[1985B] EXHIBIT 10-j
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
between
KANSAS CITY POWER & LIGHT COMPANY
and
SOCIETE GENERALE, CHICAGO BRANCH
dated as of August 19, 1993
TABLE OF CONTENTS
Section Page
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
1.01 The Letter of Credit . . . . . . . . . . . . . . . . . . . . .1
1.02 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . .2
1.03 Tender Advances and Accrued Interest Advances . . . . . . . . .2
1.04 Redemption Advances and Purchase Advances . . . . . . . . . . .3
1.05 Interest Advances . . . . . . . . . . . . . . . . . . . . . . .4
1.06 Interest on Overdue Amounts . . . . . . . . . . . . . . . . . .4
1.07 Interest Payments . . . . . . . . . . . . . . . . . . . . . . .4
1.08 Selection of Interest Rates . . . . . . . . . . . . . . . . . .4
1.09 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . .5
1.10 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . .6
1.11 Other Payments . . . . . . . . . . . . . . . . . . . . . . . .8
1.12 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . .8
1.13 Additional Interest . . . . . . . . . . . . . . . . . . . . . .9
1.14 Payments and Computations . . . . . . . . . . . . . . . . . . .9
1.15 Payment on Non-Business Days . . . . . . . . . . . . . . . . .9
1.16 Extension of the Letter of Credit . . . . . . . . . . . . . . .9
1.17 Obligations Absolute . . . . . . . . . . . . . . . . . . . . .10
ARTICLE II
CONDITIONS OF ISSUANCE
2.01 Condition Precedent to Issuance of the
Letter of Credit . . . . . . . . . . . . . . . . . . . . . .10
2.02 Additional Conditions Precedent to Issuance
of the Letter of Credit . . . . . . . . . . . . . . . . . . .11
2.03 Condition Precedent to Each Advance . . . . . . . . . . . . . .12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties . . . . . . . . . . . . . . . .12
ARTICLE IV
COVENANTS OF THE COMPANY
4.01 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . .14
a. Preservation of Corporate Existence, Etc. . . . . . . . . .14
b. Compliance with Laws, Etc. . . . . . . . . . . . . . . . .14
c. Maintenance of Insurance, Etc. . . . . . . . . . . . . . .14
d. Visitation Rights . . . . . . . . . . . . . . . . . . . . .15
e. Keeping of Books . . . . . . . . . . . . . . . . . . . . .15
f. Maintenance of Properties . . . . . . . . . . . . . . . . .15
g. Reporting Requirements . . . . . . . . . . . . . . . . . .15
h. Officer's Certificate . . . . . . . . . . . . . . . . . . .16
i. Other Agreements . . . . . . . . . . . . . . . . . . . . .16
j. Redemption or Defeasance of Bonds . . . . . . . . . . . . .16
k. Registration of Bonds . . . . . . . . . . . . . . . . . . .16
4.02 Negative Covenants . . . . . . . . . . . . . . . . . . . . . .16
a. Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . . .16
b. Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . . .17
c. Sales, Etc. of Assets . . . . . . . . . . . . . . . . . . .17
d. Compliance with ERISA . . . . . . . . . . . . . . . . . . .18
e. Amendment of Indenture or Related Document . . . . . . . .18
ARTICLE V
EVENTS OF DEFAULT
5.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . .18
5.02 Upon an Event of Default . . . . . . . . . . . . . . . . . . .20
ARTICLE VI
DEFINITIONS
6.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE VII
MISCELLANEOUS
7.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . .26
7.02 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . .26
7.03 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . .26
7.04 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . .26
7.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . .26
7.06 Liability of the Bank . . . . . . . . . . . . . . . . . . . . .27
7.07 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . .28
7.08 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . .28
7.09 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
7.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . .29
7.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .29
7.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . .29
EXHIBIT A - Form of Irrevocable Letter of Credit with Annexes A
through I thereto
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C - Form of Opinions of Bond Counsel
EXHIBIT D - Encumbrances
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT dated as of August 19,
1993, between KANSAS CITY POWER & LIGHT COMPANY, a corporation organized and
existing under the laws of the State of Missouri (the "Company"), and SOCIETE
GENERALE, CHICAGO BRANCH (the "Bank"). (Unless otherwise indicated, all
capitalized terms used herein shall have the meaning referred to or set forth
in Article VI hereof.)
WHEREAS, the Company requested the City of Burlington, Coffey County,
Kansas (the "Issuer") to issue pursuant to an Indenture of Trust dated as of
September 1, 1985 (the "Indenture"), naming United States Trust Company of New
York, as trustee (the "Trustee"), $50,000,000 aggregate principal amount of
the Issuer's Customized Purchase Pollution Control Refunding and Improvement
Revenue Bonds, Series 1985B (Kansas City Power & Light Company Project) (the
"Bonds") to various purchasers (the "Bond Purchasers") to finance the costs of
acquisition, construction, and installation of certain air and water pollution
control and sewage and solid waste disposal facilities (the "Project") in
Coffey County, Kansas; and
WHEREAS, pursuant to an Equipment Lease Agreement (the "Lease") dated as
of September 1, 1985, between the Company and the Issuer, the Company has
agreed to use the proceeds of the Bonds for the financing of the Project, and
the Company will lease the Project to the Issuer, and pursuant to an Equipment
Sublease Agreement (the "Sublease") dated as of September 1, 1985, between the
Issuer and the Company, the Project will be subleased by the Issuer to the
Company for payments to be made by the Company in such amounts and at such
times as will be sufficient to timely pay the principal and interest on the
Bonds; and
WHEREAS, in order to induce the Bond Purchasers to purchase the Bonds,
the Company requested the Long-Term Credit Bank of Japan, Limited, acting by
its New York Branch to issue its irrevocable transferable letter of credit
(the "Original Letter of Credit") in the amount of $56,041,095.89 of which
$50,000,000 supports the payment of the principal of the Bonds, and
$6,041,095.89 supports the payment of up to 294 days' accrued interest
(computed at 15%) on the Bonds; and
WHEREAS, the Company has requested the Bank to issue an Alternate Letter
of Credit (the "Letter of Credit") in accordance with section 4.4(a) of the
Sublease to replace the Original Letter of Credit.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit, the parties hereto agree as follows:
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
SECTION 1.01. The Letter of Credit. On the terms and conditions
hereinafter set forth, the Bank agrees, upon the request of the Company, to
issue the Letter of Credit dated August 19, 1993, to the Trustee in an amount
not to exceed $56,041,095.89 (the "Commitment") and expiring on or before the
Scheduled Termination Date.
SECTION 1.02. Reimbursement. (a) Subject to Section 1.03 in the case
of a drawing under the Letter of Credit made pursuant to a Tender Draft and
Section 1.04 in the case of a drawing under the Letter of Credit made pursuant
to a Redemption Draft or a Purchase Draft and Section 1.05 in the case of a
drawing under the Letter of Credit made pursuant to an Interest Draft, the
Company hereby agrees to pay to the Bank on demand (i) after the Bank shall
pay any draft presented under the Letter of Credit a sum equal to the amount
so paid under the Letter of Credit, plus (ii) interest on any amount remaining
unpaid by the Company to the Bank under clause (i) above from and including
the date such draft was paid by the Bank until such amount becomes due, at
such fluctuating interest rate per annum as shall be in effect from time to
time pursuant to Section 1.06 herein.
SECTION 1.03. Tender Advances and Accrued Interest Advances. (a) If
the Bank shall make any payment under the Letter of Credit pursuant to a
Tender Draft and the conditions set forth in Section 2.03 shall have been
fulfilled, that portion of such payment with respect to the amount of unpaid
principal of the Bonds under such Tender Draft shall constitute a tender
advance made by the Bank to the Company on the date and in the amount of such
payment, each such advance being a "Tender Advance" and collectively the
"Tender Advances." The Company shall repay the aggregate unpaid principal
amount of all Tender Advances on the Scheduled Termination Date. If the
Company repays the unpaid principal amount of any Tender Advance before the
Scheduled Termination Date, the Bank shall reinstate the Letter of Credit in
accordance with the terms of the Letter of Credit. That portion of the
payment equal to the accrued interest, if any, on the Bonds under such Tender
Draft shall constitute an accrued interest advance made by the Bank to the
Company on the date and in the amount of such payment, each such advance being
an "Accrued Interest Advance" and collectively the "Accrued Interest
Advances." The Company shall repay the unpaid principal amount of any Accrued
Interest Advance and accrued interest thereon on the first business day of the
next calendar month. If certified to the Bank by the Company as a payment
being made pursuant to this Section 1.03(a), upon such repayment, the Bank
shall reinstate the Letter of Credit in the principal amount of such Accrued
Interest Advance being prepaid. The Bank shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Company resulting from each Tender Advance and each Accrued Interest Advance
made from time to time and the amounts of principal and interest payable and
paid from time to time hereunder. In any legal action or proceeding in
respect of this Agreement, the entries made in such account shall, in the
absence of manifest error, be conclusive evidence of the existence and amounts
of the obligations of the Company therein recorded.
(b) The Company shall pay interest on the unpaid principal amount of
each Tender Advance from the date of such Tender Advance until such principal
amount shall become due, at the Domestic Rate, the Eurodollar Rate, or the CD
Bid Rate, as selected by the Company pursuant to Section 1.08(a). The Company
shall pay interest on the unpaid principal amount of each Accrued Interest
Advance from the date of such Accrued Interest Advance until such principal
amount shall become due, at the Domestic Rate. For purposes of this
subsection (b), in order to calculate whether the initial or increased level
of the Eurodollar Rate or CD Bid Rate, as the case may be, shall be applicable
to a Tender Advance and Accrued Interest Advance made subsequent to the
Initial Tender Advance, each such interest rate shall (at all times) be
calculated in accordance with the number of Interest Days that have elapsed
since the Initial Tender Advance Day. In the event of a prepayment (pursuant
to Section 1.10 below) in full at any time of the aggregate unpaid principal
amount of all Tender Advances and Accrued Interest Advances outstanding, it is
hereby understood in accordance with the applicable definitions contained in
Section 6.01 hereof that no Interest Day shall occur between the date of such
prepayment and the date of the next Tender Advance, at which time Interest
Days shall again be counted, starting with the next consecutive number after
the number of the Interest Day on which such prepayment occurred.
SECTION 1.04. Redemption Advances and Purchase Advances. (a) If the
Bank shall make any payment under the Letter of Credit pursuant to a
Redemption Draft and the conditions set forth in Section 2.03 shall have been
fulfilled, such payment shall constitute a redemption advance made by the Bank
to the Company on the date and in the amount of such payment, each such
redemption advance being a "Redemption Advance" and collectively the
"Redemption Advances." If the Bank shall make any payment under the Letter of
Credit pursuant to a Purchase Draft and the conditions set forth in Section
2.03 shall have been fulfilled, such payment shall constitute a purchase
advance made by the Bank to the Company on the date and in the amount of such
payment, each such purchase advance being a "Purchase Advance" and
collectively the "Purchase Advances." (Purchase Advances together with
Redemption Advances are hereinafter sometimes referred to individually as a
"Term Advance" and collectively as the "Term Advances.")
(b) The Company shall repay the aggregate unpaid principal amount of
all Term Advances on the Scheduled Termination Date. If the Company repays
the unpaid principal amount of any Purchase Advance before the Scheduled
Termination Date, the Bank shall reinstate the Letter of Credit in accordance
with the terms of the Letter of Credit. The Bank shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Company resulting from each Redemption Advance and Purchase Advance made
from time to time and the amounts of principal and interest payable and paid
from time to time hereunder. In any legal action or proceeding in respect of
this Agreement, the entries made in such account or accounts shall, in the
absence of manifest error, be conclusive evidence of the existence and amounts
of the obligations of the Company therein recorded.
