[1987A] EXHIBIT 10-k
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
between
KANSAS CITY POWER & LIGHT COMPANY
and
THE TORONTO-DOMINION BANK
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 . . . . . . . . . . . . . . . . . . . . . . . .1
1.03 Tender Advances and Accrued Interest Advances . . . . . . . .2
1.04 Redemption Advances and Purchase Advances . . . . . . . . . .2
1.05 Interest Advances . . . . . . . . . . . . . . . . . . . . . .3
1.06 Interest on Overdue Amounts . . . . . . . . . . . . . . . . .3
1.07 Interest Payments . . . . . . . . . . . . . . . . . . . . . .3
1.08 Selection of Interest Rates. . . . . . . . . . . . . . . . . .4
(a) Tender Advances . . . . . . . . . . . . . . . . . . . . .4
(b) Term Advances . . . . . . . . . . . . . . . . . . . . . .4
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . .4
1.10 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . .6
1.11 Other Payments . . . . . . . . . . . . . . . . . . . . . . . .7
1.12 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . .7
1.13 Additional Interest . . . . . . . . . . . . . . . . . . . . .9
1.14 Payments and Computations . . . . . . . . . . . . . . . . . .10
1.15 Payment on Non-Business Days . . . . . . . . . . . . . . . . .10
1.16 Extension of the Letter of Credit and Repayment. . . . . . . .10
1.17 Obligations Absolute . . . . . . . . . . . . . . . . . . . . .11
ARTICLE II
CONDITIONS OF ISSUANCE
2.01 Condition Precedent to Issuance of the
Letter of Credit . . . . . . . . . . . . . . . . . . . . . .11
2.02 Additional Conditions Precedent to Issuance
of the Letter of Credit . . . . . . . . . . . . . . . . . .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. . . . . . . . . . . . . . . . .15
c. Maintenance of Insurance, Etc. . . . . . . . . . . . . . .15
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. . . . . . . . . . . . . . . . . . . . . . . .17
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 . . . . . . . . . . . . . . . . . . .19
ARTICLE VI
DEFINITIONS
6.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE VII
MISCELLANEOUS
7.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . .24
7.02 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . .24
7.03 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . .25
7.04 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . .25
7.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . .25
7.06 Liability of the Bank . . . . . . . . . . . . . . . . . . . .26
7.07 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . .27
7.08 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . .27
7.09 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
7.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . .27
7.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .27
7.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . .28
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 THE
TORONTO-DOMINION BANK (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
October 1, 1987 (the "Indenture"), naming Chemical Bank, as trustee (the
"Trustee"), $50,000,000 aggregate principal amount of the Issuer's Customized
Purchase Pollution Control Revenue Refunding Bonds, Series 1987A (Kansas City
Power & Light Company Project) (the "Bonds") to various purchasers (the "Bond
Purchasers") to refinance a portion of 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 October 1, 1987, between the Company and the Issuer, the Company has
agreed to use the proceeds of the Bonds for the refinancing 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 October 1, 1987,
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 has requested the Bank to issue its irrevocable transferable
letter of credit in substantially the form of Exhibit A appropriately
completed (such letter of credit and any successor letter of credit as
provided in such letter of credit being the "Letter of Credit") in the amount
of $54,684,931.51 of which $50,000,000 shall support the payment of the
principal of the Bonds, and $4,684,931.51 shall support the payment of up to
285 days' accrued interest (computed at 12%) on the Bonds.
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 $54,684,931.51 (the "Commitment") and expiring on or before the
Scheduled Termination Date.
SECTION 1.02. Reimbursement. 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) on and
after the date on which 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, 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 Termination Date - 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 earlier of the first business day of the next calendar month
and the Termination Date - Letter of Credit. 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 repaid. 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.
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, 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 Termination Date - 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).
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.
(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 of any Tender
Advance or any Accrued Interest Advance which is not paid when due, whether
at stated maturity, by acceleration 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 rate per annum equal to 1-1/2% above the Prime
Rate. Any amount of any Term Advance which is not paid when due, whether at
stated maturity, by acceleration 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 rate per annum equal to 1-5/8% above the Prime Rate.
