Exhibit 10-98.1
CENTRAL MAINE POWER COMPANY
83 Edison Drive
Augusta, Maine 04336
CREDIT AGREEMENT
Amendment No. 2
This Agreement dated as of December 15, 1998 is among Central Maine
Power Company, a Maine corporation (the "Company"), the Lenders party hereto and
BankBoston, N.A. (formerly known as The First National Bank of Boston), and The
Bank of New York, each as agent (together, the "Managing Agents"). The parties
agree as follows:
1. Reference to Credit Agreement; Background.
1.1. Reference to Credit Agreement; Definitions. Reference is made to
the Credit Agreement dated as of October 23, 1996 as amended by Amendment No. 1
thereof dated as of July 20, 1998 (the "Credit Agreement") among the Company,
the Lenders and the Managing Agents. The Credit Agreement, as amended by the
amendments set forth in Section 2 hereof, is referred to as the "Amended Credit
Agreement." Terms defined in the Amended Credit Agreement and not otherwise
defined herein are used herein with the meanings so defined.
1.2. Background. The Company has requested that the Credit Agreement be
amended to permit the sale of the Company's non-nuclear generating assets, to
permit the reorganization of the Company as a wholly-owned subsidiary of a
publicly-held utility holding company and to achieve other objectives of the
Company. The Lenders party hereto have agreed to such amendments on the
conditions set forth herein. The Company and all of the Lenders party hereto
acknowledge and agree that the Commitments of the Lenders to provide the 364-Day
Revolving Loan have expired.
2. Amendments to Credit Agreement. Subject to all of the terms and conditions
hereof and in reliance upon the representations and warranties set forth or
incorporated by reference in Section 3 hereof, the Credit Agreement is amended,
effective as of the date hereof (the "Amendment Closing Date") or as of such
other date as may be specified with respect to any particular amendment, as
follows:
2.1. Section 1 of the Credit Agreement is amended, effective as of the
Amendment Closing Date, by amending the introductory paragraph of Section 1.4 to
read in its entirety as follows:
1.4. "Applicable Margin" means for the Three-Year Revolving
Loan the greater of (x) on each day prior to March 1, 1999 .50% per
annum and on each day on and after March 1, 1999 .75% per annum and (y)
the percentage per annum in the following table set opposite the
applicable Rating Level:
2.2. Section 1 of the Credit Agreement is further amended, effective as
of September 1, 1998, by adding thereto a new Section 1.35A reading in its
entirety as follows:
1.35A. "Consolidated EBIT" means, for any period, the total of:
(a) Consolidated Net Income;
plus (b) all amounts deducted in computing such Consolidated
Net Income in respect of:
(i) interest on, and commitment fees with respect to,
Indebtedness (including payments in the nature of interest
under Capitalized Leases and Interest Rate Protection
Agreements),
(ii) taxes based upon or measured by net income, and
(iii) dividends on preferred stock.
2.3. Section 1.39 of the Credit Agreement is amended, effective as of
September 1, 1998, to read in its entirety as follows:
1.39. [Intentionally omitted.]
2.4. Section 1 of the Credit Agreement is further amended, effective as
of September 1, 1998, by adding thereto a new Section 1.46A reading in its
entirety as follows:
1.46A. "Distribution" means, with respect to the Company:
(a) the declaration or payment of any dividend or
distribution on or in respect of any shares of any class of
capital stock of or other equity interests in the Company;
(b) the purchase, redemption or other retirement of
any shares of any class of capital stock of or other equity
interest in the Company or of options, warrants or other
rights for the purchase of such shares, directly, indirectly
through a Subsidiary or otherwise;
(c) any other distribution on or in respect of any
shares of any class of capital stock of or equity or other
beneficial interest in the Company;
(d) any payment of principal or interest with respect
to, or any purchase, redemption or defeasance of any
Indebtedness of the Company which by its terms or the terms of
any agreement is subordinated to the payment of the Credit
Obligations; and
(e) any payment, loan or advance by the Company to,
or any other Investment by the Company in, the holder of any
shares of any class of capital stock of or equity interest in
the Company, or any Affiliate of such holder (including the
payment of management and transaction fees and expenses);
provided, however, that the term "Distribution" shall not include (i)
dividends payable in perpetual common stock of or other similar equity
interests in the Company or (ii) payments in the ordinary course of
business in respect of (A) reasonable compensation paid to employees,
officers and directors, (B) advances and reimbursements to employees
for travel expenses, drawing accounts and similar expenditures, or (C)
rent paid to, or accounts payable for services rendered or goods sold
by, non-Affiliates that own capital stock of or other equity interests
in the Company.