(c) The Company shall pay interest on the unpaid principal amount of
each Term Advance from the date of such Term Advance until such principal
amount shall become due, at the Term Rate, the Term Eurodollar Rate or the
Term CD Bid Rate, as selected by the Company pursuant to Section 1.08(b). For
purposes of this subsection (c), in order to calculate whether the initial or
increased level of the Term Rate, the Term Eurodollar Rate or the Term CD Bid
Rate, as the case may be, shall be applicable to a Term Advance made
subsequent to the initial Term Advance, each such interest rate shall (at all
times) be calculated in accordance with the number of Term Interest Days that
have elapsed since the Initial Term Advance Day. In the event of a prepayment
(pursuant to Section 1.10 below) in full at any time of the aggregate unpaid
principal amount of all Term Advances it is hereby understood in accordance
with the applicable definitions contained in Section 6.01 hereof that no Term
Interest Day shall occur between the date of such prepayment and the date of
the next Term Advance, at which time Term Interest Days shall again be
counted, starting with the next consecutive number after the number of the
Term Interest Day on which such prepayment occurred.
SECTION 1.05. Interest Advances. (a) If the Bank shall make any
payment under the Letter of Credit pursuant to an Interest Draft, such payment
shall constitute an interest advance made by the Bank to the Company on the
date and in the amount of such payment, each such interest advance being an
"Interest Advance" and collectively the "Interest Advances." The Company
shall repay each Interest Advance on the same day such Interest Advance is
made by the Bank, but in any event after the Bank honors a draw under the
Letter of Credit pursuant to an Interest Draft related thereto.
(b) The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company resulting from
each Interest Advance made from time to time and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action or
proceeding in respect of this Agreement, the entries made in such account
shall, in the absence of manifest error, be conclusive evidence of the
existence and amounts of the obligations of the Company therein recorded.
SECTION 1.06. Interest on Overdue Amounts. Any amount payable pursuant
to this Agreement which is not paid when due whether by acceleration, required
prepayment or otherwise, shall bear interest from and including the date the
same becomes due until such amount is paid in full, payable on demand, at a
fluctuating interest rate at all times equal to 2% above the Domestic Rate.
SECTION 1.07. Interest Payments. The Company shall pay interest in
arrears on the unpaid principal amount of each Advance from the date of such
Advance until such principal amount shall become due, payable (i) quarterly on
the last day of each March, June, September and December during the term
thereof, and on the due date for payment of principal. The Company shall pay
interest in arrears on the unpaid principal amount of each Accrued Interest
Advance from the date of such Accrued Interest Advance until such principal
amount shall become due, payable on the first business day of the next
calendar month.
SECTION 1.08. Selection of Interest Rates. (a) Tender Advances.
Subject to Sections 1.09(a) and (b) below, the Company may from time to time
select for each Tender Advance in an unpaid principal amount equal to or
greater than $1,000,000 either the Domestic Rate, the Eurodollar Rate or the
CD Bid Rates, provided that the Company shall also select a Business Day on
which the Domestic Rate, the Eurodollar Rate or the CD Bid Rate, as the case
may be, shall begin for such Tender Advance and that telephonic notice thereof
(such notice to be confirmed by the Company immediately in writing) is given
to the Bank on or before such Business Day in the case of selection of the
Domestic Rate and at least two Business Days prior to such Business Day in the
case of selection of the CD Bid Rate or the Eurodollar Rate. The interest
rate selected for any Tender Advance by the Company pursuant to this Section
1.08(a) shall continue thereafter in effect for such Tender Advance until the
Business Day which the Company shall subsequently select pursuant hereto as
the Business Day on which another interest rate hereunder shall begin for such
Tender Advance. If during the term of any Tender Advance the Company changes
the interest rate for such Tender Advance from the Eurodollar Rate or the CD
Bid Rate to another rate, the Business Day on which such other rate shall then
begin shall be the last day of the Interest Period for such Tender Advance.
In the event that the Tender Advance shall be in an amount less than
$1,000,000 or the Company shall fail to select an interest rate, the interest
rate shall be the Domestic Rate.
(b) Term Advances. Subject to Sections 1.09(a) and (b), the Company
may from time to time select for each Term Advance in an unpaid principal
amount equal to or greater than $1,000,000 either the Term Rate, the Term
Eurodollar Rate or the Term CD Bid Rate, provided that the Company shall also
select a Business Day on which the Term Rate, the Term Eurodollar Rate or the
Term CD Bid Rate, as the case may be, shall begin for such Term Advance and
that telephonic notice thereof (such notice to be confirmed by the Company
immediately in writing) is given to the Bank on or before such Business Day in
the case of selection of the Term Rate and at least two Business Days prior to
such Business Day in the case of selection of the Term CD Bid Rate or the Term
Eurodollar Rate. The interest rate selected for any Term Advance by the
Company pursuant to this Section 1.08(b) shall continue thereafter in effect
for such Term Advance until the Business Day which the Company shall
subsequently select pursuant hereto as the Business Day on which another
interest rate hereunder shall begin for such Term Advance. If during the term
of any Term Advance the Company changes the interest rate for such Term
Advance from the Term Eurodollar Rate or the Term CD Bid Rate to another rate,
the Business Day on which such other rate shall then begin shall be the last
day of the interest period for such Term Advance. In the event that the Term
Advance shall be in an amount less than $1,000,000 or the Company shall fail
to select an interest rate, the interest rate shall be the Term Rate.
Section 1.09. Interest Periods. (a) If and so long as the Eurodollar
Rate shall be selected for any Tender Advance or the Term Eurodollar Rate
shall be selected for any Term Advance, the period between the Business Day on
which such rate shall then begin for such Eurodollar Advance or Term
Eurodollar Advance, as the case may be, and the date of payment in full of
such Eurodollar Advance or Term Eurodollar Advance, as the case may be, shall
be divided into successive periods, each such period being an "Interest
Period" for such Eurodollar Advance or Term Eurodollar Advance, as the case
may be. The initial Interest Period for such Eurodollar Advance or Term
Eurodollar Advance, as the case may be, at that time shall begin on such
Business Day and each subsequent Interest Period for such Eurodollar Advance
of Term Eurodollar Advance, as the case may be, at the time shall begin on the
last day of the immediately preceding Interest Period. The duration of each
Interest Period for any Eurodollar Advance or Term Eurodollar Advance shall be
one, two, three or six months as the Company may, upon telephonic notice given
to the Bank at least two Business Days prior to the first day of such Interest
Period (such notice to be confirmed by the Company immediately in writing),
select; provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and
(ii) the duration any Interest Period which begins prior to the
Scheduled Termination Date and would otherwise end after such date shall
end on such date.
(b) If and so long as the CD Bid Rate shall be selected for any Tender
Advance or the Term CD Bid Rate shall be selected for any Term Advance, the
period between the Business Day on which such rate shall then begin for such
CD Bid Advance or Term CD Bid Advance, as the case may be, and the date of
payment in full of such CD Bid Advance or Term CD Bid Advance, as the case may
be, shall be divided into successive periods, each such period being an
"Interest Period" for such CD Bid Advance or Term CD Bid Advance, as the case
may be. The initial Interest Period for such CD Bid Advance or Term CD Bid
Advance, as the case may be, at that time shall begin on such Business Day and
each subsequent Interest Period for such CD Bid Advance or Term CD Bid
Advance, as the case may be, at the time shall begin on the last day of the
immediately preceding Interest Period. The duration of each Interest Period
for any CD Bid Advance or Term CD Bid Advance shall be one, two, three or six
months as the Company may, upon telephonic notice given to the Bank (such
notice to be confirmed by the Company immediately in writing) at least two
Business Days prior to the first day of such Interest Period, select;
provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and
(ii) the duration of any such Interest Period which begins prior
to the Scheduled Termination Date and would otherwise end after such
date shall end on such date.
Section 1.10. Prepayments. (a) The Company may prepay in whole or in
part the outstanding amount of any Accrued Interest Advance or Demand Advance
with accrued interest to the date of such prepayment on the amount prepaid;
provided, however, that the Company shall, simultaneously with the making of
such prepayment, give notice to the Bank by telephone (which shall be
confirmed immediately in writing) or telegraph of such prepayment, which
notice shall specify (i) the amount of such prepayment and (ii) the amount of
accrued interest transmitted with such prepayment.
(b) The Company may, upon at least two Business Days' notice to the
Bank, prepay the outstanding amount of any Advance in whole or in part with
accrued interest to the date of such prepayment on the amount prepaid;
provided, however, that any prepayment of any Eurodollar Advance, Term
Eurodollar Advance, CD Bid Advance or Term CD Bid Advance shall be made on,
and only on, the last day of any Interest Period for such Eurodollar Advance,
Term Eurodollar Advance, CD Bid Advance or Term CD Bid Advance, as the case
may be, unless the Company shall pay to the Bank in accordance with Section
1.12 an amount sufficient to compensate the Bank for any loss or expenses
incurred by it by reason of such prepayment on a day other than the last day
of the relevant Interest Period; provided, further, that in the case of a
prepayment certified to the Bank by the Trustee as a payment made pursuant to
subsection (c) of this Section, the Company shall on the date of such
prepayment pay interest accrued on such Advance to the date of prepayment,
together with an amount sufficient to compensate the Bank for any loss or
expenses in accordance with Section 1.12.
(c) Prior to or simultaneously with the resale of any Bonds held by the
Custodian on behalf of the Company under the Custody Agreement as a result of
a draw or draws under the Letter of Credit by a Tender Draft or Tender Drafts,
the Company shall cause the Trustee to prepay, on behalf of the Company, in
the order in which they were made, by paying to the Bank an amount equal to
the sum of (i) that portion of any Tender Advances equal to 100% of the
principal amount of any such Bonds resold or to be resold and (ii) that
portion of the Accrued Interest Advances (the "Corresponding Accrued Interest
Advances") which bears the same ratio to the total unreimbursed Accrued
Interest Advances as the principal amount of such Bonds sold or to be resold
bears to the principal amount of all such Bonds held by the Custodian on
behalf of the Company under the Custody Agreement. Such payments shall, if
certified to the Bank by the Trustee in a certificate, completed and signed,
by the Trustee, in the form of Annex H to the Letter of Credit as payments
being made pursuant to this Section 1.10(c), be applied by the Bank in
reimbursement of such drawings (and as prepayment of the Tender Advances and
the Corresponding Accrued Interest Advances resulting from such drawings in
the manner described above). The Company irrevocably authorizes the Bank to
rely on such certificate and to reinstate the Letter of Credit in accordance
therewith.
(d) Prior to or simultaneously with the resale of any Bonds held by the
Custodian on behalf of the Company under the Custody Agreement as a result of
a draw or draws under the Letter of Credit by a Purchase Draft or Purchase
Drafts, the Company shall cause the Trustee to prepay, on behalf of the
Company, in the order in which they were made, by paying to the Bank an amount
equal to such Purchase Draft or Purchase Drafts. Such payments shall, if
certified to the Bank by the Trustee in a certificate, completed and signed,
by the Trustee, in the form of Annex H to the Letter of Credit as payments
being made pursuant to this Section 1.10(d), be applied by the Bank in
reimbursement of such drawings (and as prepayment of the Purchase Advances).
The Company irrevocably authorizes the Bank to rely on such certificate and to
reinstate the Letter of Credit in accordance therewith.
(e) Amounts received by the Bank from the Company or the Trustee on
behalf of the Company in reimbursement for drawings under the Letter of Credit
shall be applied first in reimbursement of any unreimbursed drawings made by
an Interest Draft, unless such amounts are accompanied by a certificate as
described in subsection (c) or (d) of this Section 1.10 or in Section 1.03(a).
SECTION 1.11. Other Payments. The Company hereby agrees to pay to the
Bank such fees as are set forth in a letter of even date from the Company to
the Bank.
