1
LOAN AGREEMENT
By and Among
ABN AMRO BANK N. V.,
WISCONSIN GAS COMPANY EMPLOYEES'
SAVINGS PLANS TRUST
and
WICOR, INC.
Dated
March 29, 1996
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INDEX
Page
Witnesseth
Section 1 - Definitions
1.1. Defined Terms 1
1.2. Other Definitional Provisions 6
Section 2 - Amount and Terms of Loan
2.1. ESOP Loan 7
2.2. ESOP Note 7
2.3. Prepayments 7
2.4. Interest Rate Options 7
2.5. Change of Law 10
2.6. Unavailability of Deposits or Inability to
Ascertain Adjusted Eurodollar Rate
or Adjusted CD Rate 10
2.7. Funding Indemnity 10-11
2.8. Lending Branch 11
2.9. Discretion of Bank as to Manner of Funding 11
2.10 Computation of Interest and Payments 11
2.11 Additional Interest on Loan Bearing Adjusted
Eurodollar Rate 11-12
2.12 Increased Costs 12-13
2.13 Purpose 13
Section 3 - Representations and Warranties
3.1 Organization 13
3.2 ERISA 13
3.3 Authorization 13-14
3.4 Use of Proceeds; Margin Securities 14
3.5 Authority of Trustee 14
Section 4 - Conditions Precedent
4.1 Conditions to ESOP Loan 14-15
Section 5 - Covenants
5.1 Existence and Tax Status 15
5.2 Compliance 16
5.3 Negative Covenants 16
5.4 Expenses 16
5.5 Use of Proceeds 16
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Section 6 - Defaults
6.1 Events of Default 16-17
6.2 Rights Upon Default 17
Section 7 - Miscellaneous
7.1 Amendments and Waivers 18
7.2 Notices 18-19
7.3 No Waiver; Cumulative Remedies 19
7.4 Survival of Representations and Warranties 19
7.5 Successors and Assigns 19
7.6 Governing Law and Submission to Jurisdiction 20
7.7 Severability 20
7.8 Headings 20
7.9 Special Limitations 20-21
7.10 No Representations 21
7.11 Trustee's Exculpation 21
Signatures 22
EXHIBITS
A ESOP Note
B Guaranty
C Form of Legal Opinion
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of March
29, 1996, by and among WISCONSIN GAS COMPANY EMPLOYEES' SAVINGS
PLANS TRUST (the "Trust"), WICOR, INC. (the "Company") and ABN AMRO
BANK N.V., a bank organized under the laws of the Netherlands and
acting through its Chicago branch (the "Bank").
W I T N E S S E T H:
--------------------
WHEREAS, the Trust wishes to borrow from the Bank and the
Bank is willing to make a loan to the Trust on the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and
mutual agreements contained herein, one dollar and other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall be defined as set forth below:
"Adjusted CD Rate" means a rate per annum (rounded
upwards, if necessary, to the nearest 1/8 of 1%) determined
by the Bank in accordance with the following formula:
Adjusted CD Rate = CD Rate + Assessment Rate + CD Margin
-----------------
100% - CD Reserve
"Assessment Rate" means, for purposes of computing the
Adjusted CD Rate, the assessment rate (rounded upwards, if
necessary, to the nearest 1/100 of 1%) imposed by the Federal
Deposit Insurance Corporation for insuring the Bank's
liability for time deposits, as in effect from time to time.
"CD Rate" means, with respect to each Interest Period, the
rate per annum determined by the Bank to be the arithmetic
average of the bid rates quoted to it in the secondary market
at approximately 11:00 a.m. (Chicago time) on the first day
of such Interest Period by three Chicago or New York
certificate of deposit dealers of recognized standing
selected by the Bank for the purchase at face value of
certificates of deposit of the Bank in an amount equal to the
CD Portion to be outstanding during such Interest Period.
"CD Reserve Percentage" means the rate (as determined by the
bank) of the maximum reserve requirement (including, without
limitation, any supplemental, marginal and emergency
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reserves) imposed by the Board from time to time on the Bank's non-
personal time deposits having a maturity equal to the applicable
Interest Period and in an amount equal to the unpaid principal
amount of the applicable CD Portion, subject to any amendments of
such reserve requirement by such Board, taking into account any
transitional adjustments thereto. "CD Margin" means three tenths
of one percent (3/10%) per annum. The Adjusted CD Rate shall
automatically be adjusted as of the date of any change in the CD
Reserve Percentage. Each determination of the CD Rate made by the
Bank shall be conclusive and binding absent manifest error.
"Adjusted Eurodollar Rate" shall mean the
Eurodollar Rate plus three tenths of one percent (3/10%) per
annum.
"Agreement" shall mean this Loan Agreement, as the
same may be amended, supplemented or modified from time to
time.
"Board" shall mean the Board of Governors of the
Federal Reserve System (or any successor).
"Business Day" shall mean any day except a
Saturday, a Sunday or any other day that the Bank is not open
for business to conduct commercial transactions in Chicago,
Illinois and, when used with respect to Eurodollar Portions,
a day on which the Bank is also dealing in United States
dollar deposits in New York, New York and London, England.
"CD Portion" means that part of the ESOP Loan
bearing interest at the Adjusted CD Rate for the same
Interest Period.
"Code" shall mean the Internal Revenue Code of
1986, as amended from time to time, and the regulations and
rulings issued thereunder.
"Company" shall mean WICOR, Inc., a Wisconsin
corporation.
"Default" shall mean any of the events specified in
Section 6.1 hereof, irrespective of whether any requirements
for the giving of notice, the lapse of time, or both, or any
other condition have been satisfied.
"Disqualified Person" shall mean a disqualified
person with respect to the Trust within the meaning of the
Code or a party in interest with respect to the Trust within
the meaning of ERISA.
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"Dollars" and "$" shall mean dollars in lawful
currency of the United States of America.
"Effective Date" shall mean the date on which the
conditions set forth in subsections 4.1(a) through (h) have
been satisfied.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may, from time to time, be
supplemented or amended.
"ESOP" shall mean the Wisconsin Gas Company
Employees' Savings Plan.
"ESOP Documents" shall mean, collectively, the
Wisconsin Gas Company Employees' Savings Plan as amended and
restated effective August 1, 1995 and the Wisconsin Gas
Company Employees' Savings Plans Trust Agreement between
Wisconsin Gas and the Trustee, as amended and restated, dated
August 1, 1995.
"ESOP Loan" shall mean the loan made by the Bank to
the Trust pursuant to Section 2.1 of this Agreement and
evidenced by the ESOP Note.
"ESOP Note" shall mean the promissory note of the
Trust payable to the order of the Bank in the form of Exhibit
A attached hereto.
"Eurocurrency Liabilities" has the meaning assigned
to that term in Regulation D of the Board, as in the effect
from time to time.
"Eurodollar Portion" means that part of the ESOP
Loan bearing interest at the Adjusted Eurodollar Rate for the
same Interest Period.
