FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1993
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-707
KANSAS CITY POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
Missouri 44-0308720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 Walnut Street
Kansas City, Missouri 64106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 816-556-2200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Cumulative Preferred Stock New York Stock Exchange
par value $100 per share -
3.80%, 4.50%, 4.35%
Common Stock without par value New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to the Form 10-K. Yes X No
On March 21, 1994, the Company had 61,908,726 outstanding shares of common
stock without par value, and the aggregate market value (based upon the
closing price of these shares on the New York Stock Exchange) of voting
securities held by nonaffiliates of the Company was approximately
$1,375,382,037.
Documents Incorporated by Reference
Portions of the Company's 1994 Notice of Annual Meeting of Stockholders and
Proxy Statement are incorporated by reference in Part III of this report.
TABLE OF CONTENTS
Page
Number
Item 1. Business . . . . . . . . . . . . . . . . . . . 1
The Company . . . . . . . . . . . . . . . . . . . 1
Regulation . . . . . . . . . . . . . . . . . . . 1
Rates . . . . . . . . . . . . . . . . . . . 1
Environmental Matters . . . . . . . . . . . 2
Air . . . . . . . . . . . . . . . . . . . 2
Water . . . . . . . . . . . . . . . . . . . 2
Waste Disposal . . . . . . . . . . . . . . . 3
Fuel Supply . . . . . . . . . . . . . . . . . . . 3
Coal . . . . . . . . . . . . . . . . . . . 3
Gas . . . . . . . . . . . . . . . . . . . 4
Oil . . . . . . . . . . . . . . . . . . . 4
Nuclear . . . . . . . . . . . . . . . . . . 4
Employees . . . . . . . . . . . . . . . . . 6
Subsidiaries . . . . . . . . . . . . . . . . . . . 6
Subsequent Financing Events. . . . . . . . . . . . 6
Officers of the Registrant . . . . . . . . . . . . 7
Item 2. Properties . . . . . . . . . . . . . . . . . . . . 8
Generation Resources . . . . . . . . . . . . . . . 8
Transmission and Distribution Resources . . . . . 9
General . . . . . . . . . . . . . . . . . . . 9
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders. . . 10
Item 5. Market for the Registrant's Common Equity and Related. .
Stockholder Matters . . . . . . . . . . . . . . . . . . 10
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . 11
Item 7. Management's Discussion and Analysis of Financial. . . .
Condition and Results of Operations . . . . . . . . . . 11
Item 8. Financial Statements and Supplementary Data . . . . . . 18
Item 9. Changes in and Disagreements with Accountants on . . .
Accounting and Financial Disclosure . . . . . . . . . . 38
Item 10. Directors and Executive Officers of the Registrant . . . 38
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . 38
Item 12. Security Ownership of Certain Beneficial Owners and. . .
Management . . . . . . . . . . . . . . . . . . . 38
Item 13. Certain Relationships and Related Transactions . . . . . 38
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . 39
PART I
ITEM 1. BUSINESS
The Company
Kansas City Power & Light Company (Company) was incorporated in
Missouri in 1922 and is headquartered in downtown Kansas City, Missouri. The
Company is a medium-sized public utility engaged in the generation,
transmission, distribution and sale of electricity to over 419,000 customers
in a 4,700 square mile area located in all or portions of 23 counties in
western Missouri and eastern Kansas. About two-thirds of the total retail
kilowatt-hour sales and revenue are from Missouri customers and the remainder
from Kansas customers. Customers include 368,000 residences, 49,000
commercial firms, 2,000 industries, 12 municipalities and 25 other electric
utilities. Retail revenues in Missouri and Kansas accounted for
approximately 91% of the Company's total revenues in 1993. Wholesale firm
power, bulk power sales and miscellaneous electric revenues accounted for the
remainder of revenues. The Kansas City metropolitan area, from which about
95% of the Company's retail revenues are derived, is an agribusiness center
and a major regional commercial center for wholesale, retail and service
companies.
The Company as a regulated utility does not have direct competition for
retail electric service in its service territory; however, there is
competition in the generation of electricity and between electric and gas as
an energy source.
Regulation
The Company is subject to the jurisdiction of the Public Service
Commission of the State of Missouri (MPSC), the State Corporation Commission
of the State of Kansas (KCC), the Federal Energy Regulatory Commission
(FERC), the Nuclear Regulatory Commission (NRC) and certain other
governmental regulatory bodies as to various phases of its operations,
including rates, service, safety and nuclear plant operations, environmental
matters and issuances of securities.
Rates
The Company's retail electric rates are regulated by the MPSC and KCC
for sales within the respective states of Missouri and Kansas. FERC approves
the Company's rates for wholesale bulk electricity sales. Firm electric
sales are made by contractual arrangements between the entity being served
and the Company.
The Company has not increased any of its retail or wholesale rates
since 1988. Pursuant to a stipulation and agreement with the MPSC, the
Company reduced Missouri retail rates by about 2.7 percent effective
January 1, 1994 and agreed to a moratorium through 1995 on the filing of
general retail rate increases or decreases in Missouri.
Environmental Matters
The Company, like other electric utilities, is subject to regulation by
various federal, state and local authorities with respect to air and water
emissions, waste disposal and other environmental matters. Environmental
regulations and standards are subject to continual review and the Company
cannot presently estimate the additional cost, if any, of meeting any new
regulations or standards which might be established in the future, nor can it
estimate the possible effect which any new regulations or standards could
have upon its operations. However, the Company currently estimates that
expenditures necessary to comply with environmental regulations during 1994
will not be material with the possible exceptions set forth below.
Air
The Clean Air Act Amendments of 1990 contain acid rain and air toxic
provisions which affect the Company. The acid rain provisions established a
two-phase utility pollution control program for reducing national SO2
emissions by 10 million tons and NOx emissions by 2 million tons from 1980
levels. Compliance will require the Company to install continuous emission
monitoring equipment (CEM) at some of its coal-fired electric generating
facilities during the period ending in the year 2000. The Company is
currently estimating its costs of such compliance to be approximately $4.1
million during such period ($2.9 million of such amount was spent through
1993). The other utility-related provision of the Act calls for a study by
the Environmental Protection Agency (EPA) of certain toxic emissions into the
air. Based on the outcome of these studies, regulation of certain toxic
emissions into the air, including mercury, could be required in the future.
Water
The Company commissioned an environmental assessment of its Northeast
Station and of its Spill Prevention Control and Countermeasure plan as
required by the Clean Water Act. The assessment revealed contamination of
the site by petroleum products, heavy metals, volatile and semi-volatile
organic compounds, asbestos, pesticides and other regulated substances.
Based upon studies and discussions with Burns & McDonnell, the cost of the
cleanup could range between $1.5 million and $6 million.
Also, groundwater analysis has indicated that certain volatile organic
compounds are moving through the Northeast site, just above bedrock, from
unidentified sources off-site. There is no evidence that the Company
released these compounds; however, notice was given to the Missouri
Department of Natural Resources (MDNR). MDNR has not responded to date to the
notice. Because the Company believes it will not have liability in this
matter, it has not performed a study regarding the possible cost of
remediation.
Waste Disposal
The Comprehensive Environmental Response, Compensation and Liability
Act (Superfund) established joint and several liability for persons and
entities that generate, transport or deposit hazardous waste at contaminated
sites, as well as the current owners of such sites and predecessors in title
since the time such sites were contaminated.
Interstate Power Company of Dubuque, Iowa (Interstate) filed a lawsuit
in 1989 against the Company in the Federal District Court for the District of
Iowa seeking from the Company contribution and indemnity under the Superfund
for clean-up costs of hazardous substances at the site of a demolished gas
manufacturing plant in Mason City, Iowa. The plant was operated by the
Company for very brief periods of time before the plant was demolished in
1952. The site and all other properties the Company owned in Iowa were sold
to Interstate in 1957. The Company estimates that the cleanup could cost up
to $10 million. The Company's estimate is based upon an evaluation of
available information from on-going site investigation and assessment
activities, including the costs of such activities.
Fuel Supply
The Company's latest fuel budget anticipates that fuel used for its
electric generating requirements during 1994 will be approximately 73.7%
coal, 0.3% gas, 0.3% oil, 25.6% nuclear and 0.1% steam.
Coal
The Company currently projects that during 1994 9.7 million tons of
coal will be burned at all of the Company's generating units (including
jointly-owned units); 6.7 million tons will be burned for the Company's
account. The long-term contractual arrangements for coal for the Company's
account are as follows:
1993
Average
Year Undelivered 1994 Sulfur
of Maximum Contract Content
Supplier and Expir- Quantities Designations of Coal
Surface Mine Location ation (Tons) (Tons) %
Rochelle Coal Company
Wright, Wyoming....... 1999(a) 2,544,000 1,100,000 0.2
ARCO Coal Company
Wright, Wyoming....... 2003 15,680,000(b) 1,610,000(b) 0.3
Total 18,224,000 2,710,000
(a) Contract is effective until December 31, 1999 or until the
maximum quantity of coal is delivered, whichever occurs first.
It is estimated the maximum quantity of coal will be delivered by
December 31, 1996.
(b) Company's share of coal under contract for jointly-owned units.
These long-term contracts supply 40% of the Company's anticipated coal
requirements for 1994, and the remainder will be supplied by open market
purchases.
The Company's average costs of coal burned for its account, exclusive
of fuel handling costs, for the past three years are as follows:
1993 1992 1991
Cost per million BTU..........$ 0.962 $ 1.022 $ 1.059
Cost per ton..................$16.66 $17.87 $18.79
Gas
Natural gas is purchased directly from natural gas producers or
marketers. The Company's Hawthorn Station, which uses coal as boiler fuel,
primarily uses gas for ignition and flame stabilization purposes. When
available, natural gas can also be used as a supplementary fuel to generate
electricity at Hawthorn when required for environmental or other temporary
operating conditions. The Company also has facilities at Hawthorn to use oil
for ignition and flame stabilization purposes because of possible
interruptions in the availability of gas. The Company's use of gas for
electric generation was 0.7 million mcf in 1991, 0.2 million mcf in 1992 and
0.4 million mcf in 1993. For the year ended December 31, 1993, the average
cost of gas burned for electric generation was $2.51 per million BTU.
Oil
Middle distillate fuel oil is used to operate the Company's eight peak
load combustion turbine generating units, for ignition and flame
stabilization purposes at other fossil fueled units and to fuel auxiliary
boilers at the Wolf Creek Nuclear Generating Station (Wolf Creek). In 1993,
the Company used about 20,000 barrels of fuel oil at its combustion turbine,
about 34,000 barrels for ignition and flame stabilization purposes and about
3,000 barrels at Wolf Creek. The Company's share of fuel oil storage
capacity is about 190,000 barrels. At December 31, 1993, the Company had
about 101,100 barrels of fuel oil in storage at an average cost of $27.43 per
barrel, or $4.73 per million BTU.
Nuclear
The Wolf Creek Nuclear Operating Corporation (WCNOC), which operates
Wolf Creek, has on hand or under contract 73% of the uranium required to
operate Wolf Creek through the year 2001, and the balance is expected to be
obtained through open market or contract purchases.
Contracts are in place for 100% of Wolf Creek's uranium fuel enrichment
services requirements for 1994-1996, 70% of such requirements for 1997-1998,
and 100% of such requirements for 2002-2014. The balance of the requirements
is expected to be obtained through a combination of open market and contract
purchases.
Contracts are in place for the conversion of sufficient uranium to
uranium hexaflouride to meet Wolf Creek's uranium fuel requirements through
1995 as well as for the fabrication of uranium fuel assemblies to meet Wolf
Creek's requirements through 2014.
High-Level Waste
The Nuclear Waste Policy Act of 1982 established schedules, guidelines
and responsibilities for the United States Department of Energy (DOE) to
develop and construct repositories for the ultimate disposal of spent nuclear
fuel and nuclear high-level waste. The DOE has not yet constructed a
high-level nuclear waste disposal site and has announced that a permanent
storage facility for such waste may not be in operation prior to 2013,
although an interim facility may be available earlier. Wolf Creek contains
a temporary on-site spent nuclear fuel storage facility which, under current
regulatory guidelines, provides space for the storage of spent nuclear fuel
from plant operation until approximately 2006, while still maintaining full
core off-load nuclear fuel storage capability. The Company believes adequate
additional temporary storage space for Wolf Creek's nuclear waste can be
obtained, as necessary.
Low-Level Waste
The Low-Level Radioactive Waste Policy Amendments Act of 1985 mandated
that the various states, individually or through interstate compacts, develop
alternative low-level radioactive waste disposal facilities to replace the
three currently-available facilities in South Carolina, Nevada and
Washington.
The states of Kansas, Nebraska, Arkansas, Louisiana and Oklahoma formed
the Central Interstate Low-Level Radioactive Waste Compact and selected a
site in northern Nebraska to locate a disposal facility. The present
estimate of the cost for such a facility is about $146 million. WCNOC and
the owners of the other five nuclear units in the compact have provided most
of the pre-construction financing for this project. To date, the compact has
spent in excess of $55 million, of which $6.8 million was WCNOC's share. If
WCNOC and the owners of the other nuclear units in the compact elect to
provide construction financing, WCNOC's share would be about $9.6 million.
There is uncertainty as to whether this project will be completed.
Significant opposition to the project has been raised by the residents in the
area of the proposed facility and attempts have been made to pass legislation
in Nebraska to slow down or stop development of the facility. In January
1993, a lawsuit was filed in the U.S. District Court by the Nebraska Attorney
General seeking to halt further development of the proposed facility. The
trial court rendered judgment against the Attorney General, but the decision
has been appealed to the U.S. Court of Appeals. Although all federally-
imposed milestones have been met in the past, the compact did not meet the
last milestone of having a disposal facility in operation by January 1, 1993;
however, none of the other eight compacts in the United States met this
deadline. WCNOC has expanded its on-site temporary storage capacity in order
to handle its low-level radioactive waste until such time as a disposal
facility becomes available.
Employees
At December 31, 1993, the Company had 2,735 employees (including
temporary employees), 1,809 of which were represented by three local unions
of the International Brotherhood of Electrical Workers (IBEW). However, the
Company announced an early retirement program in March 1994. See "Notes to
Consolidated Financial Statements - Subsequent Event" on page 36 of this
report. Included in the total number of employees are 315 located at LaCygne
Generating Station (LaCygne), 50% of whose services are attributable to
Kansas Gas and Electric Company (KG&E) for its 50% share of LaCygne, and 137
located at Iatan Generating Station (Iatan), 30% of whose services are
attributable to St. Joseph Light & Power Company (SJLP) and the Empire
District Electric Company (EDE) for their 18% and 12% shares of Iatan,
respectively. The Company has labor agreements with Local 1613, representing
clerical employees (which expires March 29, 1996), with Local 1464,
representing outdoor workers (which expires January 8, 1997), and with Local
412, representing power plant workers (which expires March 5, 1995). The
Company is also a 47% owner of WCNOC, which employs 1,242 persons to operate
Wolf Creek, 308 of which are represented by the IBEW.
Subsidiaries
KLT Inc., a wholly-owned subsidiary of the Company, was formed in 1992
as a holding company for various non-regulated business opportunities.
Currently KLT Inc., has three wholly owned subsidiaries which include KLT
Investments Inc. which is a passive investor in economic and community
development and energy related investments; KLT Energy Services Inc., which
is a partner in an energy management services business; and KLT Power Inc.,
which was formed in 1993 to participate in independent power and cogeneration
projects. The Company's equity investment in the KLT companies is currently
$9.5 million ($4.5 million was invested as of December 31, 1993).
Subsequent Financing Events
Since December 31, 1993, the Company has redeemed $13,982,500 its
portion of the outstanding $30,000,000 City of LaCygne, Kansas Pollution
Control Revenue Bonds (Kansas City Power & Light Company - Kansas Gas and
Electric Company) Series 1973 and $21,940,000 City of LaCygne, Kansas
Pollution Control Revenue Refunding Bonds (Kansas City Power & Light Company
Project) Series 1977 with the issuance of $35,922,500 City of LaCygne,
Kansas, Environmental Improvement Revenue Refunding Bonds (Kansas City Power
& Light Company Project) Series 1994.
Officers of the Registrant
Year Elected
Name Age Positions Currently Held as an Officer
Drue Jennings 47 Chairman of the Board, President 1980
and Chief Executive Officer
Bernard J. Beaudoin 53 Senior Vice President-Finance 1984
Chief Financial Officer
Samuel P. Cowley 59 Senior Vice President-Corporate 1977
Affairs, Chief Legal Officer and
Assistant Secretary
Ronald G. Wasson 49 Senior Vice President-Administrative 1983
& Technical Services
Frank L. Branca 46 Vice President-Power Supply 1989
Charles R. Cole 47 Vice President-Customer Services 1990
James L. Hogan 63 Vice President-Environmental & 1984
Research Services
Marcus Jackson 42 Vice President-Power Production 1989
Turner White* 44 Vice President-Communications 1990
John J. DeStefano 44 Treasurer 1989
Jeanie Sell Latz 42 Corporate Secretary 1991
Neil Roadman 48 Controller 1980
Mark C. Sholander 48 General Counsel and Assistant 1986
Secretary
* All of the foregoing persons have been officers of the Company or
employees in a responsible position with the Company for the past five years
except for Mr. White. Mr. White has been with the Company since 1989; prior
to that he was Vice President, Public Relations of Bernstein-Rein
Advertising, Inc. from 1986 to 1989.
The term of office of each officer commences with his or her
appointment by the Board of Directors and ends at such time as the Board of
Directors may determine.
ITEM 2. PROPERTIES
Generation Resources
The Company's generating facilities consist of the following:
Estimated
1994
Year Megawatt(mw)
Unit Completed Capacity
Fuel
Existing Units
Base Load..Wolf Creek(a) 1985 545(b) Nuclear
Iatan 1980 469(b) Coal
LaCygne 2 1977 335(b) Coal
LaCygne 1 1973 343(b) Coal
Hawthorn 5 1969 457
Coal/Gas
Montrose 3 1964 161 Coal
Montrose 2 1960 152 Coal
Montrose 1 1958 150 Coal
Peak Load..Northeast 13 and 14(c) 1976 112 Oil
Northeast 17 and 18(c) 1977 108 Oil
Northeast 15 and 16(c) 1975 103 Oil
Northeast 11 and 12(c) 1972 99 Oil
Grand Avenue (2 units) 1929 & 1948 64 Gas
Total 3,098
(a) This unit is one of the Company's principal generating facilities
and has the lowest fuel cost of any of its generating facilities.
Any extended shutdown of the unit for any reason could have a
substantial adverse effect on the operations of the Company and
its financial condition.
(b) Company's share of jointly-owned unit.
(c) Combustion turbines.
The Company's maximum system net hourly peak load of 2,819 mw occurred
on August 17, 1993. The maximum winter peak load of 1,829 mw occurred on
December 21, 1989. The accredited generating capacity of the Company's
electric facilities in the summer (when peak loads are experienced) of 1993
under MOKAN Power Pool standards was 3,085 mw.
The Company owns the Hawthorn Station (Jackson County, Missouri),
Montrose Station (Henry County, Missouri), Northeast Station (Jackson County,
Missouri) and two Grand Avenue Station turbine generators (Jackson County,
Missouri). The Company also owns 50% of the 685-mw LaCygne 1 Unit and 670-mw
LaCygne 2 Unit in Linn County, Kansas; 70% of the 670-mw Iatan Station in
Platte County, Missouri; and 47% of the 1,160 mw Wolf Creek in Coffey County,
Kansas.
Transmission and Distribution Resources
The Company's electric transmission system is interconnected with
systems of other utilities to permit bulk power transactions with other
electricity suppliers in Kansas, Missouri, Iowa, Nebraska and Minnesota. The
Company is a member of the MOKAN Power Pool, which is a contractual
arrangement among eleven utilities in western Missouri and Kansas which
interchange electric energy, share reserve generating capacity, and provide
emergency and standby electricity services to each other.
The Company owns approximately 1,700 miles of transmission lines and
approximately 8,900 miles of overhead distribution lines, and approximately
2,800 miles of underground distribution lines. The Company has all
franchises necessary to sell electricity within the territories from which
substantially all of its gross operating revenue is derived.
General
The Company's principal plants and properties, insofar as they
constitute real estate, are owned in fee; certain other facilities are
located on premises held under leases, permits or easements; and its electric
transmission and distribution systems are for the most part located over or
under highways, streets, other public places or property owned by others for
which permits, grants, easements or licenses (deemed satisfactory but without
examination of underlying land titles) have been obtained.
Substantially all of the fixed property and franchises of the Company,
which consists principally of electric generating stations, electric
transmission and distribution lines and systems, and buildings (subject to
exceptions and reservations) are subject to a General Mortgage Indenture and
Deed of Trust dated as of December 1, 1986. The last series of mortgage
bonds under the Indenture of Mortgage and Deed of Trust dated as of
December 1, 1946 (1946 Mortgage) secured the City of LaCygne pollution
control bonds (Pollution Bonds) which were refinanced in the first quarter of
1994--see "Subsequent Financing Events" on page 6. Upon the redemption of
the Pollution Bonds on March 1, 1994, the 1946 mortgage was discharged.
ITEM 3. LEGAL PROCEEDINGS
Inter-City Beverage Co., Inc. et. al vs. Kansas City Power & Light Company
On August 13, 1993, a lawsuit was filed by nine customers in the Circuit
Court of Jackson County, Missouri against the Company. The suit alleged the
misapplication of certain of the Company's electric rate tariffs resulting in
overcharges to industrial and commercial customers which have been provided
service under those tariffs and requested certification as a class action.
On December 3, 1993, the Court postponed ruling on motion to certify as a
class action, and dismissed the matter for lack of subject matter
jurisdiction. The plaintiff appealed to the Missouri Court of Appeals,
Western District. The Company has not yet determined the amount of the
alleged overcharges. The Company believes it will be able to successfully
defend this action.
See "Environmental Matters - Waste Disposal" on page 3 and "Notes to
Consolidated Financial Statements - Tax Matters" on page 31 of this report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the
solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Market Information:
(1) Principal Market:
Common Stock of the Company is listed on the New York Stock
Exchange and the Chicago Stock Exchange.
(2) Stock Price Information:
Common Stock Price Range
1993 1992
Quarter High Low High Low
First $25-1/8 $22 $23-3/4 $19-7/8
Second 25-1/4 23-1/2 22-1/2 20-5/8
Third 26-1/4 24-3/8 24-1/2 21-7/8
Fourth 25 21-3/4 23-1/4 21-3/4
Holders:
At December 31, 1993, the Company's Common Stock was held by 31,267
shareholders of record.
Dividends:
Common Stock dividends were declared as follows:
Quarter 1994 1993 1992
First $0.37 $0.36 $0.35
Second 0.36 0.36
Third 0.37 0.36
Fourth 0.37 0.36
The Company's Restated Articles of Consolidation contains certain
restrictions on the payment of dividends on the Company's Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31
1993 1992 1991 1990 1989
(Thousands)
Operating revenues $ 857,450 $ 802,668 $ 825,101 $ 815,570 $ 790,216
Net income $ 105,772 $ 86,334 $ 103,893 $ 102,732 $ 108,618
Earnings per common
share $ 1.66 $ 1.35 $ 1.58 $ 1.56 $ 1.65
Total assets at
year-end $ 2,755,068 $ 2,646,923 $ 2,615,039 $ 2,598,859 $ 2,620,826
Total redeemable
preferred stock and
long-term debt
(including current
maturities) $ 869,908 $ 816,625 $ 824,756 $ 852,645 $ 921,050
Cash dividends per
common share $ 1.46 $ 1.43 $ 1.37 $ 1.31 $ 1.25
Ratio of earnings to
fixed charges 3.80 3.12 3.22 2.96 2.92
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
KILOWATT (KWH) SALES AND OPERATING REVENUES
Sales and revenue data:
Increase (Decrease)
From Prior Year
1993 1992
KWH Revenues KWH Revenues
(Millions) (Millions)
Retail sales:
Residential 13 % $ 30 (12)% $ (33)
Commercial 3 % 9 (2)% (4)
Industrial 3 % 3 6 % 3
Other 1 % - 1 % -
Total retail 6 % 42 (4)% (34)
Sales for resale:
Bulk power sales 27 % 13 51 % 12
Other 5 % - (6)% -
Total operating revenues $ 55 $ (22)
Although 1993 temperatures have been milder than normal, residential and
commercial sales reflect closer to normal temperatures during 1993 compared to
the abnormally mild weather of 1992 and warmer than normal weather of 1991.
Based on the Company's records of cooling degree days above 65 degrees
Fahrenheit, the summer of 1992 was the coolest since 1950. The weather
conditions were the primary cause for the variances in residential and
commercial sales although both 1993 and 1992 also reflect load growth.
Industrial kwh sales continued to increase over prior years and reflect
increased large customer usage in the steel, auto manufacturing, grain
processing and plastic container production sectors.
Bulk power sales reflect an increase in the number of sales commitments,
the Company's high unit and fuel availability, and the requirements of other
electric systems.
Changes in total revenue per kwh are due to changes in the mix of kwh
sales among customer classifications and the effect on certain classifications
of declining price per kwh as kwh usage increases. Less than 1% of the
Company's revenues are affected by an automatic fuel adjustment provision.
Tariffs have not changed materially since 1988. Effective January 1,
1994, Missouri jurisdictional retail rates were reduced 2.66%, or
approximately $12.5 million annually, primarily to reflect the end of the
Missouri Public Service Commission (MPSC) rate phase-in amortization. This
agreement with the MPSC and public counsel also includes a provision whereby
none of the parties can file for a general increase or decrease in Missouri
retail electric rates prior to January 1, 1996. Approximately two-thirds of
total retail sales are from Missouri customers.
The level of future kwh sales will depend upon weather conditions,
customer conservation efforts, competing fuel sources and the overall economy
of the Company's service territory. Sales to industrial customers, such as
steel and auto manufacturers, are also affected by the national economy. The
level of bulk power sales in the future will depend upon the availability of
generating units, fuel costs, requirements of other electric systems and the
Company's system requirements.
Also, issues facing the electric utility industry such as transmission
access, demand-side management programs, increased competition and retention
of large industrial customers could affect sales. Alternative sources of
electricity, such as cogeneration, could affect the retention of, and future
sales to large industrial customers.
COMPETITION
The National Energy Policy Act of 1992 gave the Federal Energy
Regulatory Commission (FERC) the authority to require electric utilities to
provide wholesale transmission line access (wholesale wheeling) to independent
power producers and other utilities. Amendments to the Public Utility Holding
Company Act simplified the organization of exempt wholesale generators, who
engage exclusively in generating electricity for wholesale markets. Although
the Act prohibits FERC from ordering retail wheeling (allowing retail
customers to select a different power producer and use the transmission
facilities of the host utility to deliver the energy), the Act itself does not
prevent the state commissions from doing so. The state commissions however,
may be preempted by other provisions of the Federal Power Act. If retail
wheeling were allowed, utilities with large industrial customers could face
intense competition and potentially lose a major customer which could place an
unfair, costly burden on the remaining customer base or shareholders.
The Company continues to evaluate the effects of competition on its
operations and position itself for a more competitive marketplace. It has
been participating in wholesale wheeling voluntarily and has tariffs in place
to accommodate these activities. The Company has a diverse customer mix with
less than 18% of total sales derived from industrial customers as compared to
a utility average of approximately 35%. The Company's industrial rates are
competitively priced compared to the regional average and its rate structure
allows some flexibility in setting
rates. In addition, Company sponsored programs help customers manage their
electricity consumption, and control their costs.
FUEL, PURCHASED POWER, OTHER OPERATION AND MAINTENANCE EXPENSES
Wolf Creek completed its sixth scheduled refueling outage during 1993
and returned on-line after 73 days. The Company began accruing for this
outage in January 1992 (see Note 1 to the Consolidated Financial Statements
for a discussion of the 1992 change in accounting principle). The prior
refueling outage began in 1991, before the Company started accruing for these
costs, and extended into January 1992. Because these costs, as well as a
forced outage in 1992, had not been accrued, all expenses associated with
these outages were expensed as incurred. As a result, 1992 expenses
associated with Wolf Creek outages (including amounts accrued beginning in
January 1992) exceeded amounts expensed in 1993 by $5.6 million ($0.06 per
share) and 1992 expenses were less than 1991 expenses by $4.6 million ($0.05
per share). The next refueling outage is scheduled to begin in September
1994.
Combined fuel and purchased power expenses for 1993 increased over 1992
and 1991 reflecting additional sales. Partially offsetting these increases,
fuel prices and freight rates have gradually decreased since 1991.
Other operation expenses increased during 1993 and 1992 reflecting
increased generating plant production expenses and higher levels of
administrative and general expenses mostly due to increased wages and employee
benefits, and the 1993 accrual of postretirement benefits (see Note 2 to the
Consolidated Financial Statements).
The Company continues to place emphasis on cost control. Processes are
being reviewed and changed to provide increased efficiencies and improved
operations.
INCOME TAXES
The change in income tax expense is mostly due to the changes in income
subject to tax, but 1993 also reflects an increase of approximately $2 million
in federal income tax expense because federal income tax rates increased.
GENERAL TAXES
Components of general taxes (in thousands):
1993 1992 1991
Property taxes $ 45,545 $ 44,300 $ 38,803
Gross receipts taxes 40,659 39,232 41,223
Other general taxes 9,455 8,929 8,499
Total general taxes $ 95,659 $ 92,461 $ 88,525
Increases in property taxes since 1991 are primarily due to the Kansas
school finance legislation. The Company estimates the effects of this
legislation will increase future property taxes over 1993 levels by
approximately $1 million.
The majority of Missouri customers are billed gross receipts tax based
on billed revenues.
OTHER INCOME AND DEDUCTIONS
Miscellaneous and Income Taxes - 1992 reflects gains from the sale of
property and other contract settlements.
INTEREST CHARGES
Declines in long-term interest expense since 1991 reflect lower interest
rates on variable rate debt and the retirement, repayment or refinancing of
debt. The average interest rate paid on long-term debt including current
maturities declined to 6.0% in 1993 compared to 6.6% in 1992 and 7.5% in 1991.
Declines in short-term interest expense reflect the decreasing interest
rates since 1991 and a lower level of short-term debt outstanding during 1993.
The average daily outstanding balance of short-term debt decreased to $16
million in 1993 from $60 million in 1992 and $50 million in 1991.
PREFERRED STOCK DIVIDEND REQUIREMENTS
The 1992 decrease in the preferred stock dividend requirements compared
to 1991 reflects the refinancing of higher rate preferred stock with variable
rate preferred stock.
EARNINGS PER SHARE (EPS)
EPS for 1993 increased $0.31 over 1992 and EPS for 1992 decreased $0.23
from 1991.
The effects of weather increased 1993 EPS by approximately $0.25 over
1992 and decreased 1992 EPS by approximately $0.46 from 1991. Temperatures in
1993 were milder than normal, but closer to normal compared to the extremely
mild weather in 1992 and warmer than normal weather of 1991. Based on a
statistical relationship between sales and the differences in actual and
normal temperatures for the year, the Company estimates the effects of
abnormal weather for the last three years were as follows:
1993 1992 1991
Estimated effects of
abnormal weather on EPS $ (0.10) $ (0.35) $ 0.11
In addition to the effects of abnormal weather on EPS, 1993 expenses
associated with Wolf Creek outages (including outage accruals which began in
January 1992) decreased from 1992 resulting in an increase in EPS of $0.06.
These same 1992 expenses decreased from 1991 causing an increase in 1992 EPS
of $0.05.
EPS for 1993 and 1992 reflect efforts of the Company to control costs
despite increases in production expenses and general and administrative
expenses. Also, since 1991, the Company has refinanced a significant portion
of its long-term debt and preferred stock to take advantage of lower rates.
EPS for 1992 also reflect gains from the sales of property and other contract
settlements.
PROJECTED CONSTRUCTION EXPENDITURES
Construction expenditures, excluding AFDC, were $129.2 million in 1993
and are projected for the next five years as follows:
Construction Expenditures
1994 1995 1996 1997 1998 Total
(millions)
Generating facilities $ 52.8 $ 74.3 $ 67.4 $ 114.1 $ 148.3 $456.9
Nuclear fuel 19.3 20.7 8.1 21.0 25.7 94.8
Transmission facilities 11.1 10.6 8.5 8.7 8.8 47.7
Distribution and
general facilities 70.4 53.7 52.9 52.9 54.5 284.4
Total $ 153.6 $ 159.3 $ 136.9 $ 196.7 $ 237.3 $883.8
The Company's resource plan includes four new 146 megawatt (mw) gas-
fired combustion turbines scheduled to be completed from 1998 through 2000.
In addition, the plan envisions a new 705 mw (250 mw, Company's share) coal-
fired generating unit scheduled to begin construction in 1997 and be completed
by 2002. The projected construction expenditures include $200.2 million of
forecasted costs for these projects during the next five years. The Company's
resource plan is subject to periodic review and modification. The next
integrated resource plan will be submitted to the MPSC in July 1994.
WOLF CREEK
Wolf Creek is one of the Company's principal generating facilities
representing approximately 17% of the Company's accredited generating capacity
and 26% of the Company's annual kwh generation during the last three years,
and has the lowest fuel cost of any of its generating facilities. The plant
operated at 80%, 85% and 59% of capacity for 1993, 1992 and 1991,
respectively. Wolf Creek's assets and operating expenses represent
approximately 50% and 20% of the Company's total assets and operating
expenses, respectively. Currently no major equipment replacements are
anticipated and the Company estimates the cost of nuclear fuel per million
BTU, after the next refueling in the fall of 1994, will increase from
approximately 35% to 40% of the cost of coal. Based on contract prices and
projected future spot market prices for nuclear fuel and coal, it is
anticipated that by 1996 the cost of nuclear fuel will increase in relation to
coal to be about one-half the cost of coal.
An extended shut-down of the unit could have a substantial adverse
effect on the Company's business, financial condition and results of
operations. Higher replacement power and other costs would be incurred as a
result. Although not expected, an abnormal shut-down of the plant could be
caused by adverse incidents at the plant or by actions of the Nuclear
Regulatory Commission reacting to safety concerns at the plant or other
similar nuclear facilities. If a long-term shut-down occurred, the state
regulatory commissions could consider reducing rates by excluding Wolf Creek
investment from rate base.
Ownership and operation of a nuclear generating unit exposes the Company
to potential retroactive assessments and property losses in excess of
insurance coverage. These risks are more fully discussed in Note 4 to the
Consolidated Financial Statements-Commitments and Contingencies-Nuclear
Liability and Insurance.
ENVIRONMENTAL MATTERS
The Company's policy is to act in an environmentally responsible manner
and utilize the latest technological processes possible to avoid and treat
contamination. The Company continually conducts environmental audits designed
to assure compliance with governmental regulations and detect contamination.
However, these regulations are constantly evolving; governmental bodies may
impose additional or more rigid environmental regulations which could require
substantial changes to the Company's operations or facilities.
See Note 4 to the Consolidated Financial Statements-Commitments and
Contingencies-Environmental Matters-for discussion of costs of compliance with
environmental laws and regulations and a potential liability (which the
Company believes is not material to its financial condition or results of
operations) for cleanup costs under the Federal Superfund law.