SECTION 1.12 Increased Costs. (a) If the implementation of or any
change in any law or regulation or in the interpretation by any court or
administrative or governmental authority charged with their administration
shall either (i) impose, modify or deem applicable any reserve, special
deposit, capital adequacy or similar requirement not existing on the date of
this Reimbursement Agreement against letters of credit issued by the Bank, or
any assets held by, deposits with or for the account of, or commitments by, an
office of the Bank in connection with payments by the Bank under the Letter of
Credit (including without limitation a request or requirement which affects
the manner in which the Bank allocates capital resources to its commitments,
including its obligations hereunder); or (ii) impose on the Bank any other
condition not existing on the date of this Reimbursement Agreement regarding
this Reimbursement Agreement or the Letter of Credit, and the result of any
event referred to in clause (i) or (ii) above shall be to (x) increase the
cost to the Bank of issuing or maintaining the Letter of Credit (which
increase in cost shall be the result of the Bank's reasonable allocation of
the aggregate of such cost increases resulting from such events), or (y)
reduce any amounts payable by the Company hereunder, or (z) reduce the rate of
return on the Bank's capital as a consequence of its obligations hereunder or
its issuance and maintenance of the Letter of Credit to a level below that
which the Bank could have achieved but for such circumstances, then, upon
demand by the Bank, the Company shall pay to the Bank upon demand, in
immediately available funds, additional amounts which shall be sufficient to
compensate the Bank for such increased cost or reduction in payment or in rate
of return. If any such amount is not paid as provided herein, the Company
shall pay the Bank interest, payable on demand, at the Domestic Rate on each
such amount from the date when payment was due until paid in full. Each
demand by the Bank hereunder shall be accompanied by a certificate setting
forth in reasonable detail such increased cost or reduction in payment or in
rate of return as a result of any event mentioned in clause (i) or (ii) above
and shall, absent demonstrable error, be presumptively deemed correct. In
determining such amounts, the Bank may use any reasonable commonly accepted
averaging and attribution methods.
(b) If, due to (i) conversions of the type of interest rate pursuant to
Section 1.08, (ii) prepayments pursuant to Section 1.10 (whether by direct or
applied payments), (iii) acceleration of the maturity of the Advances pursuant
to Section 5.02, or (iv) any other reason, the Bank receives payments of
principal of any Eurodollar Advance, Term Eurodollar Advance, CD Bid Advance
or Term CD Bid Advance, or is subject to a conversion of a Eurodollar Advance,
Term Eurodollar Advance, CD Bid Advance or Term CD Bid Advance into another
type of Advance other than on the last day of an Interest Period relating to
such Advance, the Company shall, promptly after demand by the Bank, pay to the
Bank any amounts required to compensate the Bank for any additional losses,
costs or expenses which it may reasonable incur as a result of such payment or
conversion, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by the Bank to fund or maintain such Eurodollar Advance, Term
Eurodollar Advance, CD Bid Advance or Term CD Bid Advance. A certificate
setting forth the amount of such additional losses, costs or expenses and
giving a reasonable explanation thereof, submitted by the Bank to the Company,
shall constitute such demand and shall, in the absence of manifest error, be
conclusive and binding for all purposes.
Section 1.13. Additional Interest. The Company shall pay to the Bank
additional interest on the unpaid principal amount of each Advance during the
periods such Advance shall be a Eurodollar Advance or Term Eurodollar Advance
until such principal amount is paid in full, payable on each day on which
interest on such Advance is payable under Section 1.07, at an interest rate
per annum equal at all times during each Interest Period for such Advance, to
the excess of (i) the rate obtained by dividing the LIBO Rate for such
Interest Period by a percentage equal to 100% minus the reserve percentage
applicable during such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or if more than
one such percentage is so applicable, minus the daily average for such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any marginal reserve requirement)
for the Bank in respect of liabilities or assets consisting of or including
Eurocurrency liabilities over (ii) the LIBO Rate for such Interest Period.
Section 1.14. Payments and Computations. The Company, unless directed
otherwise, shall make each payment hereunder not later than 11:00 a.m.
(Chicago time) on the day when due in lawful money of the United States of
America to the Bank, Account #0154644, in same day funds. All computations of
interest at the Domestic Rate and the Term Rate shall be made by the Bank on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest at the Eurodollar Rate, the Term Eurodollar Rate, the
CD Bid Rate, the Term CD Bid Rate and the letter of credit commission
hereunder shall be made by the Bank on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) elapsed.
Section 1.15. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due, or whenever the last day of any
Interest Period would otherwise occur, on a day which is not a Business Day,
such payment shall be made, and the last day of such Interest Period shall
occur, on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or
commission, as the case may be; provided, however, if such extension would
cause such payment of a Eurodollar Advance or a Term Eurodollar Advance to be
made or the last day of such Interest Period to occur in a new calendar month,
such payment shall be made and the last day of such Interest Period shall
occur on the next preceding Business Day.
Section 1.16. Extension of the Letter of Credit. If the Company, at
least eighteen months prior to the Scheduled Termination Date of the Letter of
Credit, has requested the Bank to extend the Letter of Credit, and the Bank is
willing to extend the Letter of Credit, the Bank shall give written notice
thereof to the Company at least twelve months prior to the Scheduled
Termination Date extending such Scheduled Termination Date of the Letter of
Credit to a date specified by the Bank. If the Bank shall not so notify the
Company, the Bank shall be deemed not to have consented.
SECTION 1.17. Obligations Absolute. The payment obligations of the
Company under this Agreement shall be unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the Bonds, the Indenture, the Lease, the Sublease, or any other
agreement or instrument relating thereto (collectively the "Related
Documents");
(ii) any amendment or waiver of or any consent to departure from
all or any of the Related Documents;
(iii) the existence of any claim, set-off, defense or other right
which the Company may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any persons or
entities for whom the Trustee, any such beneficiary or any such
transferee may be acting), the Bank or any other person or entity,
whether in connection with this Agreement, the transactions contemplated
herein or in the Related Documents or any unrelated transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of the Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; provided however that such
circumstance or happening shall not have been the result of the gross
negligence or willful misconduct of the Bank.
ARTICLE II
CONDITIONS OF ISSUANCE
SECTION 2.01. Condition Precedent to Issuance of the Letter of Credit.
The obligation of the Bank to issue the Letter of Credit is subject to the
condition precedent that the Bank shall have received on or before the date of
the issuance of the Letter of Credit the following, each dated such day, in
form and substance satisfactory to the Bank:
(a) Certified copies of the resolutions of the Board of Directors
of the Company authorizing the Company to enter into this Agreement,
approving the Letter of Credit and the other matters contemplated
hereby.
(b) Originals (or copies certified by the Secretary or Assistant
Secretary of the Company) of current approvals or orders of the Issuer
and the public utility regulatory commissions of the States of Missouri
and Kansas necessary for the Company with respect to this Agreement.
(c) A certificate of the Secretary or Assistant Secretary of the
Company, certifying the names and true signatures of the officers of the
Company authorized to sign this Agreement and the other documents to be
delivered by it hereunder.
(d) Opinions of Samuel P. Cowley, Esq., Senior Vice President and
Chief Legal Officer for the Company, in substantially the form of
Exhibit B hereto and as to such other matters as the Bank may reasonably
request.
(e) Opinions of Chapman and Cutler, Bond Counsel, in
substantially the form of Exhibit C hereto and as to such other matters
as the Bank may reasonably request, including advice from such Bond
Counsel to the Bank that the Bank may rely on such opinion.
(f) A transcript relating to the issuance of the Bonds.
(g) Such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies thereof)
or opinions as the Bank may reasonably request.
(h) An executed copy (or duplicate thereof) of Amendment No. 1 to
the Custody Agreement.
SECTION 2.02. Additional Conditions Precedent to Issuance of the Letter
of Credit. The obligation of the Bank to issue the Letter of Credit shall be
subject to the further conditions precedent that on the date of the issuance
of the Letter of Credit:
(a) The following statements shall be true and the Bank shall
have received a certificate signed by a duly authorized officer of the
Company, dated the date of such issuance, stating that:
(i) the representations and warranties contained in Section
3.01 of this Agreement are correct on and as of the date of
issuance of the Letter of Credit as though made on and as of such
date; and
(ii) no event has occurred and is continuing, or would
result from the issuance of the Letter of Credit, which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both.
(b) The Issuer and the Trustee have duly authorized and executed
the Indenture and the Indenture shall continue to be in full force and
effect.
(c) The Issuer and the Company have duly authorized and executed
the Lease and the Sublease and the Lease and the Sublease shall continue
to be in full force and effect.
(d) The Issuer has duly executed, issued and delivered the Bonds.
(e) The Bank shall have received such other approvals, opinions
or documents as the Bank may reasonably request.
SECTION 2.03. Condition Precedent to Each Advance. Each payment made
by the Bank pursuant to a Tender Draft, a Redemption Draft or a Purchase Draft
under the Letter of Credit shall constitute an Advance hereunder only if it
shall be true on the date of such payment that no event has occurred and is
continuing, or would result from such Advance, which constitutes an Event of
Default or would constitute an Event of Default but for the requirement that
notice be given or time elapse or both. Unless the Company shall have
otherwise previously advised the Bank in writing, payment by the Bank pursuant
to a Tender Draft, a Redemption Draft or a Purchase Draft shall be deemed to
constitute a representation and warranty by the Company that on the date of
such payment the above statement is true.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties. The Company represents
and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business in, and is in good standing under
the laws of, the State of Kansas.
(b) The execution, delivery and performance by the Company of
this Agreement and each Related Document to which it is a party are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Company's charter
or by-laws or (ii) any law, order, rule, regulation or contractual
restriction (including, but not limited to, any restriction in the
Indenture) binding on or affecting the Company, and do not result in or
require the creation of any lien, security interest or other charge or
encumbrance (other than pursuant to this Agreement and the Related
Documents) upon or with respect to any of its properties.
(c) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into this Agreement, and the commissions have duly
issued previous orders authorizing the Company to enter into the Lease,
the Sublease and any other documents that such commissions have
jurisdiction over and to which the Company is a party and the Related
Documents to which it is a party, and such order remains in full force
and effect in the form issued. Except for the approvals of the Kansas
Department of Economic Development, the Board of Commissioners of Coffey
County, Kansas, and the City Council of the City of Burlington, Kansas,
approving issuance of the Bonds, which approvals have been duly obtained
and are in full force and effect, and the notice of timely filing with
the Board of Tax Appeals of the State of Kansas, no other authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by the Company of this Agreement or
any Related Document to which it is a party.
(d) This Agreement is, and each Related Document to which the
Company is a party when delivered hereunder will be, the legal, valid
and binding obligations of the Company enforceable against the Company
in accordance with their respective terms (except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally).
(e) Except as disclosed in the Company's Form 10-K for the year
1992, Forms 10-Q for periods March 31, 1993 and June 30, 1993, and Form
8-K dated August 16, 1993, there is no pending or, to the best of the
Company's knowledge, threatened action or investigation or proceeding
before any court, governmental agency or arbitrator against or affecting
the Company which may materially adversely affect the financial
condition or total operations of the Company; provided, however, for
purposes of this subsection (e) only, rate proceedings before any
regulatory body shall be excluded.
(f) The balance sheet of the Company as at December 31, 1992, and
the related statements of income and retained earnings and of changes in
financial position of the Company for the fiscal year then ended,
certified by Coopers & Lybrand, independent public accountants, copies
of which have been furnished to the Bank, and the balance sheet of the
Company as at June 30, 1993, and the related statements of retained
earnings for the nine months then ended, signed by the Controller of the
Company, copies of which are contained in the Company's 10-Q dated as of
June 30, 1993, a copy of which has been furnished to the Bank, fairly
present the financial condition of the Company as at such respective
dates and the results of the operations of the Company for the period
ended on such respective dates, all in accordance with generally
accepted accounting principles consistently applied, and since June 30,
1993, there has been no material adverse change in the financial
condition or total operations of the Company.
(g) Except for information contained therein describing the Bank,
as to which no representation is made, the Official Statement (said
Official Statement, together with the documents incorporated therein by
reference, being the "Official Statement") dated September 26, 1985, of
the Issuer relating to the Bonds is, and the Preliminary Official
Statement (said Preliminary Official Statement, together with the
documents incorporated therein by reference being the "Preliminary
Official Statement") dated September 12, 1985, of the Issuer relating to
the Bonds as of its date of issue was to the best of the Company's
knowledge, and any supplement or amendment to either thereof shall be,
accurate in all material respects for the purposes for which its use is,
was, or shall be, authorized; and the Official Statement does not, the
Preliminary Official Statement as of its date of issue did not to the
best of the Company's knowledge, and any such supplement or amendment
shall not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made therein,
in the light of the circumstances under which they are or were made, not
misleading.