"Eurodollar Rate" means, for each Interest Period,
(a) the LIBOR Index Rate for such Interest Period, if such
rate is available, and (b) if the LIBOR Index Rate cannot be
determined, the arithmetic average of the rates of interest
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) at which deposits in U.S. Dollars in
immediately available funds are offered to the Bank at 11:00
a.m. (London, England time) two (2) Business Days before the
beginning of such Interest Period by three (3) or more major
banks in the interbank eurodollar market selected by the Bank
for a period equal to such Interest Period and in an amount
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equal or comparable to the applicable Eurodollar Portion scheduled
to be outstanding from the Bank during such Interest Period.
"LIBOR Index Rate" means, for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a period equal to such Interest Period, which appears
on the Telerate Page 3750 as of 11:00 a.m. (London, England time)
on the day two (2) Business Days before the commencement of such
Interest Period. "Telerate Page 3750" means the display designated
as "Page 3750" on the Telerate Service (or such other page as may
replace Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits). Each
determination of the Eurodollar Rate made by the Bank shall be
conclusive and binding absent manifest error.
"Eurodollar Rate Reserve Percentage" means, for
any Interest Period, the maximum rate of all reserve
requirements (including, without limitation, any marginal,
emergency, supplemental or other special reserves) imposed by
the Board under Regulation D on Eurocurrency Liabilities for
the applicable Interest Period as of the first day of such
Interest Period, but subject to any amendments to such
reserve requirement by such Board, and taking into account
any transitional adjustments thereto becoming effective
during such Interest Period. For purposes of this
definition, Eurodollar Portions shall be deemed to be
Eurocurrency Liabilities as defined in Regulation D without
benefit of or credit for prorations, exemptions or offsets
under Regulation D.
"Event of Default" shall mean any of the events
specified in Section 6.1 hereof, provided that any
requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Fixed Rate Portions" means and includes Eurodollar
Portions and CD Portions, unless the context in which such
term is used shall otherwise require.
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from
time to time.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof,
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
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government and any corporation or other entity owned or controlled
(through stock or capital ownership or otherwise) by any of the
foregoing.
"Guaranty" shall mean that certain Guaranty dated
as of the date hereof executed by the Company for the benefit
of the Bank, substantially in the form of Exhibit B attached
hereto.
"Interest Period" means, with respect to (a) any
Eurodollar Portion, the period commencing on, as the case may
be, the creation, continuation or conversion date with
respect to such Eurodollar Portion and ending 1, 2, 3 or 6
months thereafter as selected by the Trust in its notice as
provided herein and (b) any CD Portion, the period commencing
on, as the case may be, the creation, continuation or
conversion date with respect to such CD Portion and ending
30, 60, 90 or 180 days thereafter as selected by the Trust in
its notice as provided herein; provided that all of the
foregoing provisions relating to Interest Periods are subject
to the following:
(i) if any Interest Period would otherwise
end on a day which is not a Business Day, that Interest
Period shall be extended to the next succeeding Business
Day, unless in the case of an Interest Period for an
Eurodollar Portion the result of such extension would be
to carry such Interest Period into another calendar
month in which event such Interest Period shall end on
the immediately preceding Business Day;
(ii) no Interest Period may extend beyond the
final maturity date of the ESOP Note;
(iii) the interest rate to be applicable
to each Fixed Rate Portion for each Interest Period
shall apply from and including the first day of such
Interest Period to but excluding the last day thereof;
and
(iv) no Interest Period may be selected if
after giving effect thereto the Trust will be unable to
make a principal payment scheduled to be made during
such Interest Period without paying part of such Fixed
Rate Portion on a date other than the last day of the
Interest Period applicable thereto.
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For purposes of determining an Interest Period, a month means
a period starting on one day in a calendar month and ending a
numerically corresponding day in the next calendar month, provided,
however, if an Interest Period begins on the last day of a month
or if there is no numerically corresponding day in the month in
which an Interest Period is to end, then such Interest Period shall
end on the last Business Day of such month.
"Liabilities" shall mean, as to any Person, at any
date, all items which would, in conformity with GAAP, be
classified as liabilities on a consolidated balance sheet of
such Person at such time.
"Loan Documents" shall mean this Agreement, the
Guaranty, the ESOP Note and any schedule or exhibit thereto;
one of the Loan Documents shall be referred to herein as a
"Loan Document."
"ABN AMRO Rate" means for any day the greater of:
(i) the rate of interest announced by ABN
AMRO Bank N.V. from time to time as its prime rate, or
equivalent, for U.S. Dollar loans as in effect on such
day, with any change in the ABN AMRO Rate resulting from
a change in said prime rate to be effective as of the
date of the relevant change in said prime rate; and
(ii) the sum of (x) the rate determined by the
Bank to be the prevailing rate per annum (rounded
upwards, if necessary, to the nearest one hundred-
thousandth of a percentage point) at approximately 10:00
a.m. (New York time) (or as soon thereafter as is
practicable) on such day (or, if such day is not a
Business Day, on the immediately preceding Business Day)
for the purchase at face value of overnight Federal
funds in an amount comparable to the principal amount
owed to ABN AMRO Bank N.V. for which such rate is being
determined, plus (y) 1/2 of 1% (0.50%).
"Month" shall mean any calendar month.
"Person" shall mean an individual, partnership,
joint venture, corporation, business trust, joint stock
company, trust, unincorporated organization, Governmental
Authority or other entity of whatever nature.
"Prime Rate Portion" means that part of the ESOP
Loan bearing interest at the ABN AMRO Rate.
"Quarter" shall mean any period of three (3)
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calendar months ending on the last day of February, May, August and
November.
"Stock Purchase Agreement" shall mean that certain
Stock Purchase Agreement dated as of November 4, 1991 by and
between the Company and the Trust pursuant to which the
Company agrees to sell, and the Trust agrees to purchase, the
WICOR Stock.
"Trust Agreement" shall mean the Wisconsin Gas
Company Employees' Savings Plus Trust, as amended and
restated, dated August 1, 1995, between Wisconsin Gas and the
Trustee, as amended from time to time.
"Trustee" shall mean Marshall & Ilsley Trust
Company as trustee of the ESOP, or any Person or Persons who
are so designated in accordance with the terms of the ESOP.
"Wisconsin Gas" shall mean Wisconsin Gas Company,
a Wisconsin corporation.
"WICOR Stock" shall mean those shares of the $1.00
par value common stock of WICOR purchased by the Trust
pursuant to the Stock Purchase Agreement on November 4, 1991.
1.2 Other Definitional Provisions.
(a) As used herein and in the Loan Documents, and
any certificate or other document made or delivered pursuant
hereto, accounting terms relating to the Trust not defined in
subsection 1.1 hereof, and accounting terms partly defined in
subsection 1.1 hereof to the extent not defined, shall have
the respective meanings given to them under GAAP.
(b) The words "hereof," "herein" and "hereunder,"
and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement, and section, subsection,
paragraph, clause, schedule and exhibit references are to
this Agreement unless otherwise specified.