Any amount of any Interest Advance which is not paid when due shall bear
interest from and including the date the same becomes due until such amount
is paid in full, payable on demand, at a rate per annum equal to 1-1/2% above
the Prime Rate. Except as provided above, any other amount due hereunder
which is not paid when due shall bear interest from and including the date
the same becomes due until such amount is paid in full at a rate per annum
equal to 1-1/2% above the Prime 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 (ii) in addition, on the last day of each Interest Period (as
hereinafter defined) for such Advance if such Advance is a Eurodollar
Advance, a Term Eurodollar Advance, a CD Bid Advance or a Term CD Bid
Advance. 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(c) and (d) 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 Rate, 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(c) and (e), 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
or 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, 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 of 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, 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.
(c) If (i) it shall become unlawful for the Bank to obtain funds in
the London interbank market in order to fund or maintain Eurodollar Advances
or Term Eurodollar Advances or otherwise to perform its obligations hereunder
with respect to any such Eurodollar Advances or Term Eurodollar Advances, or
(ii) due to money market conditions or otherwise, the Bank determines that
matching or offsetting deposits for Eurodollar or Term Eurodollar Advances
are not available in the London interbank market or that the Bank is unable
reasonably to quote a rate for such Advances or that the LIBO Rate does not
adequately reflect the cost of funding such Advances, upon notice by the Bank
to the Company, the rate of interest on all Eurodollar Advances shall
thereupon be the Domestic Rate or the CD Bid Rate, as the Company shall
select immediately upon receipt of such notice, and the rate of interest on
all Term Eurodollar Advances shall thereupon be the Term Rate or the Term CD
Bid Rate, as the Company shall select immediately upon receipt of such
notice, and the right of the Company to select the Eurodollar Rate for any
Tender Advance and the Term Eurodollar Rate for any Term Advance shall cease
for the period during which such illegality or such conditions shall occur
and be continuing. In the event that the Company shall fail to select an
alternative rate, the rate of interest on all Eurodollar Advances shall
thereupon be the Domestic Rate and the rate of interest on all Term
Eurodollar Advances shall be the Term Rate.
(d) On and after the date on which the unpaid principal amount of any
Tender Advance shall be reduced, by payment or prepayment or otherwise, to
less than $1,000,000, the rate of interest on the unpaid principal amount of
such Tender Advance shall be the Domestic Rate and the right of the Company
to select a rate other than the Domestic Rate for such Tender Advance shall
terminate; provided, however, that if and so long as such Tender Advance
shall bear the same rate (other than the Domestic Rate) for the same Interest
Period as another Tender Advance or other Tender Advances and the aggregate
unpaid principal amount of all such Tender Advances shall equal or exceed
$1,000,000, the Company shall have the right to select such rate for such
Interest Period for such Tender Advance.
(e) On and after the date on which the unpaid principal amount of any
Term Advance shall be reduced, by payment or prepayment or otherwise, to less
than $1,000,000 the rate of interest on the unpaid principal amount of such
Term Advance shall be the Term Rate and the right of the Company to select a
rate (other than the Term Rate) for such Term Advance shall terminate;
provided, however, that if and so long as such Term Advance shall bear the
same rate (other than the Term Rate) for the same Interest Period as another
Term Advance or other Term Advances and the aggregate unpaid principal amount
of all such Term Advances shall equal or exceed $1,000,000, the Company shall
have the right to select such rate for such Interest Period for such Term
Advance.
SECTION 1.10. Prepayments. (a) The Company may prepay in whole or in
part the outstanding amount of any Accrued Interest 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 (other than an Accrued
Interest 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 an 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 unreim-
bursed 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 that portion of any Purchase Advances equal to 100% of the
principal amount of any such Bonds resold or to be resold. 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
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.
(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 either (i) the introduction of
or any change (including, without limitation, any change by way of imposition
or increase of reserve requirements other than those referred to in Section
1.13 below) in or in the interpretation of any law or regulation or (ii) the
compliance by the Bank or a Participant with any guideline or request from
any central bank or other governmental authority (whether or not having the
force of law), shall result in any increase in the cost to the Bank or a
Participant, as the case may be, of making, funding, maintaining or
participating in Eurodollar Advances or CD Bid Advances, then the Company
shall from time to time, upon demand by the Bank, pay to the Bank additional
amounts sufficient to indemnify the Bank or such Participant, as the case may
be, against such increased cost. A certificate as to the amount of such
increased cost and a reasonable explanation thereof, submitted to the Company
by the Bank on its own behalf or on behalf of such Participant shall
constitute such demand and shall, in the absence of manifest error, be
conclusive and binding for all purposes.