(h) No Termination Event has occurred nor is reasonably expected
to occur with respect to any Plan.
(i) The Company does not contribute to any Multiemployer Plan and
has not incurred any withdrawal liability with respect to any such plan.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants. So long as a drawing is available
under the Letter of Credit or the Bank shall have any Commitment hereunder or
the Company shall have any obligation to pay any amount to the Bank hereunder,
the Company will, unless the Bank shall otherwise consent in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights (charter and statutory) and
privileges in the state of its incorporation and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is reasonably necessary in view of its business and
operations or the ownership of its properties.
(b) Compliance with Laws, Etc. Comply in all respects with all
applicable laws, rules, regulations and orders of any governmental
authority, the non-compliance with which would materially and adversely
affect the financial condition or operations of the Company, such
compliance to include, without limitation, paying before the same become
delinquent all material taxes, assessments and governmental charges
imposed upon it or upon its property, except to the extent compliance
with any of the foregoing is then being contested in good faith.
(c) Maintenance of Insurance. Maintain insurance with
responsible and reputable insurance companies or associations or through
its own program of self-insurance in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Company operates.
(d) Visitation Rights. At any reasonable time and from time to
time, permit the Bank or any of its agents or representatives at their
own expense to examine and make copies of and abstracts from the records
and books of account of, and visit the properties of, the Company and to
discuss the affairs, finances and accounts of the Company with any of
its officers.
(e) Keeping of Books. Keep proper books of record and account,
in which full and correct entries shall be made of all financial
transactions and the assets and business of the Company in accordance
with generally accepted accounting principles consistently applied.
(f) Maintenance of Properties. Maintain and preserve its
properties that are necessary to maintain its operating system in good
working order and condition, ordinary wear and tear excepted.
(g) Reporting Requirements. Furnish to the Bank the following:
(i) as soon as possible, and in any event within 3 days after the
occurrence of each Event of Default or each event which, with the giving
of notice or lapse of time, or both, would constitute an Event of
Default, continuing on the date of such statement, a statement of the
chief financial officer (or in his absence, a principal financial
officer) of the Company setting forth details of such Event of Default
or event and the action which the Company proposes to take with respect
thereto; (ii) as soon as available and in any event within 10 days after
the filing of each quarterly report on Form 10-Q by the Company with the
Securities and Exchange Commission, a copy of each such quarterly
report, together with a certificate of the chief accounting officer (or
in his absence, a principal financial officer) of the Company confirming
as of the end of such quarter the truth of the statement set forth in
Section 2.02(a)(ii) of this Agreement; (iii) as soon as available and in
any event within 10 days after the filing of each annual report on Form
10-K by the Company with the Securities and Exchange Commission, a copy
of each such annual report containing financial statements for such year
certified by nationally recognized independent public accountants,
together with a certificate of the chief accounting officer (or in his
absence, a principal financial officer) of the Company confirming as of
the end of such quarter the truth of the statement set forth in Section
2.02(a)(ii) of this Agreement; (iv) promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports which the Company sends to any of its stockholders, and copies
of all regular, periodic and special reports and all registration
statements, which the Company files with the Securities and Exchange
Commission or any governmental authority which may be substituted
therefor; (v) as soon as possible and in any event within (A) 30 days
after the Company or any of its Affiliates knows or has reason to know
that any Termination Event described in clause (i) of the definition of
Termination Event with respect to any Plan has occurred and (B) within
10 days after the Company or any of its Affiliates knows or has reason
to know that any other Termination Event with respect to any Plan has
occurred, a statement of the chief accounting officer (or in his absence
a principal financial officer) of the Company describing such
Termination Event and the action, if any, which the Company or such
Affiliate proposes to take with respect thereto; (vi) promptly and in
any event within two Business Days after receipt thereof by the Company
or any of its Affiliates from the Pension Benefit Guaranty Corporation
("PBGC"), copies of each notice received by the Company or any such
Affiliate of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan; and (vii) such other informa-
tion respecting the business, properties or the condition or operations,
financial or otherwise, of the Company as the Bank may from time to time
reasonably request in writing.
(h) Officer's Certificate. In the event that an Advance is made
pursuant to Sections 1.03 or 1.04 hereunder, the Company shall deliver
to the Bank every ninety (90) days commencing ninety (90) days from the
date such Advance is made until all outstanding Advances have been paid
in full, a certificate signed by a duly authorized officer of the
Company stating that the representations and warranties contained in
Section 3.01 (other than subsection (g)) are correct on and as of such
date as though made on and as of such date and subsection (g) of Section
3.01 was correct on the date of this Agreement.
(i) Other Agreements. Perform and comply with each of the terms,
provisions and conditions, on its part to be performed or complied with,
contained in the Indenture, the Lease and the Sublease.
(j) Redemption or Defeasance of Bonds. Use its best efforts to
cause the Trustee, (A) upon a redemption or defeasance of less than all
of the Bonds pursuant to the Indenture, to furnish to the Bank a notice
in the form of Annex G to the Letter of Credit, and (B) upon a
redemption or defeasance of all of the Bonds pursuant to the Indenture,
to surrender the Letter of Credit to the Bank for cancellation.
(k) Registration of Bonds. Cause all bonds which it acquires, or
which it has acquired for its account, to be registered forthwith in
accordance with the Indenture in the name of the Company.
SECTION 4.02. Negative Covenants. So long as a drawing is available
under the Letter of Credit or the Bank shall have any Commitment hereunder or
the Company shall have any obligation to pay any amount to the Bank hereunder,
the Company will not, without the written consent of the Bank:
(a) Liens, Etc. Create, incur, assume or suffer to exist any
lien, security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of its
properties, whether now owned or hereafter acquired, or assign any right
to receive income, in each case to secure any Obligation of any person,
other than (i) purchase money liens or purchase money security interests
upon or in any property acquired or held by the Company in the ordinary
course of business to secure the purchase price of such property or to
secure indebtedness incurred solely for the purpose of financing the
acquisition of such property, (ii) liens or security interests existing
on such property at the time of its acquisition, (iii) liens, security
interests, charges or encumbrances on or over, gas, oil, coal,
fissionable material or other fuel or fuel products as security for an
Obligation incurred by the Company for the sole purpose of financing the
acquisition or storage of such fuel or fuel products or, with respect to
nuclear fuel, the processing, reprocessing, sorting, storage and
disposal thereof, (iv) liens, security interests, charges or
encumbrances on or over all or any part of its undertaking or assets
employed wholly or mainly in or arising directly from any specific con-
struction project or generating plant as security for an Obligation
incurred by the Company for the purpose of financing all or any part of
such construction project or generating plant, (v) the lien of the
Indenture of Mortgage and Deed of Trust dated as of December 1, 1946,
from the Company to Continental Illinois National Bank and Trust Company
of Chicago and the lien of the General Mortgage Indenture and Deed of
Trust dated December 1, 1986, from the Company to United Missouri Bank,
n.a. (the "Mortgages"), (vi) encumbrances listed on Exhibit D attached
hereto, (vii) security interests granted in, or sale of, the Company's
accounts receivable, provided that such security interest secures only
new debt incurred at substantially the same time as the creation of such
security interest and that any such sale is made only for new
consideration given at substantially the same time as the making of such
sale, (viii) a second mortgage granted on the property subject to the
lien of the Mortgage as of the date hereof, and (ix) sales or transfers
of property by the Company and renting or leasing back such property,
provided that all such property in the aggregate does not exceed fifteen
percent (15%) of all the Company's assets.
(b) Mergers, Etc. Merge with or into or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) or acquire all or
substantially all of the assets, other than utility assets, of, any
person or entity, except that the Company may merge or consolidate with
any person or entity on condition in each case that, (i) immediately
after giving effect thereto, no event shall occur and be continuing
which constitutes an Event of Default or which with the giving of notice
or lapse of time, or both, would constitute an Event of Default, (ii)
the consolidation or merger shall not materially and adversely affect
the ability of the Company to perform its obligations hereunder or under
the Related Documents, and (iii) the corporation formed by any such
consolidation or into which the Company shall be merged shall assume the
Company's obligations and performance of the Company's covenants
hereunder and under the Related Documents in a writing satisfactory in
form and substance to the Bank.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or, except as otherwise permitted under Section 4.02(a),
pledge or otherwise encumber more than fifteen percent (15%) of its
assets, except in the ordinary course of its business or in connection
with a transaction authorized by subsection (b) of this Section 4.02.
(d) Compliance with ERISA. (i) Voluntarily terminate any Plan,
so as to result in any material liability of the Company to PBGC or (ii)
enter into any Prohibited Transaction (as defined in Section 4975 of the
Internal Revenue Code of 1954, as amended, and in ERISA) involving any
Plan which results in any material liability of the company to PBGC,
(iii) cause any occurrence of any Reportable Event which results in any
material liability of the Company to PBGC or (iv) allow or suffer to
exist any other event or condition known to the Company which results in
any material liability of the Company to PBGC.
(e) Amendment of Indenture or Related Document. Enter into or
consent to any amendment or modification of, the Indenture, the Lease,
the Sublease or any other Related Document, which would adversely affect
the Bank, without first obtaining the express prior written consent of
the Bank thereto.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. Events of Default. The occurrence of any of the
following events shall be an "Event of Default" hereunder unless waived by the
Bank pursuant to Section 7.01 hereof:
(a) the Company shall fail to pay any amount payable to the Bank
under any provision of Article I when due except as provided in (b)
below; or
(b) the Company shall fail to pay any amount of an Interest
Advance within one (1) day after such amount becomes due; or
(c) any representation or warranty made by the Company herein or
by the Company (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(d) the Company shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement, and any such failure
shall remain unremedied for 10 days after written notice thereof shall
have been given to the Company by the Bank; or
(e) any material provision of this Agreement shall at any time
for any reason cease to be valid and binding upon the Company, or shall
be declared to be null and void, or the validity or enforceability
thereof shall be contested by the Company, or a proceeding shall be
commenced by any governmental agency or authority having jurisdiction
over the Company seeking to establish the invalidity or unenforceability
thereof, or the Company shall deny that it has any or further liability
or obligation under this Agreement; or
(f) the Company shall (x) fail to make any payment, equal to or
exceeding $10,000,000 of any Obligation or to make any payment, equal to
or exceeding $5,000,000, of any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Obligation, or (y) fail to perform or
observe any term, covenant or condition on its part to be performed or
observed under any agreement or instrument relating to any Obligation
when required to be performed or observed, and such failure shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such failure to perform or
observe is to accelerate, or to permit the acceleration of, the maturity
of any Obligation, the unpaid principal amount of which then equals or
exceeds $10,000,000; or
(g) the Company shall generally not pay its debts as they become
due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or
(h) the Company shall institute any proceeding or voluntary case
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, reorganization or insolvency or relief or
protection of debtors or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property; or the Company shall
take any corporate action to authorize any of the actions described
above in this subsection (h); or
(i) any proceeding shall be instituted against the Company
seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement or adjustment of debts under any
law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief or the
appointment of a trustee, receiver or custodian or other similar
official for it or for any substantial part of its property, and, if
such proceeding is being contested by the Company in good faith, such
proceeding shall remain undismissed or unstayed for a period of 60 days;
or
(j) any judgement or order for the payment of money in excess of
$10,000,000 shall be rendered against the Company and either
(x) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (y) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to the
Company by the Bank, (i) such Termination Event (if correctable) shall
not have been corrected and (ii) the then present value of such Plan's
vested benefits exceeds the then current value of assets accumulated in
such Plan by more than the amount of $15,000,000 (or in the case of a
Termination Event involving the withdrawal of a "substantial employer"
(as defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess exceed such amount); or
(l) any event of default under and as defined in the Indenture,
the Lease or the Sublease shall have occurred and be continuing.