SECTION 2. AMOUNT AND TERMS OF LOAN
2.1 ESOP Loan. Subject to the terms and conditions
hereof, the Bank agrees to lend to the Trust, on the Effective
Date, Five Million Eleven Thousand Two Hundred Forty-Eight Dollars
($5,011,248.00), which amount shall be payable in twenty-seven
consecutive principal installments, consisting of: sixteen
Quarterly principal installments of Two Hundred Thirty-Five
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Thousand Dollars ($235,000.00) each on the last Business Day of
February, May and August of each year commencing on May 31, 1996;
five principal installments of One Hundred Fifty-Seven Thousand
Dollars ($157,000.00) each payable on the last Business Day of
November of each year, commencing November 29, 1996; five
principal installments of Seventy-Eight Thousand Dollars
($78,000.00) each payable on the last Business Day of January of
each year commencing January 31, 1997; and, a final payment in the
amount of the outstanding principal balance of the ESOP Loan on
August 31, 2001. Any amounts paid or prepaid with respect to the
ESOP Loan may not be reborrowed.
2.2 ESOP Note. The ESOP Loan made by the Bank pursuant
hereto shall be evidenced by the ESOP Note payable to the order of
the Bank in the original principal amount of Five Million Eleven
Thousand Two Hundred Forty-Eight Dollars ($5,011,248.00). The Bank
is hereby authorized to record the date and amount of each payment
of principal and/or interest made under the ESOP Note, either on
the schedule annexed to and constituting a part of the ESOP Note
or otherwise on the Bank's books and records and any such
recordation shall constitute PRIMA FACIE evidence of the accuracy
of the information so recorded. The ESOP Note shall (a) be dated
the Effective Date, (b) be stated to mature on August 31, 2001 and
be payable as provided in subsection 2.1 hereof, and (c) bear
interest for the period from and including the Effective Date until
the ESOP Note is paid in full on the unpaid principal amount
thereof from time to time outstanding at the applicable interest
rate per annum determined as provided in subsection 2.4. Interest
on the ESOP Note shall be payable as specified in subsection 2.4.
2.3 Voluntary Prepayments. The Trust shall have the
privilege of prepaying the ESOP Loan in whole or in part at any
time upon prior notice to the Bank by paying to the Bank the
principal amount to be prepaid and accrued interest thereon to the
date of prepayment and any amounts due the Bank under Section 2.7
hereof. Unless the Trust otherwise directs, principal payments
shall be first applied to the Prime Rate Portion until payment in
full thereof, with any balance applied to the Fixed Rate Portions
in the order in which their Interest Periods expire.
2.4 Interest Rate Options. (a) Subject to all of the
terms and conditions of this Section, portions of the principal
indebtedness evidenced by the ESOP Note (all of the indebtedness
evidenced by the ESOP Note bearing interest at the same rate for
the same period of time being hereinafter referred to as a
"Portion") may, at the option of the Trust, bear interest with
reference to the ABN AMRO Rate or with reference to an Adjusted
Eurodollar Rate or with reference to an Adjusted CD Rate. Portions
may be converted from time to time from one basis to another. All
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of the indebtedness evidenced by the ESOP Note which is not part
of a Fixed Rate Portion shall constitute a single Prime Rate
Portion. Anything contained herein to the contrary
notwithstanding, the obligation of the Bank to create, continue or
effect by conversion any Fixed Rate Portion shall be conditioned
upon the fact that at the time no Default or Event of Default shall
have occurred and be continuing. The Trust hereby promises to pay
interest on each Portion at the rates and times specified in this
Section 2.4.
(b) Prime Rate Portion. The Prime Rate Portion
shall bear interest at the rate per annum equal to the ABN
AMRO Rate as in effect from time to time, provided that if
the Prime Rate Portion or any part thereof is not paid when
due (whether by lapse of time, acceleration or otherwise)
such Portion shall bear interest, whether before or after
judgment, until payment in full thereof at the rate per annum
determined by adding 2% to the interest rate which would
otherwise be applicable thereto from time to time. Interest
on the Prime Rate Portion shall be payable quarterly in
arrears on the last Business Day of each February, May,
August and November in each year (commencing May 31, 1996)
and at maturity of the ESOP Note and interest after maturity
(whether by lapse of time, acceleration or otherwise) shall
be due and payable upon demand.
(c) Eurodollar Portions. Each Eurodollar Portion
shall bear interest for each Interest Period selected
therefor at a rate per annum equal to the Adjusted Eurodollar
Rate for such Interest Period, provided that if any
Eurodollar Portion is not paid when due (whether by lapse of
time, acceleration or otherwise) such Portion shall bear
interest, whether before or after judgment, until payment in
full thereof through the end of the Interest Period then
applicable thereto at the rate per annum determined by adding
2% to the interest rate which would otherwise be applicable
thereto, and effective at the end of such Interest Period
such Eurodollar Portion shall automatically be converted into
and added to the Prime Rate Portion and shall thereafter bear
interest at the interest rate applicable to the Prime Rate
Portion after default. Interest on each Eurodollar Portion
shall be due and payable on the last day of each Interest
Period applicable thereto and, with respect to any Interest
Period applicable to an Eurodollar Portion in excess of 3
months, on the date occurring every 3 months after the date
such Interest Period began and at the end of such Interest
Period, and interest after maturity (whether by lapse of
time, acceleration or otherwise) shall be due and payable
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upon demand. The Trust, or its designee appointed pursuant to
subsection (f) below, shall notify the Bank on or before 11:00 a.m.
(Chicago time) on the third Business Day preceding the end of an
Interest Period applicable to an Eurodollar Portion whether such
Eurodollar Portion is to continue as an Eurodollar Portion, in
which event the Trust, or its designee appointed pursuant to
subsection (f) below, shall notify the Bank of the new Interest
Period selected therefor, and in the event the Trust or its
designee shall fail to so notify the Bank, such Eurodollar Portion
shall automatically be converted into and added to the Prime Rate
Portion as of and on the last day of such Interest Period.
(d) CD Portions. Each CD Portion shall bear
interest for each Interest Period selected therefor at a rate
per annum equal to the Adjusted CD Rate for such Interest
Period, provided that if any CD Portion is not paid when due
(whether by lapse of time, acceleration or otherwise) such
Portion shall bear interest, whether before or after
judgment, until payment in full thereof through the end of
the Interest Period then applicable thereto at the rate per
annum determined by adding 2% to the interest rate which
would otherwise be applicable thereto, and effective at the
end of such Interest Period such CD Portion shall
automatically be converted into and added to the Prime Rate
Portion and shall thereafter bear interest at the interest
rate applicable to the Prime Rate Portion after default.