(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 or CD Bid Advance or is
subject to a conversion of a Eurodollar Advance or 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 or any
Participant for any additional losses, costs or expenses which it may
reasonably 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
or such Participant to fund or maintain such Eurodollar Advance or 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 on its own behalf or on behalf of such Participant to the Company,
shall constitute such demand and shall, in the absence of manifest error, be
conclusive and binding for all purposes.
(c) If after the date of this Agreement, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank or any Participant with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject the Bank or any Participant to any tax, duty
or other charge with respect to payments to the Bank or such
Participant of any amount due under this Agreement or shall change the
basis of taxation of payments to the Bank or any Participant of any
amount due under this Agreement (except for changes in the rate of tax
on the overall net income of the Bank or such Participant imposed by
the jurisdiction in which the Bank's or such Participant's, as the case
may be, principal executive office is located); or
(ii) shall impose, modify or deem applicable any reserve,
capital adequacy, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System or the Reserve Bank of Canada
or a similar entity with respect to any Participant) against assets of,
deposits with or for the account of, or credit extended by, the Bank or
any Participant or shall impose on the Bank or any Participant any
other condition affecting the Letter of Credit or its participation
therein; and the result of any of the foregoing is to increase the cost
to the Bank or any Participant of issuing or maintaining the Letter of
Credit or its participation therein, or to reduce the amount of any sum
received or receivable by the Bank or any Participant under this
Agreement or a participation agreement, as the case may be, with
respect thereto, then, at the discretion of the Bank or such
Participant, as the case may be, and within 15 days after demand by the
Bank pursuant to paragraph (f) below, the Company shall pay for the
account of the Bank such additional amount or amounts as will
compensate the Bank or such Participant, as the case may be, for such
increased cost or reduction.
(d) If after the date of this Agreement, the Bank or any Participant
shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy of general applicability, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank or any
Participant with any request or directive regarding capital adequacy of
general applicability (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the Bank's or such Participant's capital as a
consequence of the Letter of Credit or its participation therein hereunder to
a level below that which the Bank or such Participant could have achieved but
for such adoption, change or compliance (taking into consideration the Bank's
or such Participant's policies with respect to capital adequacy) then, at the
discretion of the Bank or such Participant, as the case may be, and within 15
days after demand by the Bank pursuant to paragraph (f) below, the Company
shall pay to the Bank such additional amount or amounts as will, in the
opinion of the Bank or such Participant, as the case may be, compensate it
for such reduction.
(e) The Company hereby agrees that each Participant shall have the
same rights and obligations under this Section 1.12 with respect to its
respective participation as if such Participant were named instead of the
Bank in this Section 1.12. The Bank's rights pursuant to this Section 1.12
shall apply only to that portion of the Letter of Credit, the advances made
thereunder, the Bank's rights and obligations under this Agreement and the
amounts payable to the Bank hereunder a participating interest in which has
not been sold to a Participant.
(f) The Bank will promptly notify the Company of any event of which it
has knowledge, occurring after the date hereof, that will entitle the Bank or
any Participant to compensation pursuant to paragraphs (c) or (d) of this
Section. A certificate of the Bank submitted to the Company setting forth
the additional amount or amounts to be paid to it for its own account or for
the account of a Participant and a reasonable explanation thereof shall
constitute demand for such compensation and shall be conclusive in the
absence of manifest error. In determining such amount, the Bank and the
Participants may use any reasonable averaging and attribution methods.
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.
(Houston time) on the day when due in lawful money of the United States of
America to the Bank, at Morgan Guaranty Trust Company, Account #63000271 for
the credit of The Toronto-Dominion Bank, New York Branch, 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. At least 90 days but
not more than 120 days before each May 15, commencing May 15, 1995, and each
succeeding year thereafter until the Scheduled Termination Date, the Company
may request the Bank in writing (each such request being irrevocable and
binding) to extend for one year the Scheduled Termination Date of the Letter
of Credit. The Bank shall respond to the Company's request for such
extension on or before each June 1 in the year in which the Company has
requested an extension of the Letter of Credit. In the event the Bank does
not respond to the Company's initial request by June 1 of the year the
Company first requests an extension, the Bank shall be deemed to have granted
to the Company an extension of the Letter of Credit from August 18, 1996, to
and including August 18, 1997, on the same terms and conditions as contained
herein. If the Bank fails to respond to any request for an extension of the
Scheduled Termination Date made subsequent to the Company's initial request,
such extension shall be deemed not to have been given. In the event the Bank
responds to the Company's request with an offer of new terms and conditions,
the Company shall have until July 1 of such year to give its consent or
nonconsent in writing to the Bank's offer of new terms and conditions. If
the Company does not consent in writing to such terms and conditions by such
date, the extension shall be deemed not to have been given. Any consent or
offer the Bank may give or any extension that is deemed to be given shall be
conditional upon the preparation, execution and delivery of legal
documentation in form and substance satisfactory to the Bank and its counsel.