2.5. Section 1 of the Credit Agreement is further amended, effective as
of September 1, 1998, by adding thereto a new Section 1.46B reading in its
entirety as follows:
1.46B. "Distribution Plant" means, with respect to the
Company, the distribution assets of the Company as reported from time
to time by the Company to the Federal Energy Regulatory Commission on
F.E.R.C. Form 1.
2.6. Section 1.61 of the Credit Agreement is amended, effective as of
the Amendment Closing Date, to read in its entirety as follows:
1.61. "Facility Fee" means for the Three-Year Revolving Loan
the greater of (x) .25% per annum and (y) the percentage per annum in
the table below set opposite the applicable Rating Level, in either
case multiplied by the Maximum Amount of Three-Year Revolving Credit.
2.7. Section 1.72 of the Credit Agreement is amended, effective as of
September 1, 1998, to read in its entirety as follows:
1.72. "General and Refunding Mortgage Indenture" means the
General and Refunding Mortgage Indenture dated as of April 15, 1976
between the Company and The First National Bank of Boston, as trustee
(State Street Bank and Trust Company, successor trustee), as currently
in effect and as hereafter supplemented and amended in a manner
permitted under Section 6.2.4 and any additional or substitute mortgage
indenture permitted under Section 6.2.4.
2.8. Section 1 of the Credit Agreement is further amended, effective as
of September 1, 1998, by adding thereto a new Section 1.72A reading in its
entirety as follows:
1.72A. "Generating Assets Sale Date" means the date on which
the non-nuclear generating assets of the Company are sold as permitted
by Section 6.10.4.
2.9. Section 1 of the Credit Agreement is further amended, effective as
of the Amendment Closing Date, by adding thereto a new Section 1.92A reading in
its entirety as follows:
1.92A. "New 364-Day Revolving Credit Agreement" means the
Credit Agreement dated as of December 15, 1998, as from time to time
amended, among the Company, BankBoston and Bank of New York, as
managing agents, and the lenders party thereto.
2.10. Section 1 of the Credit Agreement is further amended, effective
as of September 1, 1998, by adding thereto a new Section 1.112A reading in its
entirety as follows:
1.112A. "Reorganization Date" means September 1, 1998.
2.11. Section 6.2.4 of the Credit Agreement is amended, effective as of
September 1, 1998, to read in its entirety as follows:
6.2.4. General and Refunding Mortgage Indenture. The General
and Refunding Mortgage Indenture shall not be amended so as to increase
the aggregate principal amount of bonds which may be outstanding
thereunder at any one time or so as to include financial covenants or
events of default that are more restrictive than those included in the
Credit Documents. In addition, the Company may enter into a new
mortgage indenture in addition to or in substitution for the General
and Refunding Mortgage Indenture in effect on September 1, 1998 so long
as (1) the aggregate principal amount of Indebtedness which may be
outstanding at any one time under the General and Refunding Mortgage
Indenture and such additional or substitute mortgage indenture shall
not exceed 70% of the aggregate book value of the Distribution Plant of
the Company (including additions thereto), (2) the security for the
Indebtedness issued under such additional or substitute mortgage
indenture shall be limited to the Distribution Plant of the Company
(including additions thereto), (3) the financial covenants and events
of default included in such additional or substitute mortgage indenture
shall not be more restrictive than those included in the Credit
Documents and (4) no Default shall have occurred and be continuing or
shall exist immediately upon the effectiveness of such additional or
substitute mortgage indenture.