Interest on each CD Portion shall be due and payable on the
last day of each Interest Period applicable thereto and, with
respect to any Interest Period applicable to a CD Portion in
excess of 90 days, on the date occurring every 90 days after
the date such Interest Period began and at the end of such
Interest Period , and interest after maturity (whether by
lapse of time, acceleration or otherwise) shall be due and
payable upon demand. The Trust, or its designee appointed
pursuant to subsection (f) below, shall notify the Bank on or
before 11:00 a.m. (Chicago time) on the Business Day
preceding the end of an Interest Period applicable to a CD
Portion whether such CD Portion is to continue as a CD
Portion, in which event the Trust, or its designee appointed
pursuant to subsection (f) below, shall notify the Bank of
the new Interest Period selected therefor, and in the event
the Trust or its designee shall fail to so notify the Bank,
such CD Portion shall automatically be converted into and
added to the Prime Rate Portion as of and on the last day of
such Interest Period.
(e) Minimum Amounts. Each Fixed Rate Portion
shall be in a minimum amount of Ten Thousand Dollars
($10,000.00).
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(f) Manner of Rate Selection. The Trust shall
notify the Bank by (i) 11:00 a.m. (Chicago time) at least
three (3) Business Days prior to the date upon which the
Trust requests that any Eurodollar Portion be created or that
any part of the Prime Rate Portion or any part of a CD
Portion be converted into an Eurodollar portion and (ii)
11:00 a.m. (Chicago time) at least one (1) Business Day prior
to the date upon which the Trust requests that any CD Portion
be created or that any part of the Prime Rate Portion or any
part of an Eurodollar Portion be converted into a CD Portion
(each such notice to specify in each instance the amount
thereof and the Interest Period selected therefor). If any
request is made to convert a Fixed Rate Portion into another
type of Portion available hereunder, such conversion shall
only be made so as to become effective as of the last day of
the Interest Period applicable thereto. All requests for the
creation, continuance and conversion of Portions under this
Agreement shall be irrevocable. Such requests may be written
or oral and the Bank is hereby authorized to honor telephonic
requests for creations, continuances and conversions received
by it from any person the Bank in good faith believes to be
an authorized representative of the Trust without the need of
independent investigation. Until the Trust provides the Bank
with written notice to the contrary and the Bank has had a
reasonable opportunity to act thereon, the Trust hereby
authorizes Wisconsin Gas Company to communicate to the Bank
the interest rate selections to be made from time to time
under this Agreement, and the Trust authorizes the Bank to
honor all directions of Wisconsin Gas Company or any other
person designated pursuant to this sentence in connection
with the selection of interest rates under this Agreement
until such time as the Bank receives contrary written notice
and has had a reasonable opportunity to act thereon. Until
the Bank receives written notice from the Trust to the
contrary, it shall be entitled to assume the foregoing power
continues in full force and effect.
2.5. Change of Law. Notwithstanding any other provisions
of this Agreement or the ESOP Note, if at any time the Bank shall
determine in good faith that any change in applicable laws,
treaties or regulations or in the interpretation thereof makes it
unlawful for the Bank to create or continue to maintain any Fixed
Rate Portion, it shall promptly so notify the Trust and the
obligation of the Bank to create, continue or maintain any such
Fixed Rate Portion under this Agreement shall terminate until it
is no longer unlawful for the Bank to create, continue or maintain
such Fixed Rate Portion. The Trust, on demand, shall, if the
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continued maintenance of any such Fixed Rate Portion is unlawful,
thereupon prepay the outstanding principal amount of the affected
Fixed Rate Portion, together with all interest accrued thereon and
all other amounts payable to the Bank with respect thereto under
this Agreement; provided, however, that the Trust may elect to
convert the principal amount of the affected Portion into another
type of Portion available hereunder, subject to the terms and
conditions of this Agreement.
2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted Eurodollar Rate or Adjusted CD Rate. Notwithstanding any
other provision of this Agreement or the ESOP Note, if prior to the
commencement of any Interest Period, the Bank shall determine in
good faith that deposits in the amount of any Eurodollar Portion
or CD Portion scheduled to be outstanding during such Interest
Period are not readily available to the Bank in the relevant market
or, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Adjusted Eurodollar Rate or Adjusted CD Rate, then the Bank shall
promptly give notice thereof to the Trust and the obligations of
the Bank to create, continue or effect by conversion any such Fixed
Rate Portion in such amount and for such Interest Period shall
terminate until deposits in such amount and for the Interest Period
selected by the Trust shall again be readily available in the
relevant market and adequate and reasonable means exist for
ascertaining the Adjusted Eurodollar Rate or Adjusted CD Rate, as
the case may be.
2.7. Funding Indemnity. In the event the Bank shall
incur any loss, cost or expense (including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired or contracted to
be acquired by the Bank to fund or maintain any Fixed Rate Portion
or the relending or reinvesting of such deposits or other funds or
amounts paid or prepaid to the Bank) as a result of:
(i) any payment of a Fixed Rate Portion on a date
other than the last day of the then applicable Interest
Period for any reason, whether before or after default,
and whether or not such payment is required by any
provisions of this Agreement; or
(ii) any failure by the Trust to create, continue
or effect by conversion a Fixed Rate Portion on the date
specified in a notice given pursuant to this Agreement;
then upon the demand of the Bank, the Trust shall pay to the Bank
such amount as will reimburse the Bank for such loss, cost or
expense. If the Bank requests such a reimbursement, it shall
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provide to the Trust a certificate setting forth the computation
of the loss, cost or expense giving rise to the request for
reimbursement in reasonable detail and such certificate shall be
conclusive if reasonably determined.
2.8. Lending Branch. The Bank may, at its option, elect
to make, fund or maintain Portions of the ESOP Loan hereunder at
such of its branches or offices as the Bank may from time to time
elect. To the extent reasonably possible, the Bank shall designate
an alternate branch or funding office with respect to the Fixed
Rate Portions to reduce any liability of the Trust to the Bank
under Section 2.12 hereof or to avoid the unavailability of an
interest rate option under Section 2.6 hereof, so long as such
designation is not otherwise disadvantageous to the Bank.
2.9. Discretion of Bank as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary,
the Bank shall be entitled to fund and maintain its funding of all
or any part of the ESOP Note in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if the Bank had actually
funded and maintained each Fixed Rate Portion during each Interest
Period applicable thereto through the purchase of deposits in the
relevant market in the amount of such Fixed Rate Portion, having
a maturity corresponding to such Interest Period, and bearing an
interest rate equal to the Eurodollar Rate or CD Rate, as the case
may be, for such Interest Period.
2.10. Computation of Interest Payments. All interest
on the ESOP Loan shall be computed on the basis of a year of 360
days for the actual number of days elapsed, except that interest
on the ESOP Loan which bears interest at the ABN AMRO Rate shall
be computed on the basis of a year of 365 or 366 days, as the case
may be, for the actual number of days elapsed. Any change in the
interest rate on the ESOP Note resulting from a change in the ABN
AMRO Rate, if applicable, shall be effective as of the opening of
business on the day on which such change in the ABN AMRO Rate shall
become effective. If any payment to be made hereunder or on the
ESOP Note shall be stated to be due on a day which is not a
Business Day, such payment may be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of interest on the ESOP Loan unless in the case of an
Eurodollar Portion such payment would fall into another calendar
month in which case such payment shall be made on the immediately
preceding Business Day. All payments (including prepayments) by
the Trust on account of principal, interest and fees, shall be made
without set-off or counterclaim and without any withholding for any
present or future taxes, duties, levies or charges to the Bank in
lawful money of the United States of America and in immediately
17
available funds by wire transfer of funds as follows (or by such
other means as the Bank informs the Trust by prior written notice):
Bank Name: ABN AMRO Bank N.V., New York, N.Y.