Clean Air Act Amendments of 1990 contain two programs significantly
affecting the utility industry. Based on the results of current studies, the
Company estimates total capital expenditures needed to comply with existing
and proposed acid rain program regulations will be $4.1 million for the
installation of continuous emission monitoring equipment. The Company has
spent $2.9 million as of December 31, 1993 and has included the remaining $1.2
million in the five year projected construction expenditures. Future acid
rain program regulations may require the Company to make further capital
expenditures, but it is not possible to estimate those expenditures, if any.
The other utility-related program calls for a study of certain air toxic
substances. Based on the outcome of this study, regulation of air toxic
substances, including mercury, could be required. The Company cannot, at this
time, predict the likelihood of any such regulations or compliance costs.
CAPITAL REQUIREMENTS AND LIQUIDITY
On January 3, 1994, Moody's Investors Service upgraded the credit rating
of the Company's bonds due to an improved financial profile and low-cost
operations. The Company's long-term debt was upgraded as follows: secured
pollution control bonds to A1 from A2; general mortgage bonds-medium-term
notes to A1 from A3; unsecured pollution control bonds to A2 from Baa1; and,
preferred stock to a2 from a3. In addition, in 1993 Standard & Poor's
Corporation and Duff & Phelps upgraded the Company's General Mortgage Bonds as
follows: Standard & Poor's from A- to A; and Duff & Phelps from A to A+.
Improved ratings will make it less costly for the Company to raise funds when
needed and will contribute to the Company's continued efforts to meet the
challenge of increased competition in the utility industry.
The Company's capital structure at December 31, 1993 (including current
maturities of long-term debt less special deposit for retirement of debt)
consisted of 49.1% common stock equity, 5.1% preferred stock and 45.8% long-
term debt. The Company's goal is to maintain a capital structure in which the
percentages of common stock equity and long-term debt are approximately equal.
The Company currently estimates that it will be able to meet a
significant portion of the projected construction expenditures with
internally-generated funds. It is anticipated that funds for maturing debt
through 1998 totaling $274.5 million will be provided from operations,
refinancings or short-term debt. As of December 31, 1993, the Company had $78
million of registered but unissued Medium-Term Notes and $149 million of
unused bank lines of credit. Uncertainties which affect the
degree to which these capital requirements will be met with funds provided
from operations include such items as the effect of inflation on operating
expenses, the level of kwh sales, regulatory actions, compliance with future
environmental regulations, availability of the Company's generating units and
the level of bulk power sales with other utilities.
The Company currently uses an accelerated depreciation method for tax
purposes. The accelerated depreciation on the Wolf Creek plant has reduced
the Company's tax payments during the last three years by approximately $30
million per year. Accelerated depreciation on Wolf Creek ends in 1994.
See Note 4 to the Consolidated Financial Statements-Commitments and
Contingencies-Tax Matters-for discussion of the Company's federal income tax
returns for the years 1985 through 1990 which are presently under audit by the
Internal Revenue Service.
In order to take advantage of the potential benefits inherent in a
larger energy system, the Company might incur additional debt and/or issue
additional equity to finance system growth or new growth opportunities,
through business combinations or other investments such as an exempt wholesale
generator.
SUBSEQUENT EVENT
The Company announced an early retirement program in March 1994. See
Note 11 to the Consolidated Financial Statements for discussion of the expense
and savings of the program.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
December 31 December 31
1993 1992
ASSETS (Thousands)
UTILITY PLANT, at original cost (Notes 1, 8 and 9)
Electric $ 3,240,384 $ 3,133,059
Less-Accumulated depreciation 1,019,714 948,266
Net utility plant in service 2,220,670 2,184,793
Construction work in progress 67,766 65,965
Nuclear fuel, net of amortization of
$76,722,000 and $78,735,000 29,862 34,210
Total 2,318,298 2,284,968
REGULATORY ASSET - DEFERRED WOLF CREEK COSTS
(Note 1) 29,118 39,484
REGULATORY ASSET - RECOVERABLE TAXES (Note 1) 122,000 94,000
INVESTMENTS AND NONUTILITY PROPERTY 28,454 27,570
CURRENT ASSETS
Cash 1,539 128
Special deposit for the retirement of debt (Note 8) 60,118 -
Receivables
Customer accounts receivable (Note 5) 29,320 14,372
Other receivables 19,340 24,043
Fuel inventories, at average cost 14,550 20,625
Materials and supplies, at average cost 44,157 45,263
Prepayments 4,686 4,209
Deferred income taxes (Note 3) 3,648 5,553
Total 177,358 114,193
DEFERRED CHARGES
Regulatory Assets (Note 1)
Settlement of fuel contracts 20,634 25,751
KCC Wolf Creek carrying costs 9,575 12,311
MPSC rate phase-in plan - 7,072
Other 31,899 26,798
Other deferred charges 17,732 14,776
Total 79,840 86,708
Total $ 2,755,068 $ 2,646,923
LIABILITIES
CAPITALIZATION (Notes 7 and 8)(See Statements)
Common stock-authorized 150,000,000 shares
without par value-61,908,726 shares issued
and outstanding-stated value $ 449,697 $ 449,697
Retained earnings 418,201 405,985
Capital stock premium and expense (1,747) (1,758)
Common stock equity 866,151 853,924
Cumulative preferred stock 89,000 89,000
Cumulative preferred stock (redeemable) 1,756 1,916
Long-term debt 733,664 788,209
Total 1,690,571 1,733,049
CURRENT LIABILITIES
Notes payable to banks (Note 6) 4,000 -
Commercial paper (Note 6) 25,000 33,000
Current maturities of long-term debt 134,488 26,500
Accounts payable 59,421 77,162
Dividends declared 423 423
Accrued taxes 27,800 19,864
Accrued interest 15,575 12,949
Accrued payroll and vacations 20,127 18,044
Accrued refueling outage costs (Note 1) 7,262 12,600
Other 8,531 7,631
Total 302,627 208,173
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes (Note 3) 627,819 576,222
Deferred investment tax credits 87,185 91,530
Other 46,866 37,949
Total 761,870 705,701
COMMITMENTS AND CONTINGENCIES (Note 4)
Total $ 2,755,068 $ 2,646,923
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31
1993 1992 1991
(Thousands)
ELECTRIC OPERATING REVENUES $ 857,450 $ 802,668 $ 825,101
OPERATING EXPENSES
Operation
Fuel 130,117 130,032 132,100
Purchased power 31,403 21,868 22,226
Other 184,633 175,937 162,548
Maintenance 78,550 81,163 80,922
Depreciation 91,110 88,768 86,795
Taxes
Income (Note 3) 69,502 51,691 61,871
General 95,659 92,461 88,525
Amortization of
MPSC rate phase-in plan (Note 1) 7,072 7,072 7,072
Deferred Wolf Creek costs (Note 1) 13,102 13,102 11,734
Total 701,148 662,094 653,793
OPERATING INCOME 156,302 140,574 171,308
OTHER INCOME AND DEDUCTIONS
Allowance for equity funds used during
construction 2,846 1,073 539
Deferred Wolf Creek carrying
costs (Note 1) - - 791
Miscellaneous (2,486) 2,595 (3,829)
Income taxes (Note 3) 1,549 (505) 1,593
Total 1,909 3,163 (906)
INCOME BEFORE INTEREST CHARGES 158,211 143,737 170,402
INTEREST CHARGES
Long-term debt 50,118 54,266 63,057
Short-term notes 750 2,749 3,299
Miscellaneous 4,113 2,173 2,665
Allowance for borrowed funds used during
construction (2,542) (1,785) (2,512)
Total 52,439 57,403 66,509
YEARLY RESULTS
Net income 105,772 86,334 103,893
Preferred stock dividend requirements 3,153 3,062 6,023
Earnings available for common stock $ 102,619 $ 83,272 $ 97,870
Average number of common shares
outstanding 61,908,726 61,908,726 61,908,726
Earnings per common share $ 1.66 $ 1.35 $ 1.58
Cash dividends per common share $ 1.46 $ 1.43 $ 1.37
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31
1993 1992 1991
(Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 105,772 $ 86,334 $ 103,893
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 91,110 88,768 86,795
Amortization of:
Nuclear Fuel 8,705 9,583 6,199
Deferred Wolf Creek costs 13,102 13,102 10,943
MPSC rate phase-in plan 7,072 7,072 7,072
Other 8,234 5,921 5,147
Deferred income taxes (net) 25,502 23,979 28,064
Investment tax credit (net) (4,345) (4,521) (7,009)
Allowance for equity funds used during
construction (2,846) (1,073) (539)
Cash flows affected by changes in:
Receivables (10,245) 2,848 13,636
Fuel inventories 6,075 (859) 137
Materials and supplies 1,106 654 (98)
Accounts payable (17,741) 4,838 2,861
Accrued taxes 7,936 2,404 2,995
Accrued interest 2,626 488 (1,244)
Wolf Creek refueling outage accrual (5,338) 12,600 -
Settlement of fuel contracts - - (8,578)
Other operating activities 6,419 1,599 2,175
Net cash provided by operating
activities 243,144 253,737 252,449
CASH FLOWS FROM INVESTING ACTIVITIES
Construction expenditures (129,199) (129,559) (122,447)
Allowance for borrowed funds used during
construction (2,542) (1,785) (2,512)
Other investing activities 306 (4,589) (5,404)
Net cash used in investing activities (131,435) (135,933) (130,363)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 324,846 134,750 135,250
Issuance of preferred stock - 50,000 -
Retirement of long-term debt (271,480) (143,230) (163,215)
Retirement of preferred stock - (13,000) (40,000)
Special deposit for the retirement of
debt (60,118) - -
Premium on reacquired stock and long-term
debt (4,077) (2,321) (5,516)
Increase (decrease) in short-term
borrowings (4,000) (53,000) 42,500
Dividends declared (93,556) (91,277) (90,232)
Other financing activities (1,913) 274 (879)
Net cash used in financing activities (110,298) (117,804) (122,092)
Net increase (decrease) in cash 1,411 - (6)
Cash at beginning of year 128 128 134
Cash at end of year $ 1,539 $ 128 $ 128
Cash paid during the year for:
Interest (net of amount capitalized) $ 47,361 $ 55,223 $ 66,290
Income taxes $ 40,141 $ 32,995 $ 37,117
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
CONSOLIDATED STATEMENTS OF CUMULATIVE PREFERRED STOCK AND LONG-TERM DEBT
December 31
1993 1992
CUMMULATIVE PREFERRED STOCK (Note 7) (in thousands)
$100 Par Value
3.80% - 100,000 shares issued $ 10,000 $ 10,000
4.50% - 100,000 shares issued 10,000 10,000
4.20% - 70,000 shares issued 7,000 7,000
4.35% - 120,000 shares issued 12,000 12,000
No Par Value
3.04%* - 500,000 shares issued 50,000 50,000
Total $ 89,000 $ 89,000
CUMMULATIVE PREFERRED STOCK (REDEEMABLE) (Note 7)
$100 Par Value
4.00% - 17,557 and 19,157 shares issued $ 1,756 $ 1,916
LONG-TERM DEBT (EXCLUDING CURRENT MATURITIES) (Note 8)
First Mortgage Bonds
7.33% weighted average rate, amounts redeemed
in 1993 $ - $ 244,980
9.46% series due 1994 - 60,000
5 7/8% series due 2007 21,940 21,940
Secured by General Mortgage Bonds
Medium-Term Notes due 1994-2008, 6.78% and 7.29%
weighted average rate at December 31 378,750 220,000
3.34%* Environmental Improvement Revenue
Refunding Bonds due 2012-23 122,846 31,000
Guaranty of Pollution Control Bonds
5 3/4% series due 2003 13,742 13,980
3.15%* due 2015-17 196,500 196,500
Unamortized Premium and Discount (net) (114) (191)
Total $ 733,664 $ 788,209
* Variable rate securities, weighted average rate as of December 31, 1993
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Year ended December 31
1993 1992 1991
(in thousands)
Beginning Balance $ 405,985 $ 411,161 $ 399,294
Net Income 105,772 86,334 103,893
511,757 497,495 503,187
Premium on Reacquired Preferred Stock - 233 1,794
Dividends Declared:
Preferred Stock, at required rates 3,169 2,747 5,417
Common Stock - $1.46, $1.43 and $1.37
per share 90,387 88,530 84,815
Ending Balance (Note 7) $ 418,201 $ 405,985 $ 411,161
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
KANSAS CITY POWER & LIGHT COMPANY
Notes to Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
System of Accounts
The accounting records of Kansas City Power & Light Company (the
Company) are maintained in accordance with the Uniform System of Accounts
prescribed by the Federal Energy Regulatory Commission (FERC) and generally
accepted accounting principles.
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and KLT Inc., a wholly-owned subsidiary. Intercompany balances and
transactions have been eliminated. Because KLT Inc. is not an electric
utility, its revenues and expenses have been classified under Other Income and
Deductions in the Consolidated Statements of Income.
KLT Inc. was formed in 1992 as a holding company for various non-
regulated business opportunities. The Company's equity investment in KLT Inc.
was $4.5 million and $1.5 million as of December 31, 1993 and 1992,
respectively.
Utility Plant
Utility plant is stated at historical costs of construction. These
costs include taxes, payroll-related costs, including pensions and other
fringe benefits, and an allowance for funds used during construction.
Allowance for Funds Used During Construction (AFDC)
AFDC represents the cost of borrowed funds and a return on equity funds
used to finance construction projects and is capitalized as a cost of
construction work in progress. The portion attributable to borrowed funds is
reflected as a reduction of interest charges while the portion applicable to
equity funds is shown as a non-cash item of other income. When a
construction project is placed in service, the related AFDC, as well as other
construction costs, is used to establish rates under regulatory rate
practices. The rates used to compute gross AFDC are compounded semi-annually
and averaged 8.3% for 1993, 6.6% for 1992 and 7.7% for 1991.
Depreciation and Maintenance
Depreciation is computed on a straight-line basis for jurisdictional
property based on depreciation rates approved by the Missouri Public Service
Commission (MPSC) and the Kansas Corporation Commission (KCC). Annual
composite rates were approximately 2.9% during the last three years.
Costs of improvements to units of property are charged to the utility
plant accounts. Property units retired or otherwise disposed are charged to
accumulated depreciation, along with removal costs, net of salvage. Repairs
of property and replacements of items determined not to be units of property
are expensed as incurred.
Nuclear Plant Decommissioning Costs
In 1986, the MPSC estimated the cost of decommissioning the Wolf Creek
Generating Station (Wolf Creek) to be $103 million in 1985 dollars. In 1989,
the KCC estimated the cost to be $206 million in 1988 dollars. Then, in 1992,
the MPSC increased its estimate to $347 million in 1990 dollars. In
accordance with MPSC and KCC requirements, the jurisdictional portions of the
Company's 47% share of these costs (current level of $3.2 million, annually)
are being recovered and charged to other operation expenses over the life of
the plant and placed in an external trust fund to be used only for the
physical decommissioning of Wolf Creek (immediate dismantlement method) which
is not expected to occur prior to 2025. A study was filed with the KCC and
MPSC during 1993 estimating the projected decommissioning costs to be $370
million in 1993 dollars. Based on this study, it is expected that the MPSC
will determine that no increase in the current level of the Missouri
jurisdictional funding and expenses will be necessary. A hearing before the
KCC is expected during 1994.
The investment in the trust fund, including reinvested earnings, was
$14.3 million and $10.6 million at December 31, 1993 and 1992, respectively.
These amounts are reflected in the Consolidated Balance Sheets under
Investments and Nonutility Property with the related liabilities for
decommissioning included in Deferred Credits and Other Liabilities-Other.
Nuclear Fuel
The cost of nuclear fuel is amortized to fuel expense based on the
quantity of heat produced for the generation of electricity. Under the
Nuclear Waste Policy Act of 1982, the Department of Energy (DOE) is
responsible for the permanent disposal of spent nuclear fuel. Currently, the
Company pays a quarterly fee of one mill per kilowatt-hour of net nuclear
generation to the DOE for future permanent disposal services. Disposal costs
are charged to fuel expense and recovered through rates. These disposal
services may not be available prior to 2013 although an interim facility may
be available earlier. Wolf Creek has an on-site, temporary storage facility
for spent nuclear fuel which, under current regulatory guidelines, can provide
storage space until approximately 2006. The Company believes additional
temporary storage space can be constructed or obtained, as necessary.
Regulatory Assets
Certain costs are recorded as regulatory assets when a rate order allows
the deferral and inclusion of the amortization in rates or when it is
probable, based on historical regulatory precedent, that future rates
established by the regulators will recover amortization of the costs. If
subsequent recovery is not permitted, any unamortized balance, net of tax,
would reduce net income.
Deferred Wolf Creek Costs
Orders from the KCC and MPSC provided for continued construction
accounting for ratemaking purposes after the September 3, 1985
commercial in-service date of Wolf Creek through September 30, 1985 and
May 5, 1986, respectively. The deferral of certain other carrying costs
was also authorized. These deferrals are being amortized and recovered
in rates over an approximate 10 year period ending in 1996.
Recoverable Taxes
See Income Taxes below for discussion.
Settlement Of Fuel Contracts
The Company has deferred the cost incurred to terminate certain
coal purchase contracts. These costs are being amortized through the
year 2002.
KCC Wolf Creek Carrying Costs
As ordered by the KCC, the Company deferred certain carrying costs
through June 1991. The recovery and corresponding amortization of this
deferral over six years began in July 1991.
MPSC Rate Phase-In Plan
MPSC's 1986 Wolf Creek rate phase-in plan resulted in the deferral
of a cash recovery of a portion of the cost of equity and the carrying
costs on the deferral. Recovery of these deferrals was completed
December 31, 1993.
Effective January 1, 1994, the MPSC approved a 2.66% rate
reduction (approximately $12.5 million annually) for the Company's
Missouri retail customers primarily to reflect the completion of this
amortization. The reduction will be spread evenly over the Missouri
retail customer classes. This agreement with the MPSC and public
counsel also includes a provision whereby none of the parties can file
for a general increase or decrease in Missouri retail electric rates
prior to January 1, 1996. Approximately two-thirds of total retail
sales are from Missouri customers.
Other
Other regulatory assets include premium on redeemed debt, deferred
flood costs, the deferral of costs to decommission and decontaminate
federal uranium enrichment facilities and other costs. These deferrals
are amortized over various periods extending to 2017.
Fair Value of Financial Instruments
The stated values of the Company's financial instruments as of December
31, 1993 and 1992 approximated the fair market values based on quoted market
prices for the securities or for similar types of securities. If quotes were
not available, the Company's incremental borrowing rate for similar types of
debt was used.
Revenue Recognition
The Company utilizes cycle billing and accrues an estimated amount for
unbilled revenue at the end of each reporting period.
Income Taxes
The Company has adopted Financial Accounting Standards Board (FASB)
Statement No. 109, Accounting for Income Taxes. This statement is not
materially different from FASB Statement No. 96, which the Company adopted in
1988. As a result, the Company establishes deferred tax liabilities and
assets, as appropriate, for all temporary differences caused when the tax
basis of an asset or liability differs from that reported in the financial
statements. These deferred tax assets and liabilities must be determined
using the tax rates scheduled by the tax law to be in effect when the
temporary differences reverse.
The Regulatory Asset-Recoverable Taxes primarily reflects the future
revenue requirements necessary to recover the tax benefits of existing
temporary differences flowed through to ratepayers in the past. During 1993,
the net change in the Regulatory Asset-Recoverable Taxes and Deferred income
taxes included a $40 million increase resulting from the changes in the
federal and Missouri state income tax laws effective January 1, 1993 and
January 1, 1994, respectively. Although the Company has calculated its
deferred tax assets and liabilities pursuant to FASB 109, operating income
taxes were recorded in accordance with ratemaking principles. However, if
FASB 109 were reflected in the Consolidated Statements of Income, net income
would remain the same.
Investment tax credits have been deferred when utilized and are
amortized to income over the remaining service lives of the related
properties.
Accrued Refueling Outage Costs - Change In Accounting Principle
Effective January 1992, the Company changed its method of accounting for
incremental costs to be incurred during scheduled Wolf Creek refueling
outages. Instead of expensing these costs as incurred, the Company is
accruing forecasted outage costs evenly (monthly) over the unit's operating
cycle which normally lasts approximately 18 months. The Company believes this
method of accounting produces a more meaningful presentation of yearly results
of operations than the prior method. Since the accrual began in January 1992,
when Wolf Creek returned on-line from a refueling outage, there was no
cumulative effect for the change in accounting principle. The pro forma
effects for the year ended December 31, 1991 were not material but would have
increased net income by $3.2 million ($0.05 per share). Because there was no
refueling outage in 1992, the effect of this change decreased 1992 net income
by $7.8 million ($0.13 per share).
Environmental Matters
The Company's policy is to accrue environmental and cleanup costs when
it is probable that a liability has been incurred and the amount of the
liability can be reasonably estimated. The Company believes it has
appropriately recorded all such costs related to environmental matters.
Reclassifications
Certain reclassifications have been made to previously issued financial
statements in order to conform with the 1993 presentation.
2. PENSION PLANS AND OTHER EMPLOYEE BENEFITS
Pension Plans
The Company has defined benefit pension plans for all its regular
employees, including officers, providing for benefits upon retirement,
normally at age 65. In accordance with the Employee Retirement Income
Security Act of 1974 (ERISA), the Company has satisfied at least its minimum
funding requirements. Benefits under these plans reflect the employee's
compensation, years of service and age at retirement.
Provisions for pensions are determined under the rules prescribed by
FASB Statement No. 87-Employers' Accounting for Pensions. The following is
the funded status of the plans:
December 31
1993 1992
(thousands)
Accumulated Benefit Obligation:
Vested $ 209,193 $173,021
Non-vested 6,296 6,126
Total $ 215,489 $179,147
Determination of Plan Assets
less Obligations:
Fair value of plan assets $ 315,179 $272,001
Projected benefit obligation 279,525 241,902
Difference $ 35,654 $ 30,099
Reconciliation of Difference:
Contributions to trusts
Prepaid $ 10,677 $ 8,759
Accrued liability (6,304) (4,881)
Unamortized transition amount 16,756 18,828
Unrecognized net gain 18,197 11,494
Unrecognized prior service cost (3,672) (4,101)
Difference $ 35,654 $ 30,099
Plan assets are invested in insurance contracts, corporate bonds, equity
securities, U.S. Government securities, notes, mortgages and short-term
investments.
Based on discount rates of 7% in 1993 and 8% in 1992; and increases in
future salary levels of 4% to 5% in 1993 and 5% to 6% in 1992.
Components of provisions for pensions (in thousands):
1993 1992 1991
Service cost $ 8,671 $ 7,301 $ 6,162
Interest cost on projected benefit
obligation 19,521 17,903 16,617
Actual return on plan assets (49,875) (24,541) (45,542)
Other 27,715 3,653 27,026
Net periodic pension cost $ 6,032 $ 4,316 $ 4,263
Long-term rates of return on plan assets of 8% to 8.5% were used.
Postretirement Benefits Other Than Pensions
In addition to providing pension benefits, the Company provides certain
postretirement health care and life insurance benefits for substantially all
retired employees.
During the first quarter of 1993 the Company adopted FASB Statement No.
106-Employers' Accounting for Postretirement Benefits Other Than Pensions.
FASB 106 requires companies to accrue the cost of postretirement health care
and life insurance benefits during an employee's active years of service.
Previously, the Company expensed these costs as paid (pay-as-you-go). The
Company currently recovers these costs through rates on a pay-as-you-go basis.
As of December 31, 1992, the transition obligation under FASB 106 was
approximately $23.5 million, with amortization over 20 years beginning in
1993.
Net periodic postretirement benefit cost (in thousands):
1993
Service cost for benefits earned
during the year $ 616
Interest cost on the accumulated
postretirement benefit obligation (APBO) 1,893
Amortization of unrecognized
transition obligation 1,175
Net periodic postretirement cost 3,684
Less: Pay-as-you-go costs 1,109
Net increase in cost due to FASB 106 $ 2,575
The increase in the annual health care cost trend rate for 1994 is
assumed to be 13%, decreasing gradually over a seven year period to its
ultimate level of 6%. The Company's health care plan requires retirees to
participate in the cost when premiums exceed a certain amount. Because of
this provision, an increase in the assumed health care cost trend rate by 1%
in each year would only increase the APBO as of December 31, 1993 by
approximately $786,000 and the aggregate service and interest cost components
of net periodic postretirement benefit cost for 1993 by approximately $98,000.
Reconciliation of the status of postretirement benefit plans to amounts
recorded in the Consolidated Balance Sheets (in thousands):
December 31
1993
APBO:
Retirees $ (10,672)
Fully eligible active plan participants (6,405)
Other active plan participants (10,501)
Unfunded APBO (27,578)
Unrecognized loss 2,689
Unrecognized transition obligation 22,314
Accrued postretirement benefit obligation
(included in Deferred Credits
and Other Liabilities - Other) $ (2,575)
The weighted average discount rate of 7% and future salary level
increases of 4% were used to determine the APBO.
Long-Term Incentive Plan
In 1992, the shareholders adopted a 10 year, Long-Term Incentive Plan
for officers and key employees. Awards issued under the Plan cannot exceed
three million common stock shares. During 1993 and 1992, awards to purchase
63,125 and 86,000 shares of common stock were granted with exercise prices of
$23.875 and $21.625 per share, respectively. During 1993, awards to purchase
4,000 shares were canceled. Under granted stock options, recipients are
entitled to receive accumulated dividends as though reinvested if the options
are exercised and if the market price at the time of exercise equals or
exceeds the grant price. Under the assumption that all shares will eventually
be exercised, the Company expensed $0.1 million and $0.2 million in 1993 and
1992, respectively, representing accumulated dividends and the change in stock
price since the date of grant. At December 31, 1993, options for 145,125
shares of common stock were outstanding and options for 41,000 shares were
exercisable.
3. INCOME TAXES
Income tax expense as shown in the Consolidated Statements of Income
consists of the following:
1993 1992 1991
(thousands)
Current income taxes:
Federal $ 41,207 $ 28,081 $33,667
State 5,589 4,657 5,556
Total 46,796 32,738 39,223
Deferred income taxes, net:
Federal 22,274 20,488 23,696
State 3,228 3,491 4,368
Total 25,502 23,979 28,064
Investment tax credit, net (4,345) (4,521) (7,009)
Total income tax expense $ 67,953 $ 52,196 $60,278
The following table shows a reconciliation of the federal statutory income
tax rate to the effective rate reflected in the Consolidated Statements of
Income. See Note 1 to the Consolidated Financial Statements for a discussion
of the Company's income tax policies.
1993 1992 1991
Federal statutory income tax rate 35.0 % 34.0 % 34.0 %
Differences between book and tax
depreciation not normalized 1.3 1.7 1.8
Amortization of investment tax
credit (2.5) (3.3) (4.3)
State income taxes 3.3 3.9 4.0
Other 2.0 1.4 1.2
Effective income tax rate 39.1 % 37.7 % 36.7 %
The significant temporary differences resulting in deferred tax assets
and liabilities in the Consolidated Balance Sheets are as follows:
December 31
1993 1992
(thousands)
Depreciation differences $ 476,637 $ 449,701
Recoverable taxes 122,000 94,000
Other 25,534 26,968
Net deferred income tax liability $ 624,171 $ 570,669
The net deferred income tax liability consists of the following:
December 31
1993 1992
(thousands)
Gross deferred income tax assets $ (63,187) $ (64,746)
Gross deferred income tax liabilities 687,358 635,415
Net deferred income tax liability $ 624,171 $ 570,669
4. COMMITMENTS AND CONTINGENCIES
Nuclear Liability and Insurance
The Price-Anderson Act currently limits the public liability of nuclear
reactor owners to $9.4 billion, including attorney costs, for claims that
could arise from a nuclear incident. Accordingly, the Company and the other
owners of Wolf Creek have liability insurance coverage of this amount which
consists of the maximum available commercial insurance of $200 million and
Secondary Financial Protection (SFP). SFP coverage is funded by a mandatory
program of deferred premiums assessed against all owners of licensed reactors
for any nuclear incident anywhere in the country. The maximum assessment per
reactor is $79.3 million ($37.3 million, Company's share) per incident. The
owners of Wolf Creek are jointly and severally liable for these charges,
payable at a rate not to exceed $10 million ($4.7 million, Company's share)
per incident per year.
The owners of Wolf Creek also have $2.8 billion of property damage,
decontamination and decommissioning insurance for loss resulting from damage
to the Wolf Creek facilities. Nuclear insurance pools provide $1.3 billion of
coverage, while Nuclear Electric Insurance Limited (NEIL) provides $1.5
billion. In the event of an accident, insurance proceeds must first be used
for reactor stabilization and site decontamination. The remaining proceeds
from the $2.8 billion insurance coverage ($1.3 billion, Company's share), if
any, can be used for property damage up to $1.1 billion (Company's share),
premature decommissioning costs up to $117.5 million (Company's share) in
excess of funds previously collected for decommissioning (as discussed in Note
1) with the remaining $47 million (Company's share) available for either
property damage or premature decommissioning costs.
The owners of Wolf Creek have also procured extra expense insurance from
NEIL. Under both the NEIL property and extra expense policies, the Company is
subject to retroactive assessment if NEIL losses, with respect to each policy
year, exceed the accumulated funds available to the insurer under that policy.
The estimated maximum retroactive assessments for the Company's share under
the policies total approximately $9 million per year.
In the event of a catastrophic loss at Wolf Creek, the amount of
insurance available may not be adequate to cover property damages and extra
expenses incurred. Uninsured losses, to the extent not recovered through
rates, would be assumed by the Company and could have a material, adverse
effect on the Company's financial condition and results of operations.
Nuclear Fuel Commitments
At December 31, 1993, Wolf Creek's nuclear fuel commitments (Company's
share) were approximately $16 million for uranium concentrates through 1997,
$126 million for enrichment through 2014 and $46 million for fabrication
through 2014.
Tax Matters
The Company's federal income tax returns for the years 1985 through 1990
are presently under examination by the Internal Revenue Service (IRS). The
IRS has issued Revenue Agent's Reports for the years 1985 through 1990. The
Reports include proposed adjustments that would reduce the Company's Wolf
Creek investment tax credit (ITC) by 25% or approximately $20 million and tax
depreciation by 23% or approximately $190 million. These amounts include the
continuing effect of the adjustments through December 31, 1993. These
adjustments, principally, are based upon the IRS's contention that (i) certain
start-up and testing costs considered by the Company to be costs of the plant,
should be treated as licensing costs, which do not qualify for ITC or
accelerated depreciation, and (ii) certain cooling and generating facilities
should not qualify for ITC or accelerated depreciation.
If the IRS were to prevail on all of these proposed adjustments, the
Company would be obligated to make cash payments, calculated through December
31, 1993, of approximately $95 million for additional federal and state income
taxes and $50 million for corresponding interest. After offsets for deferred
income taxes, these payments would reduce net income by approximately $30
million.
The Company has filed a protest with the appeals division of the IRS.
Based upon their interpretation of applicable tax principles and the tax
treatment of similar costs and facilities with respect to other plants, it is
the opinion of management and outside tax counsel that the IRS's proposed Wolf
Creek adjustments are substantially overstated. Management believes any
additional taxes, together with interest, resulting from the final resolution
of these matters will not be material to the Company's financial condition or
results of operations.
Environmental Matters
The Company's operations must comply with federal, state and local
environmental laws and regulations. The generation of electricity utilizes,
produces and requires disposal of certain products and by-products including
polychlorinated biphenyl (PCB's), asbestos and other potentially hazardous
materials. The Federal Comprehensive Environmental Response, Compensation and
Liability Act, the "Superfund" law, imposes strict joint and several liability
for those who generate, transport or
deposit hazardous waste as well as the current property owner and predecessor
owner at the time of contamination. The Company continually conducts
environmental audits designed to detect contamination and assure compliance
with governmental regulations. However, compliance programs necessary to meet
future environmental laws and regulations governing water and air quality,
including carbon dioxide emissions, hazardous waste handling and disposal,
toxic substances and the effects of electromagnetic fields, could require
substantial changes to the Company's operations or facilities.
Interstate Power Company of Dubuque, Iowa (Interstate) filed a lawsuit
in 1989 against the Company in the Federal District Court for the District of
Iowa seeking from the Company contribution and indemnity under the Superfund
law for cleanup costs of hazardous substances at the site of a demolished gas
manufacturing plant in Mason City, Iowa. The plant was operated by the
Company for very brief periods of time before the plant was demolished in
1952. The site and all other properties the Company owned in Iowa were sold
to Interstate in 1957. The Company estimates that the cleanup could cost up
to $10 million. The Company's estimate is based upon an evaluation of
available information from on-going site investigation and assessment
activities, including the costs of such activities.
In August 1993, the Company, along with other parties to the lawsuit,
received a letter from the Environmental Protection Agency (EPA) notifying
each such party that it was considered a potentially responsible party for
cleanup costs at the site. The EPA has also proposed to list the site on the
National Priorities List.
The Company believes it has several valid defenses to this action
including the fact that the 1957 sales documents included clauses which
require Interstate to indemnify the Company from and against all claims and
damages arising after the sale. However, the Court in an October 1993 order
rejected this position, ruling that the indemnity clauses were not
sufficiently broad to indemnify for environmental cleanup. This order will be
final for appeal after a trial to allocate the cleanup costs among the
parties, which is expected in 1994. Even if unsuccessful on the liability
issue, the Company does not believe its allocated share of the cleanup costs
will be material to its financial condition or results of operations.
Other Agreements
Under long-term contractual arrangements, the Company's share of
purchased coal totaled approximately $17 million in 1993 and $21 million in
1992 and 1991. The Company's share of purchase commitments in 1993 dollars
under the remaining terms of the coal contracts is approximately $110 million.
The Company also purchases coal on the spot market.
The Company has a transmission line lease with another utility whereby,
with FERC approval, the rental payments can be increased by the lessor, after
which the Company is entitled to cancel the lease if able to secure an
alternative transmission path. Total commitments under this lease are $1.9
million per year and approximately $60 million over the remaining life of the
lease if the lease is not canceled.
Under other leases, the Company incurred rental expense during the last
three years of approximately $15 million to $19 million per year. Rental
commitments under these leases for railroad cars, computer equipment,
buildings, a transmission line and similar items are approximately $114
million over the remaining life of the leases with payments during each of the
next five years ranging from a high of $17 million in 1994 to $8 million in
1998. Capital leases are not material to the Company and are included in the
amounts discussed above.
The Company has contracted to purchase capacity from other utilities
through 2009. The obligations are as follows (cost in millions):
Cost Megawatts (mw)
1994 $12.4 470
1995 15.1 450
1996 19.4 500
1997 22.8 500
1998 22.8 500
1999 22.8 500
2000 16.6 150
Thereafter -
annual amounts through 2009 10.4 150
5. SALE OF ACCOUNTS RECEIVABLE
In 1989, the Company entered into an agreement with a financial
institution to sell, with limited recourse, an undivided interest in
designated accounts receivable. Accounts receivable sold under this agreement
totaled $60 million as of December 31, 1993, 1992 and 1991. Costs associated
with the sale of customer accounts receivable of $2.2 million, $2.6 million
and $3.5 million for 1993, 1992 and 1991, respectively, are included in Other
Income and Deductions-Miscellaneous.