2.12. Section 6.2 of the Credit Agreement is amended, effective as of
September 1, 1998, by adding thereto a new Section 6.2.5 reading in its entirety
as follows:
6.2.5. More Favorable Provisions. In any transaction providing
for Indebtedness in excess of $1,000,000, the Company shall not enter
into or become bound by any credit agreement or other document or
instrument which (i) contains financial covenants or events of default
that are more restrictive or onerous on the Company than those
covenants or events of default contained in this Agreement or (ii)
provides for, or permits the exercise of, remedies upon the occurrence
of an event of default thereunder which are not provided for in, or
permitted to be exercised under or in respect of, this Agreement (each
such covenant, event of default and provision described in the
preceding clauses (i) and (ii) being herein called a "More Favorable
Provision"), unless, prior to or simultaneously with the Company
entering into or becoming bound by such credit agreement or other
document or instrument, (x) the Company executes and delivers to the
Lenders an amendment to this Agreement and such other documents and
instruments as the Managing Agents shall reasonably request, in each
case reasonably satisfactory in form and substance to the Managing
Agents, which modify the provisions of this Agreement and the terms of
the transactions contemplated hereby and by the Credit Documents so as
to give the Lenders the benefit of each More Favorable Provision, and
(y) the Company furnishes to the Lenders a copy of such credit
agreement, or other document or instrument.
2.13. Section 6.4.3 (c) of the Credit Agreement is amended, effective
as of September 1, 1998, to read in its entirety as follows:
(c) From and after the Reorganization Date, such effective
registration statements, definitive proxy statements and regular or
periodic reports, including Forms S-1, S-2, S-3, S-4, 10-K, 10-Q and
8-K, as may be filed by the parent corporation of the Company or by the
Company or any of its Subsidiaries with the Securities and Exchange
Commission (other than filings and reports with respect to dividend
reinvestment, employee benefits or other similar plans, and filings and
reports pertaining to sales of or other transactions in securities of
such parent or the Company or any Subsidiary by Persons other than such
parent or the Company or such Subsidiary).
2.14. Section 6.5.1 of the Credit Agreement is amended, effective as of
September 1, 1998, to read in its entirety as follows:
6.5.1. Consolidated Net Worth. Consolidated Net Worth shall at
all times prior to the Generating Assets Sale Date equal or exceed the
sum of (a) $450,000,000 plus (b) the amount by which (i) 100% of the
proceeds to the Company (net of issuance costs) realized after the
Initial Closing Date resulting from any Equity Transaction of the
Company and its Subsidiaries as determined in accordance with GAAP by
PricewaterhouseCoopers LLP (or, if they cease to be auditors of the
Company and its Subsidiaries, other independent certified public
accountants of recognized national standing selected by the Company)
exceeds (ii) $5,000,000 plus (c) the amount by which (i) 100% of the
Consolidated after-tax gain on sales of assets by the Company and its
Subsidiaries after the Initial Closing Date as determined quarterly in
accordance with GAAP by PricewaterhouseCoopers LLP (or, if they cease
to be auditors of the Company and its Subsidiaries, other independent
certified public accountants of recognized national standing selected
by the Company) exceeds (ii) $5,000,000.
2.15. Section 6.5 of the Credit Agreement is amended, effective as of
September 1, 1998, to add a new Section 6.5.1A reading in its entirety as
follows:
6.5.1A. Consolidated Net Worth. Consolidated Net Worth shall
at all times on and after the Generating Assets Sale Date equal or
exceed the sum of (a) $275,000,000 plus (b) the amount by which (i)
100% of the proceeds to the Company (net of issuance costs) realized
after the Generating Assets Sale Date resulting from any Equity
Transaction of the Company and its Subsidiaries as determined in
accordance with GAAP by PricewaterhouseCoopers LLP (or, if they cease
to be auditors of the Company and its Subsidiaries, other independent
certified public accountants of recognized national standing selected
by the Company) exceeds (ii) $5,000,000 plus (c) the amount by which
(i) 100% of the Consolidated after-tax gain on sales of assets by the
Company and its Subsidiaries which take place after the Generating
Assets Sale Date as determined quarterly in accordance with GAAP by
PricewaterhouseCoopers LLP (or, if they cease to be auditors of the
Company and its Subsidiaries, other independent certified public
accountants of recognized national standing selected by the Company)
exceeds (ii) $5,000,000.
2.16. Section 6.5.3 of the Credit Agreement is amended, effective as of
September 1, 1998, to read in its entirety as follows:
6.5.3. Consolidated EBIT to Consolidated Interest Expense.
Consolidated EBIT for each period of four consecutive fiscal quarters
of the Company shall equal or exceed 175% of Consolidated Interest
Expense for such period.