ABA #026009580
F/O ABN AMRO Bank N.V. - Chicago Branch
ACCT No. 651-0-010111-42
2.11. Additional Interest on Loan Bearing Adjusted
Eurodollar Rate. The Trust shall pay to the Bank, so long as the
Bank shall be required under regulations of the Board to maintain
reserves with respect to Liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the
unpaid principal amount of the ESOP Loan in any Interest Period
during which the ESOP Loan bears interest at the Adjusted
Eurodollar Rate, at an interest rate per annum equal at all times
to the remainder obtained by subtracting (i) the Adjusted
Eurodollar Rate for such Interest Period from (ii) the rate
obtained by dividing such Adjusted Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period, payable on each date on which interest is payable
with respect to such Interest Period. Such additional interest
shall be determined by the Bank and notice thereof shall be given
to the Trust and Wisconsin Gas (or such other Person designated as
the Trust's designee). If requested by the Trust or Wisconsin Gas,
the Bank shall provide a brief summary of the manner in which such
additional interest was determined, provided that the failure to
deliver such summary or, absent manifest error, the contents of
such summary shall not affect the obligation of the Trust to pay
such additional interest.
2.12. Increased Costs.
(a) If, due to either (i) the introduction of or
any change (other than any change by way of imposition or
increase of reserve requirements, in cases where the ESOP
Loan is bearing interest at the Adjusted CD Rate, included in
the Adjusted CD Rate Reserve Percentage or, in cases where
the ESOP Loan is bearing interest at the Adjusted Eurodollar
Rate, included in the Eurodollar Rate Reserve Percentage) in
or in the interpretation of any law or regulation, or (ii)
the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having
the force of law), there shall be any increase in the cost to
the Bank of maintaining the ESOP Loan at the Adjusted CD Rate
or the Adjusted Eurodollar Rate, then the Trust shall from
time to time, upon demand by the Bank pay to the Bank
additional amounts sufficient to compensate the Bank for such
increased cost. The Bank agrees to notify the Trust and
18
Wisconsin Gas (or such other Person designated as the Trust's
designee) of any such increased costs as soon as reasonably
practicable after determining that such increased cost is
applicable hereunder. A certificate as to the amount of such
increased cost, submitted to the Trust and Wisconsin Gas (or such
other Person designated as the Trust's designee) by the Bank, shall
be conclusive and binding for all purposes, absent manifest error.
If requested by the Trust or Wisconsin Gas (or such other Person
designated as the Trust's designee), the Bank shall provide a brief
summary of the manner in which such increased cost was determined,
provided that the failure to deliver such summary or, absent
manifest error, the contents of such summary shall not affect the
obligation of the Trust to pay such increased cost.
(b) If the Bank determines that compliance with
any law or regulation or any guideline or request from any
central bank or other Governmental Authority (whether or not
having the force of law) affects or would affect the amount
of capital required or expected to be maintained by the Bank
or any corporation controlling the Bank and that the amount
of such capital is increased by or based upon the existence
of the Bank's commitment to lend hereunder and other
commitments of this type, then, upon demand by the Bank, the
Trust shall immediately pay to the Bank, from time to time as
specified by the Bank, additional amounts sufficient to
compensate the Bank or such corporation in the light of such
circumstances, to the extent that the Bank reasonably
determines such increase in capital to be allocable to the
existence of the Bank's commitment hereunder. The Bank
agrees to notify the Trust and Wisconsin Gas (or such other
Person designated as the Trust's designee) of any such
additional amount as soon as reasonably practicable after the
Bank makes such determination. A certificate as to such
amounts submitted to the Trust and Wisconsin Gas by the Bank
shall be conclusive and binding for all purposes, absent
manifest error. If requested by the Trust or Wisconsin Gas
(or such other Person designated as the Trust's designee),
the Bank requesting such additional amount shall provide a
brief summary of the manner in which such additional amount
was determined, provided that the failure to deliver such
summary or, absent manifest error, the contents of such
summary shall not affect the obligation of the Trust to pay
such additional amount.
(c) The provisions contained in this Section 2.12
shall survive for a period of 90 days after the repayment of
the ESOP Loan.
2.13. Purpose. The proceeds of the ESOP Loan shall
19
be used by the Trust exclusively to repay in full, on the Effective
Date, all remaining principal and interest outstanding under a
current loan from M&I Marshall & Ilsley Bank, Milwaukee, Wisconsin.
The proceeds of such M&I Marshall & Ilsley Bank loan (entered into
on November 4, 1991) were used exclusively by the Trust to acquire
WICOR Stock pursuant to the Stock Purchase Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The following representations and warranties are made to
the Bank:
3.1. Organization. The Trust and the Company represent
and warrant that the Trust (i) is a validly created and existing
trust established pursuant to the Trust Agreement; (ii) is the
Trust established under the ESOP; and (iii) has all requisite power
to own its property and conduct its affairs as now conducted and
as presently contemplated. The Trust Agreement is valid, binding
and enforceable in accordance with its terms.
3.2. ERISA. The Company represents and warrants that the
Trust meets the requirements for qualification (and is qualified)
as a trust forming a part of a stock bonus plan under Section
401(a) of the Code and for tax exemption under Section 501(a) of
the Code. The ESOP of which the Trust is a part includes an
employee stock ownership plan within the meaning of Section 407(d)
(6) of ERISA and Section 4975(e) (7) of the Code. The acquisition
of the WICOR Stock by the Trust, the execution, delivery and
performance of this Agreement by the parties hereto and the
transactions contemplated by this Agreement will not constitute a
violation of, or give rise to any liability under, Title I of ERISA
or Section 4975 of the Code.
3.3. Authorization. The Company represents and warrants
that the execution, delivery and performance of this Agreement and
the ESOP Note and the transactions contemplated hereby and thereby,
the acquisition and continued holding of WICOR Stock by the ESOP
as contemplated hereby and the administration of the Trust pursuant
to the terms of the Trust Agreement and the ESOP (i) are within the
powers of the Trust; (ii) have been duly authorized by the Boards
of Directors of Wisconsin Gas and of the Company and by all other
necessary actions; (iii) do not and will not conflict with,
contravene or violate any provision of, or result in a breach of
or default under, or require the waiver (not already obtained) of
any provision of or the consent (not already given) of any Person
under the terms of, the Trust Agreement; and (iv) will not violate,
conflict with, or constitute a default under any law, regulation,
order (including, without limitation, the Securities Act of 1933,
as amended, the securities laws of the State of Wisconsin, Sections
20
404, 406 and 407 of ERISA, Section 4975 of the Code, and 26 C.F.R.