6. SHORT-TERM BORROWINGS
The Company borrows short-term funds from banks and through the sale of
commercial paper as needed. Under minimal fee arrangements, the Company has
confirmed bank lines of credit totaling $153 million, of which $149 million
remains available at December 31, 1993.
7. COMMON STOCK EQUITY, PREFERRED STOCK AND REDEEMABLE PREFERRED STOCK
Retained earnings at December 31, 1993 included $16 million which was
not available for cash dividends on common stock under the provisions of the
Indenture of Mortgage securing First Mortgage Bonds.
During 1991, the Company reacquired and retired the 800,000 shares of
the $2.33 and 800,000 shares of the $2.20 Cumulative No Par Preferred Stock
with a combined stated value of $40 million. This transaction included a $4.7
million premium of which $2.9 million was charged against capital stock
premium and expense and $1.8 million was charged against retained earnings.
In February 1992, the Company redeemed and retired the 130,000 shares of
the 7.72% Cumulative Preferred Stock with a par value of $13 million. The
cost of redeeming this stock included a premium of $0.3 million which was
charged against retained earnings.
In April 1992, the Company issued $50 million, Cumulative No Par
Preferred Stock, Auction Series A, stated value of $100 per share. The $0.9
million in costs associated with this issue were charged to capital stock
premium and expense.
The issued cumulative preferred stock of $91 million may be redeemed at
the option of the Company at prices which, in the aggregate, total $91
million.
Scheduled mandatory sinking fund requirements for the outstanding
redeemable 4% Cumulative Preferred Stock are $160,000 per year.
At December 31, 1993, the Company had authorized 407,557 shares of
Cumulative Preferred Stock at a par value of $100 per share, 1,572,000 shares
of Cumulative No Par Preferred Stock and 11,000,000 shares of Preference Stock
without par value.
If any dividends on its preferred stock are not declared and paid when
scheduled, the Company could not declare or pay dividends on its common stock
or acquire any shares in consideration thereof. If the amount of any such
unpaid dividends equals four or more full quarterly dividends, the holders of
preferred stock, voting as a single class, could elect representatives to the
Company's Board of Directors.
On January 3, 1994, the Company registered 2,000,000 shares of its
common stock with the Securities and Exchange Commission for a Dividend
Reinvestment and Stock Purchase Plan (the Plan). Under the Plan, common
shareholders and employees and directors of the Company and its subsidiaries
have the opportunity to purchase shares of the Company's common stock by
reinvesting dividends and/or making optional cash payments. Rather than
issuing new shares, the Company intends to purchase the shares for the Plan on
the open market.
8. LONG-TERM DEBT
First Mortgage Bonds
The Company cannot issue additional First Mortgage Bonds authorized by
the Indenture of Mortgage and Deed of Trust dated as of December 1, 1946, as
supplemented, as long as any of the General Mortgage Bonds (discussed below)
are outstanding. Substantially all of the Company's utility plant is pledged
under the terms of the Indenture.
At December 31, 1993, $60 million was held as a special deposit and used
on January 5, 1994 to redeem the maturing $60 million First Mortgage Bonds.
General Mortgage Bonds
The Company is authorized to issue General Mortgage Bonds under the
General Mortgage Indenture and Deed of Trust dated December 1, 1986, as
supplemented. The amount of additional bonds which may be issued is subject
to certain restrictive provisions of the General Mortgage Indenture. The
General Mortgage Indenture constitutes a mortgage lien on substantially all of
the Company's utility plant and is junior to the lien of the First Mortgage.
Upon retirement and/or maturity of the remaining outstanding First Mortgage
Bonds, the General Mortgage Bonds will become first mortgage bonds.
The Company pledged General Mortgage Bonds in the amount of $531 million
to secure the outstanding $453 million (including $74 million classified as
current maturities of long-term debt) and the unissued $78 million of Medium-
Term Notes as of December 31, 1993.
Scheduled Maturities
The amount of long-term debt maturing in each of the next five years is
as follows (in millions): 1994 - $134.5; 1995 - $30.0; 1996 - $47.3; 1997 -
$0.8; and 1998 - $61.9.
9. JOINTLY-OWNED ELECTRIC UTILITY PLANTS
The Company has joint ownership agreements with other utilities
providing undivided interests in utility plants at December 31, 1993 as
follows (in millions of dollars):
Wolf Creek La Cygne Iatan
Unit Units Unit
Company's share 47% 50% 70%
Utility plant in service $ 1,326 $ 282 $ 247
Estimated accumulated depreciation
(Production plant only) $ 270 $ 150 $ 111
Nuclear fuel, net $ 30 - -
Company's accredited capacity-mw 532 678 469
Each participant must provide its own financing. The Company's share of
direct expenses is included in the corresponding operating expenses in the
Consolidated Statements of Income.
10. QUARTERLY OPERATING RESULTS
(UNAUDITED)
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
(thousands)
1993
Operating revenues $ 191,380 $ 208,323 $ 256,919 $ 200,828
Operating income $ 29,624 $ 38,878 $ 57,865 $ 29,935
Net income $ 15,800 $ 25,731 $ 44,920 $ 19,321
Earnings per common share $ 0.24 $ 0.40 $ 0.72 $ 0.30
1992
Operating revenues $ 180,022 $ 196,505 $ 229,425 $ 196,716
Operating income $ 23,795 $ 34,351 $ 50,638 $ 31,790
Net income $ 8,321 $ 21,335 $ 38,044 $ 18,634
Earnings per common share $ 0.12 $ 0.33 $ 0.60 $ 0.29
The business of the Company is subject to seasonal fluctuations with peak
periods occurring during summer months. See Management's Discussion and
Analysis of Financial Condition and Results of Operations for discussion of
items affecting quarterly results.
11. EVENT (UNAUDITED) SUBSEQUENT TO THE DATE OF THE INDEPENDENT ACCOUNTANTS'
REPORT
In March 1994, the Company offered a voluntary early retirement program
to 411 eligible management and union employees. Eligible employees have until
May 31, 1994 to decide whether or not to participate in the program. As of
March 24, 1994, approximately 35% of eligible employees had elected to
participate.
The Company's last early retirement program in 1986 had a participation
rate of approximately 60% of those eligible. While there is no way of knowing
how many or which employees will elect to participate in the program, assuming
the 1986 participation rate and using averages, the cost of the program to the
Company would be approximately $22 million and would be recorded in the first
half of 1994 as an expense when the employee elects to participate in the
program. The Company estimates that these program costs would be offset by
savings of payroll and benefit costs of approximately $6 million in 1994 and
an average of $11 million per year for the period 1995 through 1998. These
savings assume no replacements for retiring employees.
The expense and savings of the program as discussed above are estimates
and could change significantly because of changes from the assumed
participation rate, mix of employees accepting the offer, and extent of
replacements of retiring employees.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Kansas City Power & Light Company:
We have audited the consolidated financial statements and the financial
statement schedules of Kansas City Power & Light Company listed in the index
on page 39 of this Form 10-K. These financial statements and financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Kansas City
Power & Light Company as of December 31, 1993 and 1992, and the consolidated
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1993, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedules referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all material
respects, the information required to be included therein.
As discussed in Note 1 to the consolidated financial statements, the Company
changed its method of accounting for incremental nuclear refueling outage costs
in 1992.
/s/Coopers & Lybrand
COOPERS & LYBRAND
Kansas City, Missouri
January 28, 1994
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
The information concerning directors required by Item 401 of Regulation S-K
has been furnished by the Company in its definitive proxy statement dated
March 11, 1994, filed with the Securities and Exchange Commission pursuant to
Regulation 14A under the Securities Exchange Act of 1934, and is incorporated
herein by reference.
Executive Officers
See Part I, page 7, entitled "Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K has been furnished
by the Company in its definitive proxy statement dated March 11, 1994, filed
with the Securities and Exchange Commission pursuant to Regulation 14A under the
Securities and Exchange Act of 1934, and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information required by Item 403 of Regulation S-K has been furnished
by the Company in its definitive proxy statement dated March 11, 1994, filed
with the Securities and Exchange Commission pursuant to Regulation 14A under the
Securities and Exchange Act of 1934, and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
Page
No.
Financial Statements
a.
Consolidated Balance Sheets - December 31, 1993 and 1992 18-19
b.
Consolidated Statements of Income for the years ended
December 31, 1993, 1992 and 1991
20
c. Consolidated Statements of Cash Flows for the years
ended December 31, 1993, 1992 and 1991
21
d.
Consolidated Statements of Cumulative Preferred Stock &
Long-Term Debt - December 31, 1993 and 1992 22
e.
Consolidated Statements of Retained Earnings for the
years ended December 31, 1993, 1992 and 1991 22
f.
Notes to Consolidated Financial Statements 23
g.
Report of Independent Accountants 37
Financial Statement Schedules
a.
Schedule V - Property, Plant and Equipment - For the
years ended December 31, 1993, 1992 and 1991
42-44
b.
Schedule VI - Accumulated Depreciation and Amortization
of Property, Plant and Equipment - For the years ended
December 31, 1993, 1992 and 1991
45-47
c.
Schedule IX - Short-Term Borrowings - December 31, 1993,
1992 and 1991
48
Compensatory Plans or Arrangements
a. Long-Term Incentive Plan 41
b. Indemnification Agreement entered into by the Company
with each of its officers and directors 41
c. Executive Incentive Compensation Plan 41
d. Severance Agreement entered into by the Company with
certain of its executive officers 41
e. Supplemental Executive Retirement and Deferred
Compensation Plan 41
Exhibits Required by Item 601 of Regulation S-K.
Exhibit
Number Description of Document
3-a *Restated Articles of Consolidation of the Company dated as of May 5, 1992
Exhibit 4 to Registration Statement, Registration No. 33-54196).
3-b *By-laws of the Company, as amended and in effect on December 31, 1993
(Exhibit 3-b to Form 10-K for the year ended 1993).
4-a *General Mortgage and Deed of Trust dated as of December 1, 1986, between
the Company and United Missouri Bank N.A. (formerly United Missouri
Bank of Kansas City, N.A.), Trustee (Exhibit 4-bb to Form 10-K for the
year ended December 31, 1986).
4-b *Third Supplemental Indenture dated as of April 1, 1991, to Indenture
dated as of December 1, 1986 (Exhibit 4-aq to Registration Statement,
Registration No. 33-42187).
4-c *Fourth Supplemental Indenture dated as of February 15, 1992, to Indenture
dated as of December 1, 1986 (Exhibit 4-y to Form 10-K for year ended
December 31, 1991).
4-d *Fifth Supplemental Indenture dated as of September 15, 1992, to Indenture
dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q dated September
30, 1992).
4-e *Sixth Supplemental Indenture dated as of November 1, 1992, to Indenture
dated as of December 1, 1986 (Exhibit 4-z to Registration Statement,
Registration No. 33-54196).
4-f *Seventh Supplemental Indenture dated as of October 1, 1993, to Indenture
dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q dated September
30, 1993).
4-g *Eighth Supplemental Indenture dated as of December 1, 1993, to Indenture
dated as of December 1, 1986 (Exhibit 4 to Registration Statement,
Registration No. 33-51799).
4-h Ninth Supplemental indenture dated as of February 1, 1994, to Indenture
dated as of December 1, 1986.
4-i *Resolution of Board of Directors Establishing 3.80% Cumulative Preferred
Stock (Exhibit 2-R to Registration Statement, Registration No. 2-40239).
4-j *Resolution of Board of Directors Establishing
Stock (Exhibit 2-S to Registration Statement, Registration No. 2-40239).
4-k *Resolution of Board of Directors Establishing 4.50% Cumulative Preferred
Stock (Exhibit 2-T to Registration Statement, Registration No. 2-40239).
4-l *Resolution of Board of Directors Establishing 4.20% Cumulative Preferred
Stock (Exhibit 2-U to Registration Statement, Registration No. 2-40239).
4-m *Resolution of Board of Directors Establishing 4.35% Cumulative Preferred
Stock (Exhibit 2-V to Registration Statement, Registration No. 2-40239).
4-n *Certificate of Designation of Board of Directors Establishing the
$50,000,000 Cumulative No Par Preferred Stock, Auction Series A
(Exhibit 4-a to Form 10-Q dated March 31, 1992).
4-o *Indenture for Medium-Term Note Program dated as of April 1, 1991,
between the Company and The Bank of New York (Exhibit 4-bb to
Registration Statement, Registration No. 33-42187).
4-p *Indenture for Medium-Term Note Program dated as of February 15, 1992,
between the Company and The Bank of New York (Exhibit 4-bb to
Registration Statement, Registration No. 33-45736).
4-q *Indenture for Medium-Term Note Program dated as of November 15, 1992,
between the Company and The Bank of New York (Exhibit 4-aa to
Registration Statement, Registration No. 33-54196).
10-a *Copy of Wolf Creek Generating Station Ownership Agreement between Kansas
City Power & Light Company, Kansas Gas and Electric Company and Kansas
Electric Power Cooperative, Inc. (Exhibit 10-d to Form 10-K for the
year ended December 31, 1981).
10-b *Copy of Receivables Purchase Agreement dated as of September 27, 1989,
between the Company, Commercial Industrial Trade-Receivables Investment
Company and Citicorp North America, Inc., (Exhibit 10-p to Form 10-K
for year ended December 31, 1989).
10-c *Copy of Amendment to Receivables Purchase Agreement dated as of August 8,
1991, between the Company, Commercial Industrial Trade-Receivables
Investment Company and Citicorp North America, Inc. (Exhibit 10-m to
Form 10-K for year ended December 31, 1991).
10-d *Long-Term Incentive Plan (Exhibit 28 to Registration Statement,
Registration No. 33-42187).
10-e *Copy of Indemnification Agreement entered into by the Company with each
of its officers and directors (Exhibit 10-O to Form 10-K for year ended
December 31, 1986).
10-f *Copy of Executive Incentive Compensation Plan (Exhibit 10-g to form 10-K
for year ended December 31, 1986).
10-g *Copy of Severance Agreement entered into by the Company with certain of
its executive officers (Exhibit 10 to Form 10-Q dated June 30, 1993).
10-h Copy of Supplemental Executive Retirement and Deferred Compensation Plan.
10-i Copy of $50 million Letter of Credit and reimbursement agreement dated
as of August 19, 1993, with The Toronto-Dominion Bank.
10-j Copy of $56 million Letter of Credit and Reimbursement Agreement dated
as of August 19, 1993, with Societe Generale, Chicago Branch.
10-k Copy of $50 million Letter of Credit and Reimbursement Agreement dated
as of August 19, 1993, with The Toronto-Dominion Bank.
10-l Copy of $40 million Letter of Credit and Reimbursement Agreement dated
as of August 19, 1993, with Deutsche Bank AG, acting through its New
York and Cayman Islands Branches.
12 Computation of Ratios of Earnings to Fixed Charges.
23-a Consent of Counsel.
23-b Consent of Independent Public Accountants--Coopers & Lybrand.
24 Powers of Attorney.
* Filed with the Securities and Exchange Commission as exhibits to prior
registration statements (except as otherwise noted) and are incorporated herein
by reference and made a part hereof. The exhibit number and file number of the
documents so filed, and incorporated herein by reference, are stated in
parenthesis in the description of such exhibit.
Copies of any of the exhibits filed with the Securities and Exchange
Commission in connection with this document may be obtained from the Company
upon written request.
KANSAS CITY POWER & LIGHT COMPANY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Retire- Changes - End of
Classification of Period at Cost ments Add(Deduct) Period
(Thousands)
Electric Utility Plant
Plant in service
Steam production $ 727,202 $ 44,287 $ 7,727 $ - $ 763,762
Nuclear production 1,304,921 11,369 587 - 1,315,703
Other production 41,949 527 - - 42,476
Transmission 179,507 9,645 1,026 276 188,402
Distribution 810,053 43,963 6,884 (153) 846,979
General 62,750 17,044 2,604 24 77,214
Intangibles 365 - - - 365
Property under capital lease 3,144 - - (319) 2,825
Plant held for future use 3,168 2 - (512) 2,658
Construction work in progress 65,965 1,663 - 138 67,766
Total 3,199,024 128,500 18,828 (546) 3,308,150
Nuclear Fuel 112,945 6,087 12,448 - 106,584
Total Utility Plant 3,311,969 134,587 31,276 (546) 3,414,734
Nonutility Property 4,573 - 795 227 4,005
Total $3,316,542 $ 134,587 $ 32,071 $ (319) $3,418,739
Additions are reflected net of electric utility plant completions.
Includes allowance for funds used during construction.
Amount reflects the reduction in capital lease obligations.
KANSAS CITY POWER & LIGHT COMPANY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Retire- Changes - End of
Classification of Period at Cost ments Add(Deduct) Period
(Thousands)
Electric Utility Plant
Plant in service
Steam production $ 717,689 $ 16,387 $ 6,869 $ (5) $ 727,202
Nuclear production 1,304,071 7,567 6,717 - 1,304,921
Other production 41,475 680 209 3 41,949
Transmission 170,332 10,702 1,725 198 179,507
Distribution 774,897 46,816 11,704 44 810,053
General 47,505 22,644 5,173 (2,226) 62,750
Intangibles 95 270 - - 365
Property under capital lease - 3,151 - (7) 3,144
Plant held for future use 4,216 (803) - (245) 3,168
Plant acquisition adjustment 53 - - (53) -
Construction work in progress 57,706 8,259 - - 65,965
Total 3,118,039 115,673 32,397 (2,291) 3,199,024
Nuclear Fuel 96,212 16,744 - (11) 112,945
Total Utility Plant 3,214,251 132,417 32,397 (2,302) 3,311,969
Nonutility Property 1,529 879 68 2,233 4,573
Total $3,215,780 $ 133,296 $ 32,465 $ (69) $3,316,542
Additions are reflected net of electric utility plant completions.
Includes allowance for funds used during construction.
In 1992, amortized to other income and deductions - miscellaneous.
KANSAS CITY POWER & LIGHT COMPANY
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
Column A Column B Column C Column D Column E Column F
Balance at Other Balance at
Beginning Additions Retire- Changes - End of
Classification of Period at Cost ments Add(Deduct) Period
(Thousands)
Electric Utility Plant
Plant in service
Steam production $ 691,506 $ 27,106 $ 923 $ - $ 717,689
Nuclear production 1,310,118 8,469 14,514 (2) 1,304,071
Other production 41,427 48 - - 41,475
Transmission 162,202 8,754 708 84 170,332
Distribution 730,553 51,975 7,303 (328) 774,897
General 45,226 4,303 2,021 (3) 47,505
Intangibles 95 - - - 95
Plant held for future use 3,921 50 - 245 4,216
Plant acquisition adjustment 97 - - (44) 53
Construction work in progress 52,759 4,947 - - 57,706
Total 3,037,904 105,652 25,469 (48) 3,118,039
Nuclear Fuel 84,037 19,846 7,671 - 96,212
Total Utility Plant 3,121,941 125,498 33,140 (48) 3,214,251
Nonutility Property 1,508 17 - 4 1,529
Total $3,123,449 $ 125,515 $ 33,140 $ (44) $3,215,780
Additions are reflected net of electric utility plant completions.
Includes allowance for funds used during construction.
KANSAS CITY POWER & LIGHT COMPANY
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E Column F
Additions Retirements
Balance Charged to Removal Other
at Deprecia- Charged Cost and Changes Balance at
Beginning tion to Other Property Salvage Add End of
Description of Period Accounts Retired (Net) (Deduct) Period
(Thousands)
Electric Utility Plant
Steam production $ 350,011 $ 25,720 $ 810 $ 7,727 $ 1,153 $ - $ 367,661
Nuclear production 236,949 34,139 - 587 202 - 270,299
Other production 28,342 1,723 - - 29 - 30,036
Transmission 72,561 4,080 - 1,026 174 - 75,441
Distribution 247,032 23,374 - 6,884 (508) - 264,030
General 13,399 1,880 106 2,604 (36) - 12,817
Retirement work in
progress (28) - - - 542 - (570)
Total 948,266 90,916 916 18,828 1,556 - 1,019,714
Nuclear Fuel 78,735 - 8,705 12,448 - 1,730 76,722
Total 1,027,001 90,916 9,621 31,276 1,556 1,730 1,096,436
Nonutility Property 424 22 - - - - 446
Total $1,027,425 $ 90,938 $ 9,621 $ 31,276 $ 1,556 $ 1,730 $1,096,882
See Note 1 of Notes to Consolidated Financial Statements for a description of the depreciation
policy.
Depreciation on the Consolidated Statements of Income includes an additional $194,000 which
represents amortization of certain costs recorded in Regulatory Assets - Other.
Amount reflects an adjustment to nuclear fuel carrying value.
The $76,722,000 of accumulated provision for amortization of nuclear fuel has been netted
against nuclear fuel on the Consolidated Balance Sheets. Nuclear fuel amortization is charged
to fuel expense.
KANSAS CITY POWER & LIGHT COMPANY
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
Column A Column B Column C Column D Column E Column F
Additions Retirements
Balance Charged to Removal Other
at Deprecia- Charged Cost and Changes Balance at
Beginning tion to Other Property Salvage Add End of
Description of Period Accounts Retired (Net) (Deduct) Period
(Thousands)
Electric Utility Plant
Steam production $ 331,330 $ 25,075 $ 790 $ 6,869 $ 315 $ - $ 350,011
Nuclear production 209,884 34,014 - 6,686 263 - 236,949
Other production 26,989 1,683 - 210 120 - 28,342
Transmission 71,298 3,875 - 1,725 887 - 72,561
Distribution 236,580 22,360 - 10,851 686 (371) 247,032
General 17,031 1,567 144 5,172 (161) (332) 13,399
Retirement work in
progress (1,330) - - - (1,302) - (28)
Total 891,782 88,574 934 31,513 808 (703) 948,266
Nuclear Fuel 69,152 - 9,583 - - - 78,735
Total 960,934 88,574 10,517 31,513 808 (703) 1,027,001
Nonutility Property 87 14 - 10 - 333 424
Total $ 961,021 $ 88,588 $ 10,517 $ 31,523 $ 808 $ (370) $1,027,425
See Note 1 of Notes to Consolidated Financial Statements for a description of the depreciation
policy.
Depreciation on the Consolidated Statements of Income includes an additional $194,000 which
represents amortization of certain costs recorded in Regulatory Assets - Other.
The $78,735,000 of accumulated provision for amortization of nuclear fuel which has been netted
against nuclear fuel on the Consolidated Balance Sheets. Nuclear fuel amortization is charged
to fuel expense.
KANSAS CITY POWER & LIGHT COMPANY
SCHEDULE VI - ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
Column A Column B Column C Column D Column E Column F
Additions Retirements
Balance Charged to Removal Other
at Deprecia- Charged Cost and Changes Balance at
Beginning tion to Other Property Salvage Add End of
Description of Period Accounts Retired (Net) (Deduct) Period
(Thousands)
Electric Utility Plant
Steam production $ 307,415 $ 24,344 $ 755 $ 923 $ 261 $ - $ 331,330
Nuclear production 190,428 34,159 - 14,514 189 - 209,884
Other production 25,303 1,686 - - - - 26,989
Transmission 68,385 3,676 - 708 55 - 71,298
Distribution 222,314 21,274 - 7,114 (201) (95) 236,580
General 17,479 1,418 196 2,021 41 - 17,031
Retirement work in
progress (702) - - - 628 - (1,330)
Total 830,622 86,557 951 25,280 973 (95) 891,782
Nuclear Fuel 70,624 - 6,199 7,671 - - 69,152
Total 901,246 86,557 7,150 32,951 973 (95) 960,934
Nonutility Property 87 - - - - - 87
Total $ 901,333 $ 86,557 $ 7,150 $ 32,951 $ 973 $ (95) $ 961,021
See Note 1 of Notes to Consolidated Financial Statements for a description of the depreciation
policy.
Depreciation on the Consolidated Statements of Income includes an additional $238,000 which
represents amortization of certain costs recorded in Regulatory Assets - Other ($194,000) and
amortization of a unit train acquisition adjustment recorded in Utility Plant ($44,000).
The $69,152,000 of accumulated provision for amortization of nuclear fuel which has been netted
against nuclear fuel on the Consolidated Balance Sheets. Nuclear fuel amortization is charged
to fuel expense.
KANSAS CITY POWER & LIGHT COMPANY
SCHEDULE IX - SHORT-TERM BORROWINGS
Column A Column B Column C Column D Column E Column F
Weighted
Maximum Daily
Combined Average Average
Weighted Amount Amount Interest
Category of Aggregate Balance at Average Outstanding Outstanding Rate
Short-Term Borrowings End of Interest at any During the During the
Period Rate Month End Period Period
December 31, 1993
Bank loans $ 4,000,000 4.47% $ 6,000,000 $ 964,384 5.15%
Commercial paper 25,000,000 3.96% 55,000,000 14,984,110 4.68%
Combined $ 29,000,000 4.03% $ 61,000,000 $ 15,948,494 4.71%
December 31, 1992
Bank loans $ - - $ 36,500,000 $ 18,594,000 5.43%
Commercial paper 33,000,000 4.30% 64,000,000 41,125,000 4.23%
Combined $ 33,000,000 4.30% $ 100,500,000 $ 59,719,000 4.60%
December 31, 1991
Bank loans $ 34,000,000 4.62% $ 34,000,000 $ 13,444,000 7.61%
Commercial paper 52,000,000 5.13% 52,000,000 36,315,000 6.27%
Combined $ 86,000,000 4.93% $ 86,000,000 $ 49,759,000 6.63%
Short-term borrowings normally mature in less than three months with an interest rate
determined at the time of borrowing or on a daily basis.
The average is based on a daily average.
The weighted daily average interest rate during the year is determined by dividing interest
expense, including commitment fees, by the average daily balance (Column E). Commitment
fees of $213,000, $196,900 and $175,500 were charged to interest expense for 1993, 1992
and 1991, respectively.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Kansas City, and State of Missouri on the 25th day of March, 1994.
KANSAS CITY POWER & LIGHT COMPANY
By /s/Drue Jennings
(Drue Jennings)
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board and )
/s/Drue Jennings President (Principal )
(Drue Jennings) Executive Officer) )
)
Senior Vice President-Finance )
/s/B. J. Beaudoin (Principal Financial )
(B. J. Beaudoin) Officer) )
)
/s/Neil Roadman Controller (Principal )
(Neil Roadman) Accounting Officer )
)
William H. Clark* Director )
)
Robert J. Dineen* Director ) March 25, 1994
)
)
Arthur J. Doyle* Director )
)
W. Thomas Grant II* Director )
)
George E. Nettels, Jr.* Director )
)
George A. Russell* Director )
)
Dr. Linda Hood Talbott* Director )
)
Robert H. West* Director )
)
*By /s/Drue Jennings
(Drue Jennings)
Attorney-in-fact
NINTH SUPPLEMENTAL INDENTURE
KANSAS CITY POWER & LIGHT COMPANY
UNITED MISSOURI BANK, N.A.
DATED AS OF FEBRUARY 1, 1994
CREATING A MORTGAGE BOND
SERIES 1994
SUPPLEMENTAL TO GENERAL MORTGAGE INDENTURE AND
DEED OF TRUST DATED AS OF DECEMBER 1, 1986
NINTH SUPPLEMENTAL INDENTURE, dated as of February 1, 1994, between
KANSAS CITY POWER & LIGHT COMPANY, a Missouri corporation ("Company"), and
UNITED MISSOURI BANK, N.A. (formerly United Missouri Bank of Kansas City,
N.A.), as Trustee ("Trustee") under the Indenture hereinafter mentioned.
WHEREAS, all capitalized terms used in this Supplemental Indenture have
the respective meanings set forth in the Indenture;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a General Mortgage Indenture and Deed of Trust ("Indenture"), dated
as of December 1, 1986, to secure Mortgage Bonds issued by the Company
pursuant to the Indenture, unlimited in aggregate principal amount except as
therein otherwise provided.
WHEREAS, the Company has heretofore executed and delivered to the
Trustee, a First Supplemental Indenture, dated as of December 1, 1986,
creating a first series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee, a Second Supplemental Indenture, dated as of April 1, 1988, creating
a second series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Third Supplemental Indenture, dated as of April 1, 1991, creating
a third series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Fourth Supplemental Indenture, dated as of February 15, 1992,
creating a fourth series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Fifth Supplemental Indenture, dated as of September 1, 1992,
creating a fifth series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Sixth Supplemental Indenture, dated as of November 1, 1992,
creating a sixth series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Seventh Supplemental Indenture, dated as of October 1, 1993,
creating a seventh series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Eighth Supplemental Indenture, dated as of December 1, 1993,
creating an eighth series of Mortgage Bonds;
WHEREAS, the Company desires in and by this Supplemental Indenture to
create a ninth series of Mortgage Bonds to be issued under the Indenture, to
designate such series, to set forth the maturity date or dates, interest rate
or rates and the form and other terms of such Mortgage Bonds;
WHEREAS, all acts and things necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein
expressed, have been done and performed; and the execution and delivery of
this Supplemental Indenture have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the premises and in further
consideration of the sum of One Dollar in lawful money of the United States
of America paid to the Company by the Trustee at or before the execution and
delivery of this Supplemental Indenture, the receipt whereof is hereby
acknowledged, and of other good and valuable consideration, it is agreed by
and between the Company and the Trustee as follows:
DESCRIPTION OF CERTAIN PROPERTY SUBJECT
TO THE LIEN OF THE INDENTURE
The Company hereby confirms unto the Trustee, and records the
description of the property described in Exhibit A attached and expressly
made a part hereof, which property is subject to the lien of the Indenture in
all respects as if originally described herein.
ARTICLE I.
MORTGAGE BOND SERIES 1994
SECTION 1. (a) There is hereby created a ninth series of Mortgage
Bonds to consist of one Mortgage Bond issued under and secured by the
Indenture, to be designed as "Mortgage Bond Series 1994" of the Company
("Bond of the Ninth Series").
(b) The Bond of the Ninth Series shall be issued in the principal
amount of $35,922,500, but the principal amount of the Bond of the Ninth
Series actually outstanding as of any particular time shall be equal to the
principal amount of securities titled "City of LaCygne, Kansas Environmental
Improvement Revenue Refunding Bonds (Kansas City Power & Light Company
Project) Series 1994" ("Revenue Bonds") which at such particular time are
outstanding under the Indenture of Trust dated as of February 1, 1994,
("Revenue Bond Indenture"), between the City of LaCygne, Kansas and The Bank
of New York, as trustee ("Revenue Bond Trustee").
(c) The Bond of the Ninth Series shall be a registered Bond without
coupons and shall be dated February 18, 1994. The Bond of the Ninth Series
shall mature on the same date or dates as the Revenue Bonds, subject to prior
redemption pursuant to Section 3.
(d) Interest will accrue on the unpaid portion of the principal of
the Bond of the Ninth Series from the last date to which interest was paid,
or if no interest has been paid from the date of the original issuance of the
Bond of the Ninth Series until the entire principal amount of the Bond of
Ninth Series is paid. The Bond of the Ninth Series shall bear interest at
the rate or rates per annum born by the Revenue Bonds as provided for in
Section 2.02 of the Revenue Bond Indenture and in the Revenue Bonds and
interest shall be paid on the date or dates on which, and at the same place
or places as, interest is payable on the Revenue Bonds.
(e) The payment or payments of principal of the Bond of the Ninth
Series shall be equal to the principal amount of, and any premium on, the
Revenue Bonds which is due and payable under the Revenue Bond Indenture and
shall be payable on the date or dates on which, and at the same place or
places as, the principal of, and any premium on such Revenue Bonds.
(f) The Mortgage Bond shall be subject to redemption at the same
times and in the same amounts as the Revenue Bonds.
(g) The principal amount of and interest on the Bond of the Ninth
Series shall be payable in lawful money of the United States of America.
SECTION 2. At such time or times as the Revenue Bond Trustee shall
deliver a certificate signed by a Responsible Officer, as defined by the
Revenue Bond Indenture stating that all or a portion of the principal amount
of the Revenue Bonds have been redeemed or otherwise deemed to have been
paid, the principal amount of the Bond of the Ninth Series shall be reduced
by such specific principal amount, and such specific principal amount shall
be deemed for all purposes of the Indenture, including Article IV and Article
XI of the Indenture, to be Retired Bonds.
SECTION 3. If the Revenue Bonds, shall become immediately due and
payable, pursuant to the provisions of the first paragraph of Section 8.02 of
the Revenue Bond Indenture (by reason of the occurrence and continuance of an
"Event of Default" under paragraph (a), (b) or (c) of Section 8.01 of the
Revenue Bond Indenture), the Bond of the Ninth Series shall be subject to
redemption in whole. The Trustee shall redeem the Bond of the Ninth Series
upon receipt of a written notice (hereinafter referred to as the "Notice")
from the Revenue Bond Trustee stating that the Revenue Bonds have become
immediately due and payable. The Notice shall direct the Trustee to call the
Bond of the Ninth Series for redemption. No notice of redemption of the Bond
of the Ninth Series shall be required in connection with such redemption and
the Notice shall also contain a waiver by the Revenue Bond Trustee, as holder
of the Bond of the Ninth Series of any notice of redemption as may be
required under Article IX of the Indenture. The Bond of the Ninth Series
shall be redeemed in whole immediately upon the receipt by the Trustee of
such Notice. The Trustee may conclusively presume the statements contained
in the Notice to be correct. Any such redemption of the Bond of the Ninth
Series shall be at a redemption price equal to the principal amount of the
Bond of the Ninth Series together with accrued interest to the redemption
date, and such amount shall become and be due and payable immediately. The
Company hereby covenants that, if a Notice shall be delivered to the Trustee,
the Company will deposit immediately with the Trustee, in accordance with
Article IX of the Indenture, an amount in cash sufficient to redeem the Bond
of the Ninth Series so called for redemption.
SECTION 4. The Bond of the Ninth Series is not transferable except to
a successor Revenue Bond Trustee under the Revenue Bond Indenture.
SECTION 5. (a) The Bond of the Ninth Series shall be pledged by the
Company with and delivered to the Revenue Bond Trustee to secure payment of
the principal of, premium, if any, and interest on the Revenue Bonds for the
benefit of the owners and beneficial owners from time to time of the Revenue
Bonds.
(b) The obligation of the Company to make any payment of the
principal of or any premium or interest on the Bond of the Ninth Series shall
be fully or partially, as the case may be, paid, deemed to have been paid or
otherwise satisfied and discharged to the extent that at the time any such
payment shall be due, the then due principal of and any premium or interest
on the Revenue Bonds shall have been fully or partially paid, deemed to have
been paid or otherwise satisfied and discharged.
(c) The Trustee shall conclusively presume that the obligation of the
Company to make payments of the principal of or any premium or interest on
the Bond of the Ninth Series shall have been fully paid, deemed to have been
paid or otherwise satisfied and discharged when due unless and until the
Trustee shall have received written notice from the Revenue Bond Trustee,
signed by a Responsible Officer (as defined in the Revenue Bond Indenture),
stating that the payments of principal of and premium or interest on the
Revenue Bonds specified in such notice were not fully paid, deemed to have
been paid or otherwise satisfied and discharged when due and remain unpaid at
the date of such notice.