2.17. Section 6.6.7 of the Credit Agreement is amended, effective as of
September 1, 1998, to read in its entirety as follows:
6.6.7. Indebtedness of the Company evidenced by General and
Refunding Mortgage Bonds of the Company issued under the General and
Refunding Mortgage Indenture, but only so long as the Company is in
compliance with Section 6.2.4.
2.18. Section 6.6.8 of the Credit Agreement is amended, effective as of
September 1, 1998, to read in its entirety as follows:
6.6.8. Indebtedness of the Company in respect of its Unsecured
Medium Term Notes, provided that the aggregate principal amount of all
Indebtedness permitted by this Section 6.6.8 at any one time
outstanding shall not exceed $500,000,000.
2.19. Section 6.6.9 of the Credit Agreement is amended, effective as of
the Amendment Closing Date, to read in its entirety as follows:
6.6.9. Indebtedness in respect of unsecured debt to banks
other than the Credit Obligations and the Indebtedness permitted by
Section 6.6.12; provided that the aggregate principal amount of all
Indebtedness permitted by this Section 6.6.9 at any time outstanding
shall not exceed $10,000,000.
2.20. Section 6.6.10 of the Credit Agreement is amended, effective as
of the Amendment Closing Date, to read in its entirety as follows:
6.6.10. Indebtedness of the Company in respect of commercial
paper, provided that the sum of the aggregate principal amount of all
Indebtedness permitted by this Section 6.6.10 and by Sections 6.6.9 and
6.6.12 and the principal amount of the Credit Obligations at any one
time outstanding shall not exceed $85,000,000.
2.21. Section 6.6 of the Credit Agreement is amended, effective as of
the Amendment Closing Date, to add a new Section 6.6.12 reading in its entirety
as follows:
6.6.12. Unsecured Indebtedness of the Company outstanding
under the New 364-Day Revolving Credit Agreement.
2.22. The first sentence of Section 6.10 of the Credit Agreement,
effective as of September 1, 1998, is deleted and replaced by two sentences
reading in their entirety as follows:
The Company shall not merge with or enter into a consolidation with
another Person, except that CMP Merger Co., a Maine corporation, may
merge into the Company on terms substantially identical to those
provided in the form of Agreement and Plan of Merger set forth in
Appendix B to the Proxy Statement of the Company dated April 15, 1998.
The Company shall not sell, transfer or otherwise dispose of (or pledge
or assign) any accounts receivable (except for collection or
enforcement in the ordinary course of business).
2.23. Section 6.10 of the Credit Agreement is further amended,
effective as of September 1, 1998, by adding thereto a new Section 6.10.4
reading in its entirety as follows:
6.10.4. Upon obtaining final approvals of such sale from the
Maine Public Utilities Commission and the Federal Energy Regulatory
Commission, the Company may sell to an affiliate of FPL Group pursuant
to the bid submitted by such buyer on December 10, 1997 all of the
Company's hydro, fossil and biomass generating assets, including its
interest in certain Subsidiaries which operate or participate in such
assets, with a combined generating capacity of 1,185 megawatts.
2.24. Section 6.11 of the Credit Agreement is amended, effective as of
the Amendment Closing Date, by adding thereto a new subsection (d) reading in
its entirety as follows:
(d) The New 364-Day Revolving Credit Agreement.
2.25. Section 6 of the Credit Agreement is amended, effective as of
September 1, 1998, by adding thereto a new Section 6.14 reading in its entirety
as follows:
6.14. Distributions. The Company shall make no Distribution
(or become contractually committed to do so) if after giving effect to
such Distribution any Default shall exist under Section 6.5.1, 6.5.1A
or 6.5.2.