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 circum-
stances:
(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 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 an 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.
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.
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 (ii) any law 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; or (iii) any other instruments to which the
Company is a party or by which it may be bound or to which any of the
property or assets of the Company may be subject, or any law, order,
rule or regulation applicable to the Company or any court, federal or
state, regulatory body, administrative agency or other governmental
body having jurisdiction over the Company.
(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 orders remain in full force
and effect in the form issued. Except for the approvals of 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
ended 1992, Form 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 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.
(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 six 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
other than disclosed or contemplated in the notes to the financials in
the Company's 10-Q dated June 30, 1993.
(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 October 29,
1987, 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 October 16, 1986, 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 avail-
able 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
(except as disclosed in the notes to the balance sheet and related
statements of income and retained earnings).
(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 accounting 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 information
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 construction 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 of Kansas City, N.A. (the "Mortgage"), (vi) encumbrances
listed on Exhibit D attached hereto, (vii) security interests granted
in, or sale of, the Company's accounts receivable, (viii) 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 1986, 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 unenforce-
ability 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 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 (g); or 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 reorga-
nization 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
(h) any judgment 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
(i) 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
(j) 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 701 of the Indenture of the occurrence and continuance of an Event of
Default hereunder, 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 other 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 1986, 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 the Bank to
the Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring U.S. dollar deposits of
the Bank 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
Revenue Refunding Bonds, Series 1987A (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 Houston and, if the
applicable Business Day relates to any 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 5/8 of 1% per annum above the
CD Bid Formula.
"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. Houston 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 Chemical Bank, as custodian under the Custody
Agreement.
"Custody Agreement" means the Custody Agreement dated as of
October 1, 1987, 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 Prime Rate.
"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 1/2 of 1% per annum above
the LIBO Rate.
"Event of Default" shall have the meaning set forth in Section
5.01 hereof.
"Final Draft" has the meaning set forth in the Letter of Credit.
"Indenture" means the Indenture of Trust dated as of October 1,
1987, between the Issuer and Chemical Bank, as trustee and all
amendments, modifications and supplements thereto.
"Interest Advance" has the meaning set forth in Section 1.05(a)
hereof.
"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.
"Issuer" means the City of Burlington, Kansas.
"Lease" means the Equipment Lease Agreement dated as of October
1, 1987, 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 such 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.
"Mortgages" 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).
"Participant" means any bank or other financial institution which
has purchased from the Bank a participation in this Agreement or the
Letter of Credit.
"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 rate of interest per annum from time to
time designated by the Bank at its principal office in Houston, Texas
as its "prime rate," whether or not such "prime rate" is actually
charged by the Bank, with all changes 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 August 18, 1996, or such later
date to which the term of the Letter of Credit is extended pursuant to
Section 1.16 of this Agreement.
"Sublease" means the Equipment Sublease Agreement dated as of
October 1, 1987, 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 3/4 of 1% above the CD
Bid Formula.
"Term Eurodollar Advance" means a Term Advance bearing interest
at the Term Eurodollar Rate.
"Term Eurodollar Rate" during any Interest Period for any Term
Eurodollar Advance means an interest rate per annum equal at all times
during each Interest Period for such Term Advance to 5/8 of 1% per
annum above the LIBO Rate.
"Term Rate" means an interest rate equal to 1/8 of 1% per annum
above the Prime Rate.
"Termination Date - Letter of Credit" 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 close of business on the date on which 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) 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 Chemical Bank, 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.
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 909 Fannin Street, Suite
1700, Houston, Texas, 77010 Attention: Manager, Agency or facsimile:
(713)951-9921 and a copy to 31 West 52nd Street, New York, New York, 10019,
or if to the Trustee, mailed or delivered to it, addressed to it at 450 W.