SECTION 6. The form of the Bond of the Ninth Series shall be
substantially as follows:
(FORM OF BOND OF THE NINTH SERIES)
KANSAS CITY POWER & LIGHT COMPANY
MORTGAGE BOND SERIES 1994
$35,922,500
Bond Number R-1
Kansas City Power & Light Company, a Missouri corporation ("Company"),
for value received, hereby promises to pay to The Bank of New York as Trustee
under the Indenture dated as of February 1, 1994, between the City of
LaCygne, Kansas, and such Trustee ("Revenue Bond Indenture"), or the
successor Trustee under the Revenue Bond Indenture, the sum of $35,922,500
or, if less, the aggregate unpaid principal amount of all City of LaCygne,
Kansas Environmental Improvement Revenue Refunding Bonds (Kansas City Power
& Light Company Project) Series 1994 ("Revenue Bonds") outstanding under the
Revenue Bond Indenture. The payment of principal, premium, or interest on
the Bond shall be equal to the principal amount of, any premium on, and
interest due on the Revenue Bonds as set forth in the Revenue Indenture. The
principal of and any premium or interest on this Bond of the Ninth Series are
payable in lawful money of the United States of America.
THIS BOND OF THE NINTH SERIES IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR
TRUSTEE UNDER THE REVENUE BOND INDENTURE.
The obligation of the Company to make any payment of the principal of
or any premium or interest on this Bond of the Ninth Series shall be fully or
partially, as the case may be, paid, deemed to have been paid or otherwise
satisfied and discharged to the extent that at the time any such payment
shall be due, the then due principal of and any premium or interest on the
Revenue Bonds shall have been fully or partially paid, deemed to have been
paid or otherwise satisfied and discharged.
This Bond of the Ninth Series is one, of the series hereinafter
specified, of the bonds of the Company ("Bonds") known as its "Mortgage
Bonds," issued and to be issued in one or more series under and secured by a
General Mortgage Indenture and Deed of Trust dated as of December 1, 1986
("Indenture"), duly executed by the Company to United Missouri Bank, N.A.,
(formerly United Missouri Bank of Kansas City, N.A.) Trustee ("Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the property mortgaged and pledged, the nature and
extent of the security, the terms and conditions upon which the Bonds are,
and are to be, issued and secured, and the rights of the owners of the Bonds
and of the Trustee in respect of such security, and the prior liens to which
the security for the Bonds are junior; capitalized terms used in this Bond of
the Ninth Series have the respective meanings set forth in the Indenture. As
provided in the Indenture, the Bonds may be various principal sums, are
issuable in series, may mature at different times, may bear interest at
different rates and may otherwise vary as therein provided; and this Bond of
the Ninth Series is the only one of the series entitled "Mortgage Bond Series
1994," created by a Ninth Supplemental Indenture dated as of February 1,
1994, as provided for in the Indenture. With the consent of the holders of
more than 50% in aggregate principal amount of the Outstanding Bonds, the
Company and the Trustee may from time to time and at any time, enter into a
Supplemental Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any provision of the Indenture or of
any Supplemental Indenture or of modifying in any manner the rights of the
holders of the Bonds and any coupons; provided, however, that (i) no such
Supplemental Indenture shall, without the consent of the holder of each
Outstanding Bond affected thereby (A) extend the fixed maturity of any Bonds,
change any terms of any sinking fund or analogous fund or conversion rights
with respect to any Bonds, or reduce the rate or rates or extend the time of
payment of interest thereon, or reduce the principal amount thereof, or,
subject to certain exceptions, limit the right of a holder of Bonds to
institute suit for the enforcement of payment of principal of or any premium
or interest on such Bonds in accordance with the terms of said Bonds, or (B)
reduce the aforesaid percentage of Bonds, the holders of which are required
to consent to any such Supplemental Indenture, or (C) permit the creation by
the Company of any Prior Lien, and (ii) no such action which would affect the
rights of the holders of Bonds of only one series may be taken unless
approved by the holders of more than 60% in aggregate principal amount of the
Outstanding Bonds of such series affected, but if any such action would
affect the Bonds of two or more series, the approval of such action on behalf
of the holders of Bonds of such two or more series may be effected by holders
of more than 60% in aggregate principal amount of the Outstanding Bonds of
such two or more series, which need not include 60% in principal amount of
Outstanding Bonds of each of such series; provided, however, that, in no
event shall such action be effective unless approved by holders of more than
50% in aggregate principal amount of all the then Outstanding Bonds of all
such series.
In the event that this Bond of the Ninth Series shall not be presented
for payment when all Revenue Bonds issued are no longer outstanding under the
Revenue Bond Indenture, then all liability of the Company to the Registered
Holder of this Bond of the Ninth Series for the payment of the principal
hereof and any premium or interest hereon shall forthwith cease, determine
and be completely discharged and the right of such Registered Holder of this
Bond of the Ninth Series for the payment of the principal hereof and any
premium or interest hereon shall forthwith cease, determine and be completely
discharged and such Registered Holder shall no longer be entitled to any lien
or benefit of the Indenture.
In case an event of Default shall occur, the principal of this Bond of
the Ninth Series may become or be declared due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture.
This Bond of the Ninth Series is transferable by the Registered Holder
hereof in person or by attorney duly authorized in writing, only to a
successor to the Revenue Bond Trustee under the Revenue Bond Indenture, at
the principal office of the Trustee in Kansas City, Missouri, (or at the
principal office of any successor in trust), upon surrender and cancellation
of this Bond of the Ninth Series, and upon any such transfer a new registered
Bond of the Ninth Series without coupons of the same series for the same
principal amount will be issued to the transferee in exchange herefor.
The Company and the Trustee may deem and treat the person in whose name
this Bond of the Ninth Series is registered as the absolute owner hereof for
the purpose of receiving payment and for all other purposes, and neither the
Company nor the Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or any
premium or interest on this Bond of the Ninth Series, or for any claim based
hereon or otherwise in respect hereof or of the Indenture or any Supplemental
Indenture, against any incorporator, stockholder, director or officer, past,
present or future, of the Company or of any predecessor corporation, as such,
either directly or through the Company or of any such predecessor or
successor corporation, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise, all
such liability of incorporators, stockholders, directors and officers being
waived and released by every owner hereof by the acceptance of this Bond of
the Ninth Series and as part of the consideration for the issue hereof, and
being likewise waived and released by the terms of the Indenture.
This Bond of the Ninth Series shall not be valid or become obligatory
for any purpose unless and until the certificate of authentication hereon
shall have been executed by the Trustee or its successor in trust under said
Indenture.
IN WITNESS WHEREOF, KANSAS CITY POWER & LIGHT COMPANY has caused this
Bond of the Ninth Series to be executed in its name by the manual or
facsimile signature of its Chairman of the Board or its President or one of
its Vice Presidents, and its corporate seal to be impressed or imprinted
hereon and attested by the manual or facsimile signature of its Secretary or
one of its Assistant Secretaries.
KANSAS CITY POWER & LIGHT COMPANY,
Dated: By____________________________
Authorized Signature
________________________________
Attest:
________________________________
Secretary or Assistant Secretary
The form of Trustee's certificate to appear on the Bond of the Ninth
Series shall be substantially as follows:
(FORM OF TRUSTEE'S CERTIFICATE)
This Bond of the Ninth Series is the Bond of the series designated
therein, described in the within-mentioned Indenture and Ninth Supplemental
Indenture.
UNITED MISSOURI BANK, N.A.,
as Trustee,
By_____________________________
Authorized Signature
ARTICLE II.
ISSUE OF BOND OF THE NINTH SERIES.
SECTION 1. The Bond of the Ninth Series may be executed, authenticated
and delivered as permitted by the provisions of Article III, IV, V or VI of
the Indenture.
ARTICLE III.
THE TRUSTEE.
SECTION 1. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or the due execution hereof by the Company, or for or
in respect of the recitals and statements contained herein, all of which
recitals and statements are made solely by the Company.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee
by reason of this Supplemental Indenture other than as set forth in the
Indenture; and this Supplemental Indenture is executed and accepted on behalf
of the Trustee, subject to all the terms and conditions set forth in the
Indenture, as fully to all intents as if the same were herein set forth at
length.
ARTICLE IV.
MISCELLANEOUS PROVISIONS.
SECTION 1. Except insofar as herein otherwise expressly provided, all
the provisions, definitions, terms and conditions of the Indenture, as
amended, shall be deemed to be incorporated in, and made a part of, this
Supplemental Indenture; and the Indenture as supplemented and amended by this
Supplemental Indenture is in all respects ratified and confirmed; and the
Indenture, as amended, and this Supplemental Indenture shall be read, taken
and construed as one and the same instrument.
SECTION 2. Nothing in this Supplemental Indenture is intended, or
shall be construed to give to any person or corporation, other than the
parties hereto and the holders of Bond of the Ninth Series issued and to be
issued under and secured by the Indenture, any legal or equitable right,
remedy or claim under or in respect of this Supplemental Indenture, or under
any covenant, condition or provision herein contained, all the covenants,
conditions and provisions of this Supplemental Indenture being intended to
be, and being, for the sole and exclusive benefit of the parties hereto and
of the holders of Bond of the Ninth Series issued and to be issued under the
Indenture and secured thereby.
SECTION 3. All covenants, stipulations and agreements in this
Supplemental Indenture contained by or on behalf of the Company shall bind
and (subject to the provisions of the Indenture, as amended) inure to the
benefit of its successors and assigns, whether so expressed or not.
SECTION 4. The headings of the several Articles of this Supplemental
Indenture are inserted for convenience of reference, and shall not be deemed
to be any part hereof.
SECTION 5. This Supplemental Indenture may be executed in any number
of counterparts, and each of such counterparts shall together constitute but
one and the same instrument.
IN WITNESS WHEREOF, KANSAS CITY POWER & LIGHT COMPANY has caused this
Supplemental Indenture to be executed by its Chairman of the Board or one of
its Vice Presidents and its corporate seal to be hereunto affixed, duly
attested by its Secretary or one of its Assistant Secretaries, and UNITED
MISSOURI BANK, N.A., as Trustee as aforesaid, has caused the same to be
executed by its President or one of its Vice Presidents and its corporate
seal to be hereunto affixed, duly attested by one of its Assistant
Secretaries, as of the day and year first above written.
KANSAS CITY POWER & LIGHT COMPANY,
By
(B. J. Beaudoin)
ATTEST:
(Jeanie Sell Latz)
UNITED MISSOURI BANK, N.A.,
By
(Frank C. Bramwell)
ATTEST:
(R. William Bloemker)
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 16th day of February, 1994, before me, a Notary Public in and
for said County in the State aforesaid, personally appeared B. J. Beaudoin,
to me personally known, who, being by me duly sworn, did say that he is
Senior Vice President-Finance and Chief Financial Officer of KANSAS CITY
POWER & LIGHT COMPANY, a Missouri corporation, one of the corporations
described in and which executed the foregoing instrument, that the seal
affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed on behalf of said
corporation by authority of its Board of Directors; and said B. J. Beaudoin
acknowledged said instrument and the execution thereof to be the free and
voluntary act and deed of said corporation by it voluntary executed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid the day and year first above written.
Janee C. Rosenthal
Notary Public, Clay
County, Missouri
(SEAL)
My commission expires
February 25, 1995
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 16th day of February, 1994, before me, a Notary Public in and
for said County in the State aforesaid, personally appeared Frank C.
Bramwell, to me personally known, who, being by me duly sworn, did say that
he is a Vice President of UNITED MISSOURI BANK, N.A., a national banking
association organized and existing under the laws of the United States of
America, one of the corporations described in and which executed the
foregoing instrument, that the seal affixed to the foregoing instrument is
the corporate seal of said corporation, and that said instrument was signed
and sealed on behalf of said corporation by authority of its Board of
Directors; and said Frank C. Bramwell acknowledged said instrument and the
execution thereof to be the free and voluntary act and deed of said
corporation by it voluntary executed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid the day and year first above written.
Janee C. Rosenthal
Notary Public, Clay
County, Missouri
(SEAL)
My commission expires
February 25, 1995
KANSAS CITY POWER & LIGHT COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT
AND DEFERRED COMPENSATION PLAN
KANSAS CITY POWER & LIGHT COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT AND DEFERRED COMPENSATION PLAN
PREAMBLE
The principal objective of this Supplemental Executive Retirement and
Deferred Compensation Plan is to ensure the payment of a competitive level of
retirement income in order to attract, retain, and motivate selected
executives, to provide opportunities for selected employees and members of
the Board of Directors to defer the receipt of compensation, and to restore
benefits which cannot be paid under the Company's Qualified Pension, 401(k)
Savings Plan and Capital Accumulation Plan due to restrictions on benefits,
contributions, or compensation covered under those plans. This plan will
become effective on November 2, 1993, and will be effective as to each
Participant on the date he or she is designated as a Participant hereunder.
This plan supersedes all previous non-qualified retirement and deferred
compensation plans that may be in existence.
TABLE OF CONTENTS
SECTION PAGE
I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . -1-
II ELIGIBILITY FOR BENEFITS . . . . . . . . . . . . . . . . -2-
III AMOUNT AND FORM OF RETIREMENT BENEFITS . . . . . . . . . -3-
IV PAYMENT OF RETIREMENT BENEFITS . . . . . . . . . . . . . -4-
V DEATH BENEFITS PAYABLE . . . . . . . . . . . . . . . . . -5-
VI DEFERRED COMPENSATION. . . . . . . . . . . . . . . . . . -5-
VII ALTERNATIVE SUPPLEMENTAL RETIREMENT, DEATH AND
DISABILITY BENEFITS. . . . . . . . . . . . . . . . . . .-11-
VIII CAPITAL ACCUMULATION PLAN EXCESS BENEFITS. . . . . . . .-12-
IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . .-13-
SECTION I
DEFINITIONS
1.1 "Basic Plan" means the Kansas City Power & Light Company
Management Pension Plan.
1.2 "Basic Plan Benefit" means the amount of benefit payable from the
Basic Plan to a Participant in the form of a Single Life Pension. The
following terms shall have the same meaning as set forth in the Basic Plan as
amended from time-to-time:
- Normal Retirement Date
- Years of Credited Service
- Actuarial Equivalent
- Single Life Pension
1.3 "Board of Directors" means the Board of Directors of the Company,
which has the authority to administer the Plan.
1.4 "Company" means Kansas City Power & Light Company.
1.5 "Final Average Monthly Salary" means Final Average Monthly Salary
as defined under the Basic Plan but computed using a period of thirty-six
consecutive months, plus the amount of any deferrals under Section 6.1 of the
Plan which would have been included but for such deferrals, plus any amounts
disregarded pursuant to the provisions of Internal Revenue Code Section
401(a)(17).
1.6 "Committee" means the Nominating & Compensation Committee (or
successor to such Committee) of the Company's Board of Directors.
1.7 "Participant" for purposes of Sections II, III, IV, and V, means
an employee of the Company which has been designated as a Participant by the
Board of Directors or the Committee and continues to be designated as a
Participant at the time of his or her Retirement. Such employee shall become
a Participant in the Plan as of the date he or she is individually selected
by, and specifically named in the resolutions of, the Board of Directors or
the Committee for participation in the Plan.
For purposes of Sections VI, VII, and VIII, Participant shall include any
employee selected for participation by the Chief Executive Officer. For
purposes of Sections 6.1 to 6.7, Participant shall include members of the
Board of Directors.
1.8 "Plan" means this Supplemental Executive Retirement and Deferred
Compensation Plan.
1.9 "Retirement" means the termination of a Participant's employment
with the Company on one of the retirement dates specified in Section 2.1.
1.10 "Surviving Spouse" means a Participant's surviving spouse who is
eligible to receive a surviving spouse's benefit under the Basic Plan.
1.11 The masculine gender, where appearing in the Plan, will be deemed
to include the feminine gender, and the singular may include the plural,
unless the context clearly indicates the contrary.
SECTION II
ELIGIBILITY FOR BENEFITS
2.1 Each Participant shall be eligible to retire and receive a
supplemental retirement benefit under this Plan beginning on one of the
following dates:
(a) "Normal Retirement Date" as defined in the Basic Plan.
(b) "Early Retirement Date"; at any time after attaining age 55
and prior to his Normal Retirement Date, the Participant may request early
retirement by giving written notice of such request to the Chief Executive
Officer ("CEO") (six months is the normal notice period required
hereunder, thus enabling the Company to fully consider the request,
determine its impact on Company operations, and to take any steps or
actions that might be required to accommodate such request) and if the CEO
recommends that the request be granted, the CEO shall submit such request
to the Board of Directors for its final determination.
SECTION III
AMOUNT AND FORM OF RETIREMENT BENEFITS
3.1 The annual supplemental retirement benefit payable at Normal
Retirement Date under the Plan shall equal:
(a) Two percent (2%) of the Employee's Final Average Monthly
Salary multiplied by the Participant's Years and fractions of Years of
Credited Service, except that Years of Credited Service in excess of
thirty (30) shall not be taken into consideration and accordingly the
maximum supplemental retirement benefit shall be sixty percent (60%) of
the Employee's Final Average Monthly Salary; less
(b) The actual normal retirement benefit payable to the
Employee under the Basic Plan.
The supplemental retirement benefit shall be the actuarial equivalent of a
Single Life Pension regardless of the form of pension actually elected by or
applicable to the Participant. The supplemental retirement benefit payable
to the Participant or to his spouse under this Plan shall be calculated
without regard to limitations imposed by Section 415 of the Internal Revenue
Code, as now or hereafter amended.
3.2 The annual supplemental retirement benefit payable at an Early
Retirement Date shall equal the benefit determined in Section 3.1 reduced by
one-quarter of one percent (0.25%) for each month the Participant's Early
Retirement Date precedes the first day of the month following the month in
which he will attain age 62.
3.3 A Participant whose employment with the Company terminates due to
a total disability for which the Participant is eligible to receive benefits
under the Company's Long-Term Disability Plan shall be eligible for a
supplemental retirement benefit payable at the Participant's Early or Normal
Retirement Date. The supplemental retirement benefit shall be determined in
accordance with Section 3.1 except that the Participant's Final Average
Monthly Salary shall be determined as of the date of the Participant's
disability, and his Years of Credited Service shall include the period from
the date of disability to the earlier of the Participant's commencement of
benefits under this Plan or his Normal Retirement Date, but in no event shall
Years of Credited Service in excess of 30 be considered.
3.4 The supplemental retirement benefits determined under this Plan
shall be payable in the same form as that elected by the Participant with
respect to benefits payable under the Basic Plan; provided, however, such
optional form of pension shall be the Actuarial Equivalent of the
supplemental retirement benefit if paid as a Single Life Pension.
SECTION IV
PAYMENT OF RETIREMENT BENEFITS
4.1 Supplemental retirement benefits payable in accordance with Section
III shall commence on the date specified in Section 2.1. Benefits shall
continue to be paid until the first day of the month following the month in
which the retired Participant dies, unless the form in which the
Participant's benefit is paid pursuant to Section 3.4 provides for payment of
survivor benefits.
SECTION V
DEATH BENEFITS PAYABLE
5.1 If a Participant should die before supplemental retirement
benefit payments commence under this Plan, his Surviving Spouse shall receive
a qualified pre-retirement survivor annuity under this Plan calculated as
provided in the Basic Plan except that the Participant's pension, for
purposes of the calculation, shall be the amount determined in Section III
above, the amount of the survivor annuity so determined to be reduced by the
qualified pre-retirement survivor annuity such surviving spouse may receive
under the Basic Plan.
5.2 A Surviving Spouse's benefit shall be payable monthly, and shall
commence on the first day of the month following the month in which the
Participant dies or, if later, on the first day of the month in which he
would have attained age 55. The last payment shall be on the first day of
the month in which the Surviving Spouse dies.
SECTION VI
DEFERRED COMPENSATION
6.1 Prior to the beginning of any calendar year, the Participant may
elect to defer receipt of:
(a) a specified dollar amount or percentage of his anticipated
base salary (or director's fees) as in effect on January 1
of the year in which salary is to be deferred; and/or
(b) a specified dollar amount or percentage of any anticipated
award under any bonus or incentive plan to be paid to the
Participant for performance in the following calendar year.
If the Participant desires to make such an election, the election shall be in
writing on a form provided by the Company and shall indicate an election to
defer a fixed percentage of up to 50 percent of base salary, and/or 100
percent of directors fees or any award under any bonus or incentive plan
("Incentive Awards"). Alternatively, the Participant may elect to defer a
fixed dollar amount of base salary and/or any Incentive Awards in increments
of one thousand dollars, with a minimum deferral of $2,000 and a maximum
deferral of an amount equal to 50 percent of base salary and 100 percent of
directors fees or any Incentive Awards. Base salary may be deferred in a
given year only if the Participant participates in the Company's Employee
Savings Plus Plan to the maximum extent allowed for that year. A new
Participant who becomes a Participant during a year may make a deferral
election for the balance of the year in which he becomes a Participant,
provided the election is made on or before the 30th day after the day on
which he becomes a Participant.
An election to defer compensation under this Section VI shall apply only
to compensation earned subsequent to the date the election is made. An
election to defer compensation shall be effective only for the year or
portion of the year for which the election was made, and may not be
terminated or changed during such year or portion of such year. Should the
Participant desire to continue the same election from year to year, he must
nevertheless make each year an affirmative election to defer compensation.
For purposes of this Section 6.1, "base salary" means the Participant's
annual salary.
6.2 The Company shall establish on its books of account separate
deferred compensation accounts for each Participant under this Section VI,
and shall credit to the account of a Participant that portion of his
compensation being deferred, together with any other applicable amounts of
additional deferred compensation for that calendar year.
Deferred base salary shall be credited to the Participant's account each
month at the time non-deferred base salary is paid to the Participant.
Deferred Incentive Awards shall be credited to the Participant's account
annually at the time the award is approved. All such accounts shall be
unsecured. The Participant and his designated beneficiary or beneficiaries
shall not have any property interest whatsoever in any specific assets of the
Company as a result of this Plan.
6.3 The Committee shall establish a means by which a return is earned
on Participant's account. The method and manner for establishing such return
shall be reviewed from time to time by the Committee. Such return shall be
credited and compounded to a Participant's account on a monthly basis or at
such other time or times as the Committee may decide.
6.4 A Participant's deferral election shall indicate, with respect to
amounts deferred pursuant to the election, a deferral period in accordance
with Section 6.5 and a distribution alternative in accordance with Section
6.6.
6.5 A Participant may elect to defer receipt of amounts deferred
pursuant to a deferral election until one of the following:
(a) A stated date;
(b) A stated attained age; or
(c) A stated event (e.g., death) or events, or the earlier of
two or more stated events (e.g., the earlier of death or attainment of age
65).
In the event a Participant fails to designate a deferral period hereunder,
payment of amounts deferred pursuant to the deferral election shall commence
within 90 days of the Participant's termination of employment.
The investment return shall continue to accrue with respect to the balance
of a Participant's account during the payout period elected pursuant to this
Section VI, and such return shall be paid to the Participant in monthly
installments over the payout period. The return attributable to compensation
deferred pursuant to a particular deferral election shall be payable
according to the same terms, conditions, limitations, and restrictions
applicable to the compensation deferred pursuant to the deferral election.
The return shall continue to be credited to the Participant's account until
all amounts credited to his account have been paid and shall be credited to
the Participant's account, after giving effect to any reduction in the
account as a result of any payments. Any remaining payments shall be re-
computed to reflect the additional return.
6.6 A Participant's deferral election shall indicate the manner in
which the Participant desires the amounts deferred pursuant to the election
to be paid. The Participant may choose to have such amounts paid:
(a) in a single lump-sum payment; or
(b) in monthly installments (of principal plus earnings) over a
period of 60 months certain, 120 months certain, or 180 months certain.
In the event a Participant fails to make an election concerning the form of
payment, payment shall be made in a single lump sum.
Any amounts paid to the Participant shall be subject to any income tax
withholding or other deductions as may from time to time be required by
federal, state, or local law. Payments under this Section shall include, if
applicable, a proration of benefit adjustment amounts through the day
preceding the day on which the Participant retires, becomes disabled, or
ceases to be an employee of the Company. Payments under this Section on
account of deferral shall be paid in full if the lump-sum option is chosen,
or shall begin to be paid in monthly installments if a monthly payment option
is chosen, within 30 days of the date elected by the Participant, or as soon
thereafter as practicable.
Following the close of each year, or as soon as practicable thereafter,
the Participant or his designated beneficiary or beneficiaries shall receive
a statement of the Participant's deferred compensation account as of the end
of such year. The statement shall reflect the total benefit adjustment
amount, if any; total accrued earnings credited to the account as of the end
of such year; and any additional amounts of deferred compensation, if any,
credited to the account as of the end of such year; less any monthly
installment payments paid during such year.
6.7 At the time a Participant elects to defer compensation under this
Plan he shall designate a death beneficiary or beneficiaries. Such
designation may be changed at any time by the Participant. If a Participant
dies before he begins to receive payment of amounts deferred pursuant to a
given deferral election, the full amount due the Participant under said
election shall be paid to his designated beneficiary or beneficiaries in a
single lump-sum payment as soon as practicable after the Participant's death.
If a Participant dies after he begins to receive payment of amounts
deferred pursuant to a given deferral election, the balance of the amounts
which would have been paid under the deferral election to the Participant but
for his death shall continue to be paid to his beneficiary or beneficiaries
at the same times and in the same form as the payments would have been paid
to the Participant but for his death. If a Participant is not survived by
a designated beneficiary, the balance of the amounts due the Participant
under the deferral election for which no surviving beneficiary exists shall
be paid in a single lump-sum payment to the Participant's estate as soon as
practicable following his death. If, with respect to a particular deferral
election a Participant's last surviving designated beneficiary should die
after the Participant but before the balance of the amounts due the
beneficiary under the deferral election have been paid, the balance shall
be paid in a single lump-sum payment to the estate of the last surviving
designated beneficiary as soon as practicable after the beneficiary's death.
6.8 The Company shall credit to a Participant's account a matching
contribution in an amount equal to 50% of the first 6% of the amount of the
Participant's deferral of base salary under Section 6.1(a), but such amount
shall be reduced by the matching contribution made during the year to the
Participant's account in the Employee Savings Plus Plan. In no event shall
the total matching contribution in the Employee Savings Plus Plan and this
Plan exceed 50% of 6% of the Participant's base salary in any given year.
Any additional matching contribution under this Plan shall be credited to the
Participant's account on a monthly basis. The matching contributions shall
be subject to the following vesting schedule:
Years of Service*
Vested Percentage
Less Than Two Years 0%
Two Years 20
Three Years 40
Four Years 60
Five Years 80
Six Years 100
* As defined in Employee Savings Plus Plan.
SECTION VII
ALTERNATIVE SUPPLEMENTAL RETIREMENT, DEATH AND DISABILITY BENEFITS
7.1 Participants eligible for benefits under Sections II, III, IV,
and V shall not be eligible for benefits under this Section VII.
7.2 Certain Participants eligible to defer compensation under Section
VI may incur a reduction in their retirement benefit under the Basic Plan as
a result of their decision to defer base salary in accordance with Section
6.1. A monthly alternative supplemental retirement benefit shall be payable
under this Plan to such Participant upon his retirement, said benefit
calculated upon the Participant's termination or retirement as follows:
(a) The difference between (i) the accrued benefit under the
Basic Plan based on Final Average Monthly Salary determined using Base
Salary before any deferrals under Section 6.1(a), and (ii) the accrued
benefit determined under the Basic Plan;
(b) Reduction for Early Retirement as elected by the
Participant under the Basic Plan (if applicable); and
(c) Reduction to reflect the optional payment form election by
the Participant under the Basic Plan (if applicable).
Such benefit shall be payable to the Participant in the same form as the form
of benefit in which the Participant elected to receive his Basic Plan
benefit.
7.3 This Plan shall pay any death or disability benefit which
otherwise would be payable under the Basic Plan but for the election to defer
compensation under Section 6.1(a) of this Plan. These Alternative
Supplemental Death and Disability Benefits shall be paid at the same time at
which, and in the same form in which, the death or disability payments are
paid under the Basic Plan, and shall be subject to any other conditions or
restrictions applicable under the terms of the Basic Plan to death or
disability benefits payable by that Plan.
SECTION VIII
CAPITAL ACCUMULATION PLAN EXCESS BENEFIT
8.1 At the beginning of each calendar year or as soon thereafter as
practicable, an amount will be credited to Participant's CAP Excess Benefit
Account equal to Participant's total number of flex dollars for the year
minus:
(a) the maximum permissible contribution of the Company's Capital
Accumulation Plan for the year on behalf of the Participant, and
(b) the number of flex dollars used during such year to purchase the
benefits available to Participant under the Flexible Benefits Program.
8.2 Benefits will be paid to the Participant as follows:
(a) When the Participant's employment is terminated (whether due to
death, disability, retirement or other termination), a single lump sum
payment will be made. The payment shall be equal to the amount credited to
the CAP Excess Benefits Account, plus the additional amount credited to the
CAP Excess Benefits Account under Section 8.2(c) below. Payment will be made
no later than the 60th day after the close of the calendar year in which the
Participant's employment terminates. If the Participant dies before payment
is made, payment shall be made to the Participant's beneficiary. The
Participant's beneficiary for the purposes of this Section VIII shall be
beneficiary under the Capital Accumulation Plan.
(b) If both the Participant and his beneficiary die before payment is
made, payment shall be made as promptly as possible to the estate.
(c) The Participant's CAP Excess Benefits Account shall be credited
and compounded with the same return and in the same manner as provided for in
Section 6.3 herein.
8.3 The CAP excess benefits provided for in this Section VIII
supersedes those provided for in the Company's Capital Accumulation Plan
Excess Benefit Agreement, and any amounts accrued under such Agreements shall
be transferred to this Plan and subject to the provisions herein.
SECTION IX
MISCELLANEOUS
9.1 The Board of Directors may, in its sole discretion, terminate,
suspend, or amend this Plan at any time or from time-to-time, in whole or in
part. However, no amendment or suspension of the Plan shall affect a
Participant's right or the right of a Surviving Spouse to benefits accrued up
to the date of any amendment or termination. In the event the Plan is
terminated the Committee will continue to administer the Plan until all
amounts accrued and vested have been paid.
9.2 Nothing contained herein shall confer upon any Participant the
right to be retained in the service of the Company, nor shall it interfere
with the right of the Company to discharge or otherwise deal with
Participants without regard to the existence of this Plan.
9.3 This Plan is unfunded, and the Company shall make Plan benefit
payments on a current disbursement basis.
9.4 To the maximum extent permitted by law, no benefit under the Plan
shall be assignable or subject in any manner to alienation, sale, transfer,
claims of creditors, pledge, attachment, or encumbrances of any kind.
9.5 The Plan shall be administered by the Committee or its designee,
which may adopt rules and regulations to assist it in the administration of
the Plan.
9.6 Each Participant shall receive a copy of the Plan and the Company
shall make available for inspection by any Participant a copy of any rules
and regulations used by the Company in administering the Plan.
9.7 If any contest or dispute shall arise as to amounts due to a
Participant (other than amounts derived from the investments of deferred
compensation) under this Plan, the Company shall reimburse the Participant,
on a current basis all legal fees and expenses, incurred by the Participant
in connection with such contest or dispute; provided, however, that in the
event the resolution of any such contest or dispute includes a finding
denying the Participant's claims, the Participant shall be required to
immediately reimburse the Company for all sums advanced to the Participant
hereunder.
9.8 This Plan is established under and shall be construed according
to the Laws of the State of Missouri.
[1985A] EXHIBIT 10-i
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
between
KANSAS CITY POWER & LIGHT COMPANY
and
THE TORONTO-DOMINION BANK
dated as of August 19, 1993
TABLE OF CONTENTS
Section Page
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
1.01 The Letter of Credit . . . . . . . . . . . . . . . . . . . . .1
1.02 Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . .1
1.03 Tender Advances and Accrued Interest Advances. . . . . . . . .2
1.04 Redemption Advances and Purchase Advances. . . . . . . . . . .3
1.05 Interest Advances . . . . . . . . . . . . . . . . . . . . . .3
1.06 Interest on Overdue Amounts. . . . . . . . . . . . . . . . . .3
1.07 Interest Payments. . . . . . . . . . . . . . . . . . . . . . .4
1.08 Selection of Interest Rates. . . . . . . . . . . . . . . . . .4
(a) Tenders Advances. . . . . . . . . . . . . . . . . . . . .4
(b) Term Advances . . . . . . . . . . . . . . . . . . . . . .4
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . .5
1.10 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . .7
1.11 Other Payments . . . . . . . . . . . . . . . . . . . . . . . .8
1.12 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . .8
1.13 Additional Interest. . . . . . . . . . . . . . . . . . . . . 10
1.14 Payments and Computations. . . . . . . . . . . . . . . . . . 10
1.15 Payments on Non-Business Days. . . . . . . . . . . . . . . . 10
1.16 Extension of the Letter of Credit . . . . . . . . . . . . . 11
1.17 Obligations Absolute . . . . . . . . . . . . . . . . . . . . 11
ARTICLE II
CONDITIONS OF ISSUANCE
2.01 Condition Precedent to Issuance of the
Letter of Credit . . . . . . . . . . . . . . . . . . 12
2.02 Additional Conditions Precedent to Issuance
of the Letter of Credit. . . . . . . . . . . . . . . 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties . . . . . . . . . . . . . . . 13
ARTICLE IV
COVENANTS OF THE COMPANY
4.01 Affirmative Covenants. . . . . . . . . . . . . . . . . . . . 15
a. Preservation of Corporate Existence, Etc.. . . . . . . . 15
b. Compliance with Laws, Etc. . . . . . . . . . . . . . . . 16
c. Maintenance of Insurance, Etc. . . . . . . . . . . . . . 16
d. Visitation Rights. . . . . . . . . . . . . . . . . . . . 16
e. Keeping of Books . . . . . . . . . . . . . . . . . . . . 16
f. Maintenance of Properties. . . . . . . . . . . . . . . . 16
g. Reporting Requirements . . . . . . . . . . . . . . . . . 16
h. Officer's Certificate. . . . . . . . . . . . . . . . . . 17
i. Other Agreements . . . . . . . . . . . . . . . . . . . . 17
j. Redemption of Defeasance of Bonds. . . . . . . . . . . . 17
k. Registration of Bonds. . . . . . . . . . . . . . . . . . 17
4.02 Negative Covenants . . . . . . . . . . . . . . . . . . . . . 18
a. Liens, Etc.. . . . . . . . . . . . . . . . . . . . . . . 18
b. Mergers, Etc.. . . . . . . . . . . . . . . . . . . . . . 18
c. Sales, Etc. of Assets. . . . . . . . . . . . . . . . . . 19
d. Compliance with ERISA. . . . . . . . . . . . . . . . . . 19
e. Amendment of Indenture or Related Document . . . . . . . 19
ARTICLE V
EVENTS OF DEFAULT
5.01 Events of Default. . . . . . . . . . . . . . . . . . . . . . 19
5.02 Upon an Event of Default . . . . . . . . . . . . . . . . . . 21
ARTICLE VI
DEFINITIONS
6.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VII
MISCELLANEOUS
7.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . 26
7.02 Notices, Etc.. . . . . . . . . . . . . . . . . . . . . . . . 26
7.03 No Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . 27
7.04 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . 27
7.05 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 27
7.06 Liability of the Bank. . . . . . . . . . . . . . . . . . . . 28
7.07 Costs, Expenses and Taxes. . . . . . . . . . . . . . . . . . 28
7.08 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 29
7.09 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.10 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . 30
7.12 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 30
7.13 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 30
EXHIBIT A - Form of Irrevocable Letter of Credit with Annexes A through
I thereto
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C - Form of Opinions of Bond Counsel
EXHIBIT D - Encumbrances
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT dated as of August 19,
1993, between KANSAS CITY POWER & LIGHT COMPANY, a corporation organized
and existing under the laws of the State of Missouri (the "Company"), and
THE TORONTO-DOMINION BANK (the "Bank"). (Unless otherwise indicated, all
capitalized terms used herein shall have the meaning referred to or set
forth in Article VI hereof.)
