Exhibit 10.03
SUPPORT AGREEMENT BETWEEN
LG&E ENERGY CORP.
AND
LG&E CAPITAL CORP.
This Support Agreement, dated as of September __, 1997, is
between LG&E Energy Corp., a Kentucky corporation (together with
its successors and assigns and any resulting or surviving
corporation, "Energy Corp."), and LG&E Capital Corp., a Kentucky
corporation (together with its successors and assigns and any
resulting or surviving corporation, "LCC").
WHEREAS, Energy Corp. is the owner of 100% of the
outstanding capital stock of LCC;
WHEREAS, LCC intends from time to time to make borrowings
from Lenders (as hereinafter defined), issue debt securities to
Lenders, incur other obligations or liabilities to Lenders,
guarantee loans to its subsidiaries from Lenders and guarantee
other obligations of its subsidiaries to Lenders (such
borrowings, debt securities, guarantees and other obligations or
liabilities being hereinafter referred to as "Obligations");
WHEREAS, Energy Corp. and LCC desire to take certain actions
to enhance and maintain the financial condition of LCC as
hereinafter set forth in order to enable LCC and its subsidiaries
to incur indebtedness and other obligations on more advantageous
and reasonable terms; and
WHEREAS, the Lenders will rely upon this Support Agreement
("Agreement") in making loans or extending credit to, or
purchasing securities of, LCC and/or its subsidiaries.
NOW, THEREFORE, in consideration of the premises, and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the
terms defined):
"Required Lenders" means each Lender; provided that in
respect of any consent required under Section 2 of this
Agreement, in the event that any Lender is bound with one or more
other Lenders by an instrument, indenture, agreement or other
document pursuant to which the Obligation was issued, "Required
Lenders" in respect thereof means the requisite percentage of
such Lenders the consent of which is required therefor as set
forth in such instrument, indenture, agreement or other document
or, if not so specified, the requisite percentage of such Lenders
the consent of which is required pursuant to such instrument,
indenture, agreement or other document to authorize a similar
amendment in respect of such Obligation.
"Subsidiary" means for Energy Corp., any corporation,
partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of said
corporation, partnership or other entity (irrespective of whether
or not at the time securities or other ownership interests of any
other class or classes of such corporation, partnership or other
entity shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or
indirectly owned or controlled by Energy Corp. or one or more
Subsidiaries of Energy Corp. or by Energy Corp. and one or more
Subsidiaries of Energy Corp.
"Utility" means Louisville Gas and Electric Company, a
Kentucky corporation, together with its successors and assigns
and any resulting or surviving corporation.
2. Stock Ownership. While this Agreement remains in
effect, (i) Energy Corp. will own, directly or indirectly, not
less than 80% of the capital stock of LCC and (ii) Energy Corp.
will not, without the prior written consent of Required Lenders,
own less than 100% of the common stock of the Utility. Each
person, firm, corporation or other entity designated as a Lender
pursuant to Section 8 of this Agreement acknowledges and agrees
that, in consideration for it being designated as a Lender, it
will not (after consideration of those factors that it deems
relevant, including the manner in which the proceeds from any
such sale or transfer by Energy Corp. of the Utility's common
stock are to be used to satisfy Obligations, whether contingent
or otherwise, owed to the Lenders) unreasonably withhold its
consent to such sale or transfer.
3. Negative Pledge. During the term of this Agreement,
Energy Corp. will not create or suffer to exist any lien,
security interest or other charge or encumbrance, upon or with
respect to any common stock of the Utility from time to time
owned by Energy Corp. or any capital stock of LCC from time to
time owned by Energy Corp.
4. Net Worth. Energy Corp. agrees that it shall cause LCC
to have at all times a net worth (total assets less liabilities
less intangible assets, if any) of $25 million, as determined in
accordance with generally accepted accounting principles.
5. Liquidity Provision. If, during the term of this
Agreement, LCC is unable to make timely payment, when due, of
interest, principal or premium, if any, or other obligation on
any Obligation owing to any Lender by LCC, Energy Corp. promptly
shall provide LCC, at its request such funds (in the form of cash
or liquid assets in an amount sufficient to permit LCC to make
timely payment, when due, in respect of each such Obligation) as
equity. Any request for payment pursuant to this Section 5 shall
specifically identify the Obligation in respect of which LCC is
unable to make timely payment and with respect to which LCC seeks
funds. LCC, Energy Corp. and each Lender hereby acknowledge that
any funds provided by Energy Corp. pursuant hereto shall be used
solely to make payment with respect to such identified Obligation
and not for any other purposes. Without limiting any obligations
hereunder, in the event that a request is made with respect to
two or more identified Obligations and the funds provided by
Energy Corp. are not sufficient to pay the amounts owing on each
such identified Obligations, the funds provided by Energy Corp.
shall be applied pro rata (in proportion to the amounts then due
and owing on such Obligations) to such identified Obligations.