Section 54.4975-7(b)) or any other requirement of any court,
tribunal, arbitrator, or Governmental Authority. This Agreement
and the ESOP Note constitute valid and legally binding obligations
of the Trust, and are enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights.
3.4. Use of Proceeds; Margin Securities. The Company
represents and warrants that the Trust is not engaged principally,
or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulations G, U, or X of the Board), and,
except as set forth in Section 2.8, above, no part of the proceeds
of the ESOP Loan will be used to purchase or carry any such margin
stock or to extend credit to others for the purpose of purchasing
or carrying such margin stock. The Company represents and warrants
that neither the Trust nor any person or entity acting on its
behalf has taken or will take any action which might cause this
Agreement or the ESOP Note to violate any of said Regulations G,
U, or X, or any other regulations of the Board or to violate the
Securities Exchange Act of 1934, in each as now in effect or as the
same may hereafter be in effect.
3.5. Authority of Trustee. The Company represents and
warrants that the Trustee is the duly authorized representative of
the Trust. The execution, delivery and performance by the Trust
of this Agreement, the ESOP Note and any other Loan Document to
which the Trust is (or will be) a party have been duly authorized,
and this Agreement and the ESOP Note and the other Loan Documents,
if any, to which the Trust is a party have been validly executed
and delivered by the Trust.
SECTION 4. CONDITIONS PRECEDENT
4.1. Conditions to ESOP Loan. This Agreement shall
become effective upon satisfaction of the conditions set forth in
the following paragraphs:
(a) The Bank shall have received this Agreement,
together with all exhibits and schedules hereto, duly
executed and delivered by the Trust, the Bank and the
Company.
(b) The Bank shall have received the ESOP Note
payable to the order of the Bank, conforming to the
requirements hereof and duly executed and delivered by the
Trust.
21
(c) The Bank shall have received the favorable
written opinion of counsel to the Company and the Trust, in
the forms attached hereto as Exhibit C.
(d) Each of the representations and warranties
made by the Company or the Trust in or pursuant to this
Agreement and in the other Loan Documents and of the Company
in the Guaranty shall be true and correct in all material
respects, there shall exist no Default or Event of Default
and no law or regulation shall prohibit, and no order,
judgment or decree of any Governmental Authority shall enjoin
or restrain, the ESOP Loan to be made hereunder.
(e) The Bank shall have received a certificate of
the Company as to: (i) the conditions described in
subsection 4.1(d) having been satisfied, (ii) the
authorization by the Trustee, Wisconsin Gas and the Company
of the execution and delivery of the Loan Documents and the
ESOP Documents and copies of the resolutions adopted by the
Board of Directors of Wisconsin Gas and the Company with
respect thereto, (iii) the names, incumbency and signatures
of the officers of Wisconsin Gas and the Company authorized
to execute the Loan Documents and the ESOP Documents and (iv)
the accuracy and currency of the Articles of Incorporation
and Bylaws of Wisconsin Gas and the Company and the ESOP
Documents attached thereto.
(f) The Bank shall have received certified copies
of the ESOP and the Trust Agreement.
(g) The Bank shall have received a certificate of
the Trust as to the names, incumbency and signatures of the
officers of the Trustee authorized to execute the Loan
Documents and the ESOP Documents.
(h) The Bank shall have received the Guaranty
executed by the Company.
SECTION 5. COVENANTS
During the term of this Agreement and so long as the ESOP
Note shall remain unpaid, the Company covenants and agrees for
itself and Wisconsin Gas, and the Trust agrees for itself, as
follows:
5.1. Existence and Tax Status. The Trust will do or
cause to be done all things necessary to preserve and keep in force
and effect its existence and will comply with all valid and
22
applicable federal and state statutes, governmental rules and
regulations and will continue to satisfy all requirements for (i)
qualification under Section 401(a) of the Code, (ii) tax-exempt
status under Section 501(a) of the Code, (iii) to the extent
applicable treatment as an employee stock ownership plan under
Section 4975(e) (7) of the Code, (iv) exemption of the ESOP Loan
under Section 4975(d) (3) of the Code from the prohibited
transaction tax imposed by Section 4975(a) of the Code, and (v)
exemption from the prohibited transaction provisions of the Code
and of ERISA.
5.2. Compliance. In all material respects, the Trust
will comply with the provisions of the ESOP and the Trust Agreement
and with all applicable laws, rules and regulations, including,
without limitation, ERISA and the Code and, in timely fashion, the
borrowings under this Agreement will be reported to the Internal
Revenue Service on Form 5500 (Annual Return - Report of Employee
Benefit Plans).
5.3. Negative Covenants. Until the ESOP Note is paid in
full and all obligations of the Trust hereunder performed, the
Company hereby covenants and agrees that unless the Bank otherwise
consents in advance in writing, Wisconsin Gas will not and will not
permit the Trust to:
(a) Fundamental Changes. (i) Amend the ESOP or
the Trust Agreement in any manner which would adversely
affect the Trust's ability to perform or comply with any of
the terms, conditions, or agreements or to perform any of the
transactions contemplated under this Agreement; or (ii)
terminate the ESOP.
(b) Other Agreements. Enter into any agreement or
undertaking containing any provision which would be violated
or breached by the Trust's performance of its obligations
under this Agreement.
5.4. Expenses. The Company agrees that Wisconsin Gas
will promptly pay all out-of-pocket expenses, including, but not
limited to, all legal fees and expenses, incurred by the Bank in
the preparation or review of the Loan Documents and the ESOP
Documents and the enforcement of the Bank's rights and remedies
under the Loan Documents and the ESOP Documents.
5.5. Use of Proceeds. The Trust shall use the proceeds
of the ESOP Loan only for the purpose set forth in Section 2.13
hereof.
SECTION 6. DEFAULTS
23
6.1. Events of Default. An Event of Default shall be
deemed to have occurred if:
(a) The Trust shall fail to pay any principal of,
or any interest on, the ESOP Note when the same becomes due
and payable; or
(b) Any representation or warranty made or deemed
made by the Company or the Trust in the Loan Documents or any
certificate, document, financial statement or other statement
furnished at any time under or in connection with the Loan
Documents, proves to have been incorrect in any material
respect on or as of the date made; or
(c) The Company or the Trust shall fail to perform
or observe any term, covenant or agreement contained in this
Agreement (other than obligations specifically set forth
elsewhere in this Section 6.1) on its part to be performed or
observed if the failure to perform or observe such other
term, covenant or agreement, if susceptible of remedy, shall
remain unremedied for 30 days after written notice thereof
shall have been given to the Company and the Trust by the
Bank; or
(d) The Trust shall generally not pay its debts as
such debts 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 any proceeding
shall be instituted by or against the Trust 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, custodian or other similar official for it or for
any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by
it), such proceeding shall remain undismissed or unstayed for
a period of 45 days, any of the actions sought in such
proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur or the
Trust shall consent to or acquiesce in any such proceeding;
or the Trust shall take any action to authorize any of the
actions set forth above in this subsection (d); or
24
(e) The Trust's or the Company's obligations under
this Agreement or the ESOP Note shall become unenforceable,
or the Trust or the Company or any court or governmental or
regulatory body having jurisdiction over the Trust, shall so
assert in writing; or
(f) If there shall occur any Default or Event of
Default under or any breach or violation of, or if the
Company shall fail to observe or perform any of the covenants
to be observed or performed by it under, the Guaranty or any
of the other Loan Documents, which Default, Event of Default,
breach or violation is not fully cured within the applicable
grace period therefor, if any.