SECTION 5.02. Upon an Event of Default. If any Event of Default shall
have occurred and be continuing, the Bank may (i) by notice to the Company,
declare the obligation of the Bank to issue the Letter of Credit to be
terminated, whereupon the same shall forthwith terminate, or if the Letter of
Credit shall have been issued, (ii) give notice to the Trustee pursuant to
Section 802 of the Indenture directing the Trustee to declare the principal of
all Bonds then outstanding and all interest accrued and unpaid thereon to be
due and payable and (iii) declare the Advances, all amounts payable under any
provision of Article I, all interest thereon and all other amounts payable
hereunder to be forthwith due and payable, whereupon the Advances, all amounts
payable under any provision of Article I, all interest thereon and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by the Company.
ARTICLE VI
DEFINITIONS
SECTION 6.01. Definitions. Unless otherwise indicated in this
Agreement, the capitalized terms used herein shall have the following
meanings:
"Accrued Interest Advance" has the meaning set forth in Section
1.03(a) hereof.
"Advances" means, collectively, Tender Advances, Accrued Interest
Advances, Redemption Advances and Purchase Advances, and an "Advance"
means any of them.
"Affiliate" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a
member and which is under common control within the meaning of the
regulations under Section 414 of the Internal Revenue Code of 1954, as
amended.
"Assessment Rate" for any Interest Period for any CD Bid Advance
or Term CD Bid Advance means the annual assessment rate per annum
estimated by the Bank on the first day of such Interest Period for
determining the then current annual assessment payable by any
participants to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring U.S.
dollar deposits of such participants in the United States.
"Available Amount" in effect at any time means the maximum amount
available to be drawn at such time under the Letter of Credit (the
determination of such maximum amount to assume, throughout this
Agreement, compliance with all conditions for drawing and no reduction
for any amount drawn by an Interest Draft referred to in the Letter of
Credit (unless such amount is not reinstated under the Letter of
Credit)).
"Bonds" means the Issuer's Customized Purchase Pollution Control
Refunding and Improvement Revenue Bonds, Series 1985B (Kansas City
Power & Light Company Project).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or Chicago, and, if the
applicable Business Day relates to any Eurodollar Advance, Term
Eurodollar Advance, or Interest Period therefor, on which dealings are
carried on in the London interbank market.
"CD Bid Advance" means a Tender Advance bearing interest at the CD
Bid Rate.
"CD Bid Rate" during any Interest Period for any CD Bid Advance
means an interest rate per annum equal to (i) 1/2 of 1% per annum above
the CD Bid Formula from and including the Initial Tender Advance Day to
but excluding the sixtieth Interest Day and (ii) 5/8 of 1% per annum
above the CD Bid Formula from and including the sixtieth Interest Day to
but excluding the scheduled Termination Date.
"CD Bid Formula" shall mean a rate equal to the sum of (x) the
rate of interest equal to the per annum rate determined by the Bank at
9:00 a.m. Chicago time (or as soon thereafter as practicable) on the
first day of the applicable Interest Period, of certificates of deposit
with maturities identical to the duration of such Interest Period, plus
(y) the Assessment Rate divided by (z) one hundred percent (100%) minus
the Reserve Percentage.
"Commitment" has the meaning set forth in Section 1.01 hereof.
"Company" means Kansas City Power & Light Company, a corporation
organized and existing under the laws of the State of Missouri.
"Corresponding Accrued Interest Advances" has the meaning set
forth in Section 1.10(c) hereof.
"Custodian" means United States Trust Company of New York, as
custodian under the Custody Agreement.
"Custody Agreement" means the Custody Agreement dated as of
September 1, 1985, between the Company and the Custodian and all
amendments, modifications and supplements thereto.
"Domestic Advance" means a Tender Advance bearing interest at the
Domestic Rate.
"Domestic Rate" means an interest rate equal to the higher of (i)
the Prime Rate and (ii) the Fed Funds Rate plus 1/2 of 1% per annum.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Advance" means a Tender Advance bearing interest at
the Eurodollar Rate.
"Eurodollar Rate" during any Interest Period for any Tender
Advance means an interest rate per annum equal at all times during each
Interest Period for such Tender Advance to (i) 3/8 of 1% per annum above
the LIBO Rate from and including the Initial Tender Advance Day to but
excluding the sixtieth Interest Day and (ii) 1/2 of 1% per annum above
the LIBO Rate from and including the sixtieth Interest Day to but
excluding the Scheduled Termination Date.
"Event of Default" shall have the meaning set forth in Section
5.01 hereof.
"Fed Funds Rate" for any day means the effective federal funds
rate published by the Federal Reserve Bank of New York for such date.
If no such rate is published by the Federal Reserve Bank, such rate
shall be the average of the quotations for such day on overnight Federal
funds transactions received by the Bank from three Federal funds brokers
of recognized standing selected by the Bank. If such day is not a
Business Day, the rate for such day shall be the rate determined for the
immediately preceding Business Day.
"Final Draft" has the meaning set forth in the Letter of Credit.
"Indenture" means the Indenture of Trust dated as of September 1,
1985, between the Issuer and United States Trust Company of New York, as
trustee and all amendments, modifications and supplements thereto.
"Initial Tender Advance Day" means the Interest Day on which the
initial Tender Advance is made.
"Initial Term Advance Day" means the Term Interest Day on which
the initial Term Advance is made.
"Interest Advance" has the meaning set forth in Section 1.05(a)
hereof.
"Interest Day" means a day on which one or more Tender Advances
are outstanding.
"Interest Draft" has the meaning set forth in the Letter of
Credit.
"Interest Period" has the meaning set forth in Section 1.09(a)
hereof.
"Issuance Date" has the meaning set forth in Section 1.11 hereof.
"Interest Payment Date" has the meaning set forth in the
Indenture.
"Issuer" means the City of Burlington, Kansas.
"Lease" means the Equipment Lease Agreement dated as of
September 26, 1985, between the Issuer and the Company, and all
amendments, modifications and supplements thereto.
"Letter of Credit" means the irrevocable, transferable letter of
credit issued by the Bank in substantially the form of Exhibit A hereto
and any successor letter of credit as provided in such letter of credit.
"LIBO Rate" for any Interest Period means the rate of interest per
annum at which deposits in United States dollars are offered to the Bank
at its London, England branch by prime banks in the London Interbank
Market for a period equal to the duration of the Eurodollar Interest
Period relating to any Advance at or about 11:00 a.m. (London time) two
Business Days before the first day of such Interest Period.
"Mortgage" has the meaning set forth in Section 4.02(a) hereof.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Obligation" of any person or entity means (i) indebtedness for
borrowed money or for the deferred purchase price of property or
services in respect of which such person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
such person otherwise assures a creditor against loss, (ii) obligations
under leases in respect of which obligations such person is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such person otherwise assures a creditor
against loss, and (iii) liabilities in respect of unfunded vested
benefits under each Plan maintained for employees of such person and
covered by Title IV of ERISA.
"Official Statement" has the meaning set forth in Section 3.01(g).
"Plan" means an employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any Affiliate and
covered by Title IV of ERISA.
"Preliminary Official Statement" has the meaning set forth in
Section 3.01(g).
"Prime Rate" means the interest rate per annum from time to time
designated by the Bank at its principal office in Chicago, Illinois, as
its prime rate whether or not such prime rate is actually charged by the
Bank, with all charges therein to be effective on the date announced.
"Purchase Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Purchase Draft" has the meaning set forth in the Letter of
Credit.
"Redemption Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Redemption Draft" has the meaning set forth in the Letter of
Credit.
"Related Documents" has the meaning set forth in Section 1.17(i)
hereof.
"Reserve Percentage" for any Interest Period for any CD Bid
Advance or Term CD Bid Advance is that percentage which is specified on
the first day of such Interest Period by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement for the Bank with respect to liabilities consisting
of or including (among other liabilities) U.S. dollar nonpersonal time
deposits in the United States in an amount of $1,000,000 or more and
with a maturity equal to such Interest Period, together with any
marginal, emergency, supplemental, special or other reserve that the
Bank, in its sole discretion, determines that it is required to maintain
on such day for deposits with a maturity equal to such Interest Period.
"Scheduled Termination Date" means the earliest of (i) the date on
which the Trustee surrenders the Letter of Credit for cancellation, (ii)
the date on which the Bank honors a Redemption Draft for all the Bonds,
(iii) the date on which the Bank honors a Final Draft, (iv) the tenth
day after the Bank receives written notice that all the Bonds have been
converted to the Fixed Interest Rate within the meaning of the
Indenture, (v) the date on which the Bank receives notice that there is
no longer any Bond outstanding, (vi) the date the Bank receives written
notice of the substitution of an alternate Letter of Credit in
accordance with the Indenture, and (vii) August 18, 1996, unless
extended pursuant to Section 1.16 hereof.
"Sublease" means the Equipment Sublease Agreement dated as of
September 26, 1985, between the Issuer and the Company and all
amendments, modifications and supplements thereto.
"Tender Advance" has the meaning set forth in Section 1.03(a)
hereof.
"Tender Draft" has the meaning set forth in the Letter of Credit.
"Term Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Term CD Bid Advance" means a Term Advance bearing interest at the
Term CD Bid Rate.
"Term CD Bid Rate" during any Interest Period for any Term CD Bid
Advance means an interest rate per annum equal at all times during each
Interest Period for such Term CD Bid Advance to (i) 3/4 of 1% above the
CD Bid Formula from and including the Initial Term Advance Day to but
excluding the sixtieth Term Interest Day, and (ii) 1% above the CD Bid
Formula from and including the sixtieth Term Interest Day to but
excluding the Scheduled Termination Date.
"Term Eurodollar Advance" means a Term Advance bearing interest at
the Term Eurodollar Rate.
"Term Eurodollar Rate" during any Interest Period for any Term
Advance mans an interest rate per annum equal at all times during each
Interest Period for such Term Advance to (i) 5/8 of 1% per annum above
the LIBO Rate from and including the Initial Term Advance Day to but
excluding the sixtieth Term Interest Day, and (ii) 7/8 of 1% per annum
above the LIBO Rate from and including the sixtieth Term Interest Day to
but excluding the Scheduled Termination Date.
"Term Interest Day" means a day on which one or more Term Advances
are outstanding.
"Term Rate" means an interest rate equal to (i) 1/8 of 1% per
annum above the Prime Rate from and including the Initial Term Advance
Day to but excluding the sixtieth Term Interest Day and (ii) 3/8 of 1%
per annum above the Prime Rate from and including the sixtieth Term
Interest Day to but excluding the Scheduled Termination Date.
"Termination Event" means (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than
a Reportable Event not subject to the provision for 30-day notice to the
PBGC under such regulations), or (ii) the withdrawal of the Company or
any of its Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a Plan by the
PBGC, or (v) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
"Trustee" means United States Trust Company of New York, as
trustee under the Indenture.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Company therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Bank and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. The Company
will give notice to Moody's Investor Service of any material amendment to this
Agreement.
SECTION 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
and mailed, sent or delivered, if to the Company, at its address at 1201
Walnut, Kansas City, Missouri 64106 Attention: Treasurer, facsimile (816)556-
2992 and if to the Bank, at its address at 181 West Madison, Suite 3400,
Chicago, Illinois 60602 Attention: Letter of Credit Operations, facsimile
(312)578-5099 or if to the Trustee, mailed or delivered to it, addressed to it
at 114 West 47th Street, New York, New York, 10036 Attention: Corporate
Trust Department, facsimile: (212)852-1625; or as to each party, to such
other party and/or at such other address as shall be designated by such person
in a written notice to the other party. All such notices and communications
shall be effective when mailed or sent, addressed as aforesaid, except that
notices to the Bank pursuant to the provisions of Article I shall not be
effective until received by the Bank, and any notice to the Trustee pursuant
to Section 5.02(ii) shall not be effective until received by the Trustee.