WHEREAS, the Company requested the City of Burlington, Coffey County,
Kansas (the "Issuer") to issue pursuant to an Indenture of Trust dated as
of September 1, 1985 (the "Indenture"), naming United States Trust Company
of New York, as trustee (the "Trustee"), $56,500,000 aggregate principal
amount of the Issuer's Customized Purchase Pollution Control Refunding and
Improvement Revenue Bonds, Series 1985A (Kansas City Power & Light Company
Project) (the "Bonds") to various purchasers (the "Bond Purchasers") to
finance the costs of acquisition, construction, and installation of certain
air and water pollution control and sewage and solid waste disposal
facilities (the "Project") in Coffey County, Kansas; and
WHEREAS, pursuant to an Equipment Lease Agreement (the "Lease") dated
as of September 1, 1985, between the Company and the Issuer, the Company
has agreed to use the proceeds of the Bonds for the financing of the
Project, and the Company will lease the Project to the Issuer, and pursuant
to an Equipment Sublease Agreement (the "Sublease") dated as of September
1, 1985, between the Issuer and the Company, the Project will be subleased
by the Issuer to the Company for payments to be made by the Company in such
amounts and at such times as will be sufficient to timely pay the principal
and interest on the Bonds; and
WHEREAS, in order to induce the Bond Purchasers to purchase the Bonds,
the Company has requested the Bank to issue its irrevocable transferable
letter of credit in substantially the form of Exhibit A appropriately
completed (such letter of credit and any successor letter of credit as
provided in such letter of credit being the "Letter of Credit") in the
amount of $63,117,465.75 of which $56,500,000 shall support the payment of
the principal of the Bonds, and $6,617,465.75 shall support the payment of
up to 285 days' accrued interest (computed at 15%) on the Bonds.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Bank to issue the Letter of Credit, the parties hereto agree as
follows:
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
SECTION 1.01. The Letter of Credit. On the terms and conditions
hereinafter set forth, the Bank agrees, upon the request of the Company, to
issue the Letter of Credit dated August 19, 1993, to the Trustee in an
amount not to exceed $63,117,465.75 (the "Commitment") and expiring on or
before the Scheduled Termination Date.
SECTION 1.02. Reimbursement. (a) Subject to Section 1.03 in the case
of a drawing under the Letter of Credit made pursuant to a Tender Draft and
Section 1.04 in the case of a drawing under the Letter of Credit made
pursuant to a Redemption Draft or a Purchase Draft and Section 1.05 in the
case of a drawing under the Letter of Credit made pursuant to an Interest
Draft, the Company hereby agrees to pay to the Bank on demand (i) on and
after the date on which the Bank shall pay any draft presented under the
Letter of Credit a sum equal to the amount so paid under the Letter of
Credit, plus (ii) interest on any amount remaining unpaid by the Company to
the Bank under clause (i) above from and including the date such draft was
paid by the Bank until such amount becomes due, at such fluctuating
interest rate per annum as shall be in effect from time to time pursuant to
Section 1.06 herein.
(b) The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company resulting
from each Demand Advance made from time to time hereunder and the amounts
of principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account or accounts shall, in the absence of manifest error,
be conclusive evidence of the existence and amounts of the obligations of
the Company therein recorded.
SECTION 1.03. Tender Advances and Accrued Interest Advances. (a) If
the Bank shall make any payment under the Letter of Credit pursuant to a
Tender Draft, that portion of such payment with respect to the amount of
unpaid principal of the Bonds under such Tender Draft shall constitute a
tender advance made by the Bank to the Company on the date and in the
amount of such payment, each such advance being a "Tender Advance" and
collectively the "Tender Advances." The Company shall repay the aggregate
unpaid principal amount of all Tender Advances on the Scheduled Termination
Date. That portion of the payment equal to the accrued interest, if any,
on the Bonds under such Tender Draft shall constitute an accrued interest
advance made by the Bank to the Company on the date and in the amount of
such payment, each such advance being "Accrued Interest Advance" and
collectively the "Accrued Interest Advances." The Company shall repay the
unpaid principal amount of any Accrued Interest Advance and accrued
interest thereon on the first business day of the next calendar month. If
certified to the Bank by the Company as a payment being made pursuant to
this Section 1.03(a), upon such repayment, the Bank shall reinstate the
Letter of Credit in the principal amount of such Accrued Interest Advance
being repaid. The Bank shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company
resulting from each Tender Advance and each Accrued Interest Advance made
from time to time and the amounts of principal and interest payable and
paid from time to time hereunder. In any legal action or proceeding in
respect of this Agreement, the entries made in such account shall, in the
absence of manifest error, be conclusive evidence of the existence and
amounts of the obligations of the Company therein recorded.
(b) The Company shall pay interest on the unpaid principal amount of
each Tender Advance from the date of such Tender Advance until such
principal amount shall become due, at the Domestic Rate, the Eurodollar
Rate, or the CD Bid Rate, as selected by the Company pursuant to Section
1.08(a). The Company shall pay interest on the unpaid principal amount of
each Accrued Interest Advance from the date of such Accrued Interest
Advance until such principal amount shall become due, at the Domestic Rate.
SECTION 1.04. Redemption Advances and Purchase Advances. (a) If the
Bank shall make any payment under the Letter of Credit pursuant to a
Redemption Draft, such payment shall constitute a redemption advance made
by the Bank to the Company on the date and in the amount of such payment,
each such redemption advance being a "Redemption Advance" and collectively
the "Redemption Advances." If the Bank shall make any payment under the
Letter of Credit pursuant to a Purchase Draft, such payment shall
constitute a purchase advance made by the Bank to the Company on the date
and in the amount of such payment, each such purchase advance being a
"Purchase Advance" and collectively the "Purchase Advances." (Purchase
Advances together with Redemption Advances are hereinafter sometimes
referred to individually as a "Term Advance" and collectively as the "Term
Advances.")
(b) The Company shall repay the aggregate unpaid principal amount of
all Term Advances on the Scheduled Termination Date. The Bank shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Company resulting from each Redemption
Advance and Purchase Advance made from time to time and the amounts of
principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account or accounts shall, in the absence of manifest error,
be conclusive evidence of the existence and amounts of the obligations of
the Company therein recorded.
(c) The Company shall pay interest on the unpaid principal amount of
each Term Advance from the date of such Term Advance until such principal
amount shall become due, at the Term Rate, the Term Eurodollar Rate or the
Term CD Bid Rate, as selected by the Company pursuant to Section 1.08(b).
SECTION 1.05. Interest Advances. (a) If the Bank shall make any
payment under the Letter of Credit pursuant to an Interest Draft, such
payment shall constitute an interest advance made by the Bank to the
Company on the date and in the amount of such payment, each such interest
advance being an "Interest Advance" and collectively the "Interest
Advances." The Company shall repay each Interest Advance on the same day
such Interest Advance is made by the Bank.
(b) The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company resulting
from each Interest Advance made from time to time and the amounts of
principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account shall, in the absence of manifest error, be conclusive
evidence of the existence and amounts of the obligations of the Company
therein recorded.
SECTION 1.06. Interest on Overdue Amounts. Any amount of any Tender
Advance or any Accrued Interest Advance which is not paid when due, whether
at stated maturity, by acceleration or otherwise, shall bear interest from
and including the date the same becomes due until such amount is paid in
full, payable on demand, at a rate per annum equal to 1-1/2% above the
Prime Rate. Any amount of any Term Advance which is not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear
interest from and including the date the same becomes due until such amount
is paid in full, payable on demand, at a rate per annum equal to 1-5/8%
above the Prime Rate. Any amount of any Interest Advance which is not paid
when due shall bear interest from and including the date the same becomes
due until such amount is paid in full, payable on demand, at a rate per
annum equal to 1-1/2% above the Prime Rate. Except as provided above, any
other amount due hereunder which is not paid when due shall bear interest
from and including the date the same becomes due until such amount is paid
in full at a rate per annum equal to 1-1/2% above the Prime Rate.
SECTION 1.07. Interest Payments. The Company shall pay interest in
arrears on the unpaid principal amount of each Advance from the date of
such Advance until such principal amount shall become due, payable (i)
quarterly on the last day of each March, June, September and December
during the term thereof, and (ii) in addition, on the last day of each
Interest Period (as hereinafter defined) for such Advance if such Advance
is a Eurodollar Advance, a Term Eurodollar Advance, a CD Bid Advance or a
Term CD Bid Advance. The Company shall pay interest in arrears on the
unpaid principal amount of each Accrued Interest Advance from the date of
such Accrued Interest Advance until such principal amount shall become due,
payable on the first business day of the next calendar month.
SECTION 1.08. Selection of Interest Rates. (a) Tender Advances.
Subject to Sections 1.09(c) and (d) below, the Company may from time to
time select for each Tender Advance in an unpaid principal amount equal to
or greater than $1,000,000 either the Domestic Rate, the Eurodollar Rate or
the CD Bid Rate, provided that the Company shall also select a Business Day
on which the Domestic Rate, the Eurodollar Rate or the CD Bid Rate, as the
case may be, shall begin for such Tender Advance and that telephonic notice
thereof (such notice to be confirmed by the Company immediately in writing)
is given to the Bank on or before such Business Day in the case of
selection of the Domestic Rate and at least two Business Days prior to such
Business Day in the case of selection of the CD Bid Rate or the Eurodollar
Rate. The interest rate selected for any Tender Advance by the Company
pursuant to this Section 1.08(a) shall continue thereafter in effect for
such Tender Advance until the Business Day which the Company shall subse-
quently select pursuant hereto as the Business Day on which another
interest rate hereunder shall begin for such Tender Advance. If during the
term of any Tender Advance the Company changes the interest rate for such
Tender Advance from the Eurodollar Rate or the CD Bid Rate to another rate,
the Business Day on which such other rate shall then begin shall be the
last day of the Interest Period for such Tender Advance. In the event that
the Tender Advance shall be in an amount less than $1,000,000 or the
Company shall fail to select an interest rate, the interest rate shall be
the Domestic Rate.
(b) Term Advances. Subject to Sections 1.09(c) and (e), the Company
may from time to time select for each Term Advance in an unpaid principal
amount equal to or greater than $1,000,000 either the Term Rate, the Term
Eurodollar Rate or the Term CO Bid Rate, provided that the Company shall
also select a Business Day on which the Term Rate, the Term Eurodollar Rate
or the Term CD Bid Rate, as the case may be, shall begin for such Term
Advance and that telephonic notice thereof (such notice to be confirmed by
the Company immediately in writing) is given to the Bank on or before such
Business Day in the case of selection of the Term Rate and at least two
Business Days prior to such Business Day in the case of selection of the
Term CD Bid Rate or the Term Eurodollar Rate. The interest rate selected
for any Term Advance by the Company pursuant to this Section 1.08(b) shall
continue thereafter in effect for such Term Advance until the Business Day
which the Company shall subsequently select pursuant hereto as the Business
Day on which another interest rate hereunder shall begin for such Term
Advance. If during the term of any Term Advance the Company changes the
interest rate for such Term Advance from the Term Eurodollar Rate or the
Term CD Bid Rate to another rate, the Business Day on which such other rate
shall then begin shall be the last day of the Interest Period for such Term
Advance. In the event that the Term Advance shall be in an amount less
than $1,000,000 or the Company shall fail to select an interest rate, the
interest rate shall be the Term Rate.
SECTION 1.09. Interest Periods. (a) If and so long as the Eurodollar
Rate shall be selected for any Tender Advance or the Term Eurodollar Rate
shall be selected for any Term Advance, the period between the Business Day
on which such rate shall then begin for such Eurodollar Advance or Term
Eurodollar Advance, as the case may be, and the date of payment in full of
such Eurodollar Advance or Term Eurodollar Advance, as the case may be,
shall be divided into successive periods, each such period being an
"Interest Period" for such Eurodollar Advance or Term Eurodollar Advance,
as the case may be. The initial Interest Period for such Eurodollar
Advance or Term Eurodollar Advance, as the case may be, at that time shall
begin on such Business Day and each subsequent Interest Period for such
Eurodollar Advance or Term Eurodollar Advance, as the case may be, at the
time shall begin on the last day of the immediately preceding Interest
Period. The duration of each Interest Period for any Eurodollar Advance or
Term Eurodollar Advance shall be one, three or six months as the Company
may, upon telephonic notice given to the Bank at least two Business Days
prior to the first day of such Interest Period (such notice to be confirmed
by the Company immediately in writing), select; provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and
(ii) the duration of any Interest Period which begins prior to
the Scheduled Termination Date and would otherwise end after such
date shall end on such date.
(b) If and so long as the CD Bid Rate shall be selected for any
Tender Advance or the Term CD Bid Rate shall be selected for any Term
Advance, the period between the Business Day on which such rate shall then
begin for such CD Bid Advance or Term CD Bid Advance, as the case may be,
and the date of payment in full of such CD Bid Advance or Term CD Bid
Advance, as the case may be, shall be divided into successive periods, each
such period being an "Interest Period" for such CD Bid Advance or Term CD
Bid Advance, as the case may be. The initial Interest Period for such CD
Bid Advance or Term CD Bid Advance, as the case may be, at that time shall
begin on such Business Day and each subsequent Interest Period for such CD
Bid Advance or Term CD Bid Advance, as the case may be, at the time shall
begin on the last day of the immediately preceding Interest Period. The
duration of each Interest Period for any CD Bid Advance or Term CD Bid
Advance shall be one, three or six months as the Company may, upon tele-
phonic notice given to the Bank (such notice to be confirmed by the Company
immediately in writing) at least two Business Days prior to the first day
of such Interest Period, select; provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and (ii) the duration of any such Interest Period which begins
prior to the Scheduled Termination Date and would otherwise end after
such date shall end on such date.
(c) If (i) it shall become unlawful for the Bank to obtain funds in
the London interbank market in order to fund or maintain Eurodollar
Advances or Term Eurodollar Advances or otherwise to perform its
obligations hereunder with respect to any such Eurodollar Advances or Term
Eurodollar Advances, or (ii) due to money market conditions or otherwise,
the Bank determines that matching or offsetting deposits for Eurodollar or
Term Eurodollar Advances are not available in the London interbank market
or that the Bank is unable reasonably to quote a rate for such Advances or
that the LIBO Rate does not adequately reflect the cost of funding such
Advances, upon notice by the Bank to the Company, the rate of interest on
all Eurodollar Advances shall thereupon be the Domestic Rate or the CD Bid
Rate, as the Company shall select immediately upon receipt of such notice,
and the rate of interest on all Term Eurodollar Advances shall thereupon be
the Term Rate or the Term CD Bid Rate, as the Company shall select
immediately upon receipt of such notice, and the right of the Company to
select the Eurodollar Rate for any Tender Advance and the Term Eurodollar
Rate for any Term Advance shall cease for the period during which such
illegality or such conditions shall occur and be continuing. In the event
that the Company shall fail to select an alternative rate, the rate of
interest on all Eurodollar Advances shall thereupon be the Domestic Rate
and the rate of interest on all Term Eurodollar Advances shall be the Term
Rate.
(d) On and after the date on which the unpaid principal amount of any
Tender Advance shall be reduced, by payment or prepayment or otherwise, to
less than $1,000,000, the rate of interest on the unpaid principal amount
of such Tender Advance shall be the Domestic Rate and the right of the
Company to select a rate other than the Domestic Rate for such Tender
Advance shall terminate; provided, however, that if and so long as such
Tender Advance shall bear the same rate (other than the Domestic Rate) for
the same Interest Period as another Tender Advance or other Tender Advances
and the aggregate unpaid principal amount of all such Tender Advances shall
equal or exceed $1,000,000, the Company shall have the right to select such
rate for such Interest Period for such Tender Advance.
(e) On and after the date on which the unpaid principal amount of any
Term Advance shall be reduced, by payment or prepayment or otherwise, to
less than $1,000,000 the rate of interest on the unpaid principal amount of
such Term Advance shall be the Term Rate and the right of the Company to
select a rate (other than the Term Rate) for such Term Advance shall
terminate; provided, however, that if and so long as such Term Advance
shall bear the same rate (other than the Term Rate) for the same Interest
Period as another Term Advance or other Term Advances and the aggregate
unpaid principal amount of all such Term Advances shall equal or exceed
$1,000,000, the Company shall have the right to select such rate for such
Interest Period for such Term Advance.
SECTION 1.10. Prepayments. (a) The Company may prepay in whole or in
part the outstanding amount of any Accrued Interest Advance with accrued
interest to the date of such prepayment on the amount prepaid; provided,
however, that the Company shall, simultaneously with the making of such
prepayment, give notice to the Bank by telephone (which shall be confirmed
immediately in writing) or telegraph of such prepayment, which notice shall
specify (i) the amount of such prepayment and (ii) the amount of accrued
interest transmitted with such prepayment.
(b) The Company may, upon at least two Business Days' notice to the
Bank, prepay the outstanding amount of any Advance (other than an Accrued
Interest Advance) in whole or in part with accrued interest to the date of
such prepayment on the amount prepaid; provided, however, that any
prepayment of any Eurodollar Advance, Term Eurodollar Advance, CD Bid
Advance or Term CD Bid Advance shall be made on, and only on, the last day
of an Interest Period for such Eurodollar Advance, Term Eurodollar Advance,
CD Bid Advance or Term CD Bid Advance, as the case may be, unless the
Company shall pay to the Bank in accordance with Section 1.12 an amount
sufficient to compensate the Bank for any loss or expenses incurred by it
by reason of such prepayment on a day other than the last day of the
relevant Interest Period; provided, further, that in the case of a
prepayment certified to the Bank by the Trustee as a payment made pursuant
to subsection (c) of this Section, the Company shall on the date of such
prepayment pay interest accrued on such Advance to the date of prepayment,
together with an amount sufficient to compensate the Bank for any loss or
expenses in accordance with Section 1.12.
(c) Prior to or simultaneously with the resale of any Bonds held by
the Custodian on behalf of the Company under the Custody Agreement as a
result of a draw or draws under the Letter of Credit by a Tender Draft or
Tender Drafts, the Company shall cause the Trustee to prepay, on behalf of
the Company, in the order in which they were made, by paying to the Bank an
amount equal to the sum of (i) that portion of any Tender Advances equal to
100% of the principal amount of any such Bonds resold or to be resold and
(ii) that portion of the Accrued Interest Advances (the "Corresponding
Accrued Interest Advances") which bears the same ratio to the total unreim-
bursed Accrued Interest Advances as the principal amount of such Bonds sold
or to be resold bears to the principal amount of all such Bonds held by the
Custodian on behalf of the Company under the Custody Agreement. Such
payments shall, if certified to the Bank by the Trustee in a certificate,
completed and signed, by the Trustee, in the form of Annex H to the Letter
of Credit as payments being made pursuant to this Section 1.10(c), be
applied by the Bank in reimbursement of such drawings (and as prepayment of
the Tender Advances and the Corresponding Accrued Interest Advances result-
ing from such drawings in the manner described above). The Company
irrevocably authorizes the Bank to rely on such certificate and to rein-
state the Letter of Credit in accordance therewith.
(d) Prior to or simultaneously with the resale of any Bonds held by
the Custodian on behalf of the Company under the Custody Agreement as a
result of a draw or draws under the Letter of Credit by a Purchase Draft or
Purchase Drafts, the Company shall cause the Trustee to prepay, on behalf
of the Company, in the order in which they were made, by paying to the Bank
an amount equal to that portion of any Purchase Advances equal to 100% of
the principal amount of any such Bonds resold or to be resold. Such
payments shall, if certified to the Bank by the Trustee in a certificate,
completed and signed, by the Trustee, in the form of Annex H to the Letter
of Credit as payments being made pursuant to this Section 1.10(d), be
applied by the Bank in reimbursement of such drawings (and as prepayment of
the Purchase Advances resulting from such drawings in the manner described
above). The Company irrevocably authorizes the Bank to rely on such
certificate and to reinstate the Letter of Credit in accordance therewith.
(e) Amounts received by the Bank from the Company or the Trustee on
behalf of the Company in reimbursement for drawings under the Letter of
Credit shall be applied first in reimbursement of any unreimbursed drawings
made by an Interest Draft, unless such amounts are accompanied by a
certificate as described in subsection (c) or (d) of this Section 1.10 or
in Section 1.03(a).
SECTION 1.11. Other Payments. The Company hereby agrees to pay to the
Bank such fees as are set forth in a letter of even date from the Company
to the Bank.
SECTION 1.12. Increased Costs. (a) If either (i) the introduction of
or any change (including, without limitation, any change by way of imposi-
tion or increase of reserve requirements other than those referred to in
Section 1.13 below) in or in the interpretation of any law or regulation or
(ii) the compliance by the Bank with any guideline or request from any
central bank or other governmental authority (whether or not having the
force of law), shall result in any increase in the cost to the Bank of
making, funding or maintaining Eurodollar Advances or Term Eurodollar
Advances, then the Company shall from time to time, upon demand by the
Bank, pay to the Bank additional amounts sufficient to indemnify the Bank
against such increased cost. A certificate as to the amount of such
increased cost and a reasonable explanation thereof, submitted to the
Company by the Bank, shall constitute such demand and shall, in the absence
of manifest error, be conclusive and binding for all purposes.
(b) If, due to (i) conversions of the type of interest rate pursuant
to Section 1.08, (ii) prepayments pursuant to Section 1.10 (whether by
direct or applied payments), (iii) acceleration of the maturity of the
Advances pursuant to Section 5.02, or (iv) any other reason, the Bank
receives payments of principal of any Eurodollar Advance, Term Eurodollar
Advance, CD Bid Advance or Term CO Bid Advance, or is subject to a
conversion of a Eurodollar Advance, Term Eurodollar Advance, CD Bid Advance
or Term CD Bid Advance into another type of Advance other than on the last
day of an Interest Period relating to such Advance, the Company shall,
promptly after demand by the Bank, pay to the Bank any amounts required to
compensate the Bank for any additional losses, costs or expenses which it
may reasonably incur as a result of such payment or conversion, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by the Bank
to fund or maintain such Eurodollar Advance, Term Eurodollar Advance, CD
Bid Advance or Term CD Bid Advance. A certificate setting forth the amount
of such additional losses, costs or expenses and giving a reasonable
explanation thereof, submitted by the Bank to the Company, shall constitute
such demand and shall, in the absence of manifest error, be conclusive and
binding for all purposes.
(c) If, after the date of this Agreement, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject the Bank to any tax, duty or charge with
respect to payments to the Bank of any amount due under this
Agreement or shall change the basis of taxation of payments to the
Bank of any amount due under this Agreement (except for changes in
the rate of tax on the overall net income of the Bank imposed by the
jurisdiction in which the Bank's principal executive office is
located); or
(ii) shall impose, modify or deem applicable any reserve,
capital adequacy, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System or the Reserve Bank of
Canada) against assets of, deposits with or for the account of, or
credit extended by, the Bank or shall impose on the Bank any other
condition affecting the Letter of Credit or its participation
therein;
and the result of any of the foregoing is to increase the cost to the Bank
of issuing or maintaining the Letter of Credit or its participation
therein, or to reduce the amount of any sum received or receivable by the
Bank under this Agreement with respect thereto, then, at the discretion of
the Bank and within 15 days after demand by the Bank pursuant to paragraph
(e) below, the Company shall pay for the account of the Bank such
additional amount or amounts as will compensate the Bank for such increased
cost or reduction.
(d) If after the date of this Agreement, the Bank shall have
determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy of general applicability, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank with
any request or directive regarding capital adequacy of general
applicability (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on the Bank's capital as a consequence of
the Letter of Credit or its participation therein hereunder to a level
below that which the Bank could have achieved but for such adoption, change
or compliance (taking into consideration the Bank's policies with respect
to capital adequacy) then, at the discretion of the Bank and within 15 days
after demand by the Bank pursuant to paragraph (e) below, the Company shall
pay to the Bank such additional amount or amounts as will, in the opinion
of the Bank, compensate it for such reduction.
(e) The Bank will promptly notify the Company of any event of which
it has knowledge, occurring after the date hereof, that will entitle the
Bank to compensation pursuant to paragraphs (c) or (d) of this Section. A
certificate of the Bank submitted to the Company setting forth the
additional amount or amounts to be paid to it and a reasonable explanation
thereof shall constitute demand for such compensation and shall be
conclusive in the absence of manifest error. In determining such amount,
the Bank may use any reasonable averaging and attribution methods.
SECTION 1.13. Additional Interest. The Company shall pay to the Bank
additional interest on the unpaid principal amount of each Advance during
the periods such Advance shall be a Eurodollar Advance or Term Eurodollar
Advance until such principal amount is paid in full, payable on each day on
which interest on such Advance is payable under Section 1.07, at an
interest rate per annum equal at all times during each Interest Period for
such Advance, to the excess of (i) the rate obtained by dividing the LIBO
Rate for such Interest Period by a percentage equal to 100% minus the
reserve percentage applicable during such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or if more than one such percentage is so applicable, minus the
daily average for such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) for determining
the maximum reserve requirement (including, without limitation, any
marginal reserve requirement) for the Bank in respect of liabilities or
assets consisting of or including Eurocurrency liabilities over (ii) the
LIBO Rate for such Interest Period.
SECTION 1.14. Payments and Computations. The Company, unless directed
otherwise, shall make each payment hereunder not later than 11:00 a.m.
(Houston time) on the day when due in lawful money of the United States of
America to the Bank, at Morgan Guaranty Trust Company Account #63000271 for
the credit of The Toronto-Dominion Bank, New York Branch, in same day
funds. All computations of interest at the Domestic Rate and the Term Rate
shall be made by the Bank on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest at the Eurodollar Rate, the
Term Eurodollar Rate, the CD Bid Rate, the Term CO Bid Rate and the letter
of credit commission hereunder shall be made by the Bank on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day, but excluding the last day) elapsed.
SECTION 1.15. Payment on Non-Business Days. Whenever any payment to
be made hereunder shall be stated to be due, or whenever the last day of
any Interest Period would otherwise occur, on a day which is not a Business
Day, such payment shall be made, and the last day of such Interest Period
shall occur, on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest or commission, as the case may be; provided, however, if such
extension would cause such payment of a Eurodollar Advance or a Term
Eurodollar Advance to be made or the last day of such Interest Period to
occur in a new calendar month, such payment shall be made and the last day
of such Interest Period shall occur on the next preceding Business Day.
SECTION 1.16. Extension of the Letter of Credit. At least 90 days but
not more than 120 days before each May 15, commencing May 15, 1995, and
each succeeding year thereafter until the Scheduled Termination Date, the
Company may request the Bank in writing (each such request being
irrevocable and binding) to extend for one year the Scheduled Termination
Date of the Letter of Credit. The Bank shall respond to the Company's
request for such extension on or before each June 1 in the year in which
the Company has requested an extension of the Letter of Credit. In the
event the Bank does not respond to the Company's initial request by June 1
of the year the Company first requests an extension, the Bank shall be
deemed to have granted to the Company an extension of the Letter of Credit
from August 18, 1996, to and including August 18, 1997, on the same terms
and conditions as contained herein. If the Bank fails to respond to any
request for an extension of the Scheduled Termination Date made subsequent
to the Company's initial request, such extension shall be deemed not to
have been given. In the event the Bank responds to the Company's request
with an offer of new terms and conditions, the Company shall have until
July 1 of such year to give its consent or nonconsent in writing to the
Bank's offer of new terms and conditions. If the Company does not consent
in writing to such terms and conditions by such date, the extension shall
be deemed not to have been given. Any consent or offer the Bank may give
or any extension that is deemed to be given shall be conditional upon the
preparation, execution and delivery of legal documentation in form and
substance satisfactory to the Bank and its counsel .
SECTION 1.17. Obligations Absolute. The payment obligations of the
Company under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the Bonds, the Indenture, the Lease, the Sublease, or any
other agreement or instrument relating thereto (collectively the
"Related Documents");
(ii) any amendment or waiver of or any consent to departure
from all or any of the Related Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Company may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any persons
or entities for whom the Trustee, any such beneficiary or any such
transferee may be acting), the Bank or any other person or entity,
whether in connection with this Agreement, the transactions
contemplated herein or in the Related Documents or any unrelated
transaction;
(iv any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of the Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; provided however that such
circumstance or happening shall not have been the result of the gross
negligence or willful misconduct of the Bank.
ARTICLE II
CONDITIONS OF ISSUANCE
SECTION 2.01. Condition Precedent to Issuance of the Letter of Credit.
The obligation of the Bank to issue the Letter of Credit is subject to the
condition precedent that the Bank shall have received on or before the date
of the issuance of the Letter of Credit the following, each dated such day,
in form and substance satisfactory to the Bank:
(a) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the Company to enter into this
Agreement, approving the Letter of Credit and the other matters
contemplated hereby.
(b) Originals (or copies certified by the Secretary or
Assistant Secretary of the Company) of current approvals or orders of
the Issuer and the public utility regulatory commissions of the
States of Missouri and Kansas necessary for the Company with respect
to this Agreement.
(c) A certificate of the Secretary or Assistant Secretary of
the Company, certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the other
documents to be delivered by it hereunder.
(d) Opinions of Samuel P. Cowley, Esq., Senior Vice President
and Chief Legal Officer for the Company, in substantially the form of
Exhibit B hereto and as to such other matters as the Bank may
reasonably request.
(e) Opinions of Chapman and Cutler, Bond Counsel, in
substantially the form of Exhibit C hereto and as to such other
matters as the Bank may reasonably request, including advice from
such Bond Counsel to the Bank that the Bank may rely on such opinion.
(f) A transcript relating to the issuance of the Bonds.
(g) Such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies
thereof) or opinions as the Bank may reasonably request.
SECTION 2.02. Additional Conditions Precedent to Issuance of the
Letter of Credit. The obligation of the Bank to issue the Letter of Credit
shall be subject to the further conditions precedent that on the date of
the issuance of the Letter of Credit:
(a) The following statements shall be true and the Bank shall
have received a certificate signed by a duly authorized officer of
the Company, dated the date of such issuance, stating that:
(i) The representations and warranties contained in Section
3.01 of this Agreement are correct on and as of the date of
issuance of the Letter of Credit as though made on and as of
such date; and
(ii) no event has occurred and is continuing, or would result
from the issuance of the Letter of Credit, which constitutes an
Event of Default or would constitute an Event of Default, but
for the requirement that notice be given or time elapse or
both.
(b) The Issuer and the Trustee have duly authorized and
executed the Indenture and the Indenture shall continue to be in full
force and effect.
(c) The Issuer and the Company have duly authorized and
executed the Lease and the Sublease and the Lease and the Sublease
shall continue to be in full force and effect.
(d) The Issuer has duly executed, issued and delivered the
Bonds.
(e) The Bank shall have received such other approvals, opinions
or documents as the Bank may reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties. The Company represents
and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business in, and is in good standing
under the laws of, the State of Kansas.
(b) The execution, delivery and performance by the Company of
this Agreement and each Related Document to which it is a party are
within the Company's corporate powers, have been duly authorized by
all necessary corporate action, do not contravene (i) the Company's
charter or by-laws (ii) any law or contractual restriction
(including, but not limited to, any restriction in the Indenture)
binding on or affecting the Company, and do not result in or require
the creation of any lien, security interest or other charge or
encumbrance (other than pursuant to this Agreement and the Related
Documents) upon or with respect to any of its properties; or (iii)
any other instruments to which the Company is a party or by which it
may be bound or to which any of the property or assets of the Company
may be subject, or any law, order, rule or regulation applicable to
the Company or any court, federal or state, regulatory body,
administrative agency or other governmental body having jurisdiction
over the Company.
(c) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into this Agreement, and the commissions have duly
issued previous orders authorizing the Company to enter into the
Lease, the Sublease and any other documents that such commissions
have jurisdiction over and to which the Company is a party and the
Related Documents to which it is a party, and such order remains in
full force and effect in the form issued. Except for the approvals
of the Kansas Department of Economic Development, the Board of
Commissioners of Coffey County, Kansas, and the City Council of the
City of Burlington, Kansas, approving issuance of the Bonds, which
approvals have been duly obtained and are in full force and effect,
and the notice of timely filing with the Board of Tax Appeals of the
State of Kansas, no other authorization or approval or other action
by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Company of this Agreement or any Related Document
to which it is a party.
(d) This Agreement is, and each Related Document to which the
Company is a party when delivered hereunder will be, the legal, valid
and binding obligations of the Company enforceable against the
Company in accordance with their respective terms (except to the
extent that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally).
(e) Except as disclosed in the Company's Form 10-K for the year
1992, Forms 10-Q for the periods March 31, 1993, and June 30, 1993,
and Form 8-K dated August 16, 1993, there is no pending or, to the
best of the Company's knowledge, threatened action or investigation
or proceeding before any court, governmental agency or arbitrator
against or affecting the Company which may materially adversely
affect the financial condition or total operations of the Company;
provided, however, for purposes of this subsection (e) only, rate
proceedings before any regulatory body shall be excluded.
(f) The balance sheet of the Company as at December 31, 1992,
and the related statements of income and retained earnings and of
changes in financial position of the Company for the fiscal year then
ended, certified by Coopers & Lybrand, independent public
accountants, copies of which have been furnished to the Bank, and the
balance sheet of the Company as at June 30, 1993, and the related
statements of retained earnings for the six months then ended, signed
by the Controller of the Company, copies of which are contained in
the Company's 10-Q dated as of June 30, 1993, a copy of which has
been furnished to the Bank, fairly present the financial condition of
the Company as at such respective dates and the results of the
operations of the Company for the period ended on such respective
dates, all in accordance with generally accepted accounting
principles consistently applied, and since June 30, 1993, there has
been no material adverse change in the financial condition or total
operations of the Company.
(g) Except for information contained therein describing the
Bank, as to which no representation is made, the Official Statement
(said Official Statement, together with the documents incorporated
therein by reference, being the "Official Statement") dated
September 26, 1985, of the Issuer relating to the Bonds is, and the
Preliminary Official Statement (said Preliminary Official Statement,
together with the documents incorporated therein by reference being
the "Preliminary Official Statement") dated September 12, 1985, of
the Issuer relating to the Bonds as of its date of issue was to the
best of the Company's knowledge, and any supplement or amendment to
either thereof shall be, accurate in all material respects for the
purposes for which its use is, was, or shall be, authorized; and the
Official Statement does not, the Preliminary Official Statement as of
its date of issue did not to the best of the Company's knowledge, and
any such supplement or amendment shall not, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements made therein, in the light of the
circumstances under which they are or were made, not misleading.
(h) No Termination Event has occurred nor is reasonably
expected to occur with respect to any Plan.
