
Interest Period applicable to such Eurodollar Advance. If an Event of Default
shall have occurred and be continuing, the Agent shall, at the request of
the Required Lenders, notify the Borrower (by telephone or otherwise) that
all, or such lesser amount as the Required Lenders shall designate, of the
outstanding Eurodollar Advances shall be automatically converted to ABR
Advances, in which event such Eurodollar Advances shall be automatically
converted to ABR Advances on the date such notice is given.
(c) No Interest Period selected in respect of conversion or
continuation of any Eurodollar Advance shall end after the Maturity Date.
(d) Each conversion or continuation shall be effected by each
Lender by applying the proceeds of its new ABR Advance or Eurodollar Advance,
as the case may be, to its Advances (or portion thereof) being converted (it
being understood that such conversion shall not constitute a borrowing for
purposes of Sections 4, 5 or 6).
(e) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice of borrowing given to the Agent,
the Agent may act without liability upon the basis of telephonic notice of such
borrowing believed by the Agent in good faith to be from an authorized officer
of the Borrower prior to receipt of written confirmation. In each such case,
the Agent's records with regard to any such telephone notice shall be
presumptively correct, absent manifest error.
2.8. Interest Rate and Payment Dates
(a) Prior to Maturity. Except as otherwise provided in
Section 2.8(b), prior to maturity, the Loans shall bear interest on the
outstanding principal balance thereof at the applicable interest rate or rates
per annum set forth below:
<TABLE>
<CAPTION>
ADVANCES RATE
<S> <C>
Each ABR Advance Alternate Base Rate.
Each Eurodollar Eurodollar Rate for the
Advance applicable Eurodollar Interest Period
plus the Applicable Margin.
Each Competitive Bid Rate applicable thereto for
Bid Loan the applicable Competitive Interest Period.
</TABLE>
-21-
<PAGE>
(b) Late Charges. If all or any portion of the principal balance
of or interest payable on any of the Loans or any other amount payable under
the Loan Documents shall not be paid when due (whether at the stated maturity
thereof, by acceleration or otherwise), such overdue balance or amount shall
bear interest at a rate per annum (whether before or after the entry of a
judgment thereon) equal to 2% plus the rate which would otherwise be
applicable pursuant to Section 2.8(a), from the date of such nonpayment to, but
not including, the date such balance is paid in full. All such interest shall
be payable on demand.
(c) In General. Interest on (i) ABR Advances to the extent based
on the BNY Rate shall be calculated on the basis of a 365 or 366-day year (as
the case may be), and (ii) ABR Advances to the extent based on the Federal
Funds Rate, on Eurodollar Advances and on Competitive Bid Loans shall be
calculated on the basis of a 360-day year, in each case, for the actual number
of days elapsed, including the first day but excluding the last. Except as
otherwise provided in Section 2.8(b), interest shall be payable in arrears on
each Interest Payment Date and upon each payment (including prepayment) of the
Loans. Any change in the interest rate on the Loans resulting from a change in
the Alternate Base Rate shall become effective as of the opening of business on
the day on which such change shall become effective. The Agent shall, as soon
as practicable, notify the Borrower and the Lenders of the effective date and
the amount of each such change in the BNY Rate, but any failure to so notify
shall not in any manner affect the obligation of the Borrower to pay interest
on the Loans in the amounts and on the dates required. Each determination of
the Alternate Base Rate or a Eurodollar Rate by the Agent pursuant to this
Agreement shall be conclusive and binding on all parties hereto absent
manifest error. At no time shall the interest rate payable on the Loans,
together with the Commitment Fee and all other amounts payable under the Loan
Documents, to the extent the same are construed to constitute interest,
exceed the Highest Lawful Rate. If any amount paid hereunder would exceed the
maximum amount of interest permitted by the Highest Lawful Rate, than such
amount shall automatically be reduced to such maximum permitted amount, and
interest for any subsequent period, to the extent less than the maximum amount
permitted for such period by the Highest Lawful Rate, shall be increased by the
unpaid amount of such reduction. Any interest actually received for any
period in excess of such maximum allowable amount for such period shall be
deemed to have been applied as a prepayment of the Loans. The Borrower
acknowledges that to the extent interest payable on ABR Advances is based on
the BNY Rate, such Rate is only one of the bases for computing interest on
loans made by the Lenders, and by basing interest payable on ABR Advances on
the BNY Rate, the Lenders have not committed to charge, and the Borrower has
not in any way bargained for, interest based on a lower or the lowest rate at
which the Lenders may now or in the future make loans to other borrowers.
2.9. Substituted Interest Rate
In the event that (i) the Agent shall have determined in the
exercise of its reasonable discretion (which determination shall be conclusive
and binding upon the Borrower) that by reason of circumstances affecting the
interbank eurodollar market either reasonable means do not exist for
ascertaining the Eurodollar Rate or (ii) the Required Lenders shall have
notified the Agent that they have determined (which determination shall be
conclusive and binding on the Borrower) that the applicable Eurodollar Rate
will not adequately and fairly reflect the cost to such Lenders of maintaining
or funding loans bearing interest based on such Eurodollar Rate, with respect
to any portion of the Revolving Credit Loans that the Borrower has requested be
-22-
<PAGE>
made as Eurodollar Advances or Eurodollar Advances that will result from the
requested conversion or continuation of any portion of the Advances into or as
Eurodollar Advances (each, an "Affected Advance"), the Agent shall promptly
notify the Borrower and the Lenders (by telephone or otherwise, to be promptly
confirmed in writing) of such determination on or, to the extent practicable,
prior to the requested Borrowing Date or Conversion/Continuation Date for such
Affected Advances. If the Agent shall give such notice, (a) any Affected
Advances shall be made as ABR Advances, (b) the Advances (or any portion
thereof) that were to have been converted to or continued as Affected
Advances shall be converted to or continued as ABR Advances and (c) any
outstanding Affected Advances shall be converted, on the last day of the then
current Interest Period with respect thereto, to ABR Advances. Until any
notice under clauses (i) or (ii), as the case may be, of this Section has been
withdrawn by the Agent (by notice to the Borrower promptly upon either (1) the
Agent's having determined that such circumstances affecting the interbank
eurodollar market no longer exist and that adequate and reasonable means do
exist for determining the Eurodollar Rate pursuant to Section 2.8 or (2) the
Agent having been notified by such Required Lenders that circumstances no
longer render the Advances (or any portion thereof) to be Affected Advances),
no further Eurodollar Advances shall be required to be made by the Lenders, nor
shall the Borrower have the right to convert or continue all or any portion of
the Loans to Eurodollar Advances.
2.10. Taxes
(a) Payments to Be Free and Clear. Provided that all
documentation, if any, then required to be delivered by any Lender or the Agent
pursuant to Section 2.10(c) has been delivered, all sums payable by the
Borrower under the Loan Documents shall be paid free and clear of and (except
to the extent required by law) without any deduction or withholding on account
of any Tax (other than a Tax on the Overall Net Income of any Lender (for which
payment need not be free and clear, but no deduction or withholding shall be
made unless then required by applicable law)) imposed, levied, collected,
withheld or assessed by or within the United States or any political
subdivision in or of the United States or any other jurisdiction from or to
which a payment is made by or on behalf of the Borrower or by any federation or
organization of which the United States or any such jurisdiction is a member at
the time of payment.
(b) Grossing-up of Payments. If the Borrower or any other
Person is required by law to make any deduction or withholding on account of
any such Tax from any sum paid or payable by the Borrower to the Agent or any
Lender under any of the Loan Documents:
(i) the Borrower shall notify the Agent and such Lender of
any such requirement or any change in any such requirement as soon as the
Borrower becomes aware of it;
(ii) the Borrower shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the liability to
pay is imposed on the Borrower) for its own account or (if that liability is
imposed on the Agent or such Lender, as the case may be) on behalf of and in
the name of the Agent or such Lender;
(iii) the sum payable by the Borrower to the Agent or a
Lender in respect of which the relevant deduction, withholding or payment is
-23-
<PAGE>
required shall be increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, the Agent or such Lender, as
the case may be, receives on the due date therefor a net sum equal to what it
would have received had no such deduction, withholding or payment been
required or made; and
(iv) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30 days after
the due date of payment of any Tax which it is required by clause (ii) above to
pay, the Borrower shall deliver to the Agent and the applicable Lender evidence
satisfactory to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant Governmental Authority;
provided that no additional amount shall be required to be paid to any Lender
under clause (iii) above except to the extent that any change after the date
hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment and Acceptance Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment and Acceptance, as the case may be, in respect of payments to
such Lender, and provided further that any Lender claiming any additional
amounts payable pursuant to this Section 2.10 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Applicable Lending Office if the making of such
a change would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender.
(c) U.S. Tax Certificates. Each Lender that is organized under
the laws of any jurisdiction other than the United States shall deliver to the
Agent for transmission to the Borrower, on or prior to the Effective Date (in
the case of each Lender listed on the signature pages hereof) or on the
effective date of the Assignment and Acceptance Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other times as
may be necessary in the determination of the Borrower or the Agent (each in
the reasonable exercise of its discretion), including, without limitation, upon
the occurrence of any event requiring a change in the most recent counterpart
of any form set forth below previously delivered by such Lender to the Borrower,
such certificates, documents or other evidence, properly completed and duly
executed by such Lender (including, without limitation, Internal Revenue
Service Form 1001, Form 4224, Form W-8 or Form W-9, or any successor form, or
any other certificate or statement of exemption required by Treasury
Regulations Section 1.1441-4(a) or Section 1.1441-6(c) or any successor
thereto) to establish that such Lender is not subject to deduction or
withholding of United States federal income tax under Section 1441 or 1442 of
the Code or otherwise (or under any comparable provisions of any successor
statute) with respect to any payments to such Lender of principal, interest,
fees or other amounts payable under any of the Loan Documents. The Borrower
shall not be required to pay any additional amount to any such Lender under
Section 2.10(b)(iii) above if such Lender shall have failed to satisfy the
requirements of the immediately preceding sentence; provided that if such
Lender shall have satisfied such requirements on the Effective Date (in the
case of each Lender listed on the signature pages hereof) or on the effective
date of the Assignment and Acceptance Agreement pursuant to which it became a
-24-
<PAGE>
Lender (in the case of each other Lender), nothing in this Section shall
relieve the Borrower of its obligation to pay any additional amounts pursuant
to Section 2.10(b)(iii) in the event that, as a result of any change in
applicable law, such Lender is no longer properly entitled to deliver
certificates, documents or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in the
immediately preceding sentence.
2.11. Illegality
Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender to make or
maintain its Eurodollar Advances as contemplated by this Agreement, (i) the
commitment of such Lender hereunder to make Eurodollar Advances or convert
ABR Advances to Eurodollar Advances shall forthwith be suspended and (ii) such
Lender's Loans then outstanding as Eurodollar Advances affected hereby, if any,
shall be converted automatically to ABR Advances on the last day of the then
current Interest Period applicable thereto or on such earlier date if and as
required by law, provided that, before making any such suspension or
conversion, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending Office to continue to perform its
obligations to make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. If the commitment of any Lender with
respect to Eurodollar Advances is suspended pursuant to this Section and it is
thereafter lawful (in the Lender's determination) for such Lender to make or
maintain Eurodollar Advances, such Lender's commitment to make or maintain
Eurodollar Advances shall be reinstated upon notice to either (a) the Agent and
the Borrower by such Lender or (b) the Agent and such Lender by the Borrower.
2.12. Increased Costs
(a) In the event that any law, regulation, treaty or directive
hereafter enacted, promulgated, approved or issued or any change in any
presently existing law, regulation, treaty or directive therein or in the
interpretation or application thereof (whether or not having the force of law)
by any Governmental Authority charged with the administration thereof or
compliance by any Lender (or any corporation directly or indirectly owning or
controlling such Lender) with any request or directive from any Governmental
Authority:
(i) does or shall subject any Lender to any Taxes of any kind
whatsoever with respect to any Eurodollar Advances or its obligations under
this Agreement to make Eurodollar Advances, or change the basis of taxation of
payments to any Lender of principal, interest or any other amount payable
hereunder in respect of its Eurodollar Advances, including any Taxes required
to be withheld from any amounts payable under the Loan Documents (except for
mposition of, or change in the rate of, Tax on the Overall Net Income of
such Lender or its Applicable Lending Office for any of such Advances by the
jurisdiction in which such Lender is incorporated or has its principal office
or such Applicable Lending Office, including, in the case of Lenders
incorporated in any State of the United States, such tax imposed by the
United States); or
-25-
<PAGE>
(ii) does or shall impose, modify or make applicable any
reserve, special deposit, compulsory loan, assessment, increased cost or
similar requirement against assets held by, or deposits of, or advances or
loans by, or other credit extended by, or any other acquisition of funds by,
any office of such Lender in respect of its Eurodollar Advances which is not
otherwise included in the determination of a Eurodollar Rate; or
(iii) otherwise increases the cost to any Lender of making,
renewing, converting, continuing or maintaining its Eurodollar Advances or its
commitment to make such Eurodollar Advances, or reduces any amount receivable
hereunder in respect of its Eurodollar Advances, then, in any such case, the
Borrower shall pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduction in
such amount receivable which such Lender deems to be material as determined by
such Lender; provided, however, that nothing in this Section shall require the
Borrower to indemnify the Lenders with respect to withholding Taxes for which
the Borrower has no obligation under Section 2.10, and provided further, that
before making any such demand, each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. No failure by any Lender to demand compensation
for any increased cost during any Interest Period shall constitute a waiver of
such Lender's right to demand such compensation at any time, provided, that no
Lender shall be entitled to demand such compensation more than 90 days
following the last day of the Interest Period in respect of which such demand
is made; provided further, however, that the foregoing proviso shall in no way
limit the right of any Lender to demand or receive such compensation to the
extent that such compensation relates to the retroactive application of any
law, regulation, treaty or directive described above if such demand is made
within 90 days after the implementation of such retroactive law,
interpretation, treaty or directive. A statement setting forth the calculations
of any additional amounts payable pursuant to the foregoing submitted by a
Lender to the Borrower shall be conclusive absent manifest error.
(b) In the event that any Lender shall determine (which
determination shall, absent manifest error, be conclusive and binding upon all
parties hereto), during any Eurodollar Interest Period during which a
Eurodollar Advance of such Lender shall be outstanding, that such Lender shall
be required to maintain reserves (i) (including, without limitation, marginal,
emergency, supplemental and special reserves) as established by the Board of
Governors of the Federal Reserve System or any other banking authority to which
such Lender is subject, in respect of eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of the Board of Governors of
the Federal Reserve System) of such Lender or (ii) in respect of any other
category of liabilities, including deposits by reference to which the interest
rate on such Eurodollar Advance is determined, or any category of extensions of
credit or other assets, which includes loans by non-domestic offices of such
Lender to United States Residents, then such Lender shall promptly notify the
Borrower by telephone (confirmed thereafter by fax or other writing),
specifying the additional amounts required to indemnify such Lender against the
cost of maintaining such reserves (such written notice to provide in reasonably
sufficient detail the computation of such additional amounts), whereupon the
Borrower shall pay to such Lender, on the applicable Interest Payment Dates
with respect to the Eurodollar Advances of such Lender, such specified amounts
-26-
<PAGE>
as additional interest with respect to such Lender's Eurodollar Advances
outstanding at such time or at any time thereafter (provided that, with respect
to any subsequent Eurodollar Advances of such Lender, no further or additional
claims need be made by such Lender to the Borrower with respect to such reserve
requirements, provided further, however, that such Lender shall promptly notify
the Borrower if such reserve requirements cease to exist). In connection with
the foregoing, Eurodollar Advances shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of credits for proration, exceptions or offsets
which may be available from time to time to any Lender under Regulation D.
2.13. Indemnification for Loss
Notwithstanding anything contained herein to the contrary, if
the Borrower shall fail to borrow, convert or continue an Advance after it
shall have given notice to do so in which it shall have requested a Eurodollar
Advance pursuant to Section 2.3 or 2.7, as the case may be, or if the Borrower
shall fail to borrow a Competitive Bid Loan after it shall have accepted one or
more offers therefor pursuant to Section 2.4, or if a Eurodollar Advance or
a Competitive Bid Loan shall be terminated for any reason prior to the last day
of the Interest Period applicable thereto, or if any repayment or prepayment of
the principal amount of a Eurodollar Advance or a Competitive Bid Loan is made
for any reason on a date which is prior to the last day of the Interest Period
applicable thereto, the Borrower agrees to indemnify each Lender against, and
to pay on demand directly to such Lender, any loss or expense suffered by such
Lender as a result of such failure to borrow, convert or continue,
termination, repayment or prepayment, including an amount, if greater than
zero, equal to:
A x (B-C) x D
---
360
where:
"A" equals such Lender's (i) Commitment Percentage of the Affected
Principal Amount in the case of Eurodollar Advances or (ii) the
Affected Principal Amount in the case of Competitive Bid Loans;
"B" equals the Eurodollar Rate (expressed as a decimal) applicable to such
Eurodollar Advances or the Bid Rate applicable to such Competitive Bid
Loan;
"C" equals the applicable Eurodollar Rate or Proposed Bid Rate (in each
case expressed as a decimal), as the case may be, in effect on or
about the first day of the applicable Remaining Interest Period, based
on the applicable rates offered or bid, as the case may be, on or
about such date, for deposits (or, in the case of a Proposed Bid Rate,
based on the rate such Lender would have quoted) in an amount equal
approximately to such Lender's (i) Commitment Percentage of the
Affected Principal Amount in the case of Eurodollar Advances or (ii)
the Affected Principal Amount in the case of Competitive Bid Loans
with an Interest Period equal approximately to the applicable
Remaining Interest Period, as determined by such Lender;
-27-
<PAGE>
"D" equals the number of days from and including the first day of the
applicable Remaining Interest Period to but excluding the last day of
such Remaining Interest Period;
and any other out-of-pocket loss or expense (including any internal processing
charge customarily charged by such Lender) suffered by such Lender in
connection with such Eurodollar Advance, including, without limitation, in
liquidating or employing deposits acquired to fund or maintain the funding of
its Commitment Percentage of the Affected Principal Amount, or redeploying
funds prepaid or repaid, in amounts which correspond to its Commitment
Percentage of the Affected Principal Amount. Each determination by the Agent
or a Lender pursuant to this Section shall be conclusive and binding on the
Borrower absent manifest error.