Each of the parties hereto acknowledges that Energy Corp.'s
obligations hereunder do not constitute a guarantee by Energy
Corp. of the Obligations of LCC. This Agreement shall continue
to be effective or be reinstated with respect to any payment of
an Obligation which is rescinded or must otherwise be returned
upon the insolvency, bankruptcy, reorganization, dissolution or
liquidation of LCC, all as though such payment had not been made.
6. Waivers. Energy Corp. hereby waives any failure or
delay on the part of LCC or any Lender in asserting or enforcing
any of its rights or in making any claims or demands hereunder.
LCC or any Lender may at any time, without Energy Corp.'s
consent, without notice to Energy Corp. and without affecting or
impairing LCC's or such Lender's rights, or impairing Energy
Corp.'s obligations hereunder, do any of the following with
respect to any Obligation: (a) make changes, modifications,
amendments or alterations, by operation of law or otherwise,
including without limitation, any increase in the principal
amount of such Obligation or the rate of interest payable thereon
or any change in the method of calculating the rate of interest
payable thereon, (b) grant renewals and extensions and extensions
of time, for payment or otherwise, (c) accept new or additional
documents, instruments or agreements relating to or in
substitution of said Obligation, or (d) otherwise handle the
enforcement of their respective rights and remedies in accordance
with their business judgment.
7. Amendment. The Agreement may be amended or terminated
at any time by written amendment or agreement signed by both
parties; provided, however, that (i) no amendment to this
Agreement which adversely affects the rights of LCC or any Lender
shall be effective as to any Lender until the earliest to occur
of (x) all Obligations owing to any Lender by LCC on the date of
such amendment shall be discharged and all irrevocable
commitments of any Lender in respect of Obligations shall have
terminated, or (y) such Lender shall consent in writing to such
amendment, provided that in the event that such Lender is bound
with one or more other Lenders by an instrument, indenture,
agreement or other document pursuant to which the Obligation was
issued, the requisite consent of the Lenders to an amendment to
this Agreement set forth in such instrument, indenture, agreement
or other document is obtained or, if not so specified, such
amendment shall have been consented to by the requisite Lenders
in respect of such Obligation as shall be authorized pursuant to
which instrument, indenture, agreement or other document to
authorize a similar amendment in respect of such Obligation and
(ii) no termination of this Agreement shall be effective as to
LCC or any Lender until such time as all Obligations owing to
such Lender by LCC on the date of such termination shall have
been discharged in full and all irrevocable commitments of such
Lender in respect of Obligations shall have terminated, unless
such Lender shall consent in writing to the contrary.
8. Rights of Lenders. LCC hereby assigns and pledges to
Lenders for the ratable benefit of each Lender, LCC's rights
under Sections 2, 3, 4, 5 and 6 of this Agreement, and, if LCC
fails or refuses to take timely action to enforce its rights
under Sections 2, 3, 4, 5 and 6 of this Agreement, any Lender may
enforce such rights on behalf of LCC directly against Energy
Corp. Energy Corp. hereby consents to such assignment and pledge
and enforcement by the Lenders. The term "Lender" as used in
this Agreement shall mean any person, firm, corporation or other
entity (i) to which LCC is indebted for money borrowed or to
which LCC otherwise owes any Obligations or which is acting as
trustee or authorized representative on behalf of such person,
firm, corporation or other entity and (ii) which Energy Corp. has
expressly designated in writing to LCC and to such Lender as
being a Lender for purposes of this Agreement and entitled to the
rights and privileges hereof. Any designation of any person,
firm, corporation or other entity as a Lender for purposes of
this Agreement may provide that such person, firm, corporation or
other entity shall be a Lender only as to a specific, identified
Obligation owing to such person, firm, corporation or other
entity by LCC or that such person, firm, corporation or other
entity shall be a Lender as to all Obligations at any time owing
to such Lender by LCC. LCC and Energy Corp. agree, for the
benefit of Lenders, to execute and deliver all further
instruments and documents, and take all further action that
Lenders may reasonably request in order to perfect and protect
any security interest purported to be granted hereby.
9. Notices. Any notice, instruction, request, consent,
demand or other communication required or contemplated by this
Agreement shall be in writing, shall be given or made by United
States first class mail, telex, facsimile transmission or hand
delivery addressed as follows:
If to Energy Corp.: LG&E Energy Corp.
220 W. Main Street (P.O. Box 32030)
Louisville, Kentucky 40232
Attention: Treasurer
If to LCC: LG&E Capital Corp.
220 W. Main Street (P.O. Box 32030)
Louisville, Kentucky 40232
Attention: Treasurer
10. Successors. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and is
also intended for the benefit of the Lenders, and,
notwithstanding that such Lenders are not parties hereto, each
Lender shall be entitled to the full benefits of this Agreement
and to enforce the covenants and agreements contained herein as
set forth in Section 8. This Agreement is not intended for the
benefit of any person other than Lenders, and shall not confer or
be deemed to confer upon any such person any benefits, rights or
remedies hereunder.
11. Governing Law. This Agreement shall be governed by the
laws of the Commonwealth of Kentucky.
LG&E ENERGY CORP.
By:
Charles A. Markel III
Title: Treasurer
LG&E CAPITAL CORP.
By:
Charles A. Markel III
Title: Treasurer