(i) The Company does not contribute to any Multiemployer Plan
and has not incurred any withdrawal liability with respect to any
such plan.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants. So long as a drawing is avail-
able under the Letter of Credit or the Bank shall have any Commitment
hereunder or the Company shall have any obligation to pay any amount to the
Bank hereunder, the Company will, unless the Bank shall otherwise consent
in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights (charter and statutory) and
privileges in the state of its incorporation and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is reasonably necessary in view of its business and
operations or the ownership of its properties.
(b) Compliance with Laws, Etc. Comply in all respects with all
applicable laws, rules, regulations and orders of any governmental
authority, the non-compliance with which would materially and
adversely affect the financial condition or operations of the
Company, such compliance to include, without limitation, paying
before the same become delinquent all material taxes, assessments and
governmental charges imposed upon it or upon its property, except to
the extent compliance with any of the foregoing is then being
contested in good faith.
(c) Maintenance of Insurance. Maintain insurance with
responsible and reputable insurance companies or associations or
through its own program of self-insurance in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Company operates.
(d) Visitation Rights. At any reasonable time and from time to
time, permit the Bank or any of its agents or representatives at
their own expense to examine and make copies of and abstracts from
the records and books of account of, and visit the properties of, the
Company and to discuss the affairs, finances and accounts of the
Company with any of its officers.
(e) Keeping of Books. Keep proper books of record and account,
in which full and correct entries shall be made of all financial
transactions and the assets and business of the Company in accordance
with generally accepted accounting principles consistently applied.
(f) Maintenance of Properties. Maintain and preserve its
properties that are necessary to maintain its operating system in
good working order and condition, ordinary wear and tear excepted.
(g) Reporting Requirements. Furnish to the Bank the following:
(i) as soon as possible, and in any event within 3 days after the
occurrence of each Event of Default or each event which, with the
giving of notice or lapse of time, or both, would constitute an Event
of Default, continuing on the date of such statement, a statement of
the chief accounting officer (or in his absence, a principal
financial officer) of the Company setting forth details of such Event
of Default or event and the action which the Company proposes to take
with respect thereto; (ii) as soon as available and in any event
within 10 days after the filing of each quarterly report on Form 10-Q
by the Company with the Securities and Exchange Commission, a copy of
each such quarterly report, together with a certificate of the chief
accounting officer (or in his absence, a principal financial officer)
of the Company confirming as of the end of such quarter the truth of
the statement set forth in Section 2.02(a)(ii) of this Agreement;
(iii) as soon as available and in any event within 10 days after the
filing of each annual report on Form 10-K by the Company with the
Securities and Exchange Commission, a copy of each such annual report
containing financial statements for such year certified by nationally
recognized independent public accountants, together with a
certificate of the chief accounting officer (or in his absence, a
principal financial officer) of the Company confirming as of the end
of such quarter the truth of the statement set forth in Section
2.02(a)(ii) of this Agreement; (iv) promptly after the sending or
filing thereof, copies of all proxy statements, financial statements
and reports which the Company sends to any of its stockholders, and
copies of all regular, periodic and special reports and all
registration statements, which the Company files with the Securities
and Exchange Commission or any governmental authority which may be
substituted therefor; (v) as soon as possible and in any event within
(A) 30 days after the Company or any of its Affiliates knows or has
reason to know that any Termination Event described in clause (i) of
the definition of Termination Event with respect to any Plan has
occurred and (B) within 10 days after the Company or any of its
Affiliates knows or has reason to know that any other Termination
Event with respect to any Plan 'has occurred, a statement of the
chief accounting officer (or in his absence a principal financial
officer) of the Company describing such Termination Event and the
action, if any, which the Company or such Affiliate proposes to take
with respect thereto; (vi) promptly and in any event within two
Business Days after receipt thereof by the Company or any of its
Affiliates from the Pension Benefit Guaranty Corporation ("PBGC"),
copies of each notice received by the Company or any such Affiliate
of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan; and (vii) such other information
respecting the business, properties or the condition or operations,
financial or otherwise, of the Company as the Bank may from time to
time reasonably request in writing.
(h) Officer's Certificate. In the event that an Advance is
made pursuant to Sections 1.03 or 1.04 hereunder, the Company shall
deliver to the Bank every ninety (90) days commencing ninety (90)
days from the date such Advance is made until all outstanding
Advances have been paid in full, a certificate signed by a duly
authorized officer of the Company stating that the representations
and warranties contained in Section 3.01 (other than subsection (g))
are correct on and as of such date as though made on and as of such
date and subsection (g) of Section 3.01 was correct on the date of
this Agreement.
(i) Other Agreements. Perform and comply with each of the
terms, provisions and conditions, on its part to be performed or
complied with, contained in the Indenture, the Lease and the
Sublease.
(j) Redemption or Defeasance of Bonds. Use its best efforts to
cause the Trustee, (A) upon a redemption or defeasance of less than
all of the Bonds pursuant to the Indenture, to furnish to the Bank a
notice in the form of Annex G to the Letter of Credit, and (B) upon a
redemption or defeasance of all of the Bonds pursuant to the
Indenture, to surrender the Letter of Credit to the Bank for
cancellation.
(k) Registration of Bonds. Cause all bonds which it acquires,
or which it has acquired for its account, to be registered forthwith
in accordance with the Indenture in the name of the Company.
SECTION 4.02. Negative Covenants. So long as a drawing is available
under the Letter of Credit or the Bank shall have any Commitment hereunder
or the Company shall have any obligation to pay any amount to the Bank
hereunder, the Company will not, without the written consent of the Bank:
(a) Liens, Etc. Create, incur, assume or suffer to exist any
lien, security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of its
properties, whether now owned or hereafter acquired, or assign any
right to receive income, in each case to secure any Obligation of any
person, other than (i) purchase money liens or purchase money
security interests upon or in any property acquired or held by the
Company in the ordinary course of business to secure the purchase
price of such property or to secure indebtedness incurred solely for
the purpose of financing the acquisition of such property, (ii) liens
or security interests existing on such property at the time of its
acquisition, (iii) liens, security interests, charges or encumbrances
on or over, gas, oil, coal, fissionable material or other fuel or
fuel products as security for an Obligation incurred by the Company
for the sole purpose of financing the acquisition or storage of such
fuel or fuel products or, with respect to nuclear fuel, the
processing, reprocessing, sorting, storage and disposal thereof, (iv)
liens, security interests, charges or encumbrances on or over all or
any part of its undertaking or assets employed wholly or mainly in or
arising directly from any specific construction project or generating
plant as security for an Obligation incurred by the Company for the
purpose of financing all or any part of such construction project or
generating plant, (v) the lien of the Indenture of Mortgage and Deed
of Trust dated as of December 1, 1946, from the Company to
Continental Illinois National Bank and Trust Company of Chicago and
the lien of the General Mortgage Indenture and Deed of Trust dated
December 1, 1986, from the Company to United Missouri Bank, n.a. (the
"Mortgages"), (vi) encumbrances listed on Exhibit D attached hereto,
(vii) security interests granted in, or sale of, the Company's
accounts receivable, provided that such security interest secures
only new debt incurred at substantially the same time as the creation
of such security interest and that any such sale is made only for new
consideration given at substantially the same time as the making of
such sale, (viii) a second mortgage granted on the property subject
to the lien of the Mortgage as of the date hereof, and (ix) sales or
transfers of property by the Company and renting or leasing back such
property, provided that all such property in the aggregate does not
exceed fifteen percent (15%) of all the Company's assets.
(b) Mergers, Etc. Merge with or into or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) or
acquire all or substantially all of the assets, other than utility
assets, of, any person or entity, except that the Company may merge
or consolidate with any person or entity on condition in each case
that, (i) immediately after giving effect thereto, no event shall
occur and be continuing which constitutes an Event of Default or
which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, (ii) the consolidation or merger
shall not materially and adversely affect the ability of the Company
to perform its obligations hereunder or under the Related Documents,
and (iii) the corporation formed by any such consolidation or into
which the Company shall be merged shall assume the Company's obliga-
tions and performance of the Company's covenants hereunder and under
the Related Documents in a writing satisfactory in form and substance
to the Bank.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or, except as otherwise permitted under Section 4.02(a),
pledge or otherwise encumber more than fifteen percent (15%) of its
assets, except in the ordinary course of its business or in
connection with a transaction authorized by subsection (b) of this
Section 4.02.
(d) Compliance with ERISA. (i) Voluntarily terminate any Plan,
so as to result in any material liability of the Company to PBGC or
(ii) enter into any Prohibited Transaction (as defined in Section
4975 of the Internal Revenue Code of 1954, as amended, and in ERISA)
involving any Plan which results in any material liability of the
company to PBGC, (iii) cause any occurrence of any Reportable Event
which results in any material liability of the Company to PBGC or
(iv) allow or suffer to exist any other event or condition known to
the Company which results in any material liability of the Company to
PBGC.
(e) Amendment of Indenture or Related Document. Enter into or
consent to any amendment or modification of, the Indenture, the
Lease, the Sublease or any other Related Document, which would
adversely affect the Bank, without first obtaining the express prior
written consent of the Bank thereto.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. Events of Default. The occurrence of any of the
following events shall be an "Event of Default" hereunder unless waived by
the Bank pursuant to Section 7.01 hereof:
(a) the Company shall fail to pay any amount payable to the
Bank under any provision of Article I when due except as provided in
(b) below; or
(b) the Company shall fail to pay any amount of an Interest
Advance within one (1) day after such amount becomes due; or
(c) any representation or warranty made by the Company herein
or by the Company (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(d) the Company shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement, and any such
failure shall remain unremedied for 10 days after written notice
thereof shall have been given to the Company by the Bank; or
(e) any material provision of this Agreement shall at any time
for any reason cease to be valid and binding upon the Company, or
shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by the Company, or a
proceeding shall be commenced by any governmental agency or authority
having jurisdiction over the Company seeking to establish the
invalidity or unenforceability thereof, or the Company shall deny
that it has any or further liability or obligation under this
Agreement; or
(f) the Company shall (x) fail to make any payment, equal to or
exceeding $10,000,000 of any Obligation or to make any payment, equal
to or exceeding $5,000,000, of any interest or premium thereon, when
due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Obligation, or (y) fail to perform or
observe any term, covenant or condition on its part to be performed
or observed under any agreement or instrument relating to any
Obligation when required to be performed or observed, and such
failure shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such
failure to perform or observe is to accelerate, or to permit the
acceleration of, the maturity of any Obligation, the unpaid principal
amount of which then equals or exceeds $10,000,000; or
(g) the Company shall generally not pay its debts as they
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors or shall institute any proceeding or voluntary case seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to
bankruptcy, reorganization or insolvency or relief or protection of
debtors or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property; or the
Company shall take any corporate action to authorize any of the
actions described above in this subsection (g); or any proceeding
shall be instituted against the Company seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement or adjustment of debts under any law
relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief or
the appointment of a trustee, receiver or custodian or other similar
official for it or for any substantial part of its property, and, if
such proceeding is being contested by the Company in good faith, such
proceeding shall remain undismissed or unstayed for a period of 60
days; or
(h) any judgement or order for the payment of money in excess
of $10,000,000 shall be rendered against the Company and either (x)
enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (y) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(i) any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to
the Company by the Bank, (i) such Termination Event (if correctable)
shall not have been corrected and (ii) the then present value of such
Plan's vested benefits exceeds the then current value of assets
accumulated in such Plan by more than the amount of $15,000,000 (or
in the case of a Termination Event involving the withdrawal of a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA),
the withdrawing employer's proportionate share of such excess exceed
such amount); or
(j) any event of default under and as defined in the Indenture,
the Lease or the Sublease shall have occurred and be continuing.
SECTION 5.02. Upon an Event of Default. If any Event of Default
shall have occurred and be continuing, the Bank may (i) by notice to the
Company, declare the obligation of the Bank to issue the Letter of Credit
to be terminated, whereupon the same shall forthwith terminate, or if the
Letter of Credit shall have been issued, (ii) give notice to the Trustee
pursuant to Section 802 of the Indenture directing the Trustee to declare
the principal of all Bonds then outstanding and all interest accrued and
unpaid thereon to be due and payable and (iii) declare the Advances, all
amounts payable under any provision of Article I, all interest thereon and
all other amounts payable hereunder to be forthwith due and payable,
whereupon the Advances, all amounts payable under any provision of Article
I, all interest thereon and all such other amounts shall become and be
forthwith due and payable, without presentment, demand, protest, or further
notice of any kind, all of which are hereby expressly waived by the
Company.
ARTICLE VI
DEFINITIONS
SECTION 6.01. Definitions. Unless otherwise indicated in this
Agreement, the capitalized terms used herein shall have the following
meanings:
"Accrued Interest Advance" has the meaning set forth in Section
1.03(a) hereof.
"Advances" means, collectively, Tender Advances, Accrued
Interest Advances, Redemption Advances and Purchase Advances, and an
"Advance" means any of them.
"Affiliate" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a
member and which is under common control within the meaning of the
regulations under Section 414 of the Internal Revenue Code of 1954,
as amended.
"Assessment Rate" for any Interest Period for any CD Bid
Advance or Term CD Bid Advance means the annual assessment rate per
annum estimated by the Bank on the first day of such Interest Period
for determining the then current annual assessment payable by the
Bank to the Federal Deposit Insurance Corporation (or any successor)
for such Corporation's (or such successor's) insuring U.S. dollar
deposits of the Bank in the United States.
"Available Amount" in effect at any time means the maximum
amount available to be drawn at such time under the Letter of Credit
(the determination of such maximum amount to assume, throughout this
Agreement, compliance with all conditions for drawing and no
reduction for any amount drawn by an Interest Draft referred to in
the Letter of Credit (unless such amount is not reinstated under the
Letter of Credit)).
"Bonds" means the Issuer's Customized Purchase Pollution Control
Refunding and Improvement Revenue Bonds, Series 1985A (Kansas City
Power & Light Company Project).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or Houston, Texas,
and, if the applicable Business Day relates to any Eurodollar Advance
or Interest Period therefor, on which dealings are carried on in the
London interbank market.
"CD Bid Advance" means a Tender Advance bearing interest at the
CD Bid Rate.
"CD Bid Rate" during any Interest Period for any CD Bid Advance
means an interest rate per annum equal to 5/8 of 1% per annum.
"CD Bid Formula" shall mean a rate equal to the sum of (x) the
rate of interest equal to the per annum rate determined by the Bank
at 9:00 a.m. Houston time (or as soon thereafter as practicable) on
the first day of the applicable Interest Period, of certificates of
deposit with maturities identical to the duration of such Interest
Period, plus (y) the Assessment Rate divided by (z) one hundred
percent (100%) minus the Reserve Percentage.
"Commitment" has the meaning set forth in Section 1.01 hereof.
"Company" means Kansas City Power & Light Company, a corporation
organized and existing under the laws of the State of Missouri.
"Corresponding Accrued Interest Advances" has the meaning set
forth in Section 1.10(c) hereof.
"Custodian" means United States Trust Company of New York, as
custodian under the Custody Agreement.
"Custody Agreement" means the Custody Agreement dated as of
September 1, 1985, between the Company and the Custodian and all
amendments, modifications and supplements thereto.
"Demand Advance" means a payment made by the Bank under the
Letter of Credit which is due on demand pursuant to Section 1.02
hereof.
"Domestic Advance" means a Tender Advance bearing interest at
the Domestic Rate.
"Domestic Rate" means an interest rate equal to the Prime Rate.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Advance" means a Tender Advance bearing interest at
the Eurodollar Rate.
"Eurodollar Rate" during any Interest Period for any Tender
Advance means an interest rate per annum equal at all times during
each Interest Period for such Tender Advance to 1/2 of 1% per annum
above the LIBO Rate.
"Event of Default" shall have the meaning set forth in Section
5.01 hereof.
" Final Draft" has the meaning set forth in the Letter of
Credit.
"Indenture" means the Indenture of Trust dated as of September
1, 1985, between the Issuer and United States Trust Company of New
York, as trustee and all amendments, modifications and supplements
thereto.
"Interest Advance" has the meaning set forth in Section 1.05(a)
hereof.
"Interest Draft" has the meaning set forth in the Letter of
Credit.
"Interest Period" has the meaning set forth in Section 1.09(a)
hereof.
"Issuance Date" has the meaning set forth in Section 1.11
hereof.
"Issuer" means the City of Burlington, Kansas.
"Lease" means the Equipment Lease Agreement dated as of
September 26, 1985, between the Issuer and the Company, and all
amendments, modifications and supplements thereto.
"Letter of Credit" means the irrevocable, transferable letter of
credit issued by the Bank in substantially the form of Exhibit A
hereto and any successor letter of credit as provided in such letter
of credit.
"LIBO Rate" for any Interest Period means the rate of interest
per annum at which deposits in United States dollars are offered to
the Bank at its London, England branch by prime banks in the London
Interbank Market for a period equal to the duration of such Interest
Period relating to any Advance at or about 11:00 a.m. (London time)
two Business Days before the first day of such Interest Period.
"Mortgages" has the meaning set forth in Section 4.02(a)
hereof.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Obligation" of any person or entity means (i) indebtedness for
borrowed money or for the deferred purchase price of property or
services in respect of which such person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
such person otherwise assures a creditor against loss, (ii)
obligations under leases in respect of which obligations such person
is liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such person otherwise
assures a creditor against loss, and (iii) liabilities in respect of
unfunded vested benefits under each Plan maintained for employees of
such person and covered by Title IV of ERISA.
"Official Statement" has the meaning set forth in Section
3.01(g).
"Plan" means an employee benefit plan (other than a
Multiemployer Plan) maintained for employees of the Company or any
Affiliate and covered by Title IV of ERISA.
"Preliminary Official Statement" has the meaning set forth in
Section 3.01(g).
"Prime Rate" means the rate of interest per annum from time to
time designated by the Bank at its principal office in Houston,
Texas, as its "prime rate," whether or not such "prime rate" is
actually charged by the Bank, with all changes therein to be
effective on the date announced.
"Purchase Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Purchase Draft" has the meaning set forth in the Letter of
Credit.
"Redemption Advance" has the meaning set forth in Section
1.04(a) hereof.
"Redemption Draft" has the meaning set forth in the Letter of
Credit.
"Related Documents" has the meaning set forth in Section 1.17(i)
hereof.
"Reserve Percentage" for any Interest Period for any CD Bid
Advance or Term CD Bid Advance is that percentage which is specified
on the first day of such Interest Period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement for the Bank with respect to liabilities
consisting of or including (among other liabilities) U.S. dollar
nonpersonal time deposits in the United States in an amount of
$1,000,000 or more and with a maturity equal to such Interest Period,
together with any marginal, emergency, supplemental, special or other
reserve that the Bank, in its sole discretion, determines that it is
required to maintain on such day for deposits with a maturity equal
to such Interest Period.
"Scheduled Termination Date" means the earliest of (i) the date
on which the Trustee surrenders the Letter of Credit for
cancellation, (ii) the date on which the Bank honors a Redemption
Draft for all the Bonds, (iii) the date on which the Bank honors a
Final Draft, (iv) the tenth day after the Bank receives written
notice that all the Bonds have been converted to the Fixed Interest
Rate within the meaning of the Indenture, (v) the date on which the
Bank receives notice that there is no longer any Bond outstanding,
(vi) the date the Bank receives written notice of the substitution of
an alternate Letter of Credit in accordance with the Indenture, and
(vii) August 18, 1996, which date may be extended pursuant to Section
1.16 hereof.
"Sublease" means the Equipment Sublease Agreement dated as of
September 26, 1985, between the Issuer and the Company and all
amendments, modifications and supplements thereto.
"Tender Advance" has the meaning set forth in Section 1.03(a)
hereof.
"Tender Draft" has the meaning set forth in the Letter of
Credit.
"Term Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Term CD Bid Advance" means a Term Advance bearing interest at
the Term CD Bid Rate.
"Term CD Bid Rate" during any Interest Period for any Term CD
Bid Advance means an interest rate per annum equal at all times
during each Interest Period for such Term CD Bid Advance to 3/4 of 1%
above the CD Bid Formula.
"Term Eurodollar Advance" means a Term Advance bearing interest
at the Term Eurodollar Rate.
"Term Eurodollar Rate" during any Interest Period for any Term
Advance means an interest rate per annum equal at all times during
each Interest Period for such Term Advance to 5/8 of 1% per annum
above the LIBO Rate.
"Term Rate" means an interest rate equal to 1/8 of 1% per annum
above the Prime Rate.
"Termination Event" means (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other
than a Reportable Event not subject to the provision for 30-day
notice to the PBGC under such regulations), or (ii) the withdrawal of
the Company or any of its Affiliates from a Plan during a plan year
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of
proceedings to terminate a Plan by the PBGC, or (v) any other event
or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Trustee" means United States Trust Company of New York, as
trustee under the Indenture.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Bank and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
SECTION 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
and mailed, sent or delivered, if to the Company, at its address at 1201
Walnut, Kansas City, Missouri 64106, Attention: Treasurer, facsimile
(816)556-2992 and if to the Bank, at its address at 909 Fannin Street,
Suite 1700, Houston, Texas, 77010 or facsimile: (713) 951-9921 and a copy
to 31 West 52nd Street, New York, New York, 10019, or if to the Trustee,
mailed or delivered to it, addressed to it at 114 West 47th Street, New
York, New York, 10036 Attention: Corporate Trust Department, facsimile:
(212)852-1625 or as to each party, to such other party and/or at such other
address as shall be designated by such person in a written notice to the
other party. All such notices and communications shall be effective when
mailed or sent, addressed as aforesaid, except that notices to the Bank
pursuant to the provisions of Article I shall not be effective until
received by the Bank, and any notice to the Trustee pursuant to Section
5.02(ii) shall not be effective until received by the Trustee. Notices of
any Even of Default shall be sent by the Company to the Bank by facsimile.
SECTION 7.03. No Waiver; Remedies. No failure on the part of the Bank
to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
United States accounting principles consistently applied and in effect on
the date hereof.
SECTION 7.05. Indemnification. The Company hereby indemnifies and
holds the Bank harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses which the Bank may incur or which
may be claimed against the Bank by any person or entity:
(a) by reason of any inaccuracy in any material respect, or any
untrue statement or alleged untrue statement of any material fact,
contained in the Preliminary Official Statement or the Official
Statement or any amendment or supplement thereto, or by reason of the
omission or alleged omission to state therein a material fact
necessary to make such statements, in the light of the circumstances
under which they were made, not misleading; provided, however, that,
in the case of any action or proceeding alleging an inaccuracy in a
material respect, or an untrue statement, with respect to information
supplied by and describing the Bank in the Preliminary Official
Statement or the Official Statement (the "Bank Information"), or an
omission or alleged omission to state therein a material fact
necessary to make the statements in the Bank Information, in the
light of the circumstances under which they were made, not
misleading, (i) indemnification by the Company pursuant to this
Section 7.05(a) shall be limited to the costs and expenses of the
Bank (including reasonable fees and expenses of the Bank's counsel)
of defending itself against such allegation, (ii) if in any such
action or proceeding it is finally determined that the Bank
Information contained an inaccuracy in any material respect or an
untrue statement of a material fact or omitted to state therein a
material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not
misleading, then the Company shall not be required to indemnify the
Bank pursuant to this Section 7.05(a) for any claims, damages,
losses, liabilities, costs or expenses (including reasonable fees and
expenses of counsel) to the extent caused by such inaccuracy, untrue
statement or omission, and (iii) if any such action or proceeding
shall be settled by the Bank without there being a final
determination to the effect described in the preceding clause (ii),
then the Company shall be required to indemnify the Bank pursuant to
this Section 7.05(a) only if such action or proceeding is settled
with the Company's consent; or
(b) by reason of or in connection with the execution, delivery
or performance of the Bonds, the Indenture, the Lease or the
Sublease, or any transaction contemplated by the Indenture, the Lease
or the Sublease; or
(c) by reason of or in connection with the execution and
delivery or transfer of, or payment or failure to make lawful payment
under, the Letter of Credit; provided, however, that the Company
shall not be required to indemnify the Bank pursuant to this section
7.05(c) for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the
Bank's wilful misconduct or gross negligence in determining whether
documents presented under the Letter of Credit comply with the terms
of the Letter of Credit or (ii) the Bank's wilful failure to make
lawful payment, under the Letter of Credit after the presentation to
it by the Trustee or a successor trustee under the Indenture of a
draft and certificate strictly complying with the terms and
conditions of the Letter of Credit.
Nothing in this Section 7.05 is intended to limit the Company's obligations
contained in Article I. Without prejudice to the survival of any other
obligation of the Company hereunder, the indemnities and obligations of the
Company contained in this Section 7.05 shall survive the payment in full of
amounts payable pursuant to Article I and the termination of the Letter of
Credit.
SECTION 7.06. Liability of the Bank. The Company assumes all risks of
the acts or omissions of the Trustee and any beneficiary or transferee of
the Letter of Credit with respect to its use of the Letter of Credit.
Neither the Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or
any acts or omissions of the Trustee and any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should
prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by the Bank against presentation of documents which do
not comply with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to
make payment under the Letter of Credit, except that the Company shall have
a claim against the Bank, and the Bank shall be liable to the Company, to
the extent of any direct, as opposed to consequential, damages suffered by
the Company which the Company proves were caused by (i) the Bank's wilful
misconduct or gross negligence in determining whether documents presented
under the Letter of Credit comply with the terms of the Letter of Credit or
(ii) the Bank's wilful failure to make lawful payment under the Letter of
Credit after the presentation to it by the Trustee or a successor trustee
under the Indenture of a draft and certificate strictly complying with the
terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Bank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 7.07. Costs, Expenses and Taxes. The Company agrees to pay on
demand all costs and expenses in connection with the preparation,
execution, delivery, filing, recording and administration of this Agreement
and any other documents which may be delivered in connection with this
Agreement, including, without limitation, the reasonable costs incurred
with each transfer of the Letter of Credit, the reasonable fees and out-of-
pocket expenses of counsel for the Bank, and local counsel who may be
retained by said counsel, with respect thereto and with respect to advising
the Bank as to its rights and responsibilities under this Agreement and all
costs and expenses (including reasonable counsel fees and expenses) in
connection with (i) the enforcement of this Agreement and such other
documents which may be delivered in connection with this Agreement or (ii)
any action or proceeding relating to a court order, injunction or other
process or decree restraining or seeking to restrain the Bank from paying
any amount under the Letter of Credit. In addition, the Company shall pay
any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of
this Agreement and such other documents, and agrees to save the Bank
harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees
except for any penalties incurred as a result of the Bank's failure to
notify the Company of such stamp or other taxes or fees payable by the
Company of which the Bank has knowledge.
SECTION 7.08. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Company and the Bank and thereafter
shall be binding upon and inure to the benefit of the Company and the Bank
and their respective successors and assigns, except that the Company shall
not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Bank. The Bank may, at its own
expense, assign (by way of participation or otherwise) to any financial
institution all or any part of, or any interest (undivided or divided) in,
the Bank's rights and benefits under this Agreement and the Letter of
Credit, and to the extent of any such assignment, any such assignee shall
have the same rights and benefits against the Company hereunder and under
the Letter of Credit as it would have had if such assignee were the Bank
issuing or paying under the Letter of Credit hereunder.
SECTION 7.09. Collateral. If the Bank shall take or receive any
collateral as security for the Company's obligations under this Agreement,
the Bank agrees that, until the Letter of Credit shall terminate in
accordance with its terms, the security interest in such security will be
pledged to the Trustee to secure payment of both the obligations of the
Company under this Agreement and the Bonds ratably as to interest in
accordance with their respective amounts of interest and ratably as to
principal in accordance with their respective amounts of principal, it
being understood that the Bank may release or obtain reimbursement or other
payments under this Agreement from all or any of such collateral at any
time or from time to time without any consent of, notice to, or payment to
or for the account of, the Trustee or any holders of the Bonds; provided,
however, that such agreement shall terminate and be of no force and effect
either (i) when and to the extent that the Bank's taking or receiving of
such collateral would not result in the Bank's being released, prevented or
restrained from or delayed in fulfilling the Bank's obligation under the
Letter of Credit or (ii) if the absence of such agreement would not result
in the lowering or suspension by Standard & Poor's Corporation or Moody's
Investors Service of its rating of the Bonds.
SECTION 7.10. Waiver. The Bank waives any statutory right which it
may have to set off and apply any deposits of the Company or other
indebtedness of the Company if, when and after there shall be a drawing
under the Letter of Credit during the pendency of any proceeding by or
against the Company seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial
part of its property.
SECTION 7.11. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
SECTION 7.12. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the internal laws of the State of New
York.
SECTION 7.13. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
KANSAS CITY POWER & LIGHT COMPANY
By_________________________________
Senior Vice President
THE TORONTO-DOMINION BANK
By__________________________________
Title:______________________________
By__________________________________
Title:______________________________
EXHIBIT A
TO LETTER OF CREDIT
AND REIMBURSEMENT
IRREVOCABLE LETTER OF CREDIT
No. 1107
August 19, 1993
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Dear Sirs:
We hereby establish at the request and for the account of Kansas City
Power & Light Company, a Missouri corporation (the "Company"), in your favor,
as Trustee under the Indenture of Trust dated as of September 1, 1985 (the
"Indenture") between the City of Burlington, Coffey County, Kansas (the
"Issuer") and you, pursuant to which $56,500,000 in aggregate principal amount
of the Issuer's Customized Purchase Pollution Control Refunding and Improvement
Revenue Bonds, Series 1985A (Kansas City Power & Light Company Project) (the
"Bonds"), are being issued, our Irrevocable Letter of Credit No. 1107 in the
amount of $63,117,465.75 (as more fully described below), effective immediately
and expiring at the close of business at our 909 Fannin Street, Suite 1700,
Houston, Texas, 77010, office on August 18, 1996, or such later date as we may
agree to extend in writing (the "Scheduled Termination Date").
We hereby irrevocably authorize you to draw on us, in an aggregate amount
not to exceed the amount of this Letter of Credit as set forth above and in
accordance with the terms and conditions and subject to the reductions in
amount as hereinafter set forth, as follows:
(1) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in the
form of Annex A attached hereto (any such draft accompanied by such
certificate being your "Interest Draft"), an amount not exceeding
$6,617,465.75;
(2) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in the
form of Annex B attached hereto (any such draft accompanied by such
certificate being your "Tender Draft") an aggregate amount not exceeding
$63,117,465.75;
(3) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in the
form of Annex C attached hereto (any such draft accompanied by such
certificate being your "Redemption Draft"), an aggregate amount not
exceeding $56,500,000;
(4) in one or more drawings by one of more of your drafts, each
accompanied by your signed and appropriately completed certificate in the
form of Annex D attached hereto (such draft accompanied by such
certificate being your "Purchase Draft"), an aggregate amount not
exceeding $56,500,000;
(5) in a single drawing by your draft, accompanied by your signed
and appropriately completed certificate in the form of Annex E attached
hereto (such draft accompanied by such certificate being your "Final
Draft"), an amount not exceeding $63,117,465.75.
Upon our honoring any Interest Draft presented by you hereunder, the
amount of this Letter of Credit and the amounts available to be drawn by you by
any subsequent Interest Draft, Tender Draft, or Final Draft shall be
automatically decreased by an amount equal to the amount of such Interest
Draft. If you shall not have received from us within 15 calendar days from the
date of such drawing a notice from us to the effect that we have not been
reimbursed for such drawing in the form of Annex F attached hereto
appropriately completed, the amount of this Letter of Credit and the amounts
from time to time available to be drawn by you by any Interest Draft, Tender
Draft, or Final Draft shall be automatically and irrevocably reinstated in the
amount of such drawing, effective the 16th calendar day from the date of such
drawing.
Upon our honoring any Redemption Draft or Purchase Draft presented by you
hereunder, the amount of this Letter of Credit and the amounts available to be
drawn by you by any subsequent Tender Draft, Redemption Draft, Purchase Draft
and Final Draft shall be automatically decreased by an amount equal to the
amount of such Redemption Draft or Purchase Draft. Upon our honoring any
Tender Draft presented by you hereunder, (i) the amount of this Letter of
Credit and the amounts available to be drawn by any subsequent Tender Draft and
Final Draft shall be automatically decreased by an amount equal to the amount
of such Tender Draft and (ii) the amounts available to be drawn by any
subsequent Redemption Draft and Purchase Draft shall be automatically decreased
by the amount set forth in clause (i) of paragraph 3 of the Certificate
accompanying such Tender Draft.
The amount of this Letter of Credit and the amounts from time to time
available to be drawn by you by any Tender Draft or Final Draft shall be
increased when and to the extent, but only when and to the extent, that we are
reimbursed by the Company or by you, but only from amounts available to you
under the Indenture, on behalf of the Company for amounts drawn hereunder by
any Tender Draft or Purchase Draft. The amounts from time to time available to
be drawn by you by any Redemption Draft or Purchase Draft shall be increased by
the amount set forth in clause (i) of paragraph 3 of the Certificate
accompanying any Tender Draft or paragraph 3 of a Certificate accompanying any
Purchase Draft when and to the extent, but only when and to the extent, that we
are reimbursed by the Company or by you, but only from amounts available to you
under the Indenture, on behalf of the Company for amounts drawn hereunder by
any such Tender Draft or Purchase Draft. Any amount received from you on
behalf of the Company in reimbursement of amounts drawn hereunder shall, if
accompanied by an appropriately completed and signed certificate in the form of
Annex H attached hereto from you, be applied to the extent of the amounts
indicated therein in reimbursement of unreimbursed drawings under your Tender
Drafts or Purchase Drafts. Amounts otherwise received from you on behalf of
the Company shall be applied in reimbursement of unreimbursed drawings made by
your Interest Draft.
The amount of this Letter of Credit and the amounts available to be drawn
by you by any Interest Draft, Tender Draft, Redemption Draft, Purchase Draft,
and Final Draft shall be decreased upon our receipt of notice from you, in the
form of your written and appropriately completed certificate signed by you in
the form of Annex G attached hereto, of a redemption or defeasance of less than
all of the Bonds outstanding, to the respective amounts stated in such
certificate.
Each draft and certificate shall refer thereon to the number of this
Letter of Credit and shall be dated the date of its presentation, and shall be
drawn and presented at our office located at 909 Fannin Street, Suite 1700,
Houston, Texas, 77010, Attention: Manager, Agency (or any office which may be
designated by us by written notice delivered to you). If we receive any of
your drafts and certificates at such office (including receipt by facsimile
which must be followed by hard copy in overnight mail), all in strict
conformity with the terms and conditions of this Letter of Credit, on or prior
to the termination hereof and in any event on or before 11:00 a.m. (Houston
time) on a Banking Day, we will honor the same by 3:00 p.m. (Houston time) on
the same day in accordance with your payment instructions. If we receive any
of your drafts and certificates at such office (including receipt by facsimile
which must be followed by hard copy in overnight mail), all in strict
conformity with the terms and conditions of this Letter of Credit, after 11:00
a.m. (Houston time) on a Banking Day prior to the termination hereof, we will
honor the same by 12:00 p.m. (Houston time) on the next succeeding Banking Day
in accordance with your payment instructions. If requested by you, payment
under this Letter of Credit may be made by wire transfer of immediately
available funds to your account in a bank or by deposit of same day funds into
a designated account that you maintain with us. The term "Banking Day" means
any day of the year other than a Saturday, Sunday or a day on which banks are
required or authorized to close in New York City or Houston, Texas. All
payments paid under this Letter of Credit shall be paid with our own funds.