33rd Street, New York, New York, 10001, Attention: Corporate Trustee
Administration Department, or facsimile: (212)971-8567; 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 telex.
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 and in effect on the
date hereof.
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 wilful
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 wilful 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 wilful 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
wilful 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 any such assignment, any 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 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 internal laws of the State of New York.
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
THE TORONTO-DOMINION BANK
By ______________________________________
Title:________________________________
By ______________________________________
Title:________________________________
EXHIBIT A
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
No. 1108
August 19, 1993
Chemical Bank
450 W. 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
Dear Ladies and Gentlemen:
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 October 1, 1987 (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 Revenue
Refunding Bonds, Series 1987A (Kansas City Power & Light Company Project)
(the "Bonds"), are being issued, our Irrevocable Letter of Credit No. 1108,
in the amount of $54,684,931.51 (as more fully described below), effective
immediately and expiring at the close of business at our 909 Fannin Street,
Suite 1700, Houston, Texas, 77010, office on August 18, 1996 or such later
date as we may agree upon in a writing delivered to you (the "Scheduled
Termination Date") unless sooner terminated in accordance with the terms
hereof.
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 by one or more of your drafts, each
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
$4,684,931.51;
(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 $54,684,931.51;
(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, each
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 $54,684,931.51.
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, the amount of this Letter of Credit and the amounts
from time to time available to be drawn by you 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; provided however, this reinstatement shall not apply to amounts
drawn by an Interest Draft in connection with Bonds being redeemed with
amounts drawn by a Redemption Draft.
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 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. 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 you, but only from amounts available to you under the
Indenture, on behalf of the Company for amounts drawn hereunder by any such
Tender Draft or Purchase Draft. 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 of notice from
you, in the form 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 909 Fannin Street, Suite
1700, Houston, Texas, 77010 Attention: Manager, Agency (or any office which
may be designated by us by written notice delivered to you). If we receive
any of your drafts and certificates at such office (including receipt by
facsimile which must be followed by hard copy in overnight mail), 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 11:00 a.m.
(Houston time) on a Banking Day, we will honor the same on or before 3:00
p.m. (Houston time) the same day in accordance with your payment
instructions. If we receive any of your drafts and certificates at such
office (including receipt by facsimile which must be followed by hard copy in
overnight mail), all in strict conformity with the terms and conditions of
this Letter of Credit, after 11:00 a.m. (Houston time) on a Banking Day prior
to the termination hereof, we will honor the same by 12:00 p.m. (Houston
time) 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 Houston, Texas. All payments paid under this
Letter of Credit shall be paid with our own funds.
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 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 New York, including without limitation
the Uniform Commercial Code as in effect in the State of New York.
Communications with respect to this Letter of Credit shall be in writing and
shall be addressed to us at 909 Fannin Street, Suite 1700, Houston, Texas,
77010, Attention: Manager, Agency, 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 a scheduled interest payment on 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,
THE TORONTO-DOMINION BANK
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 REVENUE REFUNDING
BONDS, SERIES 1987A (KANSAS CITY POWER & LIGHT COMPANY
PROJECT) (THE "BONDS")
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (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) payment(s) of interest on the Bonds, including,
without limitation, accrued interest due upon the redemption of 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 404 of the Indenture, which payment(s) is [are]* due on
[__________.]** [CP Dates (as defined in the Indenture) established
for the current calendar month, and this drawing is also with respect
to other amounts to be drawn under Section 405(f) of the Indenture.]*
Payment of such amount is to be made to us on the same Banking Day if
the Certificate and Interest Draft are presented to you no later than
11:00 a.m. (Houston time). If presentation is after 11:00 a.m.
(Houston time), payment of such amount is to be made on the next
Banking Day. None of the Bonds, in respect of which such drawing is
being made, were registered in the name of the Company or were held on
behalf of the Company under the Custody Agreement on the Record Date
within the meaning of the Indenture.
(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 Final Draft presented on the date of this Certificate.
_______________
* To be used while the Bonds bear interest at the CP Rate.
** Insert date; to be used if drawing is not under Section 405(f) of the
Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ____________, 19___.
CHEMICAL BANK,
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
REVENUE REFUNDING BONDS, SERIES 1987A (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS") IN SUPPORT OF A TENDER
PURSUANT TO SECTIONS 301, 302, 303, 304 AND 305 OF THE
INDENTURE.