2.14. Survival of Certain Obligations
The obligations of the Borrower under Sections 2.9, 2.10, 2.11,
2.12, 2.13, 2.16, 11.5 and 11.11 shall survive the termination of the Aggregate
Commitments, the payment of the Notes and all other amounts payable under the
Loan Documents.
2.15. Use of Proceeds
The proceeds of the Loans shall be used solely for the
Borrower's general corporate purposes not inconsistent with the provisions
hereof, including, without limitation, the provisions set forth in Section 4.9.
2.16. Capital Adequacy
If the amount of capital required or expected to be maintained
by any Lender or any Person directly or indirectly owning or controlling such
Lender (each a "Control Person"), shall be affected by (i) the introduction or
phasing in of any law, rule or regulation after the Effective Date, (ii) any
change after the Effective Date in the interpretation of any existing law, rule
or regulation by any Governmental Authority charged with the administration
thereof, or (iii) compliance by such Lender or such Control Person with any
directive, guideline or request from any Governmental Authority (whether or not
having the force of law) promulgated or made after the Effective Date, and such
Lender shall have reasonably determined that such introduction, phasing in,
change or compliance shall have had or will thereafter have the effect of
reducing (A) the rate of return on such Lender's or such Control Person's
capital, or (B) the asset value to such Lender or such Control Person of the
Loans made or maintained by such Lender, in either case to a level below that
which such Lender or such Control Person could have achieved or would
thereafter be able to achieve but for such introduction, phasing in, change or
compliance (after taking into account such Lender's or such Control Person's
policies regarding capital adequacy) by an amount deemed by such Lender to be
material to such Lender or Control Person, then, within ten days after demand
by such Lender, the Borrower shall pay to such Lender or such Control Person
such additional amount or amounts as shall be sufficient to compensate such
Lender or such Control Person, as the case may be, for such reduction,
provided, that no Lender shall be entitled to demand such compensation more
than 120 days following the last day of the fiscal year of such Lender during
which such capital requirement was applicable and in respect of which such
Lender is seeking compensation; provided further, however, that the foregoing
proviso shall in no way limit the right of any Lender to demand or receive such
compensation to the extent that such compensation relates to the retroactive
-28-
<PAGE>
application by such Governmental Authority of any law, rule, regulation,
interpretation or phasing in described above if such demand is made within 120
days after the implementation of such retroactive law, rule, regulation,
interpretation or phasing in. A statement as to such amounts submitted by a
Lender to the Borrower and the Agent shall constitute such demand and shall be
conclusive absent manifest error.
2.17. Lenders' Records
Each Lender's records regarding the amount of each Loan, each
payment by the Borrower of principal and interest on the Loans and other
information relating to the Loans shall be presumptively correct absent
manifest error.
2.18. Substitution of Lender.
In the event that the Borrower becomes obligated to pay
additional amounts to any Lender pursuant to Sections 2.10, 2.12 or 2.16, the
Borrower may, within 60 days of the demand by such Lender for such additional
amounts, and subject to the consent of the Agent (which consent shall not be
unreasonably withheld), designate an Eligible Assignee to purchase the Loans of
such Lender and such Lender's rights hereunder, without recourse to or
warranty by or expense to, such Lender, for a purchase price equal to the
outstanding principal amount of such Lender's Loans plus any accrued but unpaid
interest thereon and accrued but unpaid Facility Fees in respect of such
Lender's Commitment and any other amounts payable to such Lender hereunder, and
to assume all the obligations of such Lender hereunder, and, upon such
purchase, such Lender shall no longer be a party hereto or have any rights
hereunder (except those that survive full repayment hereunder) and shall be
relieved from all obligations to the Borrower hereunder, and the Eligible
Assignee shall succeed to the rights and obligations of such Lender hereunder.
The Borrower shall execute and deliver to such Eligible Assignee a Revolving
Credit Note (in an aggregate principal amount equal to the Commitment assumed
by such Eligible Assignee) and a Competitive Bid Note. Notwithstanding
anything herein to the contrary, in the event that a Lender is replaced
pursuant to this Section 2.18, such Lender shall be entitled to receive the
additional amounts to which it would be entitled pursuant to Sections 2.10,
2.12, 2.13 and 2.16 had it not been so replaced.
3. FEES; PAYMENTS
3.1. Facility Fee
The Borrower agrees to pay to the Agent, for the account of the
Lenders in accordance with each Lender's Commitment Percentage, during the
period from and including the Effective Date through but excluding the Maturity
Date, a fee (the "Facility Fee") equal to the Applicable Facility Fee
Percentage per annum of the average daily sum of the Aggregate Commitments,
regardless of usage, during such period. The Facility Fee shall be payable
(i) quarterly in arrears on the last day of each March, June, September and
December during such period, (ii) on the date of any reduction in the Aggregate
Commitments (to the extent of such reduction) and (iii) on the Maturity Date.
The Facility Fee shall be calculated on the basis of a 365/366-day year for the
actual number of days elapsed.
-29-
<PAGE>
3.2. Agent's Fees
The Borrower agrees to pay to the Agent, for its own account,
such fees as have been agreed to in writing by the Borrower and the Agent.
3.3. Pro Rata Treatment and Application of Principal Payments
Each payment, including each prepayment, of principal and
interest on the Loans and of the Facility Fee shall be made by the Borrower to
the Agent at its office set forth in Section 11.2 in funds immediately
available to the Agent at such office by 12:00 Noon on the due date for such
payment, and, promptly upon receipt thereof by the Agent, shall be remitted
by the Agent in like funds as received, to the Lenders according to the
Commitment Percentage of each Lender, in the case of the Facility Fee, pro rata
according to the aggregate outstanding principal balance of the Revolving
Credit Loans, in the case of principal and interest due thereon, and to the
applicable Lender in the case of principal and interest due on a Competitive
Bid Loan. The failure of the Borrower to make any such payment by such time
shall not constitute a default hereunder, provided that such payment is made on
such due date, but any such payment made after 12:00 Noon on such due date
shall be deemed to have been made on the next Business Day for the purpose of
calculating interest on amounts outstanding on the Loans. If any payment
hereunder or under the Notes shall be due and payable on a day which is not a
Business Day, the due date thereof (except as otherwise provided in the
definition of Interest Period) shall be extended to the next Business Day
and (except with respect to payments in respect of the Facility Fee) interest
shall be payable at the applicable rate specified herein during such extension.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this
Agreement and to make the Loans, the Borrower makes the following
representations and warranties to the Agent and each Lender:
4.1. Subsidiaries; Capitalization
The Borrower has only the Subsidiaries set forth on Schedule 4.1.
The shares of each corporate Subsidiary are duly authorized, validly issued,
fully paid and nonassessable and are owned free and clear of any Liens. The
interest of the Borrower in each non-corporate Subsidiary is owned free and
clear of any Liens.
4.2. Existence and Power
Each of the Borrower and its Subsidiaries is duly organized or
formed and validly existing in good standing under the laws of the jurisdiction
of its incorporation or formation, 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 as a foreign corporation in each
jurisdiction in which the nature of the business conducted therein or the
Property owned therein makes such qualification necessary, except where such
failure to qualify could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
-30-
<PAGE>
4.3. Authority
The Borrower has full legal power and authority to enter into,
execute, deliver and perform the terms of the Loan Documents and to make the
borrowings contemplated hereby and by the Notes, to execute, deliver and carry
out the terms of the Notes and to incur the obligations provided for herein
and therein, all of which have been duly authorized by all proper and necessary
corporate or other applicable action and are in full compliance with its
charter or by-laws or its other organization documents.
4.4. Binding Agreement
The Loan Documents (other than the Notes) constitute, and the
Notes, when issued and delivered pursuant hereto for value received, will
constitute, the valid and legally binding obligations of the Borrower,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and general principles of equity.
4.5. Litigation and Regulatory Proceedings
Except as disclosed in any of the Borrower's Annual Report on
Form 10K for the fiscal year ended December 31, 1994, the Borrower's Annual
Report to Stockholders for the fiscal year ended December 31, 1994, the
Borrower's Quarterly Report on From 10Q for the fiscal quarter ended March 31,
1995, the Borrower's Current Report on Form 8K dated February 1, 1995, or
Schedule 4.5, there are no actions, suits or proceedings at law or in equity
or by or before any Governmental Authority (whether or not purportedly on
behalf of the Borrower or any of its Subsidiaries) pending or, to the knowledge
of the Borrower, threatened against the Borrower or any of its Subsidiaries,
which (i) if adversely determined, could individually or in the aggregate
reasonably be expected to have a Material Adverse Effect, except that the
commencement by the Borrower or any Governmental Authority of a rate
proceeding or earnings review before such Governmental Authority shall not
constitute such a pending or threatened action, suit or proceeding unless and
until such Governmental Authority has made a final determination thereunder
that could reasonably be expected to have a Material Adverse Effect, (ii) call
into question the validity or enforceability of any of the Loan Documents, or
(iii) could reasonably be expected to result in the rescission, termination
or cancellation of any material franchise, right, license, permit or similar
authorization held by the Borrower or any of its Subsidiaries.
4.6. Required Consents
Except for information filings required to be made in the
ordinary course of business which are not a condition to the Borrower's
performance under the Loan Documents, no consent, authorization or approval of,
filing with, notice to, or exemption by, stockholders, any Governmental
Authority or any other Person is required to authorize, or is required in
connection with the execution, delivery and performance of the Loan Documents
or is required as a condition to the validity or enforceability of the Loan
Documents, except the FERC Order and LPSC Order, each of which have been
obtained prior to the Effective Date and are in full force and effect and not
subject to any appeals period (except that with respect to each of the FERC
Order and the LPSC Order, an appeal therefrom may be filed up to June 26,
1995, and June 19, 1995, respectively). The FERC Order expires December 31,
1996.
-31-
<PAGE>
4.7. No Conflicting Agreements, Compliance with Laws
(a) Neither the Borrower nor any of its Subsidiaries is in
default, (i) under any mortgage, indenture, contract or agreement to which it
is a party or by which it or any of its Property is bound or (ii) with respect
to any judgment, order, writ, injunction, decree or decision of any
Governmental Authority, the effect of which default could reasonably be
expected to have a Material Adverse Effect. The execution, delivery or
carrying out of the terms of the Loan Documents will not constitute a default
under, or require the mandatory repayment of, or result in the creation or
imposition of, or obligation to create, any Lien upon any Property of the
Borrower or any of its Subsidiaries pursuant to the terms of, any such
mortgage, indenture, contract or agreement.
(b) Each of the Borrower and its Subsidiaries (i) is complying in
all material respects with all statutes, regulations, rules and orders
applicable to the Borrower or such Subsidiary of all Governmental Authorities,
including, without limitation, Environmental Laws and ERISA, a violation of
which could individually or in the aggregate reasonably be expected to have a
Material Adverse Effect and (ii) has filed or caused to be filed all tax
returns required to be filed and has paid, or has made adequate provision for
the payment of, all taxes shown to be due and payable on said returns or in any
assessments made against it (other than those being contested as permitted
under Section 7.4) which would be material to the Borrower or any of its
Subsidiaries, and no tax Liens have been filed with respect thereto.
4.8. Governmental Regulations
Neither the Borrower nor any of its Subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company" as
defined in, or is otherwise subject to regulation under, the Investment Company
Act of 1940, as amended, or (ii) a "holding company", or an "affiliate" or
"subsidiary company" of a "holding company", as those terms are defined in, or
is otherwise subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended.
4.9. Federal Reserve Regulations; Use of Loan Proceeds
Neither the Borrower nor any of its Subsidiaries is 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.
No part of the proceeds of the Loans will be used, directly or indirectly, for
a purpose which violates any law, rule or regulation of any Governmental
Authority, including, without limitation, the provisions of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System, as amended. No
part of the proceeds of the Loans will be used, directly or indirectly, to
purchase or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock.
4.10. Plans
The only Pension Plan in effect as of the Effective Date is The
Central Lousiana Electric Company, Inc. Pension Plan. Each Employee Benefit
Plan of the Borrower, its Subsidiaries and their respective ERISA Affiliates is
in compliance with ERISA and the Code, where applicable, in all material
respects. The Borrower, its Subsidiaries and/or any ERISA Affiliate has, made
-32-
<PAGE>
all contributions or payments to or under each such Pension Plan required by
law or the terms of such Pension Plan or any contract or agreement with
respect thereto, and none of the Borrower, its Subsidiaries or any of their
respective ERISA Affiliates has incurred or expects to incur any withdrawal
liability or other liability (including any joint and several liability) to the
PBGC under ERISA. Neither the Borrower, any Subsidiary or any ERISA Affiliate
is party to any Multiemployer Plan.
4.11. Financial Statements
The Borrower has heretofore delivered to the Agent and the
Lenders copies of its Form 10-K for the fiscal year ending December 31, 1994,
containing the audited Consolidated Balance Sheets of the Borrower and its
Subsidiaries and the related Consolidated Statements of Operations,
Stockholder's Equity and Cash Flows for the period then ended, and its Form
10-Q for the fiscal quarter ended March 31, 1995, containing the unaudited
Consolidated Balance Sheet of the Borrower and its Subsidiaries for such fiscal
quarter, together with the related Consolidated Statements of Operations and
Cash Flows for the fiscal quarter then ended (with the applicable related notes
and schedules, the "Financial Statements"). The Financial Statements have been
prepared in accordance with GAAP and fairly present the Consolidated financial
condition and results of the operations of the Borrower and its Subsidiaries as
of the dates and for the periods indicated therein. Since December 31, 1994,
the Borrower and each of its Subsidiaries has conducted its business only in
the ordinary course and there has been no Material Adverse Change.
4.12. Property
Each of the Borrower and its Subsidiaries has good and
marketable title to all of its Property, title to which is material to the
Borrower or such Subsidiary, subject to no Liens, except Permitted Liens.
4.13. Environmental Matters
(a) To the best knowledge of the Borrower, the Borrower and
each of its Subsidiaries is in compliance in all material respects with the
requirements of all applicable Environmental Laws.
(b) To the best knowledge of the Borrower, no Hazardous
Substances have been generated or manufactured on, transported to or from,
treated at, stored at or discharged from any Real Property in violation of any
Environmental Laws; no Hazardous Substances have been discharged into
subsurface waters under any Real Property in violation of any Environmental
Laws; no Hazardous Substances have been discharged from any Real Property on
or into Property or waters (including subsurface waters) adjacent to any Real
Property in violation of any Environmental Laws; and there are not now, nor
ever have been, on any Real Property any underground or above ground storage
tanks of the Borrower or any of its Subsidiaries regulated under any
Environmental Laws; except for such of the foregoing actions, events or
conditions, which, individually or collectively, could not reasonably be
expected to have a Material Adverse Effect.
(c) Except as described in Schedule 4.13, neither the Borrower
nor any of its Subsidiaries (i) has received notice directly or otherwise
learned indirectly (through a Corporate Officer) of any claim, demand, suit,
action, proceeding, event, condition, report, directive, Lien, violation,
-33-
<PAGE>
non-compliance or investigation indicating or concerning any potential or
actual material liability (including, without limitation, potential liability
for enforcement, investigatory costs, cleanup costs, government response costs,
removal costs, remediation costs, natural resources damages, Property damages,
personal injuries or penalties) arising in connection with: (x) any material
non-compliance with or violation of the requirements of any applicable
Environmental Laws, or (y) the presence of any Hazardous Substance on any Real
Property (or any Real Property previously owned by the Borrower or any of
its Subsidiaries) or the release or threatened release of any Hazardous
Substance into the environment which individually or collectively could
reasonably be expected to have a Material Adverse Effect or (ii) has any
overtly threatened or actual liability in connection with the presence of any
Hazardous Substance on any Real Property (or any Real Property previously owned
by the Borrower or any of its Subsidiaries) or the release or threatened release
of any Hazardous Substance into the environment.
5. CONDITIONS TO FIRST LOANS
In addition to the conditions precedent set forth in Section 6, the
obligation of each Lender to make its first Revolving Credit Loan or any Lender
to make the first Competitive Bid Loan shall be subject to the fulfillment of
the following conditions precedent:
5.1. Evidence of Action
The Agent shall have received a certificate, dated the first
Borrowing Date, of the Secretary or Assistant Secretary of the Borrower (i)
attaching a true and complete copy of the resolutions of its Board of Directors
and of all documents evidencing other necessary corporate action (in form and
substance satisfactory to the Agent) taken by it to authorize the Loan
Documents and the transactions contemplated thereby, (ii) attaching a true and
complete copy of its charter and by-laws, (iii) setting forth the incumbency of
its officer or officers who may sign the Loan Documents, including therein a
signature specimen of such officer or officers and (iv) attaching a certificate
of good standing of the Secretary of State of the jurisdiction of its
incorporation.
5.2. Loan Documents
The Agent shall have received (i) counterparts of this Agreement
signed by each of the parties hereto (or receipt by the Agent from a party
hereto of a fax signature page signed by such party which shall have agreed to
promptly provide the Agent with originally executed counterparts hereof) and
(ii) for each Lender, a Revolving Credit Note and a Competitive Bid Note, duly
executed by an Authorized Signatory of the Borrower.
5.3. Existing Indebtedness
Prior to or simultaneously with the making of the first Loans,
the Borrower shall have fully repaid all Existing Indebtedness and the RUS
Indebtedness, the Existing Credit Agreement and all documents evidencing the
RUS Indebtedness shall have been cancelled or terminated, all Liens, if any,
securing the Existing Credit Agreement or the RUS Indebtedness shall have been
terminated, and the Agent shall have received satisfactory evidence of each of
the foregoing.
-34-
<PAGE>
5.4. Approvals
The Agent shall have received a certificate of an Authorized
Signatory of the Borrower, dated the first Borrowing Date, to the effect that
all approvals and consents of all Persons required to be obtained in connection
with the consummation of the transactions contemplated by the Loan Documents
have been duly obtained and are in full force and effect, and that all required
notices have been given and all required waiting periods have expired,
attaching thereto true and complete copies of all such required governmental
and regulatory authorizations and approvals, including, without limitation,
approval of the FERC and the LPSC.
5.5. Certain Agreements
The Agent shall have received true and complete copies of the
CLECO Mortgage and the Employee Stock Ownership Plan, together with all
amendments or other modifications thereto.