Upon the earliest of (i) our honoring your Final Draft presented
hereunder, (ii) the surrender to us by you of this Letter of Credit for
cancellation, (iii) our honoring your Redemption Draft for all of the Bonds,
(iv) the close of business on the tenth day after which we receive written
notice from you that all of the Bonds have been converted to the Fixed Interest
Rate within the meaning of the Indenture, (v) the date on which we receive
written notice from you that there is no longer any Bond outstanding, (vi) the
date on which we receive written notice from you of the delivery of an
alternate letter of credit in accordance with the Indenture, and (vii) the
Scheduled Termination Date, this Letter of Credit shall automatically
terminate.
This Letter of Credit is transferable in its entirety, but not in part, to
any transferee who you certify has succeeded you as Trustee under the Indenture
and may be successively transferred by such transferee. Transfer of the
available balance under this Letter of Credit to such transferee shall be
effected by the presentation to us of this Letter of Credit accompanied by a
certificate in the form of Annex I attached hereto appropriately completed.
Upon such presentation we shall forthwith transfer the same to your transferee
or, if so requested by your transferee, issue an irrevocable letter of credit
to your transferee with provisions therein consistent with this Letter of
Credit.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificates and
the drafts referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificates and such drafts.
To the extent not inconsistent with the express terms hereof, this Letter
of Credit shall be governed by and construed in accordance with the Uniform
Customs and Practice for Documentary Credit, International Chamber of Commerce,
Publication 400 (1983 revision) and, as to matters not covered therein, by the
laws of the State of New York, including without limitation the Uniform
Commercial Code as in effect in the State of New York. Communications with
respect to this Letter of Credit shall be in writing and shall be addressed to
us at 909 Fannin Street, Suite 1700, Houston, Texas, 77010, Attention:
Manager, Agency, specifically referring to the number of this Letter of
Credit.
Anything to the contrary in Article 45 of the Uniform Customs
notwithstanding this Letter of Credit is intended to remain in full force and
effect until it expires in accordance with its terms. Any failure by you or
any successor trustee or co-trustee under the Indenture to draw upon this
Letter of Credit with respect to a scheduled interest payment on the Bonds in
accordance with the terms and conditions of the Indenture shall not cause this
Letter of Credit to be unavailable for any future drawing in accordance with
the terms and conditions of the Indenture.
Very truly yours,
THE TORONTO-DOMINION BANK
By__________________________________
Title:____________________________
By__________________________________
Title:____________________________
Annex A
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF INTEREST ON THE
CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE POLLUTION
CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985A (KANSAS
CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS")
Irrevocable Letter of Credit No. 1107
The undersigned, a duly authorized officer of the undersigned Trustee (the
"Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"), with
reference to Irrevocable Letter of Credit No. 1107 (the "Letter of Credit"),
the terms defined therein and not otherwise defined herein being used herein as
therein defined) issued by the Bank in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to (a) payment(s) of interest on the Bonds, to the extent
moneys are not available in the Bond Fund from the sources set forth in
clauses (i) through (iii), inclusive of Section 504 of the Indenture,
which payment(s) is [are]*** due on the [date on which this Certificate
and the Interest Draft it accompanies are being presented to the Bank.]*
[Banking Day following the date on which this Certificate and the
Interest Draft it accompanies are being presented to the Bank.]** [CP
Dates (as defined in the Indenture) established for the current calendar
month]*** None of the Bonds, in respect of which such drawing is being
made, were registered in the name of the Company on the Record Date
within the meaning of the Indenture.
_____________________
* To be used if the Certificate and Interest Draft are presented not
later than 11:00 a.m. (Houston time).
** To be used if the Certificate and Interest Draft are presented after
11:00 a.m. (Houston time).
*** To be used while the Bonds bear interest at the CP Rate.
(3) The amount of the Interest Draft accompanying this Certificate
is equal to $_________________. It was computed in compliance with the
terms and conditions of the Bonds and the Indenture and does not include
any amount of interest on the Bonds which is included in any Final Draft
presented on the date of this Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ______________, 19__.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By ____________________________
[Name and Title]
Annex B
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
AND INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS,
SERIES 1985A (KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS") IN
SUPPORT OF A TENDER PURSUANT TO SECTIONS 301, 302, 303, 304 and 305 OF
THE INDENTURE.
Irrevocable Letter of Credit No. 1107
The undersigned, a duly authorized officer of the undersigned Trustee (the
"Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"), with
reference to Irrevocable Letter of Credit No. 1107 (the "Letter of Credit," the
terms defined therein and not otherwise defined herein being used herein as
therein defined) issued by the Bank in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment of (i) the purchase price equal to the unpaid
principal amount of the Bonds to be purchased as a result of a tender on
or prior to the effective date of the Fixed Interest Rate (as defined in
the Indenture) pursuant to the terms of Sections 301, 302, 303, 304 and
305 of the Indenture (other than Bonds registered in the name of the
Company which are presently held by the Company or the Custodian on
behalf of the Company) and (ii) the purchase price equal to the amount of
interest accrued and unpaid to the purchase date from the immediately
preceding Interest Accrual Date (as defined in the Indenture), to the
extent moneys are not available from the sources set forth in clauses (i)
through (iv), inclusive, of Section 306 of the Indenture, which payment
is due on the [date on which this Certificate and the Tender Draft it
accompanies are being presented to the Bank.]* [Banking Day following the
date on which this certificate and the Tender Draft it accompanies are
being presented to the Bank.]**
___________________
* To be used if the Certificate and Tender Draft are presented not later
than 11:00 a.m. (Houston time).
** To be used if the Certificate and Tender Draft are presented after 11:00
a.m. (Houston time).
(3) The amount of the Tender Draft accompanying this Certificate
is equal to the sum of (i) $_____________________ being drawn in respect
of the payment of the portion of the tender price of the Bonds equal to
the unpaid principal of Bonds (other than Bonds registered in the name of
the Company which are presently held by the Company or the Custodian on
behalf of the Company) to be purchased as a result of a tender pursuant
to Sections 301, 302, 303, 304, and 305 of the Indenture and
(ii) $_______________ being drawn in respect of the payment of the
portion of the tender price of the Bonds equal to the accrued and unpaid
interest on such Bonds and does not include any amount of interest which
is included in any Tender Draft (unless such amount has been reinstated
by the Bank) or Final Draft presented on or prior to the date of this
Certificate.
(4) The amount of the Tender Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds and
the Indenture and does not exceed the amount available to be drawn by the
Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _______ day of _________________, 19__.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By ____________________________
[Name and Title]
Annex C
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE
POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985A
(KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS") UPON REDEMPTION
Irrevocable Letter of Credit No. 1107
The undersigned, a duly authorized officer of the undersigned Trustee (the
"Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"), with
reference to Irrevocable Letter of Credit No. 1107 (the "Letter of Credit"),
the terms defined therein and not otherwise defined herein being used herein as
therein defined) issued by the Bank in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon redemption [of all] [less than all]* of
the Bonds on or prior to the effective date of the Fixed Interest Rate
(as defined in the Indenture), of the unpaid principal amount of the
Bonds to be redeemed pursuant to the terms of Sections 310, 311 or 312 of
the Indenture (other than Bonds registered in the name of the Company
which are presently held by the Company or the Custodian on behalf of the
Company), to the extent moneys are not available in the Bond Fund from
the sources set forth in clauses (i) through (iii), inclusive, of Section
504 of the Indenture, which payment is due on the [date on which this
Certificate and the Redemption Draft it accompanies are being presented
to the Bank].** [Banking Day following the date on which this Certificate
and the Redemption Draft it accompanies are being presented to the
Bank.]***
____________________
* Insert appropriate description.
** To be used if the Certificate and Redemption Draft are presented
not later than 11:00 a.m. (Houston time).
*** To be used if the Certificate and Redemption Draft are presented after
11:00 a.m. (Houston time).
(3) The amount of the Redemption Draft accompanying this
Certificate is equal to the sum of $____________ being drawn in respect
of the payment of unpaid principal of Bonds (other than Bonds registered
in the name of the Company which are presently held by the Company or the
Custodian on behalf of the Company) to be redeemed.
(4) The amount of the Redemption Draft accompanying this
Certificate was computed in accordance with the terms and conditions of
the Bonds and the Indenture and does not exceed the amount available to
be drawn under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _______ day of_________________, 19__.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By ___________________________
[Name and Title]
PAGE
Annex D
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE
POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985A
(KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS") IN SUPPORT OF A
PURCHASE
Irrevocable Letter of Credit No. 1107
The undersigned, a duly authorized officer of the undersigned Trustee (the
"Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"), with
reference to Irrevocable Letter of Credit No. 1107 (the "Letter of Credit," the
terms defined therein and not otherwise defined herein being used herein as
therein defined) issued by the Bank in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, on or prior to the effective date of the
Fixed Interest Rate (as defined in the Indenture), of the unpaid
principal amount of the Bonds to be purchased by the Company in lieu of
redemption pursuant to the terms of Section 314 of the Indenture (other
than Bonds registered in the name of the Company which are presently held
by the Company or the Custodian on behalf of the Company), to the extent
moneys are not available in the Bond Fund from the sources set forth in
clauses (i) through (iii), inclusive, of Section 306 of the Indenture,
which payment is due on the [date on which this Certificate and the
Purchase Draft it accompanies are being presented to the Bank.]* [Banking
Day following the date on which this Certificate and the Purchase Draft
it accompanies are being presented to the Bank.]**
(3) The amount of the Purchase Draft accompanying this Certificate
is equal to the sum of $_______________ being drawn in respect of the
payment of unpaid principal of Bonds (other than Bonds registered in the
name of the Company which are presently held by the Company or the
Custodian on behalf of the Company) to be purchased by the Company in
lieu of redemption.
(4) The amount of the Purchase Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds and
the Indenture and does not exceed the amount available to be drawn by the
Trustee under the Letter of Credit.
____________________
* To be used if the Certificate and Purchase Draft are presented not later
than 11:00 a.m. (Houston time).
** To be used if the Certificate and Purchase Draft are presented after
11:00 a.m. (Houston time).
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the__________ day of_________________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By____________________________
[Name and Time]
Annex E
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
AND INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS,
SERIES 1985A (KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS"),
UPON STATED OR ACCELERATED MATURITY
Irrevocable Letter of Credit No. 1107
The undersigned, a duly authorized officer of the undersigned Trustee (the
"Trustee"), hereby certifies to The Toronto-Dominion Bank, (the "Bank"), with
reference to Irrevocable Letter of Credit No. 1107 (the "Letter of Credit"),
the terms defined therein and not otherwise defined herein being used herein as
therein defined) issued by the Bank in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon stated or accelerated maturity of the
unpaid principal amount of, and, to the extent such payment is not due on
an Interest Payment Date within the meaning of the Indenture, of accrued
and unpaid interest on, all of the Bonds (other than Bonds registered in
the name of the Company which are presently held by the Company or the
Custodian on behalf of the Company), to the extent moneys are not
available in the Bond Fund from the sources set forth in clauses (i)
through (iii), inclusive, of Section 504 of the Indenture, which payment
is due on [the date on which this Certificate and the Final Draft it
accompanies are being presented to the Bank.]* [the Banking Day following
the date on which this certificate and the Final Draft it accompanies are
being presented to the Bank.]**
(3) The amount of the Final Draft accompanying this Certificate is
equal to the sum of (i) $________________ being drawn in respect of the
payment of unpaid principal of all of the Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or the Custodian on behalf of the Company) and (ii) $___________
being drawn in respect of the payment of accrued and unpaid interest on
such Bonds (other than Bonds registered in the name of the Company which
are presently held by the Company or the Custodian on behalf of the
Company) and does not include any amount of interest which is included in
any Interest Draft or Tender Draft (unless such amount has been
reinstated by the Bank), presented on or prior to the date of this
Certificate.
* To be used if the Certificate and Final Draft are presented not later
than 11:00 a.m. (Houston time).
** To be used if the Certificate and Final Draft are presented after 11:00
a.m. (Houston time).
(4) The amount of the Final Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds and
the Indenture and does not exceed the amount available to be drawn by the
Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the______ day of__________________, 19__.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By___________________________
[Name and Time]
Annex F
NOTICE THAT TRUSTEE'S RIGHT TO DRAW
UNDER THE LETTER OF CREDIT BY AN
INTEREST DRAFT HAS NOT BEEN REINSTATED
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Irrevocable Letter of Credit No. 1107
Dear Sirs:
You are hereby advised that Kansas City Power & Light Company has not
reimbursed us in an amount equal to the amount drawn by you under the Interest
Draft dated _______________, 19___. Therefore, the amount of our Irrevocable
Letter of Credit No. 1107 and the amounts available to be drawn by you by an
Interest Draft, Tender Draft, or Final Draft (which available amounts have been
decreased by an amount equal to the amount of such Interest Draft) shall not be
reinstated in the amount of such Interest Draft.
____________________________
_______________________________
Annex G
CERTIFICATE FOR THE REDUCTION OF AMOUNTS AVAILABLE UNDER LETTER OF
CREDIT NO. 1107 DATED AUGUST 19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee (the
"Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"), with
reference to Irrevocable Letter of Credit No. 1107 (the "Letter of Credit"),
the terms defined therein and not otherwise defined herein being used herein as
therein defined) issued by the Bank in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The Trustee hereby notifies you that on or prior to the date
hereof $________________ principal amount of the Bonds have been redeemed
or defeased and paid pursuant to the Indenture.
(3) Following the redemption or the defeasance and payment
referred to in paragraph (2) above, the aggregate principal amount of all
of the Bonds outstanding is $_________________.
(4) The maximum amount of interest (computed at 15% per annum),
accruing on the Bonds referred to in paragraph (3) above is
$_____________.
(5) The amount available to be drawn by the Trustee under the
Letter of Credit by any Interest Draft is reduced to $_____________ (such
amount being equal to the amount specified in paragraph (4) above) upon
receipt by the Bank of this Certificate.
(6) The amount available to be drawn by the Trustee under the
Letter of Credit by any Tender Draft is reduced to $______________ (such
amount being equal to the sum of the amounts specified in paragraphs (3)
and (4) above) upon receipt by the Bank of this Certificate.
(7) The amount available to be drawn by the Trustee under the
Letter of Credit by any Redemption Draft is reduced to $____________
(such amount being equal to the amount specified in paragraph (3) above).
(8) The amount available to be drawn by the Trustee under the
Letter of Credit by any Purchase Draft is reduced to $____________ (such
amount being equal to the amount specified in paragraph (3) above).
(9) The amount available to be drawn by the Trustee under the
Letter of Credit by its Final Draft is reduced to $____________ (such
amount being equal to the sum of the amounts specified in paragraphs (3)
and (4) above) upon receipt by the Bank of this Certificate.
(10) The amount of the Letter of Credit is reduced to
$____________ (such amount being equal to the sum of the amounts
specified in paragraph (3) and (5) above) upon receipt by the Bank of
this Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the______ day of______________ 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By____________________________
[Name and Title]
Annex H
CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE UNDER IRREVOCABLE
LETTER OF CREDIT NO. 1107 DATED AUGUST 19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee (the
"Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"), with
reference to Irrevocable Letter of Credit No. 1107 (the "Letter of Credit," the
terms defined therein and not otherwise defined herein being used herein as
therein defined) issued by the Bank in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) The amount of $____________ paid to you today by the
Trustee on behalf of the Company is a payment made to reimburse you
pursuant to Section 1.10[(c)]* [(d)]** of the Letter of Credit and
Reimbursement Agreement, dated as of August 19, 1993 (the "Reimbursement
Agreement"), between the Company and the Bank, for amounts drawn under
the Letter of Credit by [Tender Drafts]* [Purchase Drafts].**
(3) Of the amount referred to in paragraph (2), $_____________
represents the principal amount of Bonds resold or to be resold on behalf
of the Company.
[(4) Of the amount referred to in paragraph (2), $_____________
represents accrued interest on Bonds calculated in accordance with clause
(ii) of Section 1.10(c) of the Reimbursement Agreement.]*
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the_____ day of______________ , 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_____________________________
[Name and Title]
____________________
* To be used in connection with reimbursement for amounts drawn under
Tender Drafts.
** To be used in connection with reimbursement for amounts drawn under
Purchase Drafts.
Annex I
INSTRUCTION TO TRANSFER
________________, 19___
Attention: Letter of Credit Operations
Re: Irrevocable Letter of Credit No. 1107
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
____________________________________
[Name of Transferee]
____________________________________
[Address]
all rights of the undersigned beneficiary to draw under the above captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Indenture (as defined in the Letter of
Credit).
By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the transferee and the transferee shall hereafter
have the sole rights as beneficiary thereof; provided, however, that no rights
shall be deemed to have been transferred to the transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith we
ask that this transfer be effective and that you transfer the same to our
transferee or that, if so requested by the transferee, you issue a new
irrevocable letter of credit in favor of the transferee with provisions
consistent with the Letter of Credit.
Very truly yours,
UNITED STATES TRUST COMPANY OF
NEW YORK,
as predecessor Trustee
By_____________________________
[Name and title]
EXHIBIT B
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF COUNSEL FOR THE COMPANY
August 19, 1993
RE: $56,500,000 City of Burlington, Kansas Customized Purchase Pollution
Control Refunding and Improvement Revenue Bonds (Kansas City Power &
Light Project) Series 1985A
Kansas City Power & Light Company
Gentlemen:
I am Chief Legal Officer of Kansas City Power & Light Company, a Missouri
corporation (the "Company"), and am familiar with the matters relating to the
preparation, execution and delivery of a Letter of Credit and Reimbursement
Agreement which terms shall include the fee letter executed pursuant to Section
1.11 thereof (the "Reimbursement Agreement") dated as of August 19, 1993,
between the Company and The Toronto-Dominion Bank (the "Bank"). Among other
things, I have examined:
(1) a fully executed counterpart of the Reimbursement Agreement;
(2) the fully executed Letter of Credit;
(3) the fully executed Indenture;
(4) the fully executed Lease;
(5) the fully executed Sublease;
(6) the fully executed Custody Agreement and Amendment No.1
thereto;
(7) the Articles of Incorporation of the Company and all
amendments thereto (the "Charter");
(8) the by-laws of the Company as now in effect (the "By-laws");
and
(9) the Company's corporate proceedings and the proceedings before
the public utility regulatory commissions of the States of Missouri and
Kansas relating to the Reimbursement Agreement and related matters.
I have also examined the originals, or copies certified to my satis-
faction, of (i) such other corporate records of the Company, certificates of
public officials and of officers of the Company, (ii) the agreements,
instruments and documents which affect or purport to affect the obligations of
the Company under the Reimbursement Agreement, and (iii) such other agreements,
instruments and documents as we have deemed necessary as a basis for the
opinions hereinafter expressed. I have assumed the due execution and delivery,
pursuant to due authorization, of the Reimbursement Agreement by the Bank. All
capitalized terms used herein and defined in the Reimbursement Agreement are
used herein as therein defined.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the opinion that:
(1) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri and is duly
qualified to do business in, and is in good standing under the laws of,
the State of Kansas.
(2) The execution, delivery and performance by the Company of the
Reimbursement Agreement and each Related Document to which it is a party
are within the Company's corporate power, have been duly authorized by
all necessary corporate action, do not contravene (i) the Charter or the
By-laws, or (ii) any law, rule or regulation applicable to the Company,
or (iii) any contractual or legal restriction (including, but not limited
to, the Indenture) binding on or affecting the Company, and do not result
in or require the creation of any lien, security interest or other charge
or encumbrance (other than pursuant to the Reimbursement Agreement and
the Related Documents) upon or with respect to any of its properties.
The Reimbursement Agreement and each Related Document to which the
Company is a party have been duly executed and delivered on behalf of the
Company.
(3) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into the Reimbursement Agreement, and the commissions
have duly issued previous orders authorizing the Company to enter into
the Lease, the Sublease and any other documents that such commissions
have jurisdiction over and to which the Company is a party and the
Related Documents to which the Company is a party, and such orders
remain in full force and effect in the form issued. Except for the
approvals of the Kansas Department of Economic Development, the Board of
Commissioners of Coffey County, Kansas, and the City Council of the City
of Burlington, Kansas, approving issuance of the Bonds, which approvals
have been duly obtained, and the notice of timely filing with the Board
of Tax Appeals of the State of Kansas, no other authorization, approval
or other action by, and no notice to or filing or registration with, any
governmental authority or regulatory body (other than for informational
purposes) is required for the due execution, delivery and performance by
the Company of the Reimbursement Agreement or any Related Document to
which it is a party.
(4) The Reimbursement Agreement and each Related Document to which
the Company is a party are the legal, valid and binding obligations of
the Company enforceable against the Company in accordance with their
respective terms.
(5) Except as disclosed in the Company's Form 10-K for the year
1992, Forms 10-Q for the periods March 31, 1993 and June 30, 1993, and
Form 8-K dated August 16, 1993, there is no pending or, to the best of my
knowledge, threatened action or proceeding before any court, governmental
agency or arbitrator against, directly involving or affecting the Company
or any of its subsidiaries, which, in any case, may materially and
adversely affect the financial condition or operations of the Company.
The opinions set forth above are subject to the following qualifications:
(a) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a party
is subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally.
(b) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a party,
may be subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
I am not licensed to practice law in the State of New York or the State of
Kansas. With respect to the Reimbursement Agreement and the Related Documents
and any other document to which the laws of either the State of New York or the
State of Kansas are applicable, I have assumed for purposes of this opinion
that such laws (other than conflict of laws) are substantially similar to the
laws of the State of Missouri. With respect to the conclusions set forth
herein, I express no opinions as to any laws other than the laws of the State
of Missouri and the Federal laws of the United States.
Very truly yours,
EXHIBIT C
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF BOND COUNSEL
[Letterhead of Chapman and Cutler]
August 19, 1993
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
The Toronto-Dominion Bank
31 West 52nd Street
New York, New York 10019-6101
Re: $56,500,000 City of Burlington, Kansas Customized Pollution Control
Refunding and Improvement Revenue Bonds, Series 1985A (Kansas City Power
& Light Company Project)
Ladies and Gentlemen:
The above-referenced bonds (the "Bonds") were issued under and are
secured by an Indenture of Trust dated as of September 1, 1985 (the
"Indenture"), between the City of Burlington, Kansas (the "Issuer") and United
States Trust Company of New York, as trustee (the "Trustee"). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Indenture.
Kansas City Power & Light Company (the "Company") has requested we
provide the opinion of Bond Counsel required by Section 4.4(a) of the Series
1985A Equipment Sublease Agreement dated as of September 1, 1985 (the
"Sublease") between the Issuer and the Company and Section 505(c) of the
Indenture with respect to the issuance of Letter of Credit No. 1107 of even
date herewith (the "Letter of Credit") issued by The Toronto-Dominion Bank (the
"Bank").
On the basis of our review of the Letter of Credit, the Indenture, the
Sublease, photocopies of various counsel opinions dated September 26, 1985
(which have been identified as authentic copies of the original opinions and
of which we have assumed the authenticity), and such other documents as we
have considered necessary, we are of the opinion that the delivery of the
Letter of Credit is authorized under the Sublease and complies with its terms.
We express no opinion as to whether the Letter of Credit is a legal,
valid, binding and enforceable obligation of the Bank in accordance with its
terms.
Respectfully submitted,
AGBacon
EXHIBIT D
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
ENCUMBRANCES
(a) liens for taxes, assessments or governmental charges not delinquent,
liens for workmen's compensation awards and similar obligations not delinquent,
and liens for labor, materials or supplies not delinquent;
(b) liens of the character specified in subparagraph (a) above, whether
or not delinquent, the validity of which is being contested at the time by the
Company in good faith, unless thereby in the opinion of counsel or of the
Trustees, as defined in the Mortgage, any of the mortgaged property may be lost
or forfeited;
(c) liens, neither assumed by the Company nor on account of which it
customarily pays interest, existing upon real estate or rights in or relating
to real estate now owned or hereafter acquired or now or hereafter leased by
the Company for substation, transmission line, distribution line, pipe line,
conduit, storage or right-of-way purposes;
(d) undetermined liens or charges incidental to construction or
current operations;
(e) the liens of any judgments in an aggregate amount of not in excess of
$50,000, or the lien of any judgment the execution of which has been stayed or
which has been appealed and secured, if necessary, by the filing of an appeal
bond, or the lien of any judgment in respect of which moneys in the amount of
the judgment have been deposited with the Trustee, as defined in the Mortgage,
to be held as part of the trust estate and to be withdrawn only as provided in
subdivision (e) of Section 8.01 of the Mortgage;
(f) easements, rights-of-way, licenses, exceptions, reservations or
restrictions, and agreements for the joint or common use of property, which do
not materially impair the use of the affected property in the operation of the
business of the Company;
(g) the right reserved to, or vested in, any municipality or public
authority by the terms of any franchise, grant, license or permit, or by any
provision of law, to terminate such franchise, grant, license or permit or to
purchase or appropriate or recapture or to designate a purchaser of any of the
mortgaged property, or to demand and collect from the Company any tax or other
compensation for the use of streets, alleys or other public places;
(h) rights reserved to, or vested in, any municipality or public
authority to use, control, remove or regulate any property of the Company;
(i) rights reserved to or vested in others to take or receive any part of
the electricity, gas, steam or water generated or produced by or from any
property of the Company;
(j) zoning laws and ordinances; and
(k) Possible adverse rights or interests and inconsequential defects or
irregularities in title which, in the opinion of counsel, may properly be
disregarded.
[1985B] EXHIBIT 10-j
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
between
KANSAS CITY POWER & LIGHT COMPANY
and
SOCIETE GENERALE, CHICAGO BRANCH
dated as of August 19, 1993
TABLE OF CONTENTS
Section Page
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
1.01 The Letter of Credit . . . . . . . . . . . . . . . . . . . . .1
1.02 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . .2
1.03 Tender Advances and Accrued Interest Advances . . . . . . . . .2
1.04 Redemption Advances and Purchase Advances . . . . . . . . . . .3
1.05 Interest Advances . . . . . . . . . . . . . . . . . . . . . . .4
1.06 Interest on Overdue Amounts . . . . . . . . . . . . . . . . . .4
1.07 Interest Payments . . . . . . . . . . . . . . . . . . . . . . .4
1.08 Selection of Interest Rates . . . . . . . . . . . . . . . . . .4
1.09 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . .5
1.10 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . .6
1.11 Other Payments . . . . . . . . . . . . . . . . . . . . . . . .8
1.12 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . .8
1.13 Additional Interest . . . . . . . . . . . . . . . . . . . . . .9
1.14 Payments and Computations . . . . . . . . . . . . . . . . . . .9
1.15 Payment on Non-Business Days . . . . . . . . . . . . . . . . .9
1.16 Extension of the Letter of Credit . . . . . . . . . . . . . . .9
1.17 Obligations Absolute . . . . . . . . . . . . . . . . . . . . .10
ARTICLE II
CONDITIONS OF ISSUANCE
2.01 Condition Precedent to Issuance of the
Letter of Credit . . . . . . . . . . . . . . . . . . . . . .10
2.02 Additional Conditions Precedent to Issuance
of the Letter of Credit . . . . . . . . . . . . . . . . . . .11
2.03 Condition Precedent to Each Advance . . . . . . . . . . . . . .12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties . . . . . . . . . . . . . . . .12
ARTICLE IV
COVENANTS OF THE COMPANY
4.01 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . .14
a. Preservation of Corporate Existence, Etc. . . . . . . . . .14
b. Compliance with Laws, Etc. . . . . . . . . . . . . . . . .14
c. Maintenance of Insurance, Etc. . . . . . . . . . . . . . .14
d. Visitation Rights . . . . . . . . . . . . . . . . . . . . .15
e. Keeping of Books . . . . . . . . . . . . . . . . . . . . .15
f. Maintenance of Properties . . . . . . . . . . . . . . . . .15
g. Reporting Requirements . . . . . . . . . . . . . . . . . .15
h. Officer's Certificate . . . . . . . . . . . . . . . . . . .16
i. Other Agreements . . . . . . . . . . . . . . . . . . . . .16
j. Redemption or Defeasance of Bonds . . . . . . . . . . . . .16
k. Registration of Bonds . . . . . . . . . . . . . . . . . . .16
4.02 Negative Covenants . . . . . . . . . . . . . . . . . . . . . .16
a. Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . . .16
b. Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . . .17
c. Sales, Etc. of Assets . . . . . . . . . . . . . . . . . . .17
d. Compliance with ERISA . . . . . . . . . . . . . . . . . . .18
e. Amendment of Indenture or Related Document . . . . . . . .18
ARTICLE V
EVENTS OF DEFAULT
5.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . .18
5.02 Upon an Event of Default . . . . . . . . . . . . . . . . . . .20
ARTICLE VI
DEFINITIONS
6.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE VII
MISCELLANEOUS
7.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . .26
7.02 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . .26
7.03 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . .26
7.04 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . .26
7.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . .26
7.06 Liability of the Bank . . . . . . . . . . . . . . . . . . . . .27
7.07 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . .28
7.08 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . .28
7.09 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
7.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . .29
7.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .29
7.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . .29
EXHIBIT A - Form of Irrevocable Letter of Credit with Annexes A
through I thereto
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C - Form of Opinions of Bond Counsel
EXHIBIT D - Encumbrances
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT dated as of August 19,
1993, between KANSAS CITY POWER & LIGHT COMPANY, a corporation organized and
existing under the laws of the State of Missouri (the "Company"), and SOCIETE
GENERALE, CHICAGO BRANCH (the "Bank"). (Unless otherwise indicated, all
capitalized terms used herein shall have the meaning referred to or set forth
in Article VI hereof.)
WHEREAS, the Company requested the City of Burlington, Coffey County,
Kansas (the "Issuer") to issue pursuant to an Indenture of Trust dated as of
September 1, 1985 (the "Indenture"), naming United States Trust Company of New
York, as trustee (the "Trustee"), $50,000,000 aggregate principal amount of
the Issuer's Customized Purchase Pollution Control Refunding and Improvement
Revenue Bonds, Series 1985B (Kansas City Power & Light Company Project) (the
"Bonds") to various purchasers (the "Bond Purchasers") to finance the costs of
acquisition, construction, and installation of certain air and water pollution
control and sewage and solid waste disposal facilities (the "Project") in
Coffey County, Kansas; and
WHEREAS, pursuant to an Equipment Lease Agreement (the "Lease") dated as
of September 1, 1985, between the Company and the Issuer, the Company has
agreed to use the proceeds of the Bonds for the financing of the Project, and
the Company will lease the Project to the Issuer, and pursuant to an Equipment
Sublease Agreement (the "Sublease") dated as of September 1, 1985, between the
Issuer and the Company, the Project will be subleased by the Issuer to the
Company for payments to be made by the Company in such amounts and at such
times as will be sufficient to timely pay the principal and interest on the
Bonds; and
WHEREAS, in order to induce the Bond Purchasers to purchase the Bonds,
the Company requested the Long-Term Credit Bank of Japan, Limited, acting by
its New York Branch to issue its irrevocable transferable letter of credit
(the "Original Letter of Credit") in the amount of $56,041,095.89 of which
$50,000,000 supports the payment of the principal of the Bonds, and
$6,041,095.89 supports the payment of up to 294 days' accrued interest
(computed at 15%) on the Bonds; and
WHEREAS, the Company has requested the Bank to issue an Alternate Letter
of Credit (the "Letter of Credit") in accordance with section 4.4(a) of the
Sublease to replace the Original Letter of Credit.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit, the parties hereto agree as follows:
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
SECTION 1.01. The Letter of Credit. On the terms and conditions
hereinafter set forth, the Bank agrees, upon the request of the Company, to
issue the Letter of Credit dated August 19, 1993, to the Trustee in an amount
not to exceed $56,041,095.89 (the "Commitment") and expiring on or before the
Scheduled Termination Date.
SECTION 1.02. Reimbursement. (a) Subject to Section 1.03 in the case
of a drawing under the Letter of Credit made pursuant to a Tender Draft and
Section 1.04 in the case of a drawing under the Letter of Credit made pursuant
to a Redemption Draft or a Purchase Draft and Section 1.05 in the case of a
drawing under the Letter of Credit made pursuant to an Interest Draft, the
Company hereby agrees to pay to the Bank on demand (i) after the Bank shall
pay any draft presented under the Letter of Credit a sum equal to the amount
so paid under the Letter of Credit, plus (ii) interest on any amount remaining
unpaid by the Company to the Bank under clause (i) above from and including
the date such draft was paid by the Bank until such amount becomes due, at
such fluctuating interest rate per annum as shall be in effect from time to
time pursuant to Section 1.06 herein.
SECTION 1.03. Tender Advances and Accrued Interest Advances. (a) If
the Bank shall make any payment under the Letter of Credit pursuant to a
Tender Draft and the conditions set forth in Section 2.03 shall have been
fulfilled, that portion of such payment with respect to the amount of unpaid
principal of the Bonds under such Tender Draft shall constitute a tender
advance made by the Bank to the Company on the date and in the amount of such
payment, each such advance being a "Tender Advance" and collectively the
"Tender Advances." The Company shall repay the aggregate unpaid principal
amount of all Tender Advances on the Scheduled Termination Date. If the
Company repays the unpaid principal amount of any Tender Advance before the
Scheduled Termination Date, the Bank shall reinstate the Letter of Credit in
accordance with the terms of the Letter of Credit. That portion of the
payment equal to the accrued interest, if any, on the Bonds under such Tender
Draft shall constitute an accrued interest advance made by the Bank to the
Company on the date and in the amount of such payment, each such advance being
an "Accrued Interest Advance" and collectively the "Accrued Interest
Advances." The Company shall repay the unpaid principal amount of any Accrued
Interest Advance and accrued interest thereon on the first business day of the
next calendar month. If certified to the Bank by the Company as a payment
being made pursuant to this Section 1.03(a), upon such repayment, the Bank
shall reinstate the Letter of Credit in the principal amount of such Accrued
Interest Advance being prepaid. The Bank shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Company resulting from each Tender Advance and each Accrued Interest Advance
made from time to time and the amounts of principal and interest payable and
paid from time to time hereunder. In any legal action or proceeding in
respect of this Agreement, the entries made in such account shall, in the
absence of manifest error, be conclusive evidence of the existence and amounts
of the obligations of the Company therein recorded.
(b) The Company shall pay interest on the unpaid principal amount of
each Tender Advance from the date of such Tender Advance until such principal
amount shall become due, at the Domestic Rate, the Eurodollar Rate, or the CD
Bid Rate, as selected by the Company pursuant to Section 1.08(a). The Company
shall pay interest on the unpaid principal amount of each Accrued Interest
Advance from the date of such Accrued Interest Advance until such principal
amount shall become due, at the Domestic Rate. For purposes of this
subsection (b), in order to calculate whether the initial or increased level
of the Eurodollar Rate or CD Bid Rate, as the case may be, shall be applicable
to a Tender Advance and Accrued Interest Advance made subsequent to the
Initial Tender Advance, each such interest rate shall (at all times) be
calculated in accordance with the number of Interest Days that have elapsed
since the Initial Tender Advance Day. In the event of a prepayment (pursuant
to Section 1.10 below) in full at any time of the aggregate unpaid principal
amount of all Tender Advances and Accrued Interest Advances outstanding, it is
hereby understood in accordance with the applicable definitions contained in
Section 6.01 hereof that no Interest Day shall occur between the date of such
prepayment and the date of the next Tender Advance, at which time Interest
Days shall again be counted, starting with the next consecutive number after
the number of the Interest Day on which such prepayment occurred.