3. Representations and Warranties. In order to induce the Lenders to enter into
this Agreement, the Company represents and warrants to each of the Lenders that:
3.1. No Legal Obstacle to Agreements. Neither the execution and
delivery of this Agreement or any other Credit Document, nor the making of any
borrowing under the Amended Credit Agreement, nor the consummation of any
transaction referred to in or contemplated by this Agreement, the Amended Credit
Agreement or any other Credit Document, nor the fulfillment of the terms hereof
or thereof has constituted or resulted in or will constitute or result in:
(a) any breach or termination of the provisions of any
agreement, instrument, deed or lease to which the Company or any of its
Subsidiaries is a party or by which it is bound, or of the Charter or
By-laws of the Company or any of its Subsidiaries (including without
limitation any provision of the Charter of the Company restricting the
issuance of unsecured debt securities);
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to the Company or any
of its Subsidiaries;
(c) the creation under any agreement, instrument, deed or
lease of any Lien upon any of the assets of the Company or any of its
Subsidiaries; or
(d) the creation or triggering of any redemption, retirement
or other repurchase obligation of the Company or any of its
Subsidiaries under any Charter, By-law, agreement, instrument, deed or
lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Company or any of its Subsidiaries in connection with
the execution and delivery of this Agreement, the performance of this Agreement,
the Amended Credit Agreement or any other Credit Document, the making of any
borrowing under the Amended Credit Agreement, the transactions contemplated
hereby or thereby or the consummation of the reorganization of the Company
contemplated by the first sentence of Section 6.10 of the Amended Credit
Agreement (the "Reorganization") or of the sale of the non-nuclear generating
assets of the Company contemplated by Section 6.10.4 of the Amended Credit
Agreement (the "Sale"), except for such approvals of the Reorganization as have
been obtained and except that approvals of the Maine Public Utilities Commission
and the Federal Energy Regulatory Commission are required to be obtained for the
Sale.
3.2. Defaults. Immediately after giving effect to the Amendment, no
Default shall exist.
3.3. Material Adverse Change. Since December 31, 1997 no Material
Adverse Change has occurred.
3.4. Incorporation of Representations and Warranties of Company.
Immediately after giving effect to the Amendment, the representations and
warranties set forth in Section 7 of the Amended Credit Agreement will be true
and correct as if originally made on and as of the Amendment Closing Date
(except to the extent of any representation or warranty which refers to a
specific earlier date).
4. Conditions. The effectiveness of the amendments set forth in Section 2 hereof
shall be subject to the satisfaction of the following conditions:
4.1. Governmental Approvals. The Company shall have provided to the
Lenders written evidence of the approvals of the Reorganization by the Maine
Public Utilities Commission, the Securities and Exchange Commission, the Federal
Energy Regulatory Commission and the Nuclear Regulatory Commission.
4.2. Proper Proceedings. All proper proceedings shall have been taken
by the Company to authorize this Agreement, the Amended Credit Agreement and the
transactions contemplated hereby and thereby. On or before the Amendment Closing
Date, the Managing Agents shall have received copies of all documents, including
legal opinions of counsel and records of corporate proceedings which the
Managing Agents may have requested in connection therewith, such documents,
where appropriate, to be certified by proper corporate or governmental
authorities.
5. General. The Amended Credit Agreement and all of the other Credit Documents
are each confirmed as being in full force and effect. This Agreement, the
Amended Credit Agreement and the other Credit Documents referred to herein or
therein constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior and current
understandings and agreements, whether written or oral, with respect to such
subject matter. The invalidity or unenforceability of any provision hereof shall
not affect the validity and enforceability of any other term or provision
hereof. The headings in this Agreement are for convenience of reference only and
shall not alter, limit or otherwise affect the meaning hereof. Each of this
Agreement and the Amended Credit Agreement is a Credit Document and may be
executed in any number of counterparts, which together shall constitute one
instrument, and shall bind and inure to the benefit of the parties and their
respective successors and assigns, including as such successors and assigns all
holders of any Note. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts applicable to
contracts made and to be performed entirely within The Commonwealth of
Massachusetts.
Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
CENTRAL MAINE POWER COMPANY
By ______________________________________
Title:
BANKBOSTON, N.A., for Itself and as
Boston Managing Agent
By ______________________________________
Authorized Officer
THE BANK OF NEW YORK, for Itself
and as New York Managing Agent
By ______________________________________
Authorized Officer
FLEET BANK OF MAINE
By ______________________________________
Authorized Officer
KEYBANK NATIONAL ASSOCIATION
By ______________________________________
Authorized Officer
COOPERATIEVE-CENTRALE
RAIFEISSEN-BOERLEENBANK, B.A.,
"RABOBANK NEDERLAND, NEW YORK
By ______________________________________
Authorized Officer
By ______________________________________
Authorized Officer
THE TOKAI BANK, LIMITED, the New York
By ______________________________________
Authorized Officer
UNION BANK OF CALIFORNIA, N.A.
By ______________________________________
Authorized Officer