5.6. Opinion of Counsel to the Borrower
The Agent shall have received an opinion of Gordon, Arata,
McCollam & Duplantis, L.L.P., counsel to the Borrower, addressed to the Agent,
the Lenders and Special Counsel, and dated the first Borrowing Date,
substantially in the form of Exhibit K, and covering such additional matters as
the Required Lenders may reasonably request. It is understood that such
opinion is being delivered to the Agent and the Lenders upon the direction
of the Borrower and that the Agent and the Lenders may and will rely upon such
opinion. As to matters of New York law and laws of jurisdictions other than
the State of Louisiana or the United States, such counsel to the Borrower may
rely upon the opinion of counsel satisfactory to the Borrower and the Agent.
5.7. Opinion of Special Counsel
The Agent shall have received an opinion of Special Counsel,
addressed to the Agent and the Lenders, dated the first Borrowing Date,
substantially in the form of Exhibit L.
5.8. Fees
All fees payable to the Agent on the first Borrowing Date, and
the fees and expenses of Special Counsel incurred and recorded to date in
connection with the preparation, negotiation and closing of the Loan Documents,
shall have been paid.
6. CONDITIONS OF LENDING - ALL LOANS
The obligation of each Lender to make any Loan (which shall not
include a continuation or conversion of a Loan pursuant to and in accordance
with Section 2.7) is subject to the satisfaction of the following conditions
precedent as of the date of such Loan:
6.1. Compliance
On each Borrowing Date and after giving effect to the Loans to be
made thereon, (i) the Borrower shall be in compliance with all of the terms,
covenants and conditions of each Loan Document, (ii) there shall exist no
-35-
<PAGE>
Default or Event of Default, (iii) the representations and warranties contained
in the Loan Documents shall be true and correct with the same effect as though
such representations and warranties had been made on such Borrowing Date and
(iv) the aggregate outstanding principal balance of the Loans will not
exceed the Aggregate Commitments. Each borrowing by the Borrower shall
constitute a certification by the Borrower as of such Borrowing Date that each
of the foregoing matters is true and correct in all respects.
6.2. Borrowing Request; Competitive Bid Request
In the case of the borrowing of Revolving Credit Loans, the Agent
shall have received a Borrowing Request, and in the case of a borrowing of a
Competitive Bid Loan, the Agent shall have received a Competitive Bid Request
and such other documents required pursuant to Section 2.4, in each case duly
executed by an Authorized Signatory of the Borrower.
6.3. Other Documents
The Agent shall have received such other documents as the Agent
or the Lenders shall reasonably request.
7. AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect, any
Loan remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender or the Agent, the Borrower shall:
7.1. Financial Statements
Maintain a standard system of accounting in accordance with GAAP,
and furnish or cause to be furnished to the Agent and each Lender:
(a) As soon as available, but in any event within 120 days after
the end of each fiscal year, a copy of Borrower's Annual Report on Form 10-K in
respect of such fiscal year required to be filed by the Borrower with the SEC,
together with the financial statements attached thereto.
(b) As soon as available, but in any event within 60 days after
the end of each fiscal quarter, a copy of the Borrower's Quarterly Report on
Form 10-Q in respect of such fiscal quarter required to be filed by the
Borrower with the SEC, together with the financial statements attached thereto.
(c) Within 60 days after the end of each of the first three
fiscal quarters (120 days after the end of the last fiscal quarter), a
certificate of the chief financial officer of the Borrower (or such other
officer as shall be acceptable to the Agent) as to the Borrower's compliance,
as of such fiscal quarter ending date, with Section 7.11, and as to the
occurrence or continuance of no Default or Event of Default as of such fiscal
quarter ending date and the date of such certificate.
(d) Such other information as the Agent or any Lender may
reasonably request from time to time.
-36-
<PAGE>
7.2. Certificates; Other Information
Furnish to the Agent and each Lender:
(a) Prompt written notice if: (i) there shall occur and be
continuing a Default or an Event of Default or (ii) a Material Adverse
Change shall have occurred;
(b) Prompt written notice of: (i) any material citation,
summons, subpoena, order to show cause or other document naming the Borrower or
any of its Subsidiaries a party to any proceeding before any Governmental
Authority, and include with such notice a copy of such citation, summons,
subpoena, order to show cause or other document or (ii) any lapse or other
termination of, or refusal to renew or extend, any material Intellectual
Property, license, permit, franchise or other authorization issued to the
Borrower or any of its Subsidiaries by any Person or Governmental Authority,
and any of the foregoing set forth in this subsection (b) could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
or call into question the validity or enforceability of any of the Loan
Documents;
(c) Promptly upon becoming available, copies of all (i) regular,
periodic or special reports, schedules and other material which the Borrower or
any of its Subsidiaries may be required to file with or deliver to any
securities exchange or the SEC, or any other Governmental Authority succeeding
to the functions thereof, (ii) material news releases and annual reports
relating to the Borrower or any of its Subsidiaries and (iii) upon the written
request of the Agent, reports that the Borrower or any of its Subsidiaries
sends to or files with the FERC or the LPSC;
(d) Prompt written notice of any order, notice, claim or
proceeding received by, or brought against, the Borrower or any of its
Subsidiaries, or with respect to any of the Real Property, under any
Environmental Law, that could reasonably be expected to have a Material Adverse
Effect;
(e) Prompt written notice of any change by either Moody's or S&P
in the rating on the Borrower's first mortgage bonds; and
(f) Such other information as the Agent or any Lender shall
reasonably request from time to time.
7.3. Legal Existence
Maintain its legal existence in good standing in the jurisdiction
of its incorporation or formation and in each other jurisdiction in which the
failure so to do could reasonably be expected to have a Material Adverse
Effect, and cause each of its Subsidiaries to maintain its legal existence in
good standing in each jurisdiction in which the failure so to do could
reasonably be expected to have a Material Adverse Effect.
7.4. Taxes
Pay and discharge when due, and cause each of its Subsidiaries so
to do, all Taxes, assessments and governmental charges, license fees and levies
upon, or with respect to the Borrower or such Subsidiary and all Taxes upon the
-37-
<PAGE>
income, profits and Property of the Borrower and its Subsidiaries, which if
unpaid, could individually or collectively reasonably be expected to have a
Material Adverse Effect or become a Lien on the Property of the Borrower or
such Subsidiary (other than a Lien described in Section 8.1(a)), unless and to
the extent only that such Taxes, assessments, charges, license fees and levies
shall be contested in good faith and by appropriate proceedings diligently
conducted by the Borrower or such Subsidiary, provided that the Borrower shall
give the Agent prompt notice of such contest and that such reserve or other
appropriate provision as shall be required by the Accountants in accordance
with GAAP shall have been made therefor.
7.5. Insurance
Maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies insurance on all its
Property in at least such amounts and against at least such risks (but
including in any event public liability and business interruption coverage) as
are usually insured against in the same general area by companies engaged in
the same or a similar business; and furnish to the Agent, upon written
request of any Lender, full information as to the insurance carried.
7.6. Payment of Indebtedness and Performance of Obligations
Pay and discharge when due, and cause each of its Subsidiaries to
pay and discharge, all lawful Indebtedness, obligations and claims for labor,
materials and supplies or otherwise which, if unpaid, could individually or
collectively reasonably be expected to (i) have a Material Adverse Effect, or
(ii) become a Lien upon Property of the Borrower or any of its Subsidiaries
other than a Permitted Lien, unless and to the extent only that the validity
of such Indebtedness, obligation or claim shall be contested in good faith
and by appropriate proceedings diligently conducted by it, provided that the
Borrower shall give the Agent prompt notice of any such contest and that such
reserve or other appropriate provision as shall be required by the Accountants
in accordance with GAAP shall have been made therefor.
7.7. Condition of Property
At all times, maintain, protect and keep in good repair, working
order and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all Property necessary to the operation of the
Borrower's or such Subsidiary's material businesses.
7.8. Observance of Legal Requirements
Observe and comply in all respects, and cause each of its
Subsidiaries so to do, with all laws, ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all Governmental Authorities, which now or at any time
hereafter may be applicable to it, including, without limitation, ERISA and all
Environmental Laws, a violation of which could individually or collectively
reasonably be expected to have a Material Adverse Effect, except such thereof
as shall be contested in good faith and by appropriate proceedings diligently
conducted by it, provided that the Borrower shall give the Agent prompt notice
of such contest and that such reserve or other appropriate provision as shall
be required by the Accountants in accordance with GAAP shall have been made
therefor.
-38-
<PAGE>
7.9. Inspection of Property; Books and Records; Discussions
Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities and permit representatives of the Agent and any Lender to visit its
offices, to inspect any of its Property and examine and make copies or
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired, and to discuss the business, operations,
prospects, licenses, Property and financial condition of the Borrower and its
Subsidiaries with the officers thereof and the Accountants; provided that, so
long as no Default or Event of Default exists, none of the Agent, its agents
and representatives nor the Lenders shall be entitled to examine or make
copies or abstracts of, or otherwise obtain information with respect to, the
Borrower's records relating to pending or threatened litigation if any such
disclosure by the Borrower could reasonably be expected (i) to give rise to a
waiver of any attorney/client privilege of the Borrower or any of its
Subsidiaries relating to such information or (ii) to be otherwise materially
disadvantageous to the Borrower or any of its Subsidiaries in the defense of
such litigation.
7.10. Licenses, Intellectual Property
Obtain or maintain, as applicable, and cause each of its
Subsidiaries to obtain or maintain, as applicable, in full force and effect,
all licenses, franchises, Intellectual Property, permits, authorizations and
other rights as are necessary for the conduct of its business and the failure
of which to obtain or maintain could individually or collectively, reasonably
be expected to have a Material Adverse Effect.
7.11. Capitalization
Maintain, as of the last day of each fiscal quarter, Common
Equity equal to at least 30% of Total Capitalization.
8. NEGATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect, any
Loan remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender or the Agent, the Borrower shall not, directly or
indirectly:
8.1. Liens
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, or permit any of its
Subsidiaries so to do, except
(a) Liens for Taxes, assessments or similar charges incurred in
the ordinary course of business which are not delinquent or which are being
contested in accordance with Section 7.4, provided that enforcement of such
Liens is stayed pending such contest;
(b) Liens (i) in connection with workers' compensation,
unemployment insurance or other social security obligations (but not ERISA),
(ii) in connection with deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory obligations,
-39-
<PAGE>
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business, (iii) in connection with zoning ordinances,
easements, rights of way, minor defects, irregularities, and other similar
restrictions affecting real Property which do not adversely affect the value of
such real Property or the financial condition of the Borrower or such
Subsidiary or impair its use for the operation of the business of the Borrower
or such Subsidiary, (iv) Liens arising by operation of law such as mechanics',
materialmen's, carriers', warehousemen's liens incurred in the ordinary course
of business which are not delinquent or which are being contested in accordance
with Section 7.6, provided that enforcement of such Liens is stayed pending
such contest and (v) Liens arising out of judgments or decrees which are being
contested in accordance with Section 7.6, provided that enforcement of such
Liens is stayed pending such contest;
(c) Liens now existing or hereafter arising in favor of the Agent
or the Lenders under the Loan Documents;
(d) purchase money Liens on Property of the Borrower or any of
its Subsidiaries acquired after the date hereof to secure Indebtedness of the
Borrower incurred in connection with the acquisition of such Property, provided
that each such Lien is limited to such Property so acquired;
(e) Liens on Property of the Borrower and its Subsidiaries
existing on the Effective Date as set forth on Schedule 8.1 as renewed from
time to time, but not any increases in the amounts secured thereby or the
Property subjected to such Lien thereon (except under the CLECO Mortgage) ;
(f) Liens existing on Property of the Borrower or any of its
Subsidiaries acquired after the Effective Date provided that such Liens are at
all times thereafter limited to the Property so acquired and were not created
in contemplation of such acquisition;
(g) the Lien evidenced by the CLECO Mortgage; provided, however,
that such Lien shall not extend to or over any Property of a character not
subject on the date hereof to the Lien granted under the CLECO Mortgage;
(h) "permitted liens" as defined under Section 1.04 of the CLECO
Mortgage, as in effect on the date hereof, other than "funded liens" described
in clause (ix) of said Section 1.4;
(i) Liens created to secure Indebtedness representing, or
incurred to finance, the cost of Property acquired, constructed or improved by
the Borrower in the ordinary course of business after the date hereof and not
subject to (i) the Lien referred to in clause (g) above or (ii) Liens existing
on such Property at the time of acquisition thereof;
(j) Liens existing on property of any Person at the time that
such Person becomes a Subsidiary of the Borrower provided that such Liens were
not created to secure the acquisition of such Person;
(k) Liens to secure Indebtedness of any Subsidiary of the
Borrower to the Borrower or to any of its other Subsidiaries;
(l) Liens on Property (including any natural gas, oil or other
mineral Property) to secure all or a part of the cost of exploration, drilling
-40-
<PAGE>
or development thereof or to secure Indebtedness incurred to provide funds for
any such purpose;
(m) Liens and security interests created, incurred or assumed in
connection with the purchase, lease, financing or refinancing of pollution
control facilities (and which Liens and security interest are limited to such
pollution control facilities);
(n) Liens created to secure sales or factoring of accounts
receivable and other receivables; and
(o) Liens created for the sole purpose of extending, renewing or
replacing in whole or in part Indebtedness secured by any lien, mortgage or
security interest referred to in the foregoing clauses (a) through (n);
provided, however, that the principal amount ofIndebtedness secured thereby
shall not exceed the principal amount of Indebtedness so secured at the time of
such extension, renewal or replacement and that such extension, renewal or
replacement, as the case may be, shall be limited to all or a part of the
property or indebtedness that secured the lien or mortgage so extended, renewed
or replaced (and any improvements on such property).
8.2. Merger, Consolidation, Purchase or Sale of Assets, Etc.
Consolidate with, be acquired by, or merge into or with any
Person, or convey, sell, lease or otherwise dispose of all or any part of its
Property, or enter into any sale-leaseback transaction, or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
Property (other than purchases or other acquisitions of inventory, materials
and equipment in the ordinary course of business) of any Person, including
acquisitions of the Stock of any Person, or permit any of its Subsidiaries so
to do, except:
(a) Sales or other dispositions of inventory in the ordinary
course of business;
(b) Sales of accounts receivables and other receivables;
(c) Asset Sales, provided that (i) no Default or Event of
Default shall exist immediately before or after giving effect thereto and (ii)
the amount of such Asset Sale, when added to the total amount of all Asset
Sales made by the Borrower during the immediately preceding twelve month
period, shall not exceed 10% or more of Total Assets as of the first day of
such twelve month period;
(d) any Subsidiary of the Borrower may merge or consolidate with
or into, or acquire control of, or acquire all or substantially all of the
assets of (i) any Person, provided that the total consideration to be paid to
or for the account of the seller or acquired Person in connection therewith,
when added to the total consideration paid by the Borrower or any Subsidiary in
connection with all other mergers, consolidations and acquisitions, and all
loans, advances and other arrangements permitted under Section 8.3, during the
period from the Effective Date through the Maturity Date, shall not exceed the
greater of (1) $110,000,000 or (2) 10% of Total Assets as of the most recently
completed fiscal quarter or (ii) any other Subsidiary of the Borrower, and
(e) mergers, consolidations or acquisitions of or by the
-41-
<PAGE>
Borrower with, into or of another Person as to which the following conditions
have been satisfied:
(i) immediately before or after giving effect thereto, no
Default or Event of Default shall exist,
(ii) immediately before or after giving effect thereto, all
of the representations and warranties shall be true and correct except as the
context thereof otherwise requires and except for those representations and
warranties which by their terms or by necessary implication are expressly
limited to a state of facts existing at a time prior to such merger,
consolidation or acquisition, and except such matters relating thereto as are
identified in a writing to the Agent and the Lenders and are satisfactory to
the Agent and the Lenders,
(iii) the Borrower shall be the surviving corporation
thereof or such surviving corporation shall be incorporated in a State of the
United States with substantially all of its assets and business located and
conducted in the United States and shall have expressly assumed the obligations
of the Borrower under the Loan Documents pursuant to a writing in form and
substance satisfactory to the Agent,
(iv) the total consideration to be paid by the Borrower to
or for the account of the seller or acquired Person in connection therewith,
when added to the total consideration paid by the Borrower and its Subsidiaries
to or for the account of the seller or acquired Person in connection with all
mergers, consolidations and acquisitions, and all loans, advances and other
arrangements permitted under Section 8.3, during the period from the
Effective Date through the Maturity Date, shall not exceed the greater of (1)
$110,000,000 or (2) 10% of Total Assets as of the most recently completed
fiscal quarter, and
(v) the Agent and the Lenders shall have received a
certificate signed by an Authorized Signatory of the Borrower identifying the
Person to be merged with or into, consolidated with, or acquired by, the
Borrower, and certifying as to each of the matters set forth in clauses (e)(i)
through (iv) above.
8.3. Loans, Advances, Etc.
At any time, make any loan or advance to, or enter into any
arrangement for the purpose of providing funds or credit to, any Person, or
permit any of its Subsidiaries so to do, other than loans, advances or
arrangements the total amount of which, when added to the total consideration
paid by the Borrower and its Subsidiaries in connection with all mergers,
consolidations and acquisitions of or by the Borrower and its Subsidiaries
during the period from the Effective Date through the Maturity Date, shall not
exceed the greater of (i) $110,000,000 or (ii) 10% of Total Assets as of the
most recently completed fiscal quarter.
8.4. Amendments, etc. of Certain Agreements
Enter into or agree to any amendment, modification or waiver of
any term or condition of the CLECO Mortgage or the Employee Stock Ownership
Plan, which amendment, modification or waiver could, in the reasonable opinion
of the Agent, adversely affect the interests of the Lenders under the Loan
Documents.