Notices of any Event of Default shall be sent by the Company to the Bank by
facsimile.
SECTION 7.03. No Waiver; Remedies. No failure on the part of the Bank
to exercise, and no delay in exercising, any right hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted United
States accounting principles consistently applied.
SECTION 7.05. Indemnification. The Company hereby indemnifies and
holds the Bank harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses which the Bank may incur or which may be
claimed against the Bank by any person or entity:
(a) by reason of any inaccuracy in any material respect, or any
untrue statement or alleged untrue statement of any material fact,
contained in the Preliminary Official Statement or the Official
Statement or any amendment or supplement thereto, or by reason of the
omission or alleged omission to state therein a material fact necessary
to make such statements, in the light of the circumstances under which
they were made, not misleading; provided, however, that, in the case of
any action or proceeding alleging an inaccuracy in a material respect,
or an untrue statement, with respect to information supplied by and
describing the Bank in the Preliminary Official Statement or the
Official Statement (the "Bank Information"), or an omission or alleged
omission to state therein a material fact necessary to make the
statements in the Bank Information, in the light of the circumstances
under which they were made, not misleading, (i) indemnification by the
Company pursuant to this Section 7.05(a) shall be limited to the costs
and expenses of the Bank (including reasonable fees and expenses of the
Bank's counsel) of defending itself against such allegation, (ii) if in
any such action or proceeding it is finally determined that the Bank
Information contained an inaccuracy in any material respect or an untrue
statement of a material fact or omitted to state therein a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading, then the
Company shall not be required to indemnify the Bank pursuant to this
Section 7.05(a) for any claims, damages, losses, liabilities, costs or
expenses (including reasonable fees and expenses of counsel) to the
extent caused by such inaccuracy, untrue statement or omission, and
(iii) if any such action or proceeding shall be settled by the Bank
without there being a final determination to the effect described in the
preceding clause (ii), then the Company shall be required to indemnify
the Bank pursuant to this Section 7.05(a) only if such action or
proceeding is settled with the Company's consent; or
(b) by reason of or in connection with the execution, delivery or
performance of the Bonds, the Indenture, the Lease or the Sublease, or
any transaction contemplated by the Indenture, the Lease or the
Sublease; or
(c) by reason of or in connection with the execution and delivery
or transfer of, or payment or failure to make lawful payment under, the
Letter of Credit; provided, however, that the Company shall not be
required to indemnify the Bank pursuant to this section 7.05(c) for any
claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (i) the Bank's willful misconduct or
gross negligence in determining whether documents presented under the
Letter of Credit comply with the terms of the Letter of Credit or
(ii) the Bank's willful failure to make lawful payment under the Letter
of Credit after the presentation to it by the Trustee or a successor
trustee under the Indenture of a draft and certificate strictly
complying with the terms and conditions of the Letter of Credit.
Nothing in this Section 7.05 is intended to limit the Company's obligations
contained in Article I. Without prejudice to the survival of any other
obligation of the Company hereunder, the indemnities and obligations of the
Company contained in this Section 7.05 shall survive the payment in full of
amounts payable pursuant to Article I and the termination of the Letter of
Credit.
SECTION 7.06. Liability of the Bank. The Company assumes all risks of
the acts or omissions of the Trustee and any beneficiary or transferee of the
Letter of Credit with respect to its use of the Letter of Credit. Neither the
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use which may be made of the Letter of Credit or any acts or omissions
of the Trustee and any beneficiary or transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Bank
against presentation of documents which do not comply with the terms of the
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except that the Company shall have a claim against the Bank, and the Bank
shall be liable to the Company, to the extent of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by (i) the Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit comply with the terms
of the Letter of Credit or (ii) the Bank's willful failure to make lawful
payment under the Letter of Credit after the presentation to it by the Trustee
or a successor trustee under the Indenture of a draft and certificate strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the
contrary.
SECTION 7.07. Costs, Expenses and Taxes. The Company agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery, filing, recording and administration of this Agreement and any other
documents which may be delivered in connection with this Agreement, including,
without limitation, the reasonable costs incurred with each transfer of the
Letter of Credit, the reasonable fees and out-of-pocket expenses of counsel
for the Bank, and local counsel who may be retained by said counsel, with
respect thereto and with respect to advising the Bank as to its rights and
responsibilities under this Agreement and all costs and expenses (including
reasonable counsel fees and expenses) in connection with (i) the enforcement
of this Agreement and such other documents which may be delivered in
connection with this Agreement or (ii) any action or proceeding relating to a
court order, injunction or other process or decree restraining or seeking to
restrain the Bank from paying any amount under the Letter of Credit. In
addition, the Company shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement and such other documents, and
agrees to save the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees except for any penalties incurred as a result of the Bank's failure
to notify the Company of such stamp or other taxes or fees payable by the
Company of which the Bank has knowledge.
SECTION 7.08. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Company and the Bank and thereafter
shall be binding upon and inure to the benefit of the Company and the Bank and
their respective successors and assigns, except that the Company shall not
have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Bank. The Bank may, at its own expense,
assign (by way of participation or otherwise) to any financial institution all
or any part of, or any interest (undivided or divided) in, the Bank's rights
and benefits under this Agreement and the Letter of Credit, and to the extent
of that assignment such assignee shall have the same rights and benefits
against the Company hereunder and under the Letter of Credit as it would have
had if such assignee were the Bank issuing or paying under the Letter of
Credit hereunder.
SECTION 7.09. Waiver. The Bank waives any statutory right or other
right which it may have to set off and apply any deposits of the Company or
other indebtedness of the Company if, when and after there shall be a drawing
under the Letter of Credit during the pendency of any proceeding by or against
the Company seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property.
SECTION 7.10. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
SECTION 7.11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
SECTION 7.12. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
KANSAS CITY POWER & LIGHT COMPANY
By _________________________________
Senior Vice President
SOCIETE GENERALE, CHICAGO BRANCH
By _________________________________
Title:___________________________
By _________________________________
Title:___________________________
EXHIBIT A
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
IRREVOCABLE LETTER OF CREDIT
No. IC70349
August 19, 1993
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Dear Sirs:
We hereby establish at the request and for the account of Kansas City
Power & Light Company, a Missouri corporation (the "Company"), in your favor,
as Trustee under the Indenture of Trust dated as of September 1, 1985, (the
"Indenture") between the City of Burlington, Coffey County, Kansas (the
"Issuer") and you, pursuant to which $50,000,000 in aggregate principal amount
of the Issuer's Customized Purchase Pollution Control Refunding and
Improvement Revenue Bonds, Series 1985B (Kansas City Power & Light Company
Project) (the "Bonds"), are being issued, our Irrevocable Letter of Credit No.
IC70349, in the amount of $56,041,095.89 (as more fully described below),
effective immediately and expiring at the close of business at our 181 West
Madison, Suite 3400, Chicago, Illinois, 60602 office on August 18, 1996 or
such later date as we may agree to extend in writing (the "Scheduled
Termination Date").
We hereby irrevocably authorize you to draw on us, in an aggregate
amount not to exceed the amount of this Letter of Credit as set forth above
and in accordance with the terms and conditions and subject to the reductions
in amount as hereinafter set forth, as follows:
(1) in one or more drawings (subject to the next succeeding
paragraph) by one or more of your drafts, accompanied by your signed and
appropriately completed certificate in the form of Annex A attached
hereto (any such draft accompanied by such certificate being your
"Interest Draft"), an amount not exceeding $6,041,095.89;
(2) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex B attached hereto (any such draft accompanied by such
certificate being your "Tender Draft"), an aggregate amount not
exceeding $56,041,095.89;
(3) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex C attached hereto (any such draft accompanied by such
certificate being your "Redemption Draft"), an aggregate amount not
exceeding $50,000,000;
(4) in one or more drawings by one or more of your drafts,
accompanied by your signed and appropriately completed certificate in
the form of Annex D attached hereto (such draft accompanied by such
certificate being your "Purchase Draft"), an aggregate amount not
exceeding $50,000,000;
(5) in a single drawing by your draft, accompanied by your signed
and appropriately completed certificate in the form of Annex E attached
hereto (such draft accompanied by such certificate being your "Final
Draft"), an amount not exceeding $56,041,095.89.
Upon our honoring any Interest Draft presented by you hereunder, the
amount of this Letter of Credit and the amounts available to be drawn by you
by any subsequent Interest Draft, Tender Draft, or Final Draft shall be
automatically decreased by an amount equal to the amount of such Interest
Draft. If you shall not have received from us within 15 calendar days from
the date of such drawing a notice from us to the effect that we have not been
reimbursed for such drawing in the form of Annex F attached hereto
appropriately completed, your right to draw on us by any Interest Draft,
Tender Draft or Final Draft shall be automatically and irrevocably reinstated
in the amount of such drawing, effective the 16th calendar day from the date
of such drawing.
Upon our honoring any Redemption Draft or Purchase Draft presented by
you hereunder, the amount of this Letter of Credit and the amounts available
to be drawn by you by any subsequent Tender Draft, Redemption Draft, Purchase
Draft and Final Draft shall be automatically decreased by an amount equal to
the amount of such Redemption Draft or Purchase Draft. Upon our honoring any
Tender Draft presented by you hereunder, (i) the amount of this Letter of
Credit and the amounts available to be drawn by any subsequent Tender Draft
and Final Draft shall be automatically decreased by an amount equal to the
amount of such Tender Draft and (ii) the amounts available to be drawn by any
subsequent Redemption Draft and Purchase Draft shall be automatically
decreased by the amount set forth in clause (i) of paragraph 3 of the
Certificate accompanying such Tender Draft.
The amount of this Letter of Credit and the amounts from time to time
available to be drawn by you by any Tender Draft, or Final Draft shall be
increased when and to the extent, but only when and to the extent, that we are
reimbursed by the Company or by you, but only from amounts available to you
under the Indenture, on behalf of the Company for amounts drawn hereunder by
any Tender Draft or Purchase Draft, and that we receive a certificate in the
form of Annex H hereto setting forth the amount of such reimbursement. The
amounts from time to time available to be drawn by you by any Redemption Draft
or Purchase Draft shall be increased by the amount set forth in clause (i) of
paragraph 3 of the Certificate accompanying any Tender Draft or paragraph 3 of
a Certificate accompanying any Purchase Draft when and to the extent, but only
when and to the extent, that we are reimbursed by the Company or by you, but
only from amounts available to you under the Indenture, on behalf of the
Company for such amount drawn hereunder by any such Tender Draft or Purchase
Draft, and that we receive a certificate in the form of Annex H hereto setting
forth the amount of such reimbursement. Any amount received from you on
behalf of the Company in reimbursement of amounts drawn hereunder shall, if
accompanied by an appropriately completed and signed certificate in the form
of Annex H attached hereto from you, be applied to the extent of the amounts
indicated therein in reimbursement of unreimbursed drawings under your Tender
Drafts or Purchase Drafts. Amounts otherwise received from you on behalf of
the Company shall be applied in reimbursement of unreimbursed drawings made by
your Interest Draft.
The amount of this Letter of Credit and the amounts available to be
drawn by you by any Interest Draft, Tender Draft, Redemption Draft, Purchase
Draft, and Final Draft shall be decreased upon our receipt from you, of your
written and appropriately completed certificate signed by you in the form of
Annex G attached hereto, of a redemption or defeasance of less than all of the
Bonds outstanding, to the respective amounts stated in such certificate.