6.2. Rights Upon Default. If an Event of Default
specified in subparagraph 6.1(d) shall occur, the ESOP Loan (with
accrued interest thereon) and all other amounts owing under this
Agreement shall immediately become due and payable. If any other
Event of Default shall occur and so long as it may continue, the
Bank may (i) by notice of default to the Trust and the Company,
declare the Bank's obligations hereunder terminated forthwith,
whereupon such obligations shall terminate, and/or (ii) by notice
of default to the Trust, declare the ESOP Loan and all amounts
owing hereunder to be due and payable forthwith, whereupon the same
shall become immediately due and payable. Except as expressly
provided above in this subsection, presentment, demand, protest or
further notice of any kind are hereby expressly waived. This
Section 6.2 shall be subject to the limitations imposed by Section
7.9.
SECTION 7. MISCELLANEOUS
7.1. Amendments and Waivers. The Bank, the Trust and the
Company may, from time to time, enter into written amendments,
supplements or modifications hereto for the purpose of adding
provisions to any Loan Document or for the purpose of changing in
any manner the rights of the Bank, of the Trust or of the Company
thereunder or hereunder, and the Bank may execute and deliver to
the Trust and the Company a written instrument waiving, on such
terms and conditions as the Bank may specify in such instrument,
any of the requirements of any Loan Document or any Default or
Event of Default and its consequences. In the case of any waiver,
the Trust, the Company and the Bank shall be restored to their
former position and rights under the Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and
not continuing. However, no waiver of a Default or Event of
Default shall extend to any subsequent or other Default or Event
of Default, or impair any right consequent thereon. No amendment,
25
supplement, modification, or waiver shall be effective except if
in writing and duly executed by the Bank and the Trust and the
Company.
7.2. Notices. Unless otherwise specified, all notices,
requests and demands to or upon the respective parties hereto shall
be deemed to be effective only if in writing or if given by
telecopy, or telex and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made, in the case of a
delivered notice, when delivered by hand, or, in the case of a
mailed notice, five (5) days after deposited in the mail, air
postage prepaid, or, in the case of telex notice, when sent, answer
back received, or, in the case of a telecopy notice, when
telecopied, addressed as follows or to such other address as may
be hereafter specified by the respective parties hereto and any
future holders of the ESOP Note:
26
The Trust: Marshall and Ilsley Trust Company
1000 North Water Street
Milwaukee, Wisconsin 53202
Attention: Michael J. Shlensky
Telecopy No.: (414) 287-7024
with a copy to: Wisconsin Gas Company
626 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Joseph P. Wenzler
Telecopy No.: (414) 291-7033
The Company: WICOR, Inc.
626 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Joseph P. Wenzler
Telecopy No.: (414) 291-7033
The Bank: With Respect to reports, notices of default,
and other credit matters
Name: Mark Lasek/Kevin McFadden
Address: ABN AMRO Bank N.V.
135 S. LaSalle Street
Suite 711
Chicago, IL 60674-9135
Telex No.: 6732700
Answerback: ABN AMRO CGO
Telephone No.: (312) 904-2074/2131
Fax No.: (312) 904-6217
With respect to interest rate selections and
other loan administration
Name: Loan Administration
Address: ABN AMRO Bank N.V.
135 S. LaSalle Street
Suite 425
Chicago, IL 60674-9135
Telex No.: 6732700
Answerback: ABN AMRO CGO
Telephone No.: (312) 904-2961
Fax No.: (312) 606-8435
provided that any notice, request or demand to or upon the Bank
pursuant to subsection 2.3 or 2.4 shall not be effective until
actually received by the Bank.
27
7.3. No Waiver; Cumulative Remedies. If the Bank fails
to exercise, or delays before exercising, any right, remedy, power
or privilege hereunder, such failure or delay shall not operate as
a waiver thereof. The single or partial exercise of any right,
remedy, power or privilege hereunder shall not preclude any other
or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges otherwise provided by law.
7.4. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any of the
Loan Documents, or any certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the ESOP Note.
7.5. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Trust, the Company,
the Bank, all future holders of the ESOP Note and their respective
successors and assigns, except that neither the Trust nor the
Company may assign or transfer any of their rights or obligations
under this Agreement without the prior written consent of the Bank.
7.6. Governing Law and Submission to Jurisdiction. The
Loan Documents and the rights and obligations of the parties
thereto shall be governed by, and construed and interpreted in
accordance with the laws of Illinois. Venue for the settlement of
disputes under this Agreement shall be in the courts of the State
of Illinois or in the United States District Court for the Northern
District of Illinois, each in Cook County, Illinois. The Trust and
the Company consent to the exercise of jurisdiction by these courts
and the vesting of venue therein.
7.7. Severability. Any provision of this Agreement which
is prohibited or unenforceable shall be ineffective to the extent
of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
7.8. Headings. Section, subsection and paragraph
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.
7.9. Special Limitations.
(a) Notwithstanding any other provision in this
Agreement or the ESOP Note, the obligations of the Trust and
the Company and the rights of the Bank under this Agreement
28
and the ESOP Note are subject to and limited by any limitations as
to recourse against the Trust, transfer of ESOP assets required to
qualify the ESOP Loan for an exemption from any prohibition
relating to transactions with the ESOP by a Disqualified Person or
otherwise, under Section 4975 of the Code or Section 406 and 408
of ERISA, or any similar or successor provision of applicable law,
but only to the extent, and for so long as, such prohibitions would
be applicable to the Bank and the ESOP Loan hereunder. The Trust
and the Company will, and will use reasonable efforts to cause the
ESOP and Wisconsin Gas to, comply with any reasonable request from
the Bank for assistance in establishing the inapplicability of such
a prohibition or the qualification for an exemption thereunder.
No such limitation or impairment shall in any way impair, diminish
or delay the performance of, any obligations of the Company under
any of the Loan Documents, or, upon a Default or Event of Default,
limit or impair the right of the Bank to accelerate as against, and
collect from, the Company, the entire indebtedness under the ESOP
Loan pursuant to the terms of the Guaranty.