-42-
<PAGE>
9. DEFAULT
9.1. Events of Default
The following shall each constitute an "Event of Default"
hereunder:
(a) The failure of the Borrower to pay any installment of
principal or interest on any Note, or any other fees or expenses payable under
any Loan Document, on the date when due and payable; or
(b) The use of the proceeds of any Loan in a manner inconsistent
with or in violation of Section 2.15; or
(c) The failure of the Borrower to observe or perform any
covenant or agreement contained in Sections 7.3, 7.11 or Section 8; or
(d) The failure of the Borrower to observe or perform any other
term, covenant, or agreement contained in any Loan Document and such failure or
event shall have continued unremedied for a period of 30 days after the
Borrower shall have obtained knowledge thereof; or
(e) Any representation or warranty made in any Loan Document
or deemed made by the Borrower pursuant to Section 6.1 or in any certificate,
report, opinion (other than an opinion of counsel) or other document delivered
or to be delivered pursuant thereto, shall prove to have been incorrect or
misleading (whether because of misstatement or omission) in any material
respect when made; or
(f) Any obligation of the Borrower (other than its obligations
under the Notes) or any of its Subsidiaries, whether as principal, guarantor,
surety or other obligor, for the payment of any Indebtedness or operating
leases in excess of $10,000,000 in the aggregate (i) shall become or shall be
declared to be due and payable prior to the expressed maturity thereof, or (ii)
shall not be paid when due or within any grace period (as such grace period may
be extended from time to time pursuant to and in accordance with the
documentation evidencing such obligation) for the payment thereof, or (iii) any
holder of any such obligation shall have the right to declare such obligation
due and payable prior to the expressed maturity thereof; or
(g) The Borrower or any of its Subsidiaries shall (i) suspend or
discontinue its business, (ii) make an assignment for the benefit of
creditors, (iii) generally not pay its debts as such debts become due, (iv)
admit in writing its inability to pay its debts as they become due, (v) file a
voluntary petition in bankruptcy, (vi) become insolvent (however such
insolvency shall be evidenced), (vii) file any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment of debt,
liquidation or dissolution or similar relief under any present or future
statute, law or regulation of any jurisdiction, (viii) petition or apply to any
tribunal for any receiver, custodian or any trustee for any substantial part of
its Property, (ix) be the subject of any such proceeding filed against it
which remains undismissed for a period of 45 days, (x) file any answer
admitting or not contesting the material allegations of any such petition filed
against it or any order, judgment or decree approving such petition in any such
proceeding, (xi) seek, approve, consent to, or acquiesce in any such
-43-
<PAGE>
proceeding, or in the appointment of any trustee, receiver, sequestrator,
custodian, liquidator, or fiscal agent for it, or any substantial part of its
Property, or an order is entered appointing any such trustee, receiver,
custodian, liquidator or fiscal agent and such order remains in effect for 45
days, or (xii) take any formal action for the purpose of effecting any of the
foregoing or looking to the liquidation or dissolution of the Borrower or
such Subsidiary; or
(h) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Borrower or any of its Subsidiaries bankrupt or
insolvent, (ii) approving as properly filed a petition seeking reorganization,
liquidation, arrangement, adjustment or composition of or in respect of the
Borrower or any of its Subsidiaries under the United States bankruptcy laws
or any other applicable Federal or state law, (iii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Borrower or any of its Subsidiaries or of any substantial part
of the Property thereof, or (iv) ordering the winding up or liquidation of the
affairs of the Borrower or any of its Subsidiaries, and any such decree or
order continues unstayed and in effect for a period of 45 days; or
(i) Judgments or decrees against the Borrower or any of its
Subsidiaries aggregating in excess of $10,000,000 shall remain unpaid, unstayed
on appeal, undischarged, unbonded or undismissed for a period of at least 30
days; or
(j) Any Loan Document shall cease, for any reason, to be in full
force and effect or the Borrower shall so assert in writing or shall disavow
any of its obligations thereunder; or
(k) (i) any Termination Event shall occur; (ii) any Accumulated
Funding Deficiency, whether waived, shall exist with respect to any Pension
Plan; (iii) any Person shall engage in any Prohibited Transaction involving any
Employee Benefit Plan; (iv) the Borrower, any of its Subsidiaries or any ERISA
Affiliate shall fail to pay when due an amount which is payable by it to the
PBGC or to a Pension Plan under Title IV of ERISA; or (v) any other event or
condition shall occur or exist with respect to an Employee Benefit Plan;
provided that the occurrence of any of the foregoing actions or events set
forth in clauses (i) through (v), individually or collectively, could
reasonably be expected to have a Material Adverse Effect; or
(l) Any authorization or approval or other action by any
Governmental Authority required for the execution, delivery or performance of
this Agreement or the Notes shall be terminated, revoked or rescinded or shall
otherwise no longer be in full force and effect.
Upon the occurrence of an Event of Default or at any time thereafter
during the continuance thereof, (a) if such event is an Event of Default
specified in clause (g) or (h) above, the Aggregate Commitments shall
immediately and automatically terminate and the Loans, all accrued and unpaid
interest thereon and all other amounts owing under the Loan Documents shall
immediately become due and payable and the Agent may, and, upon the direction
of the Required Lenders shall, exercise any and all remedies and other rights
provided in the Loan Documents, and (b) if such event is any other Event of
Default, any or all of the following actions may be taken: (i) with the consent
of the Required Lenders, the Agent may, and upon the direction of the Required
Lenders shall, by notice to the Borrower, declare the Aggregate Commitments to
-44-
<PAGE>
be terminated forthwith, whereupon the Aggregate Commitments shall immediately
terminate, and (ii) with the consent of the Required Lenders, the Agent may,
and upon the direction of the Required Lenders shall, by notice of default to
the Borrower, declare the Loans, all accrued and unpaid interest thereon, and
all other amounts owing under the Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable, and the
Agent may, and upon the direction of the Required Lenders shall, exercise any
and all remedies and other rights provided pursuant to the Loan Documents.
Except as otherwise provided in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived. The Borrower
hereby further expressly waives and covenants not to assert any appraisement,
valuation, stay, extension, redemption or similar laws, now or at any time
hereafter in force which might delay, prevent or otherwise impede the
performance or enforcement of any Loan Document.
In the event that the Aggregate Commitments shall have been terminated
or the Notes shall have been declared due and payable pursuant to the
provisions of this Section, any funds received by the Agent and the Lenders
from or on behalf of the Borrower shall be applied by the Agent and the Lenders
in liquidation of the Loans and the obligations of the Borrower under the Loan
Documents in the following manner and order: (i) first, to the payment of
interest on, and then the principal portion of, any Loans which the Agent may
have advanced on behalf of any Lender for which the Agent has not then been
reimbursed by such Lender or the Borrower; (ii) second, to the payment of any
fees or expenses due the Agent from the Borrower hereunder, (iii) third, to
reimburse the Agent and the Lenders for any expenses (to the extent not paid
pursuant to clause (ii) above) due from the Borrower pursuant to the provisions
of Section 11.5; (iv) fourth, to the payment of accrued Facility Fees and all
other fees, expenses and amounts due under the Loan Documents (other than
principal and interest on the Notes); (v) fifth, to the payment of interest due
on the Notes; (vi) sixth, to the payment of principal outstanding on the Notes,
pro rata according to each Lender's aggregate outstanding Loans; and (vii)
seventh, to the payment of any other amounts owing to the Agent and the Lenders
under any Loan Document.
10. THE AGENT
10.1. Appointment
Each Lender hereby irrevocably designates and appoints BNY as
the Agent of such Lender under the Loan Documents and each such Lender hereby
irrevocably authorizes BNY, as the Agent for such Lender, to take such action
on its behalf under the provisions of the Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
in any Loan Document, the Agent shall not have any duties or responsibilities
other than those expressly set forth therein, or any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Loan Documents or otherwise
exist against the Agent.
10.2. Delegation of Duties
-45-
<PAGE>
The Agent may execute any of its duties under the Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to rely upon
the advice of counsel concerning all matters pertaining to such duties.
10.3. Exculpatory Provisions
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with the Loan Documents (except the Agent for its own gross
negligence or willful misconduct), or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Borrower or any officer thereof contained in the Loan Documents or in
any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, the Loan
Documents or for the value, validity, effectiveness, genuineness, perfection,
enforceability or sufficiency of any of the Loan Documents or for any failure of
the Borrower or any other Person to perform its obligations thereunder. The
Agent shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, the Loan Documents, or to inspect the properties, books
or records of the Borrower. The Agent shall not be under any liability or
responsibility whatsoever, as Agent, to the Borrower or any other Person as
a consequence of any failure or delay in performance, or any breach, by any
Lender of any of its obligations under any of the Loan Documents.
10.4. Reliance by Agent
The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, fax, telex or
teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent may treat each
Lender, or the Person designated in the last notice filed with it under this
Section, as the holder of all of the interests of such Lender in its Loans and
in its Notes until written notice of transfer, signed by such Lender (or the
Person designated in the last notice filed with the Agent) and by the Person
designated in such written notice of transfer, in form and substance
satisfactory to the Agent, shall have been filed with the Agent. The Agent
shall not be under any duty to examine or pass upon the validity,
effectiveness, enforceability, perfection or genuineness of the Loan Documents
or any instrument, document or communication furnished pursuant thereto or in
connection therewith, and the Agent shall be entitled to assume that the same
are valid, effective and genuine, have been signed or sent by the proper
parties and are what they purport to be. The Agent shall be fully justified in
failing or refusing to take any action under the Loan Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Loan Documents in accordance with a request
or direction of the Required Lenders, and such request or direction and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.
-46-
<PAGE>
10.5. Notice of Default
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Agent has received
written notice thereof from a Lender or the Borrower. In the event that the
Agent receives such a notice, the Agent shall promptly give notice thereof to
the Lenders and the Borrower. The Agent shall take such action with respect to
such Default or Event of Default as shall be directed by the Required
Lenders, provided, however, that unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem to be in the best interests of the Lenders.
10.6. Non-Reliance on Agent and Other Lenders
Each Lender expressly acknowledges that neither the Agent nor
any of its respective officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representations or warranties to it and that no act
by the Agent hereinafter, including any review of the affairs of the Borrower,
shall be deemed to constitute any representation or warranty by the Agent to
any Lender. Each Lender represents to the Agent that it has, independently
and without reliance upon the Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own evaluation
of and investigation into the business, operations, Property, financial and
other condition and creditworthiness of the Borrower and made its own decision
to enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, evaluations and decisions in
taking or not taking action under any Loan Document, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, Property, financial and other condition and creditworthiness of
the Borrower. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, Property, financial and
other condition or creditworthiness of the Borrower which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7. Indemnification
Each Lender agrees to indemnify and reimburse the Agent in its
capacity as such (to the extent not promptly reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), pro rata according
to the outstanding principal balance of the Revolving Credit Loans (or at any
time when no Revolving Credit Loans are outstanding, according to its
Commitment Percentage), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever including, without
limitation, any amounts paid to the Lenders (through the Agent) by the Borrower
pursuant to the terms of the Loan Documents, that are subsequently rescinded or
avoided, or must otherwise be restored or returned) which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of the Loan Documents or any other documents contemplated by or
-47-
<PAGE>
referred to therein or the transactions contemplated thereby or any action
taken or omitted to be taken by the Agent under or in connection with any of
the foregoing; provided, however, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the finally adjudicated gross negligence or
willful misconduct of the Agent. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its pro rata
share of any unpaid fees owing to the Agent, and any costs and expenses
(including, without limitation, reasonable fees and expenses of counsel)
payable by the Borrower under Section 11.5, to the extent that the Agent has
not been paid such fees or has not be reimbursed for such costs and expenses by
the Borrower. The failure of any Lender to reimburse the Agent promptly upon
demand for its pro rata share of any amount required to be by the Lenders to
the Agent as provided in this Section shall not relieve any other Lender of
its obligation hereunder to reimburse the Agent for its pro rata share of such
amount, but no Lender shall be responsible for the failure of other Lender to
reimburse the Agent for such other Lender's pro rata share of such amount. The
agreements in this Section shall survive the payment of all amounts payable
under the Loan Documents.
10.8. Agent in Its Individual Capacity
BNY and its respective affiliates may make loans to, accept
deposits from, issue letters of credit for the account of, and generally engage
in any kind of business with, the Borrower as though BNY were not Agent
hereunder. With respect to the Commitment made or renewed by BNY and the Notes
issued to BNY, BNY shall have the same rights and powers under the Loan
Documents as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall in each case include BNY.
10.9. Successor Agent
If at any time the Agent deems it advisable, in its sole
discretion, it may submit to each of the Lenders a written notice of its
resignation as Agent under the Loan Documents, such resignation to be effective
upon the earlier of (i) the written acceptance of the duties of the Agent under
the Loan Documents by a successor Agent and (ii) on the 30th day after the
date of such notice. Upon any such resignation, the Required Lenders shall
have the right to appoint from among the Lenders a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and
accepted such appointment in writing within 30 days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which successor Agent shall be a
commercial bank organized under the laws of the United States of America or
any State thereof and having a combined capital, surplus, and undivided profits
of at least $100,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent's rights, powers, privileges and duties
as Agent under the Loan Documents shall be terminated. The Borrower and the
Lenders shall execute such documents as shall be necessary to effect such
appointment. After any retiring Agent's resignation as Agent, the provisions
of the Loan Documents shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under the Loan Documents. If at
any time there shall not be a duly appointed and acting Agent, the Borrower
-48-
<PAGE>
agrees to make each payment due under the Loan Documents directly to the
Lenders entitled thereto during such time.
11. OTHER PROVISIONS
11.1. Amendments and Waivers
With the prior written consent of the Required Lenders, the
Agent and the Borrower may, from time to time, enter into written amendments,
supplements or modifications of the Loan Documents and, with the prior written
consent of the Required Lenders, the Agent on behalf of the Lenders may execute
and deliver to any such parties a written instrument waiving or a consent to a
departure from, on such terms and conditions as the Agent may specify in such
instrument, any of the requirements of the Loan Documents or any Default or
Event of Default and its consequences; provided, however, that:
(a) no such amendment, supplement, modification, waiver or
consent shall, without the prior written consent of all of the Lenders, (i)
change the Commitment of any Lender or the Aggregate Commitments (other than as
a result of a reduction of the Aggregate Commitments in accordance with Section
2.5 or the termination or expiration of this Agreement; (ii) extend the
Maturity Date; (iii) decrease the rate or extend the time of payment of
interest on, or change or forgive the principal amount of, or change the pro
rata allocation of payments under, any Note; (iv) change the provisions of
Sections 3.3, 5, 6, 11.1 or 11.7(a); (v) decrease the Facility Fee; or (vi)
change the definition of Required Lenders; and
(b) without the written consent of BNY, no such amendment,
supplement, modification or waiver shall amend, modify or waive any provision
of Section 10 or otherwise change any of the rights or obligations of the Agent
hereunder or under the Loan Documents.
Any such amendment, supplement, modification or waiver shall
apply equally to each of the Lenders and shall be binding upon the parties to
the applicable Loan Document, the Lenders, the Agent and all future holders of
the Notes. In the case of any waiver, the parties to the applicable Loan
Document, the Lenders and the Agent shall be restored to their former position
and rights hereunder and under the outstanding Notes and other Loan Documents
to the extent provided for in such waiver, and any Default or Event of
Default waived shall not extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon. The Loan Documents may not be
amended orally or by any course of conduct.
11.2. Notices
All notices, requests and demands to or upon the respective
parties to the Loan Documents to be effective shall be in writing and, unless
otherwise expressly provided therein, shall be deemed to have been duly given
or made when delivered by hand, or when deposited in the mail, first-class
postage prepaid, or, in the case of notice by fax, when sent, addressed as
follows in the case of the Borrower or the Agent, at the Domestic Lending
Office, in the case of each Lender, or to such other addresses as to which the
Agent may be hereafter notified by the respective parties thereto or any future
holders of the Notes:
-49-
<PAGE>
The Borrower:
Central Louisiana Electric Company, Inc.
2030 Donahue Ferry Road
Pineville, LA 71361-5000
Attention: Todd J. Marye
Director of Financing and
Cash Management
Telephone: (318) 484-7541
Fax: (318) 484-7697
The Agent:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Patricia Clancy
Telephone: (212) 635-4696
Fax: (212) 635-6365/6/7
with a copy to:
The Bank of New York
Energy Industries Division
One Wall Street
19th Floor
New York, New York 10286
Attention: Dennis M. Pidherny,
Vice President
Telephone: (212) 635-7547
Fax: (212) 635-7923/4,
except that any notice, request or demand by the Borrower to or upon the Agent
or the Lenders pursuant to Sections 2.3, 2.4 or 2.5 shall not be effective
until received. Any party to a Loan Document may rely on signatures of the
parties thereto which are transmitted by fax or other electronic means as fully
as if originally signed.
11.3. No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising, on the part
of the Agent or any Lender, any right, remedy, power or privilege under any
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4. Survival of Representations and Warranties
All representations and warranties made under the Loan Documents
and in any document, certificate or statement delivered pursuant thereto or in
-50-
<PAGE>
connection therewith shall survive the execution and delivery of the Loan
Documents.
11.5. Payment of Expenses and Taxes
The Borrower agrees, promptly upon presentation of a statement
or invoice therefor, and whether any Loan is made (i) to pay or reimburse the
Agent for all its out-of-pocket costs and expenses reasonably incurred in
connection with the development, preparation and execution of, the Loan
Documents and any amendment, supplement or modification thereto (whether or not
executed), any documents prepared in connection therewith and the consummation
of the transactions contemplated thereby, including, without limitation, the
reasonable fees and disbursements of Special Counsel, (ii) to pay or reimburse
the Agent and the Lenders for all of their respective costs and expenses,
including, without limitation, reasonable fees and disbursements of counsel,
incurred in connection with (A) any Default or Event of Default and any
enforcement or collection proceedings resulting therefrom or in connection
with the negotiation of any restructuring or "work-out" (whether consummated or
not) of the obligations of the Borrower under any of the Loan Documents and (B)
the enforcement of this Section, (iii) to pay, indemnify, and hold each Lender
and the Agent harmless from and against, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
the Loan Documents and any such other documents, and (iv) to pay, indemnify
and hold each Lender and the Agent and each of their respective officers,
directors and employees harmless from and against any and all other
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, reasonable counsel fees and
disbursements) with respect to the enforcement and performance of the Loan
Documents, the use of the proceeds of the Loans and the enforcement and
performance of the provisions of any subordination agreement in favor of the
Agent and the Lenders (all the foregoing, collectively, the "indemnified
liabilities") and, if and to the extent that the foregoing indemnity may be
unenforceable for any reason, the Borrower agrees to make the maximum payment
permitted or not prohibited under applicable law; provided, however, that the
Borrower shall have no obligation hereunder to pay indemnified liabilities to
the Agent or any Lender arising from the finally adjudicated gross negligence
or willful misconduct of the Agent or such Lender or claims between one
indemnified party and another indemnified party. The agreements in this
Section shall survive the termination of the Aggregate Commitments and the
payment of all amounts payable under the Loan Documents.