Each draft and certificate shall refer thereon to the number of this
Letter of Credit and shall be dated the date of its presentation, and shall be
drawn and presented at our office located at 181 West Madison, Suite 3400,
Chicago, Illinois, 60602 Attention: Letter of Credit Operations (or any office
which may be designated by us by written notice delivered to you). If we
receive any of your drafts and certificates (including a facsimile instead of
such drafts and certificates) at such office, all in strict conformity with
the terms and conditions of this Letter of Credit, on or prior to the
termination hereof and in any event on or before 12:00 p.m. (Chicago time) on
a Banking Day, we will honor the same by 3:00 p.m. on the same day in
accordance with your payment instructions. If we receive any of your drafts
and certificates (including a facsimile instead of such drafts and
certificates), all in strict conformity with the terms and conditions of this
Letter of Credit, after 12:00 p.m. (Chicago time) on a Banking Day prior to
the termination hereof, we will honor the same on the next succeeding Banking
Day in accordance with your payment instructions. If requested by you,
payment under this Letter of Credit may be made by wire transfer of
immediately available funds to your account in a bank or by deposit of same
day funds into a designated account that you maintain with us. The term
"Banking Day" means any day of the year other than a Saturday, Sunday or a day
on which banks are required or authorized to close in New York City or
Chicago.
Upon the earliest of (i) our honoring your Final Draft presented
hereunder, (ii) the surrender to us by you of this Letter of Credit for
cancellation, (iii) our honoring your Redemption Draft for all of the Bonds,
(iv) the close of business on the tenth day after date on which we receive
written notice from you that all of the Bonds have been converted to the Fixed
Interest Rate within the meaning of the Indenture, (v) the date on which we
receive written notice from you that there is no longer any Bond outstanding,
(vi) the date on which we receive written notice from you of the delivery of
an alternate letter of credit in accordance with the Indenture, and (vii) the
Scheduled Termination Date, this Letter of Credit shall automatically
terminate.
This Letter of Credit is transferable in its entirety, but not in part,
to any transferee who you certify has succeeded you as Trustee under the
Indenture and may be successively transferred by such transferee. Transfer of
the available balance under this Letter of Credit to such transferee shall be
effected by the presentation to us of this Letter of Credit accompanied by a
certificate in the form of Annex I attached hereto appropriately completed.
Upon such presentation we shall forthwith transfer the same to your transferee
or, if so requested by your transferee, issue an irrevocable letter of credit
to your transferee with provisions therein consistent with this Letter of
Credit.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificates and
the drafts referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificates and such drafts.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practice for Documentary Credit, International Chamber of
Commerce, Publication 400 (1983 revision) and, as to matters not covered
therein, by the laws of the State of Illinois, including without limitation
the Uniform Commercial Code as in effect in the State of Illinois.
Communications with respect to this Letter of Credit shall be in writing and
shall be addressed to us at 181 West Madison, Suite 3400, Chicago, Illinois,
60602 Attention: Letter of Credit Operations or fax (312) 578-5099,
specifically referring to the number of this Letter of Credit.
Anything to the contrary in Article 45 of the Uniform Customs
notwithstanding this Letter of Credit is intended to remain in full force and
effect until it expires in accordance with its terms. Any failure by you or
any successor trustee or co-trustee under the Indenture to draw upon this
Letter of Credit with respect to any payment in respect of the Bonds in
accordance with the terms and conditions of the Indenture shall not cause this
Letter of Credit to be unavailable for any future drawing in accordance with
the terms and conditions of the Indenture.
Very truly yours,
SOCIETE GENERALE, CHICAGO BRANCH
By__________________________________
Title:____________________________
By__________________________________
Title:____________________________
Annex A
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS
CUSTOMIZED PURCHASE POLLUTION CONTROL REFUNDING AND
IMPROVEMENT REVENUE BONDS, SERIES 1985B (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS")
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to (a) payments of interest on the Bonds, to the extent
moneys are not available in the Bond Fund from the sources set forth in
clauses (i) through (iii), inclusive of Section 504 of the Indenture,
which payments is [are]*** due on the [date on which this Certificate
and the Interest Draft it accompanies are being presented to the Bank.]*
[Banking Day following the date on which this Certificate and the
Interest Draft it accompanies are being presented to the Bank.]** [CP
Dates (as defined in the Indenture) established for the current calendar
month.]*** No amount is being drawn hereunder for the Bonds held under
the Custody Agreement (as defined in the Indenture) except for drawings
for scheduled interest due to a Bondholder for a Bond which was tendered
for purchase under the Indenture by such Bondholder between the most
recent Interest Accrual Date (as defined in the Indenture) and the next
ensuing Interest Payment Date (as defined in the Indenture) and such
Bonds were not held under the Custody Agreement on the immediately
preceding Interest Accrual Date.
_______________
* To be used if the Certificate and Interest Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Interest Draft are presented after
12:00 p.m. (Chicago time).
*** To be used while the Bonds bear interest at the CP Rate.
(3) The amount of the Interest Draft accompanying this
Certificate is equal to $___________. It was computed in compliance
with the terms and conditions of the Bonds and the Indenture and does
not include any amount of interest on the Bonds which is included in any
Tender Draft or Final Draft presented on the date of this Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By__________________________________
[Name and Title]
Annex B
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
AND INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS,
SERIES 1985B (KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS")
IN SUPPORT OF A TENDER PURSUANT TO SECTION 301, 302, 303, 304 OR 305 OF
THE INDENTURE.
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment of (i) the purchase price equal to the
unpaid principal amount of the Bonds to be purchased as a result of a
tender on or prior to the effective date of the Fixed Interest Rate (as
defined in the Indenture) pursuant to the terms of Section 301, 302,
303, 304 or 305 of the Indenture (other than as provided below) and
(ii) the purchase price equal to the amount of interest accrued and
unpaid to the purchase date from the immediately preceding Interest
Accrual Date (as defined in the Indenture), to the extent moneys are not
available from the sources set forth in clauses (i) through (iv),
inclusive, of Section 306 of the Indenture, which payment is due on the
[date on which this Certificate and the Tender Draft it accompanies are
being presented to the Bank.]* [Banking Day following the date on which
this certificate and the Tender Draft it accompanies are being presented
to the Bank.]** No amount is being drawn hereunder for the Bonds held
under the Custody Agreement (as defined in the Indenture).
_______________
* To be used if the Certificate and Tender Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Tender Draft are presented after 12:00
p.m. (Chicago time).
(3) The amount of the Tender Draft accompanying this Certificate
is equal to the sum of (i) $__________ being drawn in respect of the
payment of the portion of the purchase price of the Bonds equal to the
unpaid principal of Bonds (other than as provided below) to be purchased
as a result of a tender pursuant to Section 301, 302, 303, 304 or 305 of
the Indenture and (ii) $__________ being drawn in respect of the payment
of the portion of the purchase price of the Bonds equal to the accrued
and unpaid interest on such Bonds and does not include any amount of
interest which is included in any Tender Draft (unless such amount has
been reinstated by the Bank) or Final Draft presented on or prior to the
date of this Certificate. No amount is being drawn hereunder for the
Bonds held under the Custody Agreement (as defined in the Indenture).
(4) The amount of the Tender Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds
and the Indenture and does not exceed the amount available to be drawn
by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex C
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
PRINCIPAL OF THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS
CUSTOMIZED PURCHASE POLLUTION CONTROL REFUNDING AND
IMPROVEMENT REVENUE BONDS, SERIES 1985B (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS") UPON REDEMPTION
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment upon redemption [of all] [less than all]* of
the Bonds on or prior to the effective date of the Fixed Interest Rate
(as defined in the Indenture) of the unpaid principal amount of the
Bonds to be redeemed pursuant to the terms of Sections 310, 311 or 312
of the Indenture (other than as provided below), to the extent moneys
are not available in the Bond Fund from the sources set forth in clauses
(i) through (iii), inclusive, of Section 504 of the Indenture, which
payment is due on the [date on which this Certificate and the Redemption
Draft it accompanies are being presented to the Bank.]** [Banking Day
following the date on which this Certificate and the Redemption Draft it
accompanies are being presented to the Bank.]*** No amount is being
drawn hereunder for the Bonds held under the Custody Agreement (as
defined in the Indenture).
_______________
* Insert appropriate description.
** To be used if the Certificate and Redemption Draft are presented not
later than 12:00 p.m. (Chicago time).
*** To be used if the Certificate and Redemption Draft are presented after
12:00 p.m. (Chicago time).
(3) The amount of the Redemption Draft accompanying this
Certificate is equal to the sum of $_________ being drawn in respect of
the payment of unpaid principal of Bonds (other than Bonds registered in
the name of the Company which are presently held by the Company or the
Custodian on behalf of the Company) to be redeemed, the accrued interest
if any on the Bonds to be paid through an interest draft.
(4) The amount of the Redemption Draft accompanying this
Certificate was computed in accordance with the terms and conditions of
the Bonds and the Indenture and does not exceed the amount available to
be drawn under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ______________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex D
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE
POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985B
(KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS") IN SUPPORT OF
A PURCHASE
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch, (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, on or prior to the effective date of the
Fixed Interest Rate (as defined in the Indenture), of the unpaid
principal amount of the Bonds to be purchased by the Company in lieu of
redemption pursuant to the terms of Section 314 of the Indenture (other
than as provided below), to the extent moneys are not available in the
Bond Fund from the sources set forth in clauses (i) through (iii),
inclusive, of Section 306 of the Indenture, which payment is due on the
[date on which this Certificate and the Purchase Draft it accompanies
are being presented to the Bank.]* [Banking Day following the date on
which this Certificate and the Purchase Draft it accompanies are being
presented to the Bank.]** No amount is being drawn hereunder for the
Bonds held under the Custody Agreement (as defined in the Indenture).
_______________
* To be used if the Certificate and Purchase Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Purchase Draft are presented after
12:00 p.m. (Chicago time).
(3) The amount of the Purchase Draft accompanying this
Certificate is equal to the sum of $__________ being drawn in respect of
the payment of unpaid principal of Bonds (other than Bonds registered in
the name of the Company which are presently held by the Company or the
Custodian on behalf of the Company) to be purchased by the Company in
lieu of redemption.
(4) The amount of the Purchase Draft accompanying this
Certificate was computed in compliance with the terms and conditions of
the Bonds and the Indenture and does not exceed the amount available to
be drawn by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex E
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
AND INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS,
SERIES 1985B (KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS"),
UPON STATED OR ACCELERATED MATURITY
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon stated or accelerated maturity of the
unpaid principal amount of, and, to the extent such payment is not due
on an Interest Payment Date within the meaning of the Indenture, of
accrued and unpaid interest on, all of the Bonds (other than as provided
below), to the extent moneys are not available in the Bond Fund from the
sources set forth in clauses (i) through (iii), inclusive, of Section
504 of the Indenture, which payment is due on [the date on which this
Certificate and the Final Draft it accompanies are being presented to
the Bank.]* [the Banking Day following the date on which this
certificate and the Final Draft it accompanies are being presented to
the Bank.]** No amount is being drawn hereunder for the Bonds held
under the Custody Agreement (as defined in the Indenture).
_______________
* To be used if the Certificate and Final Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Final Draft are presented after 12:00
p.m. (Chicago time).
(3) The amount of the Final Draft accompanying this Certificate
is equal to the sum of (i) $_________ being drawn in respect of the
payment of unpaid principal of all of the Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or the Custodian on behalf of the Company) and (ii) $________
being drawn in respect of the payment of accrued and unpaid interest on
such Bonds (other than as provided below) and does not include any
amount of interest which is included in any Interest Draft or Tender
Draft (unless such amount has been reinstated by the Bank), presented on
or prior to the date of this Certificate. No amount is being drawn
hereunder for the Bonds held under the Custody Agreement (as defined in
the Indenture).
(4) The amount of the Final Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds
and the Indenture and does not exceed the amount available to be drawn
by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex F
NOTICE THAT TRUSTEE'S RIGHT TO DRAW
UNDER THE LETTER OF CREDIT BY AN
INTEREST DRAFT HAS NOT BEEN REINSTATED
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Irrevocable Letter of Credit No. IC70349
Dear Sirs:
You are hereby advised that Kansas City Power & Light Company has not
reimbursed us in an amount equal to the amount drawn by you under the Interest
Draft dated __________, 19___. Therefore, the amount of our Irrevocable
Letter of Credit No. IC70349 and the amounts available to be drawn by you by
an Interest Draft, Tender Draft or Final Draft (which available amounts have
been decreased by an amount equal to the amount of such Interest Draft) shall
not be reinstated in the amount of such Interest Draft.