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (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 Sections 301, 302,
303, 304 and 305 of the Indenture (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) 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 (iii), inclusive, of Section 306 of the
Indenture, which payment is due on the same Banking Day if the
Certificate and Tender Draft are presented not later than 11:00 a.m.
(Houston time), or which payment is due on the next succeeding Banking
Day if the Certificate and Tender Draft are presented after the time
deadline referred to above.
(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 tender price of the Bonds equal to the
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 as a result of a tender pursuant
to Sections 301, 302, 303, 304, and 305 of the Indenture and
(ii) $________ being drawn in respect of the payment of the portion of
the tender 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.
(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___.
CHEMICAL BANK,
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 REVENUE REFUNDING
BONDS, SERIES 1987A (KANSAS CITY POWER & LIGHT COMPANY
PROJECT) (THE "BONDS") UPON REDEMPTION
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (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 Bonds registered in the name of the
Company which are presently held by the Company or the Custodian on
behalf of the Company), to the extent moneys are not available in the
Bond Fund from the sources set forth in clauses (i) and (ii), of
Section 404 of the Indenture, which payment is due on the same Banking
Day if the Certificate and Redemption Draft are presented not later
than 11:00 a.m. (Houston time), or which payment is due on the next
succeeding Banking Day if the Certificate and Redemption Draft are
presented after the time deadline referred to above.
(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.
(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.
_______________
* Insert appropriate description.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ______________, 19___.
CHEMICAL BANK,
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 REVENUE REFUNDING
BONDS, SERIES 1987A (KANSAS CITY POWER & LIGHT COMPANY
PROJECT) (THE "BONDS") IN SUPPORT OF A PURCHASE
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (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 Bonds registered in the name of the Company which are presently
held by the Company or the Custodian on behalf of the Company), to the
extent moneys are not available in the Bond Fund from the sources set
forth in clauses (i) through (iii) of Section 306 of the Indenture,
which payment is due on the same Banking Day if the Certificate and
Purchase Draft are presented not later than 11:00 a.m. (Houston time),
or which payment is due on the next succeeding Banking Day if the
Certificate and Purchase Draft are presented after the time deadline
referred to above.
(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___.
CHEMICAL BANK,
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
REVENUE REFUNDING BONDS, SERIES 1987A (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS"), UPON STATED OR
ACCELERATED MATURITY
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank, (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (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 Bonds
registered in the name of the Company which are presently held by the
Company or the Custodian on behalf of the Company), to the extent
moneys are not available in the Bond Fund from the sources set forth in
clauses (i) through (iii) of Section 404 of the Indenture, which
payment is due on the same Banking Day if the Certificate and Final
Draft are presented not later than 11:00 a.m. (Houston time), or which
payment is due on the next succeeding Banking Day if the Certificate
and Final Draft are presented after the time deadline referred to
above.
(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 Bonds registered in the name of the Company
which are presently held by the Company or the Custodian on behalf of
the Company) 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.
(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___.
CHEMICAL BANK,
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
Chemical Bank
450 W. 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
Irrevocable Letter of Credit No. 1108
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. 1108 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. 1108 DATED AUGUST 19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (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 (computed at 12% per annum
for a period of 285 days computed on the basis of a 365 day year)
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 sum of 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 sum of the amounts specified in paragraphs (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___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
Annex H
CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE
UNDER IRREVOCABLE LETTER OF CREDIT NO. 1108 DATED AUGUST
19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (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 $_________ paid to you today by the Trustee on
behalf of the Company is a payment made to reimburse you pursuant to
Section 1.10[(c)]* [(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.