11.6. Lending Offices
Each Lender shall have the right at any time and from time to
time to transfer its Loans to a different office, provided that such Lender
shall promptly notify the Agent and the Borrower of any such change of office.
Such office shall thereupon become such Lender's Domestic Lending Office or
Eurodollar Lending Office, as the case may be, provided, however, that no such
Lender shall be entitled to receive any greater amount under Sections 2.9,
2.11 and 2.12 as a result of a transfer of any such Loans to a different office
-51-
<PAGE>
of such Lender than it would be entitled to immediately prior thereto unless
such claim would have arisen even if such transfer had not occurred.
11.7. Assignments and Participations
(a) The Loan Documents shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agent, all future holders of the
Notes and their respective successors and assigns, except that the Borrower may
not assign, delegate or transfer any of its rights or obligations under the
Loan Documents without the prior written consent of the Agent and each Lender.
(b) Each Lender shall have the right at any time, with the
prior written consent of the Borrower and the Agent (which consents shall not
be unreasonably withheld or delayed and, with respect to the Borrower, shall
not be required upon the occurrence and during the continuance of an Event of
Default), to sell, assign, transfer or negotiate all or any part of such
Lender's rights under the Loan Documents to any Eligible Assignee, provided
that there shall be paid to the Agent by the assigning Lender a fee (the
"Assignment Fee") of $3,000. For each assignment, the parties to such
assignment shall execute and deliver to the Agent for its acceptance and
recording an Assignment and Acceptance Agreement. Upon such execution,
delivery, acceptance and recording by the Agent, from and after the effective
date specified in such Assignment and Acceptance Agreement, the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance Agreement, the assignor Lender thereunder shall be
released from its obligations under the Loan Documents. The Borrower agrees
upon written request of the Agent and at the Borrower's expense to execute and
deliver (i) to such assignee, Notes, dated the effective date of such
Assignment and Acceptance Agreement, in an aggregate principal amount equal to
the Loans assigned to, and Commitment assumed by, such assignee and (2) to such
assignor Lender, Notes, dated the effective date of such Assignment and
Acceptance Agreement, in an aggregate principal amount equal to the balance of
such assignor Lender's Loans and Commitment. Upon any such sale, assignment or
other transfer, the Commitments and the Commitment Percentages set forth in
Exhibit A shall be adjusted accordingly by the Agent.
(c) Each Lender may grant participations in all or any part of
its Loans, its Notes and its Commitment to one or more banks, insurance
companies, financial institutions, pension funds or mutual funds, provided that
(i) such Lender's obligations under the Loan Documents shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties to the
Loan Documents for the performance of such obligations, (iii) the Borrower,
the Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under the
Loan Documents, (iv) no sub-participations shall be permitted and (v) the
voting rights of any holder of any participation shall be limited to decisions
that only do any of the following: (A) subject the participant to any
additional obligation, (B) reduce the principal of, or interest on the Notes
or any fees or other amounts payable hereunder or (C) postpone any date fixed
for the payment of principal of, or interest on the Notes or any fees or other
amounts payable hereunder. The Borrower acknowledges and agrees that any such
participant shall for purposes of Sections 2.9, 2.11, 2.12 and 2.15 be deemed
to be a "Lender"; provided, however, the Borrower shall not, at any time, be
obligated to pay any participant in any interest of any Lender hereunder any
-52-
<PAGE>
sum in excess of the sum which the Borrower would have been obligated to pay
to such Lender in respect of such interest had such Lender not sold such
participation.
(d) If any (i) assignment is made pursuant to subsection (b)
above or (ii) any participation is granted pursuant to subsection (c) above,
shall be made to any Person that is not a U.S. Person, such Person shall
furnish such certificates, documents or other evidence to the Borrower and the
Agent, in the case of clause (i) and to the Borrower and the Lender which sold
such participation in the case of clause (ii), as shall be required by Section
2.10(c).
(e) No Lender shall, as between and among the Borrower, the
Agent and such Lender, be relieved of any of its obligations under the Loan
Documents as a result of any sale, assignment, transfer or negotiation of, or
granting of participations in, all or any part of its Loans, its Commitment or
its Notes, except that a Lender shall be relieved of its obligations to the
extent of any such sale, assignment, transfer, or negotiation of all or any
part of its Loans, its Commitment or its Notes pursuant to subsection (b) above.
(f) Notwithstanding anything to the contrary contained in this
Section, any Lender may at any time or from time to time assign all or any
portion of its rights under the Loan Documents to a Federal Reserve Bank,
provided that any such assignment shall not release such assignor from its
obligations thereunder.
11.8. Counterparts
Each Loan Document (other than the Notes) may be executed by one
or more of the parties thereto on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same document. It shall not be necessary in making proof of any Loan Document
to produce or account for more than one counterpart signed by the party to be
charged. A counterpart of any Loan Document or to any document evidencing, and
of any an amendment, modification, consent or waiver to or of any Loan Document
transmitted by fax shall be deemed to be an originally executed counterpart. A
set of the copies of the Loan Documents signed by all the parties thereto shall
be deposited with each of the Borrower and the Agent. Any party to a Loan
Document may rely upon the signatures of any other party thereto which are
transmitted by fax or other electronic means to the same extent as if
originally signed.
11.9. Adjustments; Set-off
(a) If any Lender (a "Benefited Lender") shall at any time
receive any payment of all or any part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9.1 (h) or (i), or otherwise) in a greater proportion
than any such payment to and collateral received by any other Lender in respect
of such other Lender's Loans, or interest thereon (other than payments of
principal or interest in respect of Competitive Bid Loans when no Default or
Event of Default exists), such Benefited Lender shall purchase for cash from
each of the other Lenders such portion of each such other Lender's Loans, and
shall provide each of such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
-53-
<PAGE>
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders, provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from
such Benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. The Borrower agrees that each Lender so purchasing a portion of
another Lender's Loans may exercise all rights of payment (including, without
limitation, rights of set-off, to the extent not prohibited by law) with
respect to such portion as fully as if such Lender were the direct holder
of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence of an Event of Default and the
acceleration of the obligations owing in connection with the Loan Documents, or
at any time upon the occurrence and during the continuance of an Event of
Default, under Section 9.1(a), each Lender shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent not prohibited by applicable law, to set-off and apply against
any indebtedness, whether matured or unmatured, of the Borrower to such Lender,
any amount owing from such Lender to the Borrower, at, or at any time after,
the happening of any of the above-mentioned events. To the extent not
prohibited by applicable law, the aforesaid right of set-off may be exercised
by such Lender against the Borrower or against any trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor of the Borrower, or
against anyone else claiming through or against the Borrower or such trustee in
bankruptcy, custodian, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition, assignment for the
benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
11.10. Construction
The Borrower represents that it has been represented by counsel
in connection with the Loan Documents and the transactions contemplated thereby
and that the principle that agreements are to be construed against the
draftsman shall be inapplicable.
11.11. Indemnity
The Borrower agrees to indemnify and hold harmless the Agent
and each Lender and their respective affiliates, directors, officers,
employees, attorneys and agents (each an "Indemnified Person") from and against
any loss, cost, liability, damage or expense (including the reasonable fees and
disbursements of counsel of such Indemnified Person, including all local
counsel hired by any such counsel) incurred by such Indemnified Person in
investigating, preparing for, defending against, or providing evidence,
producing documents or taking any other action in respect of, any commenced or
threatened litigation, administrative proceeding or investigation under any
federal securities law or any other statute of any jurisdiction, or any
regulation, or at common law or otherwise, which is alleged to arise out of or
-54-
<PAGE>
is based upon (i) any untrue statement or alleged untrue statement of any
material fact by the Borrower in any document or schedule executed or filed
with any Governmental Authority by or on behalf of the Borrower; (ii) any
omission or alleged omission to state any material fact required to be stated
in such document or schedule, or necessary to make the statements made
therein, in light of the circumstances under which made, not misleading; (iii)
any acts, practices or omissions or alleged acts, practices or omissions of the
Borrower or its agents relating to the use of the proceeds of any or all
borrowings made by the Borrower which are alleged to be in violation of Section
2.15, or in violation of any federal securities law or of any other statute,
regulation or other law of any jurisdiction applicable thereto; or (iv) any
acquisition or proposed acquisition by the Borrower of all or a portion of the
Stock, or all or a portion of the assets, of any Person whether such
Indemnified Person is a party thereto. The indemnity set forth herein shall be
in addition to any other obligations or liabilities of the Borrower to each
Indemnified Person under the Loan Documents or at common law or otherwise, and
shall survive any termination of the Loan Documents, the expiration of the
Aggregate Commitments and the payment of all indebtedness of the Borrower under
the Loan Documents, provided that the Borrower shall have no obligation under
this Section to an Indemnified Person with respect to any of the foregoing to
the extent found in a final judgment of a court having jurisdiction to have
resulted primarily out of the gross negligence or wilful misconduct of such
Indemnified Person or arising solely from claims between one such Indemnified
Person and another such Indemnified Person.
11.12. Governing Law
The Loan Documents and the rights and obligations of the
parties thereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York, without regard to
principles of conflict of laws.
11.13. Headings Descriptive
Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
11.14. Severability
Every provision of the Loan Documents is intended to be
severable, and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
11.15. Integration
All exhibits to a Loan Document shall be deemed to be a part
thereof. Except for agreements between the Agent and the Borrower with respect
to certain fees, the Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders with respect to the
-55-
<PAGE>
subject matter thereof and supersede all prior agreements and understandings
among the Borrower , the Agent and the Lenders with respect to the subject
matter thereof.
11.16. Consent to Jurisdiction
The Borrower hereby irrevocably submits to the jurisdiction of
any New York State or Federal court sitting in the City of New York over any
suit, action or proceeding arising out of or relating to the Loan Documents.
The Borrower hereby irrevocably waives, to the fullest extent permitted or not
prohibited by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. The Borrower hereby agrees
that a final judgment in any such suit, action or proceeding brought in such a
court, after all appropriate appeals, shall be conclusive and binding upon it.
11.17. Service of Process
The Borrower hereby further irrevocably consents to the service
of process in any suit, action or proceeding by sending the same by first class
mail, return receipt requested or by overnight courier service, to the address
of the Borrower set forth in Section 11.2. The Borrower hereby agrees that any
such service (i) shall be deemed in every respect effective service of process
upon it in any such suit, action, or proceeding, and (ii) shall to the fullest
extent enforceable by law, be taken and held to be valid personal service upon
and personal delivery to it.
11.18. No Limitation on Service or Suit
Nothing in the Loan Documents or any modification, waiver,
consent or amendment thereto shall affect the right of the Agent or any Lender
to serve process in any manner permitted by law or limit the right of the Agent
or any Lender to bring proceedings against the Borrower in the courts of any
jurisdiction or jurisdictions in which the Borrower may be served.
11.19. WAIVER OF TRIAL BY JURY
THE AGENT, THE LENDERS AND THE BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, THE BORROWER
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE AGENT, OR THE LENDERS,
OR COUNSEL TO THE AGENT OR THE LENDERS, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. THE
BORROWER ACKNOWLEDGES THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
-56-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: /s/ David M. Eppler
Name: David M. Eppler
Title: Vice President Finance
THE BANK OF NEW YORK,
Individually and as Agent
By: /s/ Dennis Pidherny
Name: Dennis Pidherny
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ T. Thomas Cheng
Name: T. Thomas Cheng
Title: Vice President
MELLON BANK, N.A.
By: /s/ Scott Hennesse
Name: Scott Hennesse
Title: Assistant Vice President
-57-
<PAGE>
WACHOVIA BANK OF GEORGIA
By: /s/ Douglas L. Williams
Name: Douglas L. Williams
Title: Senior Vice President -
Group Executive
HIBERNIA NATIONAL BANK
By: /s/ Justin J. DeKeyzer
Name: Justin J. DeKeyzer
Title: Vice President
RAPIDES BANK AND TRUST COMPANY
IN ALEXANDRIA
By: /s/ R. Blake Chatelain
Name: R. Blake Chatelain
Title: Senior Vice President
WHITNEY NATIONAL BANK
By: /s/ John J. Zollinger, IV
Name: John J. Zollinger, IV
Title: Banking Officer
-58-
<PAGE>
CLECO EXHIBIT A
<TABLE>
LIST OF COMMITMENTS
<CAPTION>
Revolving
Credit Commitment
Lender Commitment Percentage
------- ----------- ----------
<S> <C> <C>
The Bank of $27,500,000 27.5%
New York
The First National $22,500,000 22.5%
Bank of Chicago
Mellon Bank, N.A. $ 17,500,000 17.5%
Wachovia Bank of $ 10,000,000 10.0%
Georgia
Hibernia National Bank $ 7,500,000 7.5%
Rapides Bank and Trust $ 7,500,000 7.5%
Company in Alexandria
Whitney National Bank $ 7,500,000 7.5%
------------ ------
TOTAL $100,000,000 100%
============ ======
</TABLE>
<PAGE>
CLECO EXHIBIT B-1
FORM OF REVOLVING CREDIT NOTE
$________ ______ __, 1995
New York, New York
FOR VALUE RECEIVED, on the Maturity Date, CENTRAL LOUISIANA ELECTRIC
COMPANY, INC., a Louisiana corporation (the "Borrower"), hereby promises to pay
to the order of ________________ (the "Lender"), at the office of THE BANK OF
NEW YORK, as Agent (the "Agent"), located at One Wall Street, New York, New
York or at such other place as the Agent may specify from time to time, in
lawful money of the United States of America, the principal sum of $_____, or
such lesser unpaid principal balance as shall be outstanding hereunder,
together with interest from the date hereof, on the unpaid principal balance
hereof, payable at the rate or rates and at the time or times provided for in
the Revolving Credit Agreement, dated as of June 15, 1995, among the Borrower,
the Lenders party thereto and the Agent (as the same may be amended, modified
or supplemented from time to time, the "Agreement"). Capitalized terms used
herein that are defined in the Agreement shall have the meanings therein
defined. In no event shall interest payable hereon exceed the Highest Lawful
Rate.
This Note is one of the Revolving Credit Notes referred to in the
Agreement and is entitled to the benefits of, and is subject to the terms set
forth in, the Agreement. The principal of this Note is payable in the amounts
and under the circumstances, and its maturity is subject to acceleration upon
the terms, set forth in the Agreement. Except as otherwise provided in the
Agreement, if any payment on this Note becomes due and payable on a day which
is not a Business Day, the maturity thereof shall be extended to the next
Business Day and interest shall be payable at the applicable rate or rates
specified in the Agreement during such extension period.
The (i) date and amount of each Revolving Credit Loan made by the Lender,
(ii) its character as an ABR Advance or a Eurodollar Advance, (iii) the
Eurodollar Rate and Eurodollar Interest Period applicable to any Eurodollar
Advances, and (iv) each payment and prepayment of the principal thereof, shall
be recorded by the Lender on its books and, prior to any transfer of this Note,
may be indorsed by the Lender on the schedule attached hereto or any
continuation thereof, provided that the failure of the Lender to make any such
recordation or indorsement shall not affect the obligations of the Borrower to
make payment when due of any amount owing hereunder.
Presentment for payment, demand, protest, notice of protest and notice of
dishonor and all other demands and notices in connection with the delivery,
performance and enforcement of this Note are hereby waived, except as
specifically otherwise provided in the Agreement.
This Note is being delivered in, is intended to be performed in, and
shall be construed and interpreted in accordance with and be governed by the
internal laws of, the State of New York, without regard to principles of
conflicts of law.
<PAGE>
This Note may only be amended by an instrument in writing executed
pursuant to the provisions of Section 11.1 of the Agreement.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: _________________________
Name: _______________________
Title: ______________________
-2-
<PAGE>
SCHEDULE TO
REVOLVING CREDIT NOTE
<TABLE>
<CAPTION>
Interest
Rate on
Eurodollar
Advances
Type of Amount of (without Interest
Advance (ABR principal regard to Period (if
or Eurodollar Amount of paid or Applicable Eurodollar Notation
Date Rate) Advance prepaid Margin) Advance) Made By
---- ------------- ---------- ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
CLECO EXHIBIT B-2
FORM OF COMPETITIVE BID NOTE
______ __, 1995
New York, New York
FOR VALUE RECEIVED, CENTRAL LOUISIANA ELECTRIC COMPANY, INC., a
Louisiana corporation (the "Borrower"), hereby promises to pay to the order of
_________________________ (the "Lender"), at the office of THE BANK OF NEW
YORK, as Agent (the "Agent"), located at One Wall Street, New York, New York or
at such other place as the Agent may specify from time to time, in lawful money
of the United States of America, the outstanding principal balance of the
Lender's Competitive Bid Loans, together with interest thereon payable at the
rate or rates and at the time or times provided for in the Revolving Credit
Agreement, dated as of June 15, 1995, among the Borrower, the Lenders party
thereto and the Agent (as the same may be amended, modified or supplemented
from time to time, the "Agreement"). Capitalized terms used herein that are
defined in the Agreement shall have the meanings therein defined. In no event
shall interest payable hereon exceed the Highest Lawful Rate.
This Note is one of the Competitive Bid Notes referred to in the
Agreement and is entitled to the benefits of, and is subject to the terms set
forth in, the Agreement. The principal of this Note is payable in the amounts
and under the circumstances, and its maturity is subject to acceleration upon
the terms, set forth in the Agreement. Except as otherwise provided in the
Agreement, if any payment on this Note becomes due and payable on a day which
is not a Business Day, the maturity thereof shall be extended to the next
Business Day and interest shall be payable at the applicable rate or rates
specified in the Agreement during such extension period.
The (i) date and amount of each Competitive Bid Loan made by the Lender,
(ii) the interest rate and Interest Period applicable thereto and (iii) each
payment and prepayment of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, may be indorsed
by the Lender on the schedule attached hereto or any continuation thereof,
provided that the failure of the Lender to make any such recordation or
indorsement shall not affect the obligations of the Borrower to make payment
when due of any amount owing hereunder.