____________________________
____________________________
Annex G
CERTIFICATE FOR THE REDUCTION OF AMOUNTS AVAILABLE UNDER
LETTER OF CREDIT NO. IC70349 DATED AUGUST 19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch, (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee hereby notifies you that on or prior to the date
hereof $_________ principal amount of the Bonds have been redeemed or
defeased and paid pursuant to the Indenture.
(3) Following the redemption or the defeasance and payment
referred to in paragraph (2) above, the aggregate principal amount of
all of the Bonds outstanding is $__________.
(4) The maximum amount of interest for 285 days (computed at 15%
per annum), accruing on the Bonds referred to in paragraph (3) above is
$__________.
(5) The amount available to be drawn by the Trustee under the
Letter of Credit by any Interest Draft is reduced to $___________ (such
amount being equal to the amount specified in paragraph (4) above) upon
receipt by the Bank of this Certificate.
(6) The amount available to be drawn by the Trustee under the
Letter of Credit by any Tender Draft is reduced to $_______ (such amount
being equal to the amounts specified in paragraphs (3) and (4) above)
upon receipt by the Bank of this Certificate.
(7) The amount available to be drawn by the Trustee under the
Letter of Credit by any Redemption Draft is reduced to $________ (such
amount being equal to the amount specified in paragraph (3) above).
(8) The amount available to be drawn by the Trustee under the
Letter of Credit by any Purchase Draft is reduced to $_________ (such
amount being equal to the amount specified in paragraph (3) above).
(9) The amount available to be drawn by the Trustee under the
Letter of Credit by its Final Draft is reduced to $_______
(such amount being equal to the amounts specified in paragraph (3) and
(4) above) upon receipt by the Bank of this Certificate.
(10) The amount of the Letter of Credit is reduced to $__________
(such amount being equal to the sum of the amounts specified in
paragraph (3) and (5) above) upon receipt by the Bank of this
Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex H
CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE UNDER
IRREVOCABLE LETTER OF CREDIT NO. IC70349 DATED AUGUST 19,
1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The amount of $_________ which has been finally paid to you
today by the Trustee on behalf of the Company is a payment made to
reimburse you pursuant to Section 1.08[(c)]* or [(d)]** of the Letter of
Credit and Reimbursement Agreement, dated as of August 19, 1993 (the
"Reimbursement Agreement"), between the Company and the Bank, for
amounts drawn under the Letter of Credit by [Tender Drafts]* [Purchase
Drafts].**
(3) Of the amount referred to in paragraph (2), $____________
represents the principal amount of Bonds to be resold on behalf of the
Company.
[(4) Of the amount referred to in paragraph (2), $__________
represents accrued interest on Bonds calculated in accordance with
clause (ii) of Section 1.08(c) of the Reimbursement Agreement.]*
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
* To be used in connection with reimbursement for amounts drawn under
Tender Drafts.
** To be used in connection with reimbursement for amounts drawn under
Purchase Drafts.
Annex I
INSTRUCTION TO TRANSFER
________________, 19___
Attention: Letter of Credit Operations
Re: Irrevocable Letter of Credit No. IC70349
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
________________________________________
[Name of Transferee]
________________________________________
[Address]
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Indenture (as defined in the Letter of
Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however, that
no rights shall be deemed to have been transferred to the transferee until
such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith we
ask that this transfer be effective and that you transfer the same to our
transferee or that, if so requested by the transferee, you issue a new
irrevocable letter of credit in favor of the transferee with provisions
consistent with the Letter of Credit.
Very truly yours,
UNITED STATES TRUST COMPANY OF
NEW YORK,
as predecessor Trustee
By_________________________________
[Name and title]
EXHIBIT B
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF COUNSEL FOR THE COMPANY
August 19, 1993
Societe Generale, Chicago Branch
181 West Madison, Suite 3400
Chicago, IL 60602
Kansas City Power & Light Company
Gentlemen:
I am Chief Legal Officer of Kansas City Power & Light Company, a
Missouri corporation (the "Company"), and am familiar with the matters
relating to the preparation, execution and delivery of a Letter of Credit and
Reimbursement Agreement (the "Reimbursement Agreement") dated as of August 19,
1993, between the Company and Societe Generale, Chicago Branch (the "Bank").
Among other things, I have examined:
(1) a fully executed counterpart of the Reimbursement Agreement;
(2) the fully executed Letter of Credit;
(3) the fully executed Indenture;
(4) the fully executed Lease;
(5) the fully executed Sublease;
(6) the fully executed Custody Agreement and Amendment No. 1
thereto;
(7) the Articles of Incorporation of the Company and all
amendments thereto (the "Charter");
(8) the by-laws of the Company as now in effect (the "By-laws");
and
(9) the Company's corporate proceedings and the proceedings
before the public utility regulatory commissions of the States of
Missouri and Kansas relating to the Reimbursement Agreement and related
matters.
I have also examined the originals, or copies certified to my satis-
faction, of (i) such other corporate records of the Company, certificates of
public officials and of officers of the Company, (ii) the agreements,
instruments and documents which affect or purport to affect the obligations of
the Company under the Reimbursement Agreement, and (iii) such other
agreements, instruments and documents as we have deemed necessary as a basis
for the opinions hereinafter expressed. I have assumed the due execution and
delivery, pursuant to due authorization, of the Reimbursement Agreement by the
Bank. All capitalized terms used herein and defined in the Reimbursement
Agreement are used herein as therein defined.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the opinion that:
(1) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri and is duly
qualified to do business in, and is in good standing under the laws of,
the State of Kansas.
(2) The execution, delivery and performance by the Company of the
Reimbursement Agreement and each Related Document to which it is a party
are within the Company's corporate power, have been duly authorized by
all necessary corporate action, do not contravene (i) the Company's
charter or by-laws, or (ii) any law, rule or regulation applicable to
the Company, or (iii) any contractual or legal restriction (including,
but not limited to, the Indenture) binding on or affecting the Company,
and do not result in or require the creation of any lien, security
interest or other charge or encumbrance (other than pursuant to the
Reimbursement Agreement and the Related Documents) upon or with respect
to any of its properties. The Reimbursement Agreement and each Related
Document to which the Company is a party have been duly executed and
delivered on behalf of the Company.
(3) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into the Reimbursement Agreement, and the commissions
have duly issued previous orders authorizing the Company to enter into
the Lease, the Sublease and any other documents that such commissions
have jurisdiction over and to which the Company is a party and the
Related Documents to which the Company is a party, and such orders
remain in full force and effect in the form issued. Except for the
approvals of the Kansas Department of Economic Development, the Board of
Commissioners of Coffey County, Kansas, and the City Council of the City
of Burlington, Kansas, approving issuance of the Bonds, which approvals
have been duly obtained and are in full force and effect, and the notice
of timely filing with the Board of Tax Appeals of the State of Kansas,
no other authorization, approval or other action by, and no notice to or
filing or registration with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by the
Company of the Reimbursement Agreement or any Related Document to which
it is a party.
(4) The Reimbursement Agreement and each Related Document to
which the Company is a party are the legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with their respective terms.
(5) Except as disclosed in the Company's Form 10-K for the year
1992, Forms 10-Q for the periods March 31, 1993 and June 30, 1993, and
Form 8-K dated August 16, 1993, there is no pending or, to the best of
my knowledge, threatened action or proceeding before any court,
governmental agency or arbitrator against, directly involving or
affecting the Company or any of its subsidiaries, which, in any case,
may materially and adversely affect the financial condition or
operations of the Company.
The opinions set forth above are subject to the following qualifica-
tions:
(a) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a party
is subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally.
(b) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a
party, may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
I am not licensed to practice law in the State of Illinois or the State
of Kansas. With respect to the Reimbursement Agreement and the Related
Documents and any other document to which the laws of either the State of
Illinois or the State of Kansas are applicable, I have assumed for purposes of
this opinion that such laws (other than conflict of laws) are substantially
similar to the laws of the State of Missouri. With respect to the conclusions
set forth herein, I express no opinions as to any laws other than the laws of
the State of Missouri and the Federal laws of the United States.
Very truly yours,
EXHIBIT C
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF BOND COUNSEL
[Letterhead of Chapman and Cutler]
August 19, 1993
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Societe Generale, Chicago Branch
181 West Madison Street
Chicago, Illinois 60602
Re: $50,000,000 City of Burlington, Kansas Customized Purchase Pollution
Control Refunding and Improvement Revenue Bonds, Series 1985B (Kansas
City Power & Light Company Project)
Ladies and Gentlemen:
The above-referenced bonds (the "Bonds") were issued under and are secured
by an Indenture of Trust dated as of September 1, 1985 (the "Indenture"),
between the City of Burlington, Kansas (the "Issuer") and United States Trust
Company of New York, as trustee (the "Trustee"). Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to them in the
Indenture.
Kansas City Power & Light Company (the "Company") has requested we
provide the opinion of Bond Counsel required by Section 4.4(a) of the Series
1985B Equipment Sublease Agreement dated as of September 1, 1985
(the "Sublease") between the Issuer and the Company and Section 505(c) of the
Indenture with respect to the issuance of Letter of Credit No. IC 70349 of
even date herewith (the "Letter of Credit") issued by Societe Generale, Chicago
Branch (the "Bank").
On the basis of our review of the Letter of Credit, the Indenture, the
Sublease, photocopies of various counsel opinions dated September 26, 1985
(which have been identified as authentic copies of the original opinions and
of which we have assumed the authenticity), and such other documents as we
have considered necessary, we are of the opinion that the delivery of the
Letter of Credit is authorized under the Sublease and complies with its terms.
We express no opinion as to whether the Letter of Credit is a legal,
valid, binding and enforceable obligation of the Bank in accordance with its
terms.
Respectfully submitted,
AGBacon
EXHIBIT D
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
ENCUMBRANCES
(a) liens for taxes, assessments or governmental charges not
delinquent, liens for workmen's compensation awards and similar obligations
not delinquent, and liens for labor, materials or supplies not delinquent;
(b) liens of the character specified in subparagraph (a) above, whether
or not delinquent, the validity of which is being contested at the time by the
Company in good faith, unless thereby in the opinion of counsel or of the
Trustees, as defined in the Mortgage, any of the mortgaged property may be
lost or forfeited;
(c) liens, neither assumed by the Company nor on account of which it
customarily pays interest, existing upon real estate or rights in or relating
to real estate now owned or hereafter acquired or now or hereafter leased by
the Company for substation, transmission line, distribution line, pipe line,
conduit, storage or right-of-way purposes;
(d) undetermined liens or charges incidental to construction or current
operations;
(e) the liens of any judgments in an aggregate amount of not in excess
of $50,000, or the lien of any judgment the execution of which has been stayed
or which has been appealed and secured, if necessary, by the filing of an
appeal bond, or the lien of any judgment in respect of which moneys in the
amount of the judgment have been deposited with the Trustee, as defined in the
Mortgage, to be held as part of the trust estate and to be withdrawn only as
provided in subdivision (e) of Section 8.01 of the Mortgage;
(f) easements, rights-of-way, licenses, exceptions, reservations or
restrictions, and agreements for the joint or common use of property, which do
not materially impair the use of the affected property in the operation of the
business of the Company;
(g) the right reserved to, or vested in, any municipality or public
authority by the terms of any franchise, grant, license or permit, or by any
provision of law, to terminate such franchise, grant, license or permit or to
purchase or appropriate or recapture or to designate a purchaser of any of the
mortgaged property, or to demand and collect from the Company any tax or other
compensation for the use of streets, alleys or other public places;
(h) rights reserved to, or vested in, any municipality or public
authority to use, control, remove or regulate any property of the Company;
(i) rights reserved to or vested in others to take or receive any part
of the electricity, gas, steam or water generated or produced by or from any
property of the Company;
(j) zoning laws and ordinances; and
(k) possible adverse rights or interests and inconsequential defects or
irregularities in title which, in the opinion of counsel, may properly be
disregarded.