[(4) Of the amount referred to in paragraph (2), $__________
represents accrued interest on Bonds calculated in accordance with
clause (ii) of Section 1.10(c) of the Reimbursement Agreement.]*
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
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. 1108
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,
CHEMICAL BANK,
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
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY 10019-6101
RE: $50,000,000 City of Burlington, Kansas Customized Purchase Pollution
Control Revenue Refunding Bonds (Kansas City Power & Light Project)
Series 1987A
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 which terms shall include the fee letter executed
pursuant to Section 1.11 thereof (the "Reimbursement Agreement") dated as of
August 19, 1993, between the Company and The Toronto-Dominion Bank (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
Charter or the 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 current issued orders authorizing the
Company to enter into the Reimbursement Agreement, and the commissions
have duly issued previous orders authorizing 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 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 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
(other than for informational purposes) 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 on in the Company's Form 10-K for the
year 1992, Forms 10-Q for the quarters 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 New York 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 New
York 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
Chemical Bank
450 West 33rd Street
New York, New York 10001
The Toronto-Dominion Bank
31 West 52nd Street
New York, New York 10019-6101
Re: $50,000,000 City of Burlington, Kansas Customized Purchase Pollution
Control Revenue Refunding Bonds, Series 1987A (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 October 1, 1987 (the
"Indenture"), between the City of Burlington, Kansas (the "Issuer") and
Chemical Bank, 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 of the Series
1987A Equipment Sublease Agreement dated as of October 1, 1987 (the
"Sublease") between the Issuer and the Company and Section 405(c) of the
Indenture with respect to the issuance of Letter of Credit No. 1108 of even
date herewith (the "Letter of Credit") issued by The Toronto-Dominion Bank
(the "Bank").
On the basis of our review of the Letter of Credit, the Indenture, the
Sublease, photocopies of various counsel opinions dated October 29, 1987
(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
(i) the Lien of the Mortgages;
(ii) liens for taxes or assessments by governmental bodies not yet
due or the payment of which is being contested in good faith by the
Company, provided that the Company shall have set aside on its books
reserves deemed by it to be adequate with respect to any such tax or
assessment so being contested;
(iii) any right of any municipal or other governmental body or
agency, by virtue of any franchise, grant, license, contract or statute, to
occupy, purchase or designate a purchaser of, or to order the sale of, any
mortgaged property upon payment of reasonable compensation therefor, or to
terminate any franchise, grant, license, contract or other right, or to
regulate the property and business of the Company;
(iv) liens and charges incidental to construction or current
operations of the Company which are not delinquent or, whether or not
delinquent, are being contested in good faith by the Company;
(v) easements, reservations or right of way, and zoning ordinances,
regulations and restrictions, if they do not, individually or in the
aggregate, impair the utility of the affected property in the operation of
the business of the Company;
(vi) irregularities in or defects of title with respect to any
rights of way acquired by the Company for lines, structures and
appurtenances thereto, if the Company has obtained from the apparent owner
of the real estate traversed by any such right of way a sufficient right,
by the terms of the instrument granting such right of way, to the use
thereof for the purpose of such lines, structures and appurtenances, or the
Company has eminent domain power to remove or cure such irregularities or
deficiencies;
(vii) liens securing obligation neither (A) assumed by the Company
nor (B) on account of which it customarily pays interest, directly or
indirectly, existing upon real estate, or rights in or relating to real
estate acquired by the Company for right of way for lines, structures and
appurtenances thereto;
(viii) party-wall agreements and agreements for and obligations
relating to the joint or common use of property owned solely by the Company
or owned by the Company in common or jointly with one or more parties;
(ix) liens securing indebtedness incurred by a Person, other than
the Company, which indebtedness has been neither assumed nor guaranteed by
the Company nor on which it customarily pays interest, existing on property
which the Company owns jointly or in common with such Person or such Person
and others, if there is an effective bar against partition of such property
which would preclude the sale of such property by such other Person or the
holder of such lien without the consent of the Company;
(x) any attachment, judgment and other similar lien arising in
connection with court proceedings in an amount not in excess of the greater
of $10,000,000 or 5% of the principal amount of the outstanding bonds at
the time such attachment, judgment or lien arises, or the execution of
which has been stayed or which has been appealed and secured, if necessary,
by an appeal bond;
(xi) the burdens of any law or governmental rule, regulation, order
or permit requiring the Company to maintain certain facilities or to
perform certain acts as a condition of its occupancy or use of, or
interference with, any public or private lands or highways or any river,
stream or other waters;
(xii) any duties or obligations of the Company to any federal state
or local or other governmental authority with respect to any franchise,
grant, license or permit which affects any mortgaged property;
(xiii) liens in favor of a governmental or governmental entity
securing (A) payments pursuant to a statute (other than taxes), or (B)
indebtedness incurred to finance all or part of the purchase price or cost
of construction of the property subject to such lien; and
(xiv) possible adverse rights or interests and inconsequential
defects or irregularities in title which, in an opinion of counsel may
properly be disregarded.