Presentment for payment, demand, protest, notice of protest and notice of
dishonor and all other demands and notices in connection with the delivery,
performance and enforcement of this Note are hereby waived, except as
specifically otherwise provided in the Agreement.
This Note is being delivered in, is intended to be performed in, and
shall be construed and interpreted in accordance with and be governed by the
internal laws of, the State of New York, without regard to principles of
conflicts of law.
<PAGE>
This Note may only be amended by an instrument in writing executed
pursuant to the provisions of Section 11.1 of the Agreement.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: _________________________
Name: _______________________
Title: ______________________
-2-
<PAGE>
SCHEDULE TO
COMPETITIVE BID NOTE
<TABLE>
<CAPTION>
Amount of Principal
Competitive Interest Bid Payment or Notation
Date Loan Period Rate Prepayment Made by
----- ----------- -------- ------ ---------- ---------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
CLECO EXHIBIT C
FORM OF BORROWING REQUEST
_______ __, 199_
The Bank of New York, as Agent
Agency Function Administration
One Wall Street
18th Floor
New York, New York 10286
Attention: Patricia Clancy
The Bank of New York, as Agent
Energy Industries Division
One Wall Street
19th Floor
New York, New York 10286
Attention: Dennis M. Pidherny,
Vice President
Re: Revolving Credit Agreement, dated as of June 15, 1995, by and
among CENTRAL LOUISIANA ELECTRIC COMPANY, INC. (the
"Borrower"),the Lenders party thereto, and THE BANK OF NEW
YORK, as Agent (the "Agreement")
Capitalized terms used herein that are defined in the Agreement shall
have the meanings therein defined.
1. Pursuant to Section 2.3 of the Agreement, the Borrower hereby
gives notice of its intention to borrow Revolving Credit Loans
in an aggregate principal amount of $_______ on ______ __, 19__,
which borrowing(s) shall consist of the following Advances:
<TABLE>
<CAPTION>
Initial Interest
Type of Advance Period of Eurodollar
(Eurodollar or ABR) Amount Advances
------------------- ------ --------------------
<S> <C> <C>
<CAPTION>
Revolving Credit Loans
----------------------
<S>
(a)
(b)
</TABLE>
<PAGE>
2. If the Loan requested does not include a continuation or
conversion of a prior Loan, the Borrower hereby certifies that on the date
hereof and, after giving effect to the Loans requested hereby on the
Borrowing Date set forth above:
(a) The Borrower is and shall be in compliance with all of the
terms, covenants and conditions of the Loan Documents.
(b) There exists and there shall exist no Default or Event of
Default under the Agreement.
(c) Each of the representations and warranties contained in
the Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such Borrowing Date.
(d) After giving effect to the Revolving Credit Loans
requested to be made hereby, the aggregate outstanding principal balance of the
Loans will not exceed the Aggregate Commitments.
IN WITNESS WHEREOF, the Borrower has caused this certificate to be
executed by its Authorized Signatory as of the date and year first written
above.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: __________________________
Name: _________________________
Title: ________________________
-2-
<PAGE>
CLECO EXHIBIT D
FORM OF COMPETITIVE BID REQUEST
[Date]
The Bank of New York, as Agent
Agency Function Administration
One Wall Street
18th Floor
New York, New York 10286
Attention: _______________
The Bank of New York, as Agent
Energy Industries Division
One Wall Street
19th Floor
New York, New York 10286
Attention: Dennis M. Pidherny,
Vice President
Re: Revolving Credit Agreement, dated as of June 15, 1995, by and
among CENTRAL LOUISIANA ELECTRIC COMPANY, INC. (the
"Borrower"), the Lenders party thereto, and THE BANK OF NEW
YORK, as Agent (the "Agreement")
Capitalized terms used herein which defined in the Credit
Agreement shall have the meanings therein defined.
Pursuant to Section 2.4 of the Credit Agreement, the Borrower
hereby gives notice of its request to borrow Competitive Bid Loans in the
aggregate sum of $____________ on ____________, which borrowing shall consist
of the following Competitive Interest Periods and amounts corresponding
thereto:
<TABLE>
<CAPTION>
Competitive
Interest Period Amount
--------------- --------
<S> <C>
(1)
(2)
(3)
</TABLE>
<PAGE>
If the requested Loan does not include a continuation or
conversion of a prior Loan, the Borrower hereby certifies that on the date
hereof and, after giving effect to the Competitive Bid Loans requested hereby,
on the Borrowing Date set forth above:
(a) The Borrower is and shall be in compliance with all of
the terms, covenants and conditions of each Loan Document.
(b) There exists and there shall exist no Default or Event of
Default under the Credit Agreement.
(c) The representations and warranties contained in the
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such Borrowing Date.
(d) After giving effect to the Competitive Bid Loans
requested to be made hereby, the aggregate outstanding principal balance of the
Loans will not exceed the Aggregate Commitments.
IN WITNESS WHEREOF, the Borrower has caused this certificate to be
executed by its Authorized Signatory as of the date and year first written
above.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: __________________________
Name: _________________________
Title: ________________________
-2-
<PAGE>
CLECO EXHIBIT E
FORM OF INVITATION TO BID
[Date]
To the Parties Listed on
Schedule A Annexed Hereto
Re: Credit Agreement, dated as of June 15, 1995, by and among
Central Louisiana Electric Company, Inc. (the "Borrower"), the
Lenders party thereto and The Bank of New York, as Agent (the
"Credit Agreement")
Capitalized terms used herein which are defined in the Credit
Agreement shall have the meanings therein defined.
Pursuant to a Competitive Bid Request, the Borrower gave notice
of its request to borrow Competitive Bid Loans in the aggregate sum of
$____________ on ____________, which borrowing shall consist of the following
Competitive Interest Periods and amounts corresponding thereto:
<TABLE>
<CAPTION>
Competitive
Interest Period Amount
----------------- --------
<S> <C>
(1)
(2)
(3)
</TABLE>
The Lenders are hereby invited to bid by 10:00 a.m. at least
one Business Day prior to the proposed Borrowing Date, pursuant to the terms
and conditions of the Credit Agreement, on the making of such Competitive Bid
Loans.
IN EVIDENCE of the foregoing, the undersigned has caused this Invitation
to Bid to be duly executed on its behalf.
THE BANK OF NEW YORK,
as Agent
By: ________________________
Name: ______________________
Title: _____________________
<PAGE>
CLECO EXHIBIT F
FORM OF COMPETITIVE BID
[Date]
The Bank of New York, as Agent
Agency Function Administration
One Wall Street
18th Floor
New York, New York 10286
Attention: Patricia Clancy
The Bank of New York, as Agent
Energy Industries Division
One Wall Street
19th Floor
New York, New York 10286
Attention: Dennis M. Pidherny,
Vice President
Re: Credit Agreement, dated as of June 15, 1995, by and among
Central Louisiana Electric Company, Inc. (the "Borrower"), the
Lenders party thereto and The Bank of New York, as Agent (the
"Credit Agreement")
Capitalized terms used herein which are defined in the Credit
Agreement shall have the meanings therein defined.
In response to a Competitive Bid Request, the undersigned
Lender hereby offers to lend Competitive Bid Loans in the aggregate sum of
$____________ on ____________, which borrowing shall consist of the following
Competitive Interest Periods and the amounts and Bid Rates corresponding
thereto:
<TABLE>
<CAPTION>
Competitive
Interest Period Amount Bid Rate
----------------- -------- ----------
<S> <C> <C>
(1)
(2)
(3)
</TABLE>
<PAGE>
IN EVIDENCE of the foregoing, the undersigned has caused this Competitive
Bid to be duly executed on its behalf.
[LENDER]
By: ________________________
Name: ______________________
Title: _____________________
-2-
<PAGE>
CLECO EXHIBIT G
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
The Bank of New York, as Agent
Agency Function Administration
One Wall Street
18th Floor
New York, New York 10286
Attention: Patricia Clancy
The Bank of New York, as Agent
Energy Industries Division
One Wall Street
19th Floor
New York, New York 10286
Attention: Dennis M. Pidherny,
Vice President
Re: Credit Agreement, dated as of June 15, 1995, by and among
Central Louisiana Electric Company, Inc. (the "Borrower"), the
Lenders party thereto and The Bank of New York, as Agent (the
"Credit Agreement")
Capitalized terms used herein which are defined in the Credit
Agreement shall have the meanings therein defined.
Pursuant to Section 2.4(c) of the Credit Agreement, the
Borrower hereby [gives notice of its [acceptance/rejection] of [Lender's]
Competitive Bid, dated _______________] [accepts the [Lender's] Competitive Bid
in the aggregate sum of $_________ on ________, which borrowing shall consist
of the following Competitive Interest Periods and the amounts and Bid Rates
corresponding thereto:
<TABLE>
<CAPTION>
Competitive
Interest Period Amount Bid Rate
----------------- -------- ----------
<S> <C> <C>
(1)
(2)
(3) ]
</TABLE>
<PAGE>
IN EVIDENCE of the foregoing, the undersigned has caused this
Competitive Bid Accept/Reject Letter to be duly executed on its behalf.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: ________________________
Name: ______________________
Title: _____________________
-2-
<PAGE>
CLECO EXHIBIT H
FORM OF COMPETITIVE BID LOAN CONFIRMATION
[Date]
To [Lender]
Re: Credit Agreement, dated as of June 15, 1995, by and among
Central Louisiana Electric Company, Inc. (the "Borrower"), the
Lenders party thereto and The Bank of New York, as Agent (the
"Credit Agreement")
Capitalized terms used herein which are defined in the Credit
Agreement shall have the meanings therein defined.
In accordance with Section 2.4(c) of the Credit Agreement we
hereby notify you that pursuant to a Competitive Bid Accept Letter, the
Borrower gave notice of its acceptance of [Lender's] Competitive Bid, dated
_____________, in the aggregate sum of $____________ on ____________, which
borrowing shall consist of the following Competitive Interest Periods and the
following amounts and Bid Rates corresponding thereto:
<TABLE>
<CAPTION>
Competitive
Interest Period Amount Bid Rate
--------------- ------ --------
<S> <C> <C>
(1)
(2)
(3)
</TABLE>
Pursuant to Section 2.4(e) of the Credit Agreement, [Lender] is required
to make available to the Agent at its office the proceeds of Lender's
Competitive Bid Loan(s) set forth in Section 11.2 of the Credit Agreement, in
immediately available funds, not later than 2:00 p.m. on the Borrowing Date
specified above.
IN EVIDENCE of the foregoing, the undersigned has caused this Competitive
Bid Loan Confirmation to be duly executed on its behalf.
THE BANK OF NEW YORK,
as Agent
By: ________________________
Name: ______________________
Title: _____________________
<PAGE>
CLECO EXHIBIT I
FORM OF NOTICE OF CONVERSION/CONTINUATION
_______ __, 199_
The Bank of New York, as Agent
Agency Function Administration
One Wall Street
18th Floor
New York, New York 10286
Attention: Patricia Clancy
The Bank of New York, as Agent
Energy Industries Division
One Wall Street
19th Floor
New York, New York 10286
Attention: Dennis M. Pidherny,
Vice President
Re: Credit Agreement, dated as of June 15, 1995, by and among
Central Louisiana Electric Company, Inc. (the "Borrower"), the
Lenders party thereto and The Bank of New York, as Agent (the
"Credit Agreement")
Capitalized terms used herein that are defined in the Agreement shall
have the meanings therein defined.
1. Pursuant to Section 2.7 of the Agreement, the Borrower requests
to convert or continue Advances as set forth below:
(a) on ____ __, 199_, to convert $_______ in principal amount
of presently outstanding Eurodollar Advances having an Interest Period that
expires on ____ __, 199_ to ABR Advances.
(b) on ____ __, 199_, to continue as Eurodollar Advances,
$_______ in principal amount of presently outstanding Eurodollar Advances
having an Interest Period that expires on ____ __, 199_ for an additional
Interest Period of __ months;
(c) on ____ __, 199_, to convert $_______ in principal amount
of presently outstanding ABR Advances to Eurodollar Advances that have an
initial Interest Period of __ months.
2. The Borrower hereby certifies that on the date hereof and on
the requested Conversion/Continuation Date set forth above, there exists and
there shall exist no Default or Event of Default under the Agreement.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this certificate to be
executed by its Authorized Signatory as of the date and year first written
above.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: __________________________
Name: _________________________
Title: ________________________
-2-
<PAGE>
CLECO EXHIBIT J
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance Agreement is made and entered into as
of _____ __, 19__, by and between ____________ (the "Assignor") and
_____________ (the "Assignee").
R E C I T A L S
- - - - - - - -
A. The Assignor, certain other lenders (together with any prior
assignees, the "Lenders") and The Bank of New York, as agent (the "Agent"), are
parties to that certain Revolving Credit Agreement dated as of June 15, 1995
(the "Credit Agreement") with CENTRAL LOUISIANA ELECTRIC COMPANY, INC., a
Louisiana corporation (the "Borrower"). Pursuant to the Credit Agreement, the
Lenders agreed to make Revolving Credit Loans under the Aggregate Commitments
in the aggregate amount of $__________. The amount of the Assignor's Revolving
Credit Commitment (without giving effect to the assignment effected hereby or
to other assignments thereof which have not yet become effective) is specified
in Item 1 of Schedule 1 hereto. The outstanding principal amounts of the
Assignor's Revolving Credit Loans and Competitive Bid Loans (without giving
effect to the assignment effected hereby or to other assignments thereof which
have not yet become effective) is specified in Item 2 of Schedule 1 hereto.
All capitalized terms not otherwise defined herein are used herein as defined
in the Credit Agreement.
B. The Assignor wishes to sell and assign to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, (i) the portion of
the Assignor's Revolving Credit Commitment specified in Item 3 of Schedule 1
hereto (the "Assigned Commitment") and (ii) the portion of the Assignor's
Revolving Credit Loans and/or the portion of the Assignor's Competitive Bid
Loans specified in Item 5 of Schedule 1 hereto (the "Assigned Loans").
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth herein and
in the Credit Agreement, the Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, without
recourse, on the date set forth above (the "Assignment Date") (a) all right,
title and interest of the Assignor to the Assigned Loans and (b) all
obligations of the Assignor under the Credit Agreement with respect to the
Assigned Commitment. As full consideration for the sale of the Assigned Loans
and the Assigned Commitment, the Assignee shall pay to the Assignor on the
Assignment Date the principal amount of the Assigned Loans (the "Purchase
Price") [and the Assignor shall pay to the Assignee on the Assignment Date the
fee specified in Item 6 of Schedule 1 hereto.] [1]
2. Representation and Warranties. Each of the Assignor and the Assignee
represents and warrants to the other that (a) it has full power and legal right
_________________________
1 Omit bracketed language if no fee is being paid.
<PAGE>
to execute and deliver this Agreement and to perform the provisions of this
Agreement; (b) the execution, delivery and performance of this Agreement have
been authorized by all action, corporate or otherwise, and do not violate any
provisions of its charter or by-laws or any contractual obligations or
requirement of law binding on it; and (c) this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms. The Assignor further represents that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim created by the Assignor.
3. Condition Precedent. The obligations of the Assignor and the Assignee
hereunder shall be subject to the fulfillment of the condition that the
Assignor shall have (a) received payment in full of the Purchase Price, and (b)
complied with the other applicable provisions of Section 11.7 of the Credit
Agreement.
4. Notice of Assignment. The Assignor agrees to give notice of the
assignment and assumption of the Assigned Loans and the Assigned Commitment to
the Agent and the Borrower and hereby instructs the Agent and the Borrower to
make all payments with respect to the Assigned Loans and the Assigned
Commitment directly to the Assignee at the applicable Lending Offices specified
on Schedule 2 hereto; provided, however, that the Borrower and the Agent shall
be entitled to continue to deal solely and directly with the Assignor in
connection with the interests so assigned until the Agent and the Borrower, to
the extent required by Section 11.7 of the Credit Agreement, shall have
received notice of the assignment, the Borrower shall have consented in writing
thereto, and the Agent shall have recorded and accepted this Agreement and
received the Assignment Fee required to be paid pursuant to Section 11.7 of
the Credit Agreement. From and after the date (the "Assignment Effective
Date") on which the Agent shall notify the Borrower and the Assignor that the
requirements set forth in the foregoing sentence shall have occurred and all
consents (if any) required shall have been given, (i) the Assignee shall be
deemed to be a party to the Credit Agreement and, to the extent that rights and
obligations thereunder shall have been assigned to the Assignee as provided in
such notice of assignment to the Agent, shall have the rights and obligations
of a Lender under the Credit Agreement, and (ii) the Assignee shall be deemed
to have appointed the Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. After the Assignment Effective Date, the Agent shall make all
payments in respect of the interest assigned hereby (including payments of
principal, interest, fees and other amounts) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustment in payments under the Assigned
Loans and the Assigned Commitment for periods prior to the Assignment Effective
Date hereof directly between themselves. If the Assignee is not a United
States Person as defined in Section 7701(a)(30) of the Code, the Assignee shall
deliver herewith the forms required by Section 2.10(c) of the Credit Agreement
to evidence the Assignee's complete exemption from United States withholding
taxes with respect to payments under the Loan Documents.
5. Independent Investigation. The Assignee acknowledges that it is
purchasing the Assigned Loans and the Assigned Commitments from the Assignor
totally without recourse and, except as provided in Section 2 hereof, without
representation or warranty. The Assignee further acknowledges that it has made
-2-
<PAGE>
its own independent investigation and credit evaluation of the Borrower in
connection with its purchase of the Assigned Loans and the Assigned
Commitments. Except for the representations or warranties set forth in Section
2, the Assignee acknowledges that it is not relying on any representation or
warranty of the Assignor, expressed or implied, including, without limitation,
any representation or warranty relating to the legality, validity, genuineness,
enforceability, collectibility, interest rate, repayment schedule or accrual
status of the Assigned Loans or the Assigned Commitment, the legality,
validity, genuineness or enforceability of the Credit Agreement, the Notes, or
any other Loan Document referred to in or delivered pursuant to the Credit
Agreement, or financial condition or creditworthiness of the Borrower or any
other Person. The Assignor has not and will not be acting as either the
representative, agent or trustee of the Assignee with respect to matters
arising out of or relating to the Credit Agreement or this Agreement. From and
after the Assignment Effective Date, except as set forth in Section 4 above,
the Assignor shall have no rights or obligations with respect to the Assigned
Loans or the Assigned Commitments.