(b) The Bank, the Company and the Trust
acknowledge and agree that the limitations referred to in
subsection 7.9(a) require, among other things, that the
rights, powers and remedies shall be limited by the following
requirements to the extent and so long as the same would be
applicable to the Bank and the ESOP Loan hereunder:
(i) That payments of principal and interest
(or any other sum due) with respect to the ESOP Loan
shall be made by the Trust only from: (A) cash
contributions made to the Trust under the ESOP by
Wisconsin Gas or any contributing employer to enable the
Trust to make such payments; (B) from any earnings
attributable to such contributions and any dividends
paid on the shares of WICOR Stock; and (C)
notwithstanding that the Trust has not granted to the
Bank a security interest in the WICOR Stock, to the
extent permitted by applicable law, the Bank shall have
recourse against the WICOR Stock (other than those
shares of WICOR Stock which have been allocated to
accounts of ESOP participants) and any dividends paid on
the shares of the WICOR Stock (other than those shares
of WICOR Stock which have been allocated to accounts of
ESOP participants) for the ESOP Loan and the Bank shall
have no recourse against the Trust for the ESOP Loan,
except to the extent of the WICOR Stock (other than
those shares of WICOR Stock which have been allocated to
accounts of ESOP participants) and such contributions,
earnings and dividends held by the Trust; and
29
(ii) That upon the occurrence of an Event of
Default, the value of Trust assets transferred in
satisfaction of the ESOP Loan must not exceed the amount
of default.
7.10. No Representation. The Company, Wisconsin Gas
and the Trust have independently, and with legal counsel and other
advisors of their choice, made to their satisfaction such
investigations, evaluations and determinations with regard to such
qualification and related issues as the Company, Wisconsin Gas, the
Trust and their counsel and other advisors have deemed necessary
and have done so taking into consideration the terms of this
Agreement and any proposal or commitment of the Bank pursuant to
which this Agreement has been entered into.
7.11. Trustee's Exculpation. This Agreement is
executed by the Trustee, not in its individual capacity, but solely
in its capacity as Trustee pursuant to the power and authority
conferred upon it under and by virtue of the terms and provisions
of the Trust Agreement, and the representations, warranties,
covenants, undertakings and agreements herein made and entered into
are made and entered into solely for the purpose of binding the
Trust. It is expressly agreed by the Bank, and by all Persons
claiming by, through or under the Bank, that no personal liability
is assumed by or shall at any time arise or be asserted or enforced
against the Trustee, in its individual capacity, or against any
beneficiary under the Trust Agreement, or any of its or their
respective officers, partners, employees, agents, personal
representatives, heirs, executors, administrators, successors or
assigns, on account of this Agreement or on account of the
representations, warranties, covenants, undertakings and agreements
herein contained, either express or implied, all such liability,
if any, being expressly waived and released by the Bank, and by all
Persons claiming by, through or under the Bank, and that recourse
hereunder shall be limited exclusively to the Trust and the trust
assets referred to in Section 7.9(b) above.
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.
MARSHALL & ILSLEY TRUST COMPANY,
AS TRUSTEE OF THE WISCONSIN GAS
COMPANY EMPLOYEES' SAVINGS PLANS
TRUST
30
By:
Title:
ABN AMRO BANK N. V., Chicago Branch
By: ABN AMRO North America, Inc. , as agent
By:
Title:
By:
Title:
WICOR, INC.
[ CORPORATE SEAL] By:
Title:
ATTEST:
By:
Title:
31
EXHIBIT A
LOAN AGREEMENT
PROMISSORY NOTE
$5,011,248.00 March 29, 1996
FOR VALUE RECEIVED, the undersigned Wisconsin Gas Company
Employees' Savings Plans Trust (the "Trust"), a trust legally
organized under the laws of the State of Wisconsin, promises to pay
to the order of ABN AMRO Bank N. V. (the "Bank") at its main office
in the City of Chicago, Illinois, the principal sum of Five Million
Eleven Thousand Two Hundred Forty-Eight Dollars ($5,011,248.00)
payable in twenty-seven (27) consecutive principal installments,
consisting of: sixteen Quarterly principal installments of Two
Hundred Thirty-Five Thousand Dollars ($235,000.00) each on the last
Business Day of February, May and August of each year commencing
May 31, 1996; five principal installments of One Hundred Fifty-
Seven Thousand Dollars ($157,000.00) each payable on the last
Business Day of November of each year, commencing November 29,
1996; five principal installments of Seventy-Eight Thousand Dollars
($78,000.00) each payable on the last Business Day of January of
each year commencing January 31, 1997; and, a final installment of
principal in the amount of the remaining principal balance
outstanding on August 31, 2001. Capitalized terms used herein and
not otherwise defined shall have the meanings given to such terms
in that certain Loan Agreement (the "Agreement") dated as of March
29, 1996 by and among the Trust, WICOR, Inc. (the "Company") and
the Bank.
The unpaid principal balance hereof shall bear interest
as provided in Section 2 of the Agreement.
The Trust may at any time and from time to time without
premium or penalty (except as otherwise provided in Section 2.3 of
the Agreement), make prepayments in whole or in part of the
principal amount hereof. All prepayments shall be applied to the
last maturing principal installments in the inverse order of their
maturities and shall be accompanied by interest accrued on the
amount prepaid through the prepayment date.
No person entitled to payment hereunder shall have any
right to any assets of the Trust other than as set forth in Section
7.9 of the Agreement.
32
This Note is evidence of ESOP Loan made pursuant to
Section 2.1 of the Agreement and the proceeds of such loan shall
be used in accordance with Section 2.13 thereof.
Anything herein to the contrary notwithstanding, this
Note is intended to be consistent and in conformity with all laws,
rules of law, and regulations relating to loans made to employee
stock ownership trusts (defined by Section 4975(e) (7) of the
Internal Revenue Code of 1986), including but not limited to
Sections 401, 409 and 4975 of the Internal Revenue Code of 1986 and
the regulations thereunder, and Sections 406, 407 and 408 of the
Employee Retirement Income Security Act of 1974 and the regulations
thereunder. To the extent that any provision of this Note shall
at any time be found inconsistent with any such laws, rules of law
or regulations, such inconsistent provisions shall be inapplicable
and such provisions found inapplicable shall be deemed amended,
revised, or removed, as reasonably required, in order to provide
conformity with the laws, rules of law, and regulations governing
loans to employee stock ownership trusts to purchase qualifying
employer securities.
This Note constitutes the ESOP Note issued pursuant to
the Agreement, to which Agreement reference is hereby made for
definitions of certain defined terms used herein and for a
statement of certain terms and conditions under which the loan
evidenced hereby was made and is to be repaid. If an Event of
Default shall occur, the entire unpaid principal balance of, and
all accrued interest on, this Note shall become automatically and
immediately due and payable or may be declared immediately due and
payable as provided in the Agreement.
The Trust hereby waives presentment, demand, notice,
protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this
Note. This Note shall be construed and enforced in accordance with
the laws of the State of Illinois.
MARSHALL & ILSLEY TRUST COMPANY,
as trustee for WISCONSIN GAS COMPANY
EMPLOYEES' SAVINGS PLANS TRUST
By:
Trustee
And:
Trustee