SECTION 1.04. Redemption Advances and Purchase Advances. (a) If the
Bank shall make any payment under the Letter of Credit pursuant to a
Redemption Draft and the conditions set forth in Section 2.03 shall have been
fulfilled, such payment shall constitute a redemption advance made by the Bank
to the Company on the date and in the amount of such payment, each such
redemption advance being a "Redemption Advance" and collectively the
"Redemption Advances." If the Bank shall make any payment under the Letter of
Credit pursuant to a Purchase Draft and the conditions set forth in Section
2.03 shall have been fulfilled, such payment shall constitute a purchase
advance made by the Bank to the Company on the date and in the amount of such
payment, each such purchase advance being a "Purchase Advance" and
collectively the "Purchase Advances." (Purchase Advances together with
Redemption Advances are hereinafter sometimes referred to individually as a
"Term Advance" and collectively as the "Term Advances.")
(b) The Company shall repay the aggregate unpaid principal amount of
all Term Advances on the Scheduled Termination Date. If the Company repays
the unpaid principal amount of any Purchase Advance before the Scheduled
Termination Date, the Bank shall reinstate the Letter of Credit in accordance
with the terms of the Letter of Credit. The Bank shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Company resulting from each Redemption Advance and Purchase Advance made
from time to time and the amounts of principal and interest payable and paid
from time to time hereunder. In any legal action or proceeding in respect of
this Agreement, the entries made in such account or accounts shall, in the
absence of manifest error, be conclusive evidence of the existence and amounts
of the obligations of the Company therein recorded.
(c) The Company shall pay interest on the unpaid principal amount of
each Term Advance from the date of such Term Advance until such principal
amount shall become due, at the Term Rate, the Term Eurodollar Rate or the
Term CD Bid Rate, as selected by the Company pursuant to Section 1.08(b). For
purposes of this subsection (c), in order to calculate whether the initial or
increased level of the Term Rate, the Term Eurodollar Rate or the Term CD Bid
Rate, as the case may be, shall be applicable to a Term Advance made
subsequent to the initial Term Advance, each such interest rate shall (at all
times) be calculated in accordance with the number of Term Interest Days that
have elapsed since the Initial Term Advance Day. In the event of a prepayment
(pursuant to Section 1.10 below) in full at any time of the aggregate unpaid
principal amount of all Term Advances it is hereby understood in accordance
with the applicable definitions contained in Section 6.01 hereof that no Term
Interest Day shall occur between the date of such prepayment and the date of
the next Term Advance, at which time Term Interest Days shall again be
counted, starting with the next consecutive number after the number of the
Term Interest Day on which such prepayment occurred.
SECTION 1.05. Interest Advances. (a) If the Bank shall make any
payment under the Letter of Credit pursuant to an Interest Draft, such payment
shall constitute an interest advance made by the Bank to the Company on the
date and in the amount of such payment, each such interest advance being an
"Interest Advance" and collectively the "Interest Advances." The Company
shall repay each Interest Advance on the same day such Interest Advance is
made by the Bank, but in any event after the Bank honors a draw under the
Letter of Credit pursuant to an Interest Draft related thereto.
(b) The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company resulting from
each Interest Advance made from time to time and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action or
proceeding in respect of this Agreement, the entries made in such account
shall, in the absence of manifest error, be conclusive evidence of the
existence and amounts of the obligations of the Company therein recorded.
SECTION 1.06. Interest on Overdue Amounts. Any amount payable pursuant
to this Agreement which is not paid when due whether by acceleration, required
prepayment or otherwise, shall bear interest from and including the date the
same becomes due until such amount is paid in full, payable on demand, at a
fluctuating interest rate at all times equal to 2% above the Domestic Rate.
SECTION 1.07. Interest Payments. The Company shall pay interest in
arrears on the unpaid principal amount of each Advance from the date of such
Advance until such principal amount shall become due, payable (i) quarterly on
the last day of each March, June, September and December during the term
thereof, and on the due date for payment of principal. The Company shall pay
interest in arrears on the unpaid principal amount of each Accrued Interest
Advance from the date of such Accrued Interest Advance until such principal
amount shall become due, payable on the first business day of the next
calendar month.
SECTION 1.08. Selection of Interest Rates. (a) Tender Advances.
Subject to Sections 1.09(a) and (b) below, the Company may from time to time
select for each Tender Advance in an unpaid principal amount equal to or
greater than $1,000,000 either the Domestic Rate, the Eurodollar Rate or the
CD Bid Rates, provided that the Company shall also select a Business Day on
which the Domestic Rate, the Eurodollar Rate or the CD Bid Rate, as the case
may be, shall begin for such Tender Advance and that telephonic notice thereof
(such notice to be confirmed by the Company immediately in writing) is given
to the Bank on or before such Business Day in the case of selection of the
Domestic Rate and at least two Business Days prior to such Business Day in the
case of selection of the CD Bid Rate or the Eurodollar Rate. The interest
rate selected for any Tender Advance by the Company pursuant to this Section
1.08(a) shall continue thereafter in effect for such Tender Advance until the
Business Day which the Company shall subsequently select pursuant hereto as
the Business Day on which another interest rate hereunder shall begin for such
Tender Advance. If during the term of any Tender Advance the Company changes
the interest rate for such Tender Advance from the Eurodollar Rate or the CD
Bid Rate to another rate, the Business Day on which such other rate shall then
begin shall be the last day of the Interest Period for such Tender Advance.
In the event that the Tender Advance shall be in an amount less than
$1,000,000 or the Company shall fail to select an interest rate, the interest
rate shall be the Domestic Rate.
(b) Term Advances. Subject to Sections 1.09(a) and (b), the Company
may from time to time select for each Term Advance in an unpaid principal
amount equal to or greater than $1,000,000 either the Term Rate, the Term
Eurodollar Rate or the Term CD Bid Rate, provided that the Company shall also
select a Business Day on which the Term Rate, the Term Eurodollar Rate or the
Term CD Bid Rate, as the case may be, shall begin for such Term Advance and
that telephonic notice thereof (such notice to be confirmed by the Company
immediately in writing) is given to the Bank on or before such Business Day in
the case of selection of the Term Rate and at least two Business Days prior to
such Business Day in the case of selection of the Term CD Bid Rate or the Term
Eurodollar Rate. The interest rate selected for any Term Advance by the
Company pursuant to this Section 1.08(b) shall continue thereafter in effect
for such Term Advance until the Business Day which the Company shall
subsequently select pursuant hereto as the Business Day on which another
interest rate hereunder shall begin for such Term Advance. If during the term
of any Term Advance the Company changes the interest rate for such Term
Advance from the Term Eurodollar Rate or the Term CD Bid Rate to another rate,
the Business Day on which such other rate shall then begin shall be the last
day of the interest period for such Term Advance. In the event that the Term
Advance shall be in an amount less than $1,000,000 or the Company shall fail
to select an interest rate, the interest rate shall be the Term Rate.
Section 1.09. Interest Periods. (a) If and so long as the Eurodollar
Rate shall be selected for any Tender Advance or the Term Eurodollar Rate
shall be selected for any Term Advance, the period between the Business Day on
which such rate shall then begin for such Eurodollar Advance or Term
Eurodollar Advance, as the case may be, and the date of payment in full of
such Eurodollar Advance or Term Eurodollar Advance, as the case may be, shall
be divided into successive periods, each such period being an "Interest
Period" for such Eurodollar Advance or Term Eurodollar Advance, as the case
may be. The initial Interest Period for such Eurodollar Advance or Term
Eurodollar Advance, as the case may be, at that time shall begin on such
Business Day and each subsequent Interest Period for such Eurodollar Advance
of Term Eurodollar Advance, as the case may be, at the time shall begin on the
last day of the immediately preceding Interest Period. The duration of each
Interest Period for any Eurodollar Advance or Term Eurodollar Advance shall be
one, two, three or six months as the Company may, upon telephonic notice given
to the Bank at least two Business Days prior to the first day of such Interest
Period (such notice to be confirmed by the Company immediately in writing),
select; provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and
(ii) the duration any Interest Period which begins prior to the
Scheduled Termination Date and would otherwise end after such date shall
end on such date.
(b) If and so long as the CD Bid Rate shall be selected for any Tender
Advance or the Term CD Bid Rate shall be selected for any Term Advance, the
period between the Business Day on which such rate shall then begin for such
CD Bid Advance or Term CD Bid Advance, as the case may be, and the date of
payment in full of such CD Bid Advance or Term CD Bid Advance, as the case may
be, shall be divided into successive periods, each such period being an
"Interest Period" for such CD Bid Advance or Term CD Bid Advance, as the case
may be. The initial Interest Period for such CD Bid Advance or Term CD Bid
Advance, as the case may be, at that time shall begin on such Business Day and
each subsequent Interest Period for such CD Bid Advance or Term CD Bid
Advance, as the case may be, at the time shall begin on the last day of the
immediately preceding Interest Period. The duration of each Interest Period
for any CD Bid Advance or Term CD Bid Advance shall be one, two, three or six
months as the Company may, upon telephonic notice given to the Bank (such
notice to be confirmed by the Company immediately in writing) at least two
Business Days prior to the first day of such Interest Period, select;
provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and
(ii) the duration of any such Interest Period which begins prior
to the Scheduled Termination Date and would otherwise end after such
date shall end on such date.
Section 1.10. Prepayments. (a) The Company may prepay in whole or in
part the outstanding amount of any Accrued Interest Advance or Demand Advance
with accrued interest to the date of such prepayment on the amount prepaid;
provided, however, that the Company shall, simultaneously with the making of
such prepayment, give notice to the Bank by telephone (which shall be
confirmed immediately in writing) or telegraph of such prepayment, which
notice shall specify (i) the amount of such prepayment and (ii) the amount of
accrued interest transmitted with such prepayment.
(b) The Company may, upon at least two Business Days' notice to the
Bank, prepay the outstanding amount of any Advance in whole or in part with
accrued interest to the date of such prepayment on the amount prepaid;
provided, however, that any prepayment of any Eurodollar Advance, Term
Eurodollar Advance, CD Bid Advance or Term CD Bid Advance shall be made on,
and only on, the last day of any Interest Period for such Eurodollar Advance,
Term Eurodollar Advance, CD Bid Advance or Term CD Bid Advance, as the case
may be, unless the Company shall pay to the Bank in accordance with Section
1.12 an amount sufficient to compensate the Bank for any loss or expenses
incurred by it by reason of such prepayment on a day other than the last day
of the relevant Interest Period; provided, further, that in the case of a
prepayment certified to the Bank by the Trustee as a payment made pursuant to
subsection (c) of this Section, the Company shall on the date of such
prepayment pay interest accrued on such Advance to the date of prepayment,
together with an amount sufficient to compensate the Bank for any loss or
expenses in accordance with Section 1.12.
(c) Prior to or simultaneously with the resale of any Bonds held by the
Custodian on behalf of the Company under the Custody Agreement as a result of
a draw or draws under the Letter of Credit by a Tender Draft or Tender Drafts,
the Company shall cause the Trustee to prepay, on behalf of the Company, in
the order in which they were made, by paying to the Bank an amount equal to
the sum of (i) that portion of any Tender Advances equal to 100% of the
principal amount of any such Bonds resold or to be resold and (ii) that
portion of the Accrued Interest Advances (the "Corresponding Accrued Interest
Advances") which bears the same ratio to the total unreimbursed Accrued
Interest Advances as the principal amount of such Bonds sold or to be resold
bears to the principal amount of all such Bonds held by the Custodian on
behalf of the Company under the Custody Agreement. Such payments shall, if
certified to the Bank by the Trustee in a certificate, completed and signed,
by the Trustee, in the form of Annex H to the Letter of Credit as payments
being made pursuant to this Section 1.10(c), be applied by the Bank in
reimbursement of such drawings (and as prepayment of the Tender Advances and
the Corresponding Accrued Interest Advances resulting from such drawings in
the manner described above). The Company irrevocably authorizes the Bank to
rely on such certificate and to reinstate the Letter of Credit in accordance
therewith.
(d) Prior to or simultaneously with the resale of any Bonds held by the
Custodian on behalf of the Company under the Custody Agreement as a result of
a draw or draws under the Letter of Credit by a Purchase Draft or Purchase
Drafts, the Company shall cause the Trustee to prepay, on behalf of the
Company, in the order in which they were made, by paying to the Bank an amount
equal to such Purchase Draft or Purchase Drafts. Such payments shall, if
certified to the Bank by the Trustee in a certificate, completed and signed,
by the Trustee, in the form of Annex H to the Letter of Credit as payments
being made pursuant to this Section 1.10(d), be applied by the Bank in
reimbursement of such drawings (and as prepayment of the Purchase Advances).
The Company irrevocably authorizes the Bank to rely on such certificate and to
reinstate the Letter of Credit in accordance therewith.
(e) Amounts received by the Bank from the Company or the Trustee on
behalf of the Company in reimbursement for drawings under the Letter of Credit
shall be applied first in reimbursement of any unreimbursed drawings made by
an Interest Draft, unless such amounts are accompanied by a certificate as
described in subsection (c) or (d) of this Section 1.10 or in Section 1.03(a).
SECTION 1.11. Other Payments. The Company hereby agrees to pay to the
Bank such fees as are set forth in a letter of even date from the Company to
the Bank.
SECTION 1.12 Increased Costs. (a) If the implementation of or any
change in any law or regulation or in the interpretation by any court or
administrative or governmental authority charged with their administration
shall either (i) impose, modify or deem applicable any reserve, special
deposit, capital adequacy or similar requirement not existing on the date of
this Reimbursement Agreement against letters of credit issued by the Bank, or
any assets held by, deposits with or for the account of, or commitments by, an
office of the Bank in connection with payments by the Bank under the Letter of
Credit (including without limitation a request or requirement which affects
the manner in which the Bank allocates capital resources to its commitments,
including its obligations hereunder); or (ii) impose on the Bank any other
condition not existing on the date of this Reimbursement Agreement regarding
this Reimbursement Agreement or the Letter of Credit, and the result of any
event referred to in clause (i) or (ii) above shall be to (x) increase the
cost to the Bank of issuing or maintaining the Letter of Credit (which
increase in cost shall be the result of the Bank's reasonable allocation of
the aggregate of such cost increases resulting from such events), or (y)
reduce any amounts payable by the Company hereunder, or (z) reduce the rate of
return on the Bank's capital as a consequence of its obligations hereunder or
its issuance and maintenance of the Letter of Credit to a level below that
which the Bank could have achieved but for such circumstances, then, upon
demand by the Bank, the Company shall pay to the Bank upon demand, in
immediately available funds, additional amounts which shall be sufficient to
compensate the Bank for such increased cost or reduction in payment or in rate
of return. If any such amount is not paid as provided herein, the Company
shall pay the Bank interest, payable on demand, at the Domestic Rate on each
such amount from the date when payment was due until paid in full. Each
demand by the Bank hereunder shall be accompanied by a certificate setting
forth in reasonable detail such increased cost or reduction in payment or in
rate of return as a result of any event mentioned in clause (i) or (ii) above
and shall, absent demonstrable error, be presumptively deemed correct. In
determining such amounts, the Bank may use any reasonable commonly accepted
averaging and attribution methods.
(b) If, due to (i) conversions of the type of interest rate pursuant to
Section 1.08, (ii) prepayments pursuant to Section 1.10 (whether by direct or
applied payments), (iii) acceleration of the maturity of the Advances pursuant
to Section 5.02, or (iv) any other reason, the Bank receives payments of
principal of any Eurodollar Advance, Term Eurodollar Advance, CD Bid Advance
or Term CD Bid Advance, or is subject to a conversion of a Eurodollar Advance,
Term Eurodollar Advance, CD Bid Advance or Term CD Bid Advance into another
type of Advance other than on the last day of an Interest Period relating to
such Advance, the Company shall, promptly after demand by the Bank, pay to the
Bank any amounts required to compensate the Bank for any additional losses,
costs or expenses which it may reasonable incur as a result of such payment or
conversion, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by the Bank to fund or maintain such Eurodollar Advance, Term
Eurodollar Advance, CD Bid Advance or Term CD Bid Advance. A certificate
setting forth the amount of such additional losses, costs or expenses and
giving a reasonable explanation thereof, submitted by the Bank to the Company,
shall constitute such demand and shall, in the absence of manifest error, be
conclusive and binding for all purposes.
Section 1.13. Additional Interest. The Company shall pay to the Bank
additional interest on the unpaid principal amount of each Advance during the
periods such Advance shall be a Eurodollar Advance or Term Eurodollar Advance
until such principal amount is paid in full, payable on each day on which
interest on such Advance is payable under Section 1.07, at an interest rate
per annum equal at all times during each Interest Period for such Advance, to
the excess of (i) the rate obtained by dividing the LIBO Rate for such
Interest Period by a percentage equal to 100% minus the reserve percentage
applicable during such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or if more than
one such percentage is so applicable, minus the daily average for such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any marginal reserve requirement)
for the Bank in respect of liabilities or assets consisting of or including
Eurocurrency liabilities over (ii) the LIBO Rate for such Interest Period.
Section 1.14. Payments and Computations. The Company, unless directed
otherwise, shall make each payment hereunder not later than 11:00 a.m.
(Chicago time) on the day when due in lawful money of the United States of
America to the Bank, Account #0154644, in same day funds. All computations of
interest at the Domestic Rate and the Term Rate shall be made by the Bank on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest at the Eurodollar Rate, the Term Eurodollar Rate, the
CD Bid Rate, the Term CD Bid Rate and the letter of credit commission
hereunder shall be made by the Bank on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) elapsed.
Section 1.15. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due, or whenever the last day of any
Interest Period would otherwise occur, on a day which is not a Business Day,
such payment shall be made, and the last day of such Interest Period shall
occur, on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or
commission, as the case may be; provided, however, if such extension would
cause such payment of a Eurodollar Advance or a Term Eurodollar Advance to be
made or the last day of such Interest Period to occur in a new calendar month,
such payment shall be made and the last day of such Interest Period shall
occur on the next preceding Business Day.
Section 1.16. Extension of the Letter of Credit. If the Company, at
least eighteen months prior to the Scheduled Termination Date of the Letter of
Credit, has requested the Bank to extend the Letter of Credit, and the Bank is
willing to extend the Letter of Credit, the Bank shall give written notice
thereof to the Company at least twelve months prior to the Scheduled
Termination Date extending such Scheduled Termination Date of the Letter of
Credit to a date specified by the Bank. If the Bank shall not so notify the
Company, the Bank shall be deemed not to have consented.
SECTION 1.17. Obligations Absolute. The payment obligations of the
Company under this Agreement shall be unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the Bonds, the Indenture, the Lease, the Sublease, or any other
agreement or instrument relating thereto (collectively the "Related
Documents");
(ii) any amendment or waiver of or any consent to departure from
all or any of the Related Documents;
(iii) the existence of any claim, set-off, defense or other right
which the Company may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any persons or
entities for whom the Trustee, any such beneficiary or any such
transferee may be acting), the Bank or any other person or entity,
whether in connection with this Agreement, the transactions contemplated
herein or in the Related Documents or any unrelated transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of the Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; provided however that such
circumstance or happening shall not have been the result of the gross
negligence or willful misconduct of the Bank.
ARTICLE II
CONDITIONS OF ISSUANCE
SECTION 2.01. Condition Precedent to Issuance of the Letter of Credit.
The obligation of the Bank to issue the Letter of Credit is subject to the
condition precedent that the Bank shall have received on or before the date of
the issuance of the Letter of Credit the following, each dated such day, in
form and substance satisfactory to the Bank:
(a) Certified copies of the resolutions of the Board of Directors
of the Company authorizing the Company to enter into this Agreement,
approving the Letter of Credit and the other matters contemplated
hereby.
(b) Originals (or copies certified by the Secretary or Assistant
Secretary of the Company) of current approvals or orders of the Issuer
and the public utility regulatory commissions of the States of Missouri
and Kansas necessary for the Company with respect to this Agreement.
(c) A certificate of the Secretary or Assistant Secretary of the
Company, certifying the names and true signatures of the officers of the
Company authorized to sign this Agreement and the other documents to be
delivered by it hereunder.
(d) Opinions of Samuel P. Cowley, Esq., Senior Vice President and
Chief Legal Officer for the Company, in substantially the form of
Exhibit B hereto and as to such other matters as the Bank may reasonably
request.
(e) Opinions of Chapman and Cutler, Bond Counsel, in
substantially the form of Exhibit C hereto and as to such other matters
as the Bank may reasonably request, including advice from such Bond
Counsel to the Bank that the Bank may rely on such opinion.
(f) A transcript relating to the issuance of the Bonds.
(g) Such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies thereof)
or opinions as the Bank may reasonably request.
(h) An executed copy (or duplicate thereof) of Amendment No. 1 to
the Custody Agreement.
SECTION 2.02. Additional Conditions Precedent to Issuance of the Letter
of Credit. The obligation of the Bank to issue the Letter of Credit shall be
subject to the further conditions precedent that on the date of the issuance
of the Letter of Credit:
(a) The following statements shall be true and the Bank shall
have received a certificate signed by a duly authorized officer of the
Company, dated the date of such issuance, stating that:
(i) the representations and warranties contained in Section
3.01 of this Agreement are correct on and as of the date of
issuance of the Letter of Credit as though made on and as of such
date; and
(ii) no event has occurred and is continuing, or would
result from the issuance of the Letter of Credit, which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both.
(b) The Issuer and the Trustee have duly authorized and executed
the Indenture and the Indenture shall continue to be in full force and
effect.
(c) The Issuer and the Company have duly authorized and executed
the Lease and the Sublease and the Lease and the Sublease shall continue
to be in full force and effect.
(d) The Issuer has duly executed, issued and delivered the Bonds.
(e) The Bank shall have received such other approvals, opinions
or documents as the Bank may reasonably request.
SECTION 2.03. Condition Precedent to Each Advance. Each payment made
by the Bank pursuant to a Tender Draft, a Redemption Draft or a Purchase Draft
under the Letter of Credit shall constitute an Advance hereunder only if it
shall be true on the date of such payment that no event has occurred and is
continuing, or would result from such Advance, which constitutes an Event of
Default or would constitute an Event of Default but for the requirement that
notice be given or time elapse or both. Unless the Company shall have
otherwise previously advised the Bank in writing, payment by the Bank pursuant
to a Tender Draft, a Redemption Draft or a Purchase Draft shall be deemed to
constitute a representation and warranty by the Company that on the date of
such payment the above statement is true.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties. The Company represents
and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business in, and is in good standing under
the laws of, the State of Kansas.
(b) The execution, delivery and performance by the Company of
this Agreement and each Related Document to which it is a party are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Company's charter
or by-laws or (ii) any law, order, rule, regulation or contractual
restriction (including, but not limited to, any restriction in the
Indenture) binding on or affecting the Company, and do not result in or
require the creation of any lien, security interest or other charge or
encumbrance (other than pursuant to this Agreement and the Related
Documents) upon or with respect to any of its properties.
(c) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into this Agreement, and the commissions have duly
issued previous orders authorizing the Company to enter into the Lease,
the Sublease and any other documents that such commissions have
jurisdiction over and to which the Company is a party and the Related
Documents to which it is a party, and such order remains in full force
and effect in the form issued. Except for the approvals of the Kansas
Department of Economic Development, the Board of Commissioners of Coffey
County, Kansas, and the City Council of the City of Burlington, Kansas,
approving issuance of the Bonds, which approvals have been duly obtained
and are in full force and effect, and the notice of timely filing with
the Board of Tax Appeals of the State of Kansas, no other authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by the Company of this Agreement or
any Related Document to which it is a party.
(d) This Agreement is, and each Related Document to which the
Company is a party when delivered hereunder will be, the legal, valid
and binding obligations of the Company enforceable against the Company
in accordance with their respective terms (except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally).
(e) Except as disclosed in the Company's Form 10-K for the year
1992, Forms 10-Q for periods March 31, 1993 and June 30, 1993, and Form
8-K dated August 16, 1993, there is no pending or, to the best of the
Company's knowledge, threatened action or investigation or proceeding
before any court, governmental agency or arbitrator against or affecting
the Company which may materially adversely affect the financial
condition or total operations of the Company; provided, however, for
purposes of this subsection (e) only, rate proceedings before any
regulatory body shall be excluded.
(f) The balance sheet of the Company as at December 31, 1992, and
the related statements of income and retained earnings and of changes in
financial position of the Company for the fiscal year then ended,
certified by Coopers & Lybrand, independent public accountants, copies
of which have been furnished to the Bank, and the balance sheet of the
Company as at June 30, 1993, and the related statements of retained
earnings for the nine months then ended, signed by the Controller of the
Company, copies of which are contained in the Company's 10-Q dated as of
June 30, 1993, a copy of which has been furnished to the Bank, fairly
present the financial condition of the Company as at such respective
dates and the results of the operations of the Company for the period
ended on such respective dates, all in accordance with generally
accepted accounting principles consistently applied, and since June 30,
1993, there has been no material adverse change in the financial
condition or total operations of the Company.
(g) Except for information contained therein describing the Bank,
as to which no representation is made, the Official Statement (said
Official Statement, together with the documents incorporated therein by
reference, being the "Official Statement") dated September 26, 1985, of
the Issuer relating to the Bonds is, and the Preliminary Official
Statement (said Preliminary Official Statement, together with the
documents incorporated therein by reference being the "Preliminary
Official Statement") dated September 12, 1985, of the Issuer relating to
the Bonds as of its date of issue was to the best of the Company's
knowledge, and any supplement or amendment to either thereof shall be,
accurate in all material respects for the purposes for which its use is,
was, or shall be, authorized; and the Official Statement does not, the
Preliminary Official Statement as of its date of issue did not to the
best of the Company's knowledge, and any such supplement or amendment
shall not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made therein,
in the light of the circumstances under which they are or were made, not
misleading.
(h) No Termination Event has occurred nor is reasonably expected
to occur with respect to any Plan.
(i) The Company does not contribute to any Multiemployer Plan and
has not incurred any withdrawal liability with respect to any such plan.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants. So long as a drawing is available
under the Letter of Credit or the Bank shall have any Commitment hereunder or
the Company shall have any obligation to pay any amount to the Bank hereunder,
the Company will, unless the Bank shall otherwise consent in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights (charter and statutory) and
privileges in the state of its incorporation and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is reasonably necessary in view of its business and
operations or the ownership of its properties.
(b) Compliance with Laws, Etc. Comply in all respects with all
applicable laws, rules, regulations and orders of any governmental
authority, the non-compliance with which would materially and adversely
affect the financial condition or operations of the Company, such
compliance to include, without limitation, paying before the same become
delinquent all material taxes, assessments and governmental charges
imposed upon it or upon its property, except to the extent compliance
with any of the foregoing is then being contested in good faith.
(c) Maintenance of Insurance. Maintain insurance with
responsible and reputable insurance companies or associations or through
its own program of self-insurance in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Company operates.
(d) Visitation Rights. At any reasonable time and from time to
time, permit the Bank or any of its agents or representatives at their
own expense to examine and make copies of and abstracts from the records
and books of account of, and visit the properties of, the Company and to
discuss the affairs, finances and accounts of the Company with any of
its officers.
(e) Keeping of Books. Keep proper books of record and account,
in which full and correct entries shall be made of all financial
transactions and the assets and business of the Company in accordance
with generally accepted accounting principles consistently applied.
(f) Maintenance of Properties. Maintain and preserve its
properties that are necessary to maintain its operating system in good
working order and condition, ordinary wear and tear excepted.
(g) Reporting Requirements. Furnish to the Bank the following:
(i) as soon as possible, and in any event within 3 days after the
occurrence of each Event of Default or each event which, with the giving
of notice or lapse of time, or both, would constitute an Event of
Default, continuing on the date of such statement, a statement of the
chief financial officer (or in his absence, a principal financial
officer) of the Company setting forth details of such Event of Default
or event and the action which the Company proposes to take with respect
thereto; (ii) as soon as available and in any event within 10 days after
the filing of each quarterly report on Form 10-Q by the Company with the
Securities and Exchange Commission, a copy of each such quarterly
report, together with a certificate of the chief accounting officer (or
in his absence, a principal financial officer) of the Company confirming
as of the end of such quarter the truth of the statement set forth in
Section 2.02(a)(ii) of this Agreement; (iii) as soon as available and in
any event within 10 days after the filing of each annual report on Form
10-K by the Company with the Securities and Exchange Commission, a copy
of each such annual report containing financial statements for such year
certified by nationally recognized independent public accountants,
together with a certificate of the chief accounting officer (or in his
absence, a principal financial officer) of the Company confirming as of
the end of such quarter the truth of the statement set forth in Section
2.02(a)(ii) of this Agreement; (iv) promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports which the Company sends to any of its stockholders, and copies
of all regular, periodic and special reports and all registration
statements, which the Company files with the Securities and Exchange
Commission or any governmental authority which may be substituted
therefor; (v) as soon as possible and in any event within (A) 30 days
after the Company or any of its Affiliates knows or has reason to know
that any Termination Event described in clause (i) of the definition of
Termination Event with respect to any Plan has occurred and (B) within
10 days after the Company or any of its Affiliates knows or has reason
to know that any other Termination Event with respect to any Plan has
occurred, a statement of the chief accounting officer (or in his absence
a principal financial officer) of the Company describing such
Termination Event and the action, if any, which the Company or such
Affiliate proposes to take with respect thereto; (vi) promptly and in
any event within two Business Days after receipt thereof by the Company
or any of its Affiliates from the Pension Benefit Guaranty Corporation
("PBGC"), copies of each notice received by the Company or any such
Affiliate of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan; and (vii) such other informa-
tion respecting the business, properties or the condition or operations,
financial or otherwise, of the Company as the Bank may from time to time
reasonably request in writing.
(h) Officer's Certificate. In the event that an Advance is made
pursuant to Sections 1.03 or 1.04 hereunder, the Company shall deliver
to the Bank every ninety (90) days commencing ninety (90) days from the
date such Advance is made until all outstanding Advances have been paid
in full, a certificate signed by a duly authorized officer of the
Company stating that the representations and warranties contained in
Section 3.01 (other than subsection (g)) are correct on and as of such
date as though made on and as of such date and subsection (g) of Section
3.01 was correct on the date of this Agreement.
(i) Other Agreements. Perform and comply with each of the terms,
provisions and conditions, on its part to be performed or complied with,
contained in the Indenture, the Lease and the Sublease.
(j) Redemption or Defeasance of Bonds. Use its best efforts to
cause the Trustee, (A) upon a redemption or defeasance of less than all
of the Bonds pursuant to the Indenture, to furnish to the Bank a notice
in the form of Annex G to the Letter of Credit, and (B) upon a
redemption or defeasance of all of the Bonds pursuant to the Indenture,
to surrender the Letter of Credit to the Bank for cancellation.
(k) Registration of Bonds. Cause all bonds which it acquires, or
which it has acquired for its account, to be registered forthwith in
accordance with the Indenture in the name of the Company.
SECTION 4.02. Negative Covenants. So long as a drawing is available
under the Letter of Credit or the Bank shall have any Commitment hereunder or
the Company shall have any obligation to pay any amount to the Bank hereunder,
the Company will not, without the written consent of the Bank:
(a) Liens, Etc. Create, incur, assume or suffer to exist any
lien, security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of its
properties, whether now owned or hereafter acquired, or assign any right
to receive income, in each case to secure any Obligation of any person,
other than (i) purchase money liens or purchase money security interests
upon or in any property acquired or held by the Company in the ordinary
course of business to secure the purchase price of such property or to
secure indebtedness incurred solely for the purpose of financing the
acquisition of such property, (ii) liens or security interests existing
on such property at the time of its acquisition, (iii) liens, security
interests, charges or encumbrances on or over, gas, oil, coal,
fissionable material or other fuel or fuel products as security for an
Obligation incurred by the Company for the sole purpose of financing the
acquisition or storage of such fuel or fuel products or, with respect to
nuclear fuel, the processing, reprocessing, sorting, storage and
disposal thereof, (iv) liens, security interests, charges or
encumbrances on or over all or any part of its undertaking or assets
employed wholly or mainly in or arising directly from any specific con-
struction project or generating plant as security for an Obligation
incurred by the Company for the purpose of financing all or any part of
such construction project or generating plant, (v) the lien of the
Indenture of Mortgage and Deed of Trust dated as of December 1, 1946,
from the Company to Continental Illinois National Bank and Trust Company
of Chicago and the lien of the General Mortgage Indenture and Deed of
Trust dated December 1, 1986, from the Company to United Missouri Bank,
n.a. (the "Mortgages"), (vi) encumbrances listed on Exhibit D attached
hereto, (vii) security interests granted in, or sale of, the Company's
accounts receivable, provided that such security interest secures only
new debt incurred at substantially the same time as the creation of such
security interest and that any such sale is made only for new
consideration given at substantially the same time as the making of such
sale, (viii) a second mortgage granted on the property subject to the
lien of the Mortgage as of the date hereof, and (ix) sales or transfers
of property by the Company and renting or leasing back such property,
provided that all such property in the aggregate does not exceed fifteen
percent (15%) of all the Company's assets.
(b) Mergers, Etc. Merge with or into or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) or acquire all or
substantially all of the assets, other than utility assets, of, any
person or entity, except that the Company may merge or consolidate with
any person or entity on condition in each case that, (i) immediately
after giving effect thereto, no event shall occur and be continuing
which constitutes an Event of Default or which with the giving of notice
or lapse of time, or both, would constitute an Event of Default, (ii)
the consolidation or merger shall not materially and adversely affect
the ability of the Company to perform its obligations hereunder or under
the Related Documents, and (iii) the corporation formed by any such
consolidation or into which the Company shall be merged shall assume the
Company's obligations and performance of the Company's covenants
hereunder and under the Related Documents in a writing satisfactory in
form and substance to the Bank.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or, except as otherwise permitted under Section 4.02(a),
pledge or otherwise encumber more than fifteen percent (15%) of its
assets, except in the ordinary course of its business or in connection
with a transaction authorized by subsection (b) of this Section 4.02.
(d) Compliance with ERISA. (i) Voluntarily terminate any Plan,
so as to result in any material liability of the Company to PBGC or (ii)
enter into any Prohibited Transaction (as defined in Section 4975 of the
Internal Revenue Code of 1954, as amended, and in ERISA) involving any
Plan which results in any material liability of the company to PBGC,
(iii) cause any occurrence of any Reportable Event which results in any
material liability of the Company to PBGC or (iv) allow or suffer to
exist any other event or condition known to the Company which results in
any material liability of the Company to PBGC.
(e) Amendment of Indenture or Related Document. Enter into or
consent to any amendment or modification of, the Indenture, the Lease,
the Sublease or any other Related Document, which would adversely affect
the Bank, without first obtaining the express prior written consent of
the Bank thereto.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. Events of Default. The occurrence of any of the
following events shall be an "Event of Default" hereunder unless waived by the
Bank pursuant to Section 7.01 hereof:
(a