6. Consent of the Borrower; Issuance of Notes.
Pursuant to the provisions of Section 11.7 of the Credit Agreement,
and to the extent required thereby, the Borrower, by signing below, consents to
this Agreement and to the assignment contemplated herein. The Borrower further
agrees to execute and deliver:
(i) to the Assignee, (A) a Revolving Credit Note, in an
aggregate principal amount of $____ and (B) a Competitive Bid Note, in an
aggregate principal amount of $____.
(ii) to the Assignor, (A) a Revolving Credit Note, in an
aggregate principal amount of $____ and (B) a Competitive Bid Note, in an
aggregate principal amount of $____.
7. Method of Payment. All payments to be made by either party hereunder
shall be in funds available at the place of payment on the same day and shall
be made by wire transfer to the account designated by the party to receive
payment.
8. Integration. This Agreement shall supersede any prior agreement or
understanding between the parties (other than the Credit Agreement) as to the
subject matter hereof.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon both parties, their successors and assigns.
10. Headings. Section headings have been inserted herein for convenience
only and shall not be construed to be a part hereof.
-3-
<PAGE>
11. Amendments; Waivers. This Agreement may not be amended, changed,
waived or modified except by a writing executed by the parties hereto, and may
not be amended, changed, waived or modified in any manner inconsistent with
Section 11.7 of the Credit Agreement without the prior written consent of the
Agent.
12. Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the Internal laws of the State of New
York, without regard to principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
________________, as Assignor
By: _________________________
Name: _______________________
Title: ______________________
________________, as Assignee
By: _________________________
Name: _______________________
Title: ______________________
Consented to:
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: _________________________
Name: _______________________
Title: ______________________
Accepted:
THE BANK OF NEW YORK, as Agent
By: _________________________
Name: _______________________
Title: ______________________
-4-
<PAGE>
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
between
_____________________, as Assignor
and
_____________________, as Assignee
relating to
Revolving Credit Agreement among
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.,
the Lenders party thereto,
and
The Bank of New York, as Agent,
dated as of June 15, 1995
<TABLE>
<S> <C>
Item 1. Assignor's Revolving Credit
Commitment* $___________
Item 2. Assignor's Loans:
(a) Assignor's Revolving Credit
Loans* consisting of:
ABR Advances $___________
Eurodollar Advances $___________
___________________ $___________
(b) Assignor's Competitive Bid
Loans* consisting of Loans
at the interest rates and
for the Interest Periods
set forth below:
___________________________ $___________
___________________________ $___________
___________________________ $___________
Item 3. Amount of Assigned Revolving
Credit Commitment
<PAGE>
Item 4. Percentage of Revolving Credit
Commitment assigned as a
percentage of the aggregate
Revolving Credit Commitments
of all Lenders: ______%
Item 5. Amount of Assigned Loans:
(a) Assignor's Revolving Credit
Loans consisting of:
ABR Advances $___________
Eurodollar Advances $___________
___________________ $___________
(b) Assignor's Competitive
Bid Loans consisting of
Loans at the interest
rates and for the Interest
Periods set forth below:
___________________ $___________
___________________ $___________
___________________ $___________
Item 6. Amount of Fee
payable to Assignee [1] $___________
</TABLE>
________________________
1 Omit if no fee is to be paid.
-2-
<PAGE>
SCHEDULE 2
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
between
_____________________, as Assignor
and
_____________________, as Assignee
relating to
Revolving Credit Agreement among
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.,
the Lenders party thereto,
and
The Bank of New York, as Agent,
dated as of June 15, 1995
Domestic Lending Office
______________________
______________________
Attention: ___________
___________
Telephone: (___) ___-____
Fax: (___) ___-____
Eurodollar Lending Office
______________________
______________________
Attention: ___________
___________
Telephone: (___) ___-____
Fax: (___) ___-____
Address for Notices
______________________
______________________
Attention: ___________
___________
Telephone: (___) ___-____
Fax: (___) ___-____
<PAGE>
CLECO EXHIBIT K
FORM OF OPINION OF COUNSEL TO THE BORROWER
_______________, 1995
To the Parties Listed on Schedule A
Attached Hereto
We have acted as counsel to Central Louisiana Electric Company, Inc.,
a Louisiana corporation (the "Borrower") in connection with that certain
Revolving Credit Agreement, dated as of _______________, 1995, by and among the
Borrower, the Lenders party thereto and The Bank of New York, as Agent (the
"Agreement") and the Notes (as defined in the Agreement). This opinion is
furnished to you pursuant to Section 5.6 of the Agreement. Capitalized terms
that are defined in the Agreement but are not defined herein shall have the
meanings ascribed to them in the Agreement.
In connection with the foregoing and the delivery of this opinion,
we have examined (i) executed counterparts of the Agreement and executed
originals of the Revolving Credit Notes and the Competitive Bid Notes, (ii) the
Restated Articles of Incorporation and Amended and Restated Bylaws, each as
amended to the date hereof, of the Borrower, (iii) those records of the
corporate proceedings of the Borrower as we have deemed necessary as a basis
for the opinions hereinafter expressed, including proceedings relative to the
Loan Documents, (iv) such applications to and approvals of Governmental
Authorities as we have deemed necessary as a basis for the opinions hereinafter
expressed.
We have also examined originals or copies, certified or otherwise
identified, of all respective records, documents and instruments of the
Borrower, certificates of public officials, certificates of officers of the
Borrower and other Persons, and all other documents, certificates and
corporate, or other records as we have deemed necessary as a basis for the
opinions hereinafter expressed. In our examination, we have assumed the
genuineness of all signatures (other than those of the Borrower), the
authenticity of all documents submitted to us as originals and the conformity
with the originals (and the authenticity of such originals) of all documents
submitted to us as copies. With respect to factual matters material to our
opinion, we have relied upon the representations contained in the Agreement and
upon certificates of representatives of the Borrower.
Based upon and subject to the foregoing and the assumptions,
<PAGE>
exceptions, limitations and qualifications expressed below, and having regard
for such legal considerations as we deem relevant, we are of the opinion that:
1. The Borrower is duly incorporated and validly existing in good
standing under the laws of the State of Louisiana, has all requisite corporate
authority to own its Property and to carry on its business as now conducted,
and is in good standing and authorized to do business as a foreign corporation
in each jurisdiction in which the nature of the business conducted by it
therein or the Property owned by it therein make such qualification
necessary, except where such failure to qualify could not reasonably be
expected to have a Material Adverse Effect.
2. The Borrower has power and authority to enter into, execute,
deliver and perform the terms of the Loan Documents and to incur the
obligations provided for in the Notes, all of which have been duly authorized
by all necessary corporate action and are in full compliance with its Restated
Articles of Incorporation and Amended and Restated Bylaws, each as amended to
the date hereof, or its other organization documents.
3. The Agreement constitutes, and the Notes, when issued and
delivered pursuant to the Agreement for value received, will constitute, the
valid and legally binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms.
4. To our knowledge, except as set forth on Schedule 4.5 to the
Agreement, there are no actions, suits or proceedings at law or in equity or by
or before any Governmental Authority (whether or not purportedly on behalf of
the Borrower or any of its Subsidiaries) pending or threatened against the
Borrower or any of its Subsidiaries which (i) if adversely determined, could
reasonably be expected to have a Material Adverse Effect, (ii) call into
question the validity or enforceability of any of the Loan Documents, (iii)
which seek to prevent or delay, or obtain damages or other relief in connection
with, the execution and delivery by the Borrower of the Loan Documents or the
performance by the Borrower of its agreements therein, or (iv) could reasonably
be expected to result in the rescission, termination or cancellation of any
material franchise, right, license, permit or similar authorization held by the
Borrower or any of its Subsidiaries.
5. Except for information filings required to be made in the
ordinary course of business which are not a condition to the Borrower's
performance under the Loan Documents, no consent, authorization or approval of,
-2-
<PAGE>
filing with, notice to, or exemption by, stockholders, any Governmental
Authority or any other Person is required to authorize, or is required in
connection with the execution, delivery and performance of the Loan Documents
or is required as a condition to the validity or enforceability of the Loan
Documents, except the LPSC and FERC, which, subject to the qualifications
listed below, have been obtained prior to the Effective Date. The FERC Order
is in full force and effect, except that a request for rehearing on the FERC
Order may be filed on or before June 26, 1995, and no appeal from, nor any
action, suit, proceeding or investigation challenging, or placing into question
the validity of, the FERC Order is pending under Section 313 of the Federal
Power Act, as amended, which is the exclusive authority in such act for
rehearings, judicial review and appeals with respect to orders such as the FERC
Order, nor, to our knowledge, is any such appeal or other challenge pending
under any legal authority other than Section 313 or threatened under Section
313 or otherwise. The LPSC Order is in full force and effect, except that
a motion for rehearing on the LPSC Order may be filed on or before June 19,
1995, and no appeal from, nor any action, suit, proceeding or investigation
challenging, or placing into question the validity of, the LPSC Order is
pending under La. Rev. Stat. section 45:1192, as amended, which is the
exclusive authority for rehearings, judicial review and appeals with respect
to orders such as the LPSC Order, nor, to our knowledge, is any such appeal or
other challenge pending under any legal authority other than Section 45:1192
or threatened under Section 45:1192 or otherwise.
6. Neither the execution and delivery of the Loan Documents by
the Borrower, nor the performance by the Borrower of its agreements therein,
will (i) violate the Borrower's Restated Articles of Incorporation or Amended
and Restated Bylaws, each as amended to date, (ii) breach or result in a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon the Properties of the Borrower under, any existing
obligation of the Borrower under any indenture, agreement, or instrument that
has been filed or incorporated by reference as an exhibit to the Borrower's
annual report on Form 10-K for the year ended December 31, 1994, or to any
subsequent report filed by the Borrower through the date hereof with the
Securities and Exchange Commission pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, (iii) breach or otherwise violate
any judicial or administrative order, writ, judgment, or decree of any
Governmental Authority having jurisdiction over the Borrower or its Properties
that is in effect on the date hereof and that has been identified to us by the
Borrower in the course of our inquiry to the Borrower and that the Borrower has
-3-
<PAGE>
certified to us may reasonably be expected to have a Material Adverse Effect,
or (iv) violate any statute in effect on the date hereof, or published rule
or regulation in effect on the date hereof applicable to the Borrower of any
Governmental Authority having jurisdiction over the Borrower or its Properties.
7. (a) To our knowledge, the Borrower is not in default (i) under
any mortgage, indenture, contract or agreement known to us to which it is a
party or by which it or any of its Property is bound or (ii) with respect to
any judgment, order, writ, injunction, decree or decision of any Governmental
Authority, which default could reasonably be expected to have a Material
Adverse Effect.
(b) During the course of our representation of the Borrower in
connection with the Loan Documents, we have not become aware of any material
violation of law by the Borrower which could reasonably be expected to have a
Material Adverse Effect.
8. Neither the Borrower nor CLE (as defined below) is (i) an
"investment company" or a company "controlled" by an "investment company" as
defined in, or otherwise subject to regulation under, the Investment Company
Act of 1940, as amended, or (ii) a "holding company" or an "affiliate" or a
"subsidiary company" of a "holding company" as those terms are defined in, or
otherwise subject to regulation under, the Public Utility Holding Company Act
of 1935, as amended.
9. To our knowledge, the Borrower is not engaged principally in the
business of extending credit for the purpose of purchasing or carrying any
Margin Stock. If used in accordance with Section 2.15 of the Agreement, no
part of the proceeds of the Loans will be used, directly or indirectly, for a
purpose which violates any law, rule or regulation of any Governmental
Authority, including without limitation the provisions of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System, as amended. If
used in accordance with Section 2.15 of the Agreement, no part of the proceeds
of the Loans will be used, directly or indirectly, to purchase or carry Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
Margin Stock.
10. The Borrower has certified to us that CLE Resources, Inc.
("CLE") is its only subsidiary having assets in excess of $100,000. CLE is
duly incorporated and validly existing and in good standing under the business
corporation laws of the State of Delaware, has all requisite corporate
authority to own its Property and to carry on its business as now conducted,
-4-
<PAGE>
and is in good standing and authorized to do business as a foreign corporation
in each jurisdiction in which the nature of the business conducted by it
therein or the Property owned by it therein, as certified to us by the
Borrower, make such qualification necessary, except where such failure to
qualify could not reasonably be expected to have a Material Adverse Effect.
The foregoing opinions are subject to and qualified by the following:
A. All opinions, to the extent they relate to the enforceability of
any agreement or obligation, are subject to and qualified by the following:
(1) the effect and application of bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance or transfer,
equitable subordination and other similar laws now or hereafter in effect which
relate to or limit creditors' rights and remedies generally; and
(2) the effect and application of general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, whether considered in a proceeding in equity or an
action at law; and
(3) We express no opinion as to (i) the availability of any
equitable remedies (regardless of whether enforcement is sought in a proceeding
in equity or at law); or (ii) the enforceability of any right of setoff or
indemnity granted under the Loan Documents; or (iii) any waivers or consents
under the Loan Documents, relating to the rights of the Borrower, or any
duties owing to it, existing as a matter of law, except to the extent the
Borrower may so waive or consent as a matter of law; or (iv) the severability
provisions set forth in any of the Loan Documents; or (v) any releases
contained in the Loan Documents relating to unmatured claims; or (vi) the
applicability of, or compliance by the Agent or the Lenders with any federal,
state or local law, rule, regulation or ordinance, noncompliance with which
would adversely affect the Agent's or the Lenders' right or power to enter
into, perform or enforce any of the Loan Documents.
B. Wherever we have asserted above that a matter is "to our
knowledge," or used the phrase "known to us," our knowledge is limited to the
actual knowledge of those attorneys in our office who have prepared or signed
this opinion or been actively involved in assisting in advising the Borrower in
connection with the execution and delivery of the Loan Documents, without any
independent investigation by any lawyer of this firm.
-5-
<PAGE>
C. We note that the FERC Order authorizes short-term indebtedness
(indebtedness of one year or less) incurred through December 31, 1996 and that,
after that time, renewed FERC approval may be required for the performance of
the Loan Documents.
We are members of the Bar of the State of Louisiana, and express no
opinion as to matters which may be governed by the laws of any jurisdiction
other than Louisiana, New York, the business corporation laws of the State of
Delaware and the federal laws of the United States of America.
Our opinion in paragraph 3 regarding enforceability of the Agreement
and the Notes insofar as it involves matters of the law of the State of New
York is based solely in reliance on the opinion of Satterlee Stephens Burke &
Burke LLP, dated __________, 1995, to this firm, and is subject to any
assumptions, qualifications, limitations and exceptions set forth therein which
are incorporated by reference herein.
The opinions contained herein are given only as of the date of this
opinion letter. This opinion is based upon our professional knowledge and
judgment, and shall not be construed as a guarantee or warranty that a court
considering the matters discussed herein would not rule in a manner contrary to
the opinions expressed above. No opinion is expressed as to the effect of any
future acts of the parties or changes in existing law. We undertake no
responsibility and disclaim any obligation to advise you or any other Person of
any change after the date hereof in the law or the facts presently in effect
even though such change may alter the scope or substance of the opinions herein
expressed or affect the legal or factual statements or assumptions herein.
This opinion may be relied upon solely by the Agent, the Lenders and
their respective successors and assigns in connection with the transactions
contemplated by the Loan Documents, by Emmet, Marvin & Martin, LLP, special
counsel to Agent, in connection with their opinion of even date herewith,
delivered to the Agent pursuant to section 5.7 of the Agreement and by
Satterlee Stephens Burke & Burke LLP, special New York counsel to the Borrower
in connection with their opinion of even date herewith delivered pursuant to
section 5.6 of the Agreement. Other than as provided in the preceding
sentence, the opinions rendered herein may not be used for any other purpose or
relied upon by any other Person or used, circulated, quoted or otherwise
referred to without our express prior written consent.
Very truly yours,
Gordan, Arata, McCollam & Duplantis, L.L.P
-6-
<PAGE>
SCHEDULE A
The Bank of New York,
individually and as Agent
One Wall Street
New York, New York 10286
The First National Bank of Chicago
One First National Plaza
Mail Suite 0363
Chicago, IL 60670-0363
Mellon Bank, N.A.
One Mellon Bank Center
Room 151-4425
Pittsburgh, PA 15258-0001
Wachovia Corporate Services, Inc.
191 Peachtree Street, N.E.
Atlanta, GA 30303
Hibernia National Bank
934 3rd Street
P.O. Box 351
Alexandria, LA 71309-0351
Rapides Bank and Trust Company
400 Murray Street
P.O. Box 31
Alexandria, LA 71309-0031
Whitney National Bank
228 St. Charles Avenue
P.O. Box 61260
New Orleans, LA 70130
<PAGE>
DRAFT
5/1/95
CLECO EXHIBIT K
FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO THE BORROWER
___________ 1995
Gordon Arata McCollam & Duplantis, L.L.P.
Place St. Charles
201 St. Charles Avenue, 40th Floor
New Orleans, LA 70170-4000
Dear Ladies and Gentlemen:
We have acted as special New York counsel to you in connection with the
preparation, execution and delivery of the opinion rendered by you as counsel
to Central Louisiana Electric Company, Inc., a Louisiana corporation (the
"Borrower"), regarding that certain Revolving Credit Agreement, dated as of
_____________, 1995, by and among the Borrower, the Lenders party thereto and
The Bank of New York, as Agent (the "Agreement") and the Notes (as defined in
the Agreement). Capitalized terms that are defined in the Agreement but are
not defined herein shall have the meanings ascribed to them in the Agreement.
In connection with the foregoing and the delivery of this opinion, we
have examined (i) executed original counterparts of the Agreement and executed
originals of the Revolving Credit Notes and the Competitive Bid Notes, (ii) the
Restated Articles of Incorporation and Amended and Restated By-laws, each as
amended to the date hereof, of the Borrower, and (iii) those records of the
corporate proceedings of the Borrower as we have deemed necessary as a basis
for the opinions hereinafter expressed, including proceedings relative to the
Loan Documents.
<PAGE>
We have also examined originals or copies, certified or otherwise
identified to our satisfaction as being true copies, of all respective records,
documents and instruments to the Borrower, certificates of public officials,
certificates of officers of the Borrower and other Persons, and all other
documents, certificates and corporate, or other records as we have deemed
necessary as a basis for the opinions hereinafter expressed. We are not
general counsel to the Borrower and have not conducted any independent
investigation of the books and records or other agreements or instruments to
which the Borrower is a party or by which it or its assets may be bound. In
our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the originals (and the authenticity of such originals) of all documents
submitted to us as copies, the due authorization, execution, and delivery of
all documents referred to herein by all parties thereto and the due authority
of all persons executing such documents and, in that connection, we have
relied upon the separate opinion letter of even date herewith from
yourselves to the Lenders and The Bank of New York as Agent with respect to the
due execution, delivery, validity and effectiveness of the Loan Documents as
they relate to the Borrower. With respect to factual matters material to our
opinion, we have relied, with your permission and without independent
investigation, upon the representations contained in the Agreement, and upon
certificates of representatives of the Borrower.
Based upon and subject to the foregoing and the assumptions,
exceptions, qualifications and limitations hereinafter set forth, and having
regard for such legal considerations as we deem relevant, we are of the opinion
that the Agreement constitutes, and the Notes, when issued and delivered
pursuant to the Agreement for value received, will constitute, the valid and
legally binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms.
The foregoing opinions are subject to and qualified by the following:
1. The enforceability of the Agreement and the Notes may be
limited by the effect and application of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer,
equitable subordination, receivership and other similar laws
now or hereafter in effect which relate to or limit creditors'
rights generally; and by the effect and application of general
principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing
(whether considered in a proceeding in equity or action at law);
and
-2-
<PAGE>
2. We express no opinion as to (A) the availability of any
equitable remedies (regardless of whether enforcement is sought
in a proceeding in equity or at law); or (B) the enforceability
of any right of set-off or indemnity granted under the Loan
Documents; or (C) any waivers or consents under the Loan
Documents, relating to the rights of the Borrower, or any duties
owing to it, existing as a matter of law, except to the extent
the Borrower may so waive or consent as a matter of law; or
(D) the severability provisions set forth in any of the Loan
Documents; or (E) any releases contained in the Loan Documents
relating to unmatured claims; or (F) the applicability of, or
compliance by the Agent or the Lenders with any federal, state
or local law, rule, regulation or ordinance, non-compliance
with which would adversely affect the Agent's or the Lenders'
right or power to enter into, perform or enforce any of the Loan
Documents.
We are members of the Bar of the State of New York, and express no
opinion as to matters which may be governed by laws of any jurisdiction other
than New York. Insofar as the foregoing opinions involve matters of the law
of the State of Louisiana or of the United States of America, with your consent,
they are based solely on your opinion, issued on the date hereof, and are
subject to any assumptions, qualifications, limitations and exceptions set
forth therein which are incorporated by reference herein. This opinion is
based upon our professional knowledge and judgment, and shall not be construed
as a guarantee or warranty that a court considering the matters discussed
herein would not rule in a manner contrary to the opinions expressed above.
This opinion is delivered to you as counsel to the Borrower, in connection with
your opinion of even date herewith delivered to the Agent pursuant to Section
5.6 of the Agreement and may not be used for any other purpose or relied upon
by any Person other than you, the Agent, the Lenders and their respective
successors and assigns in connection with the transactions comtemplated by the
Loan Documents and by Emmet, Marvin & Martin, L.L.P., special counsel to the
Agent, in connection with their opinion of even date herewith, delivered to the
Agent pursuant to Section 5.7 of the Agreement. Other than as provided in the
proceding sentence, the opinions rendered herein may not be used, circulated,
quoted or otherwise referred to without our express prior written consent. The
-3-
<PAGE>
opinions contained herein are given only as of the date hereof and we disclaim
any obligation to advise you or any other Person of any changes of law or fact
that occur after the date hereof even though such change may alter the scope or
substance of the opinions herein expressed or affect the legal or factual
statements or assumptions herein.
Very truly yours,
Satterlee, Stephens & Burke, L.L.P.
-4-
<PAGE>
CLECO EXHIBIT L
FORM OF OPINION OF SPECIAL COUNSEL
_____ __, 199_
To The Parties
Listed on Schedule A
Attached Hereto
Re: Credit Agreement, dated as of June 15, 1995, by and among
Central Louisiana Electric Company, Inc., the Lenders party
The Bank of New York, as Agent (the "Agreement")
We have acted as Special Counsel to the Agent in connection with the
Agreement. Capitalized terms used herein which are defined in the Agreement
shall have the meanings therein defined, unless the context hereof otherwise
requires.
We have examined originals or copies certified to our satisfaction of the
documents required to be delivered pursuant to the provisions of Sections 5 and
6 of the Agreement. In conducting such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, and the conformity to originals of all documents submitted to
us as copies.
Based upon the foregoing examination, and relying with your permission
upon the opinions of Gordon, Arata, McCollam & Duplantis, L.L.P. and Satterlee,
Stephens, Burke & Burke, counsel to the Borrower, we are of the opinion that
all legal preconditions to the making of the first Loans have been
satisfactorily met.
This opinion is rendered solely for your benefit in connection with
the transactions referred to herein and may not be relied upon by any other
Person.
In rendering the foregoing opinion, we express no opinion as to laws
other than the laws of the State of New York and the federal laws of the United
States of America.
Very truly yours,
EMMET, MARVIN & MARTIN, LLP
<PAGE>
SCHEDULE A
The Bank of New York,
individually and as Agent
One Wall Street
New York, New York 10286
The First National Bank of Chicago
One First National Plaza
Mail Suite 0363
Chicago, IL 60670-0363
Mellon Bank, N.A.
One Mellon Bank Center
Room 151-4425
Pittsburgh, PA 15258-0001
Wachovia Bank of Georgia
191 Peachtree Street, N.E.
Atlanta, GA 30303
Hibernia National Bank
934 3rd Street
P.O. Box 351
Alexandria, LA 71309-0351
Rapides Bank and Trust Company
of Alexandria
400 Murray Street
P.O. Box 31
Alexandria, LA 71309-0031
Whitney National Bank
228 St. Charles Avenue
P.O. Box 61260
New Orleans, LA 70130
<PAGE>
CLECO SCHEDULE 1.1
TO CREDIT AGREEMENT
<TABLE>
LIST OF LENDING OFFICES
<CAPTION>
DOMESTIC LENDING OFFICES EURODOLLAR LENDING OFFICES
------------------------ --------------------------
<S> <C>
1. The Bank of New York The Bank of New York
One Wall Street One Wall Street
New York, New York 10286 New York, New York 10286
Attention: Dennis M. Pidherny Attention: Dennis M. Pidherny
Vice President Vice President
Telephone: (212) 635-7547 Telephone: (212) 635-7547
Telecopy: (212) 635-7923/4 Telecopy: (212) 635-7923/4
2. The First National Bank The First National Bank
of Chicago of Chicago
One First National Plaza One First National Plaza
Mail Suite 0363 Mail Suite 0363
Chicago, IL 60670-0363 Chicago, IL 60670-0363
Attention: Michael J. Johnson Attention: Michael J. Johnson
Vice President Vice President
Telephone: (312) 732-4854 Telephone: (312) 732-4854
Telecopy: (312) 732-3055 Telecopy: (312) 732-3055
3. Mellon Bank, N.A. Mellon Bank, N.A.
One Mellon Bank Center One Mellon Bank Center
Room 151-4425 Room 151-4425
Pittsburgh, PA 15258-0001 Pittsburgh, PA 15258-0001
Attention: Scott Hennessee Attention: Scott Hennessee
Assistant Vice President Assistant Vice President
Telephone: (412) 234-4458 Telephone: (412) 234-4458
Telecopy: (412) 234-8888 Telecopy: (412) 234-8888
4. Wachovia Corporate Services, Inc. Wachovia Corporate Services, Inc.
191 Peachtree Street, N.E. 191 Peachtree Street, N.E.
Atlanta, GA 30303 Atlanta, GA 30303
Attention: Carl E. Peoples Attention: Carl E. Peoples
Assistant Vice President Assistant Vice President
Telephone: (404) 332-1470 Telephone: (404) 332-1470
Telecopy: (404) 332-6898 Telecopy: (404) 332-6898
<PAGE>
5. Hibernia National Bank Hibernia National Bank
934 3rd Street 934 3rd Street
P.O. Box 351 P.O. Box 351
Alexandria, LA 71309-0351 Alexandria, LA 71309-0351
Attention: Justin D. DeKeyzer Attention: Justin D. DeKeyzer
Vice President Vice President
Telep hone: (318) 487-2150 Telephone: (318) 487-2150
Telecopy: (318) 487-2165 Telecopy: (318) 487-2165
6. Rapides Bank and Trust Rapides Bank and Trust
Company in Alexandria Company in Alexandria
400 Murray Street 400 Murray Street
P.O. Box 31 P.O. Box 31
Alexandria, LA 71309-0031 Alexandria, LA 71309-0031
Attention: R. Blake Chatelain Attention: R. Blake Chatelain
Senior Vice President Senior Vice President
Telephone: (318) 487-2734 Telephone: (318) 487-2734
Telecopy: (318) 487-2641 Telecopy: (318) 487-2641
7. Whitney National Bank Whitney National Bank
228 St. Charles Avenue 228 St. Charles Avenue
P.O. Box 61260 P.O. Box 61260
New Orleans, LA 70161 New Orleans, LA 70161
Attention: John J. Zollinger Attention: John J. Zollinger
Banking Officer Banking Officer
Telephone: (504) 552-4586 Telephone: (504) 552-4586
Telecopy: (504) 586-7383 Telecopy: (504) 586-7383
</TABLE>
-2-
<PAGE>
CLECO SCHEDULE 4.1
TO CREDIT AGREEMENT
LIST OF SUBSIDIARIES
CLECO Construction Company, Inc.
CLECO Investments Company, Inc.
CLE Resources, Inc.
<PAGE>
CLECO SCHEDULE 4.5
TO CREDIT AGREEMENT
LIST OF LITIGATION NOT OTHERWISE DISCLOSED
None.
<PAGE>
CLECO SCHEDULE 4.13
TO CREDIT AGREEMENT
LIST OF ENVIRONMENTAL MATTERS
In 1986 the Company was named a Potentially Responsible Party (PRP) by
the EPA under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA) for its involvement at the Rose Chemicals (Rose)
disposal site in Holden, Missouri. The Company had contracted with Rose for
disposal of polychlorinated biphenyl (PCE) materials at the site from 1983
through 1986. In naming the Company a PRP, the EPA advised that Rose was no
longer authorized to process PCBs for disposal and that the Company, as one of
the generators of the materials previously sent to the site, was potentially
responsible for the removal and disposal of PCBs remaining at the site pursuant
to CERCLA. Under CERCLA, the Company could be held jointly and severally liable
for the cost of cleaning up the site. The Company, along with other PRPs, has
entered into two Administrative Orders on Consent with Region VII of the EPA
for the removal of certain PCB materials from the site. These materials have
now been removed and disposed of at federally permitted PCB disposal facilities.
All clean-up activities at the site are expected to be completed in 1995.
After the site is closed, it will be monitored for a set number of years.
The Company has contributed $337,000 to the cleanup of this site and does not
presently anticipate any requirement to make additional contributions.
<PAGE>
CLECO SCHEDULE 8.1
TO CREDIT AGREEMENT
LIST OF EXISTING LIENS
Indenture of Mortgage dated as of July 1, 1950 between the Company and First
National Bank of New Orleans, as Trustee, as amended and supplemented.
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
For the three months ended June 30,
(Unaudited)
<CAPTION>
(In thousands, except share
and per share amounts)
1995 1994
----------- -----------
<S> <C> <C>
PRIMARY
Net income applicable to common stock $ 13,490 $ 12,268
----------- -----------
Weighted average number of shares of
common stock outstanding during the
period 22,418,508 22,399,091
Common stock under stock option grants 12,198 21,556
----------- -----------
Average shares 22,430,706 22,420,647
----------- -----------
Primary net income per common share $ 0.60 $ 0.55
=========== ===========
FULLY DILUTED
Net income applicable to common stock $ 13,490 $ 12,268
Adjustments to net income related to
Employee Stock Ownership Plan (ESOP)
under the "if-converted" method:
Add loss of deduction from net income
for actual dividends paid on
convertible preferred stock, net of tax 369 372
Deduct additional cash contribution required
which is equal to dividends on preferred
stock less dividends paid at the common
dividend rate, net of tax (42) (51)
Add tax benefit associated with dividends
paid on allocated common shares 45 30
---------- ----------
Adjusted income applicable to common stock $ 13,862 $ 12,619
---------- ----------
Weighted average number of shares of
common stock outstanding during the
period 22,418,508 22,399,091
Number of equivalent common shares
attributable to ESOP 1,415,515 1,426,502
Common stock under stock option grants 12,198 21,556
---------- ----------
Average shares 23,846,221 23,847,149
---------- ----------
Fully diluted net income per common share $ 0.58 $ 0.53
========== ==========
</TABLE>
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
For the six months ended June 30,
(Unaudited)
<CAPTION>
(In thousands, except share
and per share amounts)
1995 1994
----------- -----------
<S> <C> <C>
PRIMARY
Net income applicable to common stock $ 21,072 $ 20,349
----------- -----------
Weighted average number of shares of
common stock outstanding during the
period 22,411,970 22,395,991
Common stock under stock option grants 13,313 21,943
----------- -----------
Average shares 22,425,283 22,417,934
----------- -----------
Primary net income per common share $ 0.94 $ 0.91
=========== ===========
FULLY DILUTED
Net income applicable to common stock $ 21,072 $ 20,349
Adjustments to net income related to
Employee Stock Ownership Plan (ESOP)
under the "if-converted" method:
Add loss of deduction from net income
for actual dividends paid on
convertible preferred stock, net of tax 737 744
Deduct additional cash contribution required
which is equal to dividends on preferred
stock less dividends paid at the common
dividend rate, net of tax (92) (111)
Add tax benefit associated with dividends
paid on allocated common shares 85 56
----------- -----------
Adjusted income applicable to common stock $ 21,802 $ 21,038
----------- -----------
Weighted average number of shares of
common stock outstanding during the
period 22,411,970 22,395,991
Number of equivalent common shares
attributable to ESOP 1,417,085 1,428,109
Common stock under stock option grants 13,363 22,236
----------- -----------
Average shares 23,842,418 23,846,336
----------- -----------
Fully diluted net income per common share $ 0.91 $ 0.88
=========== ===========
</TABLE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
For the twelve months ended June 30, 1995
(Unaudited)
<CAPTION>
(In thousands,
except ratios)
----------------
<S> <C>
Earnings $ 45,785
Income taxes 21,126
-----------
Earnings from continuing operations before income taxes 66,911
-----------
Fixed charges
Interest, long-term debt 23,767
Interest, other (including interest on short-term debt) 3,367
Amortization of debt expense, premium, net 1,218
Portion of rentals representative of an interest factor 693
-----------
Total fixed charges 29,045
-----------
Earnings from continuing operations before
income taxes and fixed charges $ 95,956
-----------
Ratio of earnings to fixed charges 3.30x
===========
Fixed charges from above $ 29,045
Preferred stock dividends * 2,955
-----------
Total fixed charges and preferred stock dividends $ 32,000
-----------
Ratio of earnings to combined fixed charges and
preferred stock dividends 3.00x
===========
* Preferred stock dividends multiplied by the ratio of pretax
income to net income.
</TABLE>
Coopers Coopers & Lybrand L.L.P. 639 Loyola Avenue telephone (504)529-2700
a professional services firm Suite 1800 facsmile (504)529-1439
& Lybrand New Orleans, LA 70113
August 11, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Central Louisiana Electric Company, Inc. Registrations
on Form S-8 (Nos. 2-79671, 33-10169, 33-38362 and 33-44663)
and Form S-3 (Nos. 33-24895, 33-61068 and 33-62950)
We are aware that our report dated July 26, 1995 on our review of the interim
financial information of Central Louisiana Electric Company, Inc. as of
June 30, 1995 and for the three-month and six-month periods ended June 30, 1995
and 1994 included in this Form 10-Q is incorporated by reference in the above
mentioned registration statements. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a part of the
registration statements prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P., a registered limited liability partnership, is a
member firm of Coopers & Lybrand International.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
Company's financial statements and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $ 918,737
<OTHER-PROPERTY-AND-INVEST> $ 11,081
<TOTAL-CURRENT-ASSETS> $ 72,945
<TOTAL-DEFERRED-CHARGES> $ 195,840
<OTHER-ASSETS> $ 8,128
<TOTAL-ASSETS> $ 1,206,731
<COMMON> $ 45,475
<CAPITAL-SURPLUS-PAID-IN> $ 106,849
<RETAINED-EARNINGS> $ 215,926
<TOTAL-COMMON-STOCKHOLDERS-EQ> $ 368,250
$ 6,880
$ 7,287
<LONG-TERM-DEBT-NET> $ 170,803
<SHORT-TERM-NOTES> $ 0
<LONG-TERM-NOTES-PAYABLE> $ 190,000
<COMMERCIAL-PAPER-OBLIGATIONS> $ 26,240
<LONG-TERM-DEBT-CURRENT-PORT> $ 14,000
$ 0
<CAPITAL-LEASE-OBLIGATIONS> $ 0
<LEASES-CURRENT> $ 805
<OTHER-ITEMS-CAPITAL-AND-LIAB> $ 422,466
<TOT-CAPITALIZATION-AND-LIAB> $1,206,731
<GROSS-OPERATING-REVENUE> $ 180,471
<INCOME-TAX-EXPENSE> $ 10,939
<OTHER-OPERATING-EXPENSES> $ 134,648
<TOTAL-OPERATING-EXPENSES> $ 145,587
<OPERATING-INCOME-LOSS> $ 34,884
<OTHER-INCOME-NET> $ 1,316
<INCOME-BEFORE-INTEREST-EXPEN> $ 36,200
<TOTAL-INTEREST-EXPENSE> $ 14,108
<NET-INCOME> $ 22,092
$ 1,020
<EARNINGS-AVAILABLE-FOR-COMM> $ 21,072
<COMMON-STOCK-DIVIDENDS> $ 16,585
<TOTAL-INTEREST-ON-BONDS> $ 7,396
<CASH-FLOW-OPERATIONS> $ 24,434
<EPS-PRIMARY> $ 0.94
<EPS-DILUTED> $ 0.91
</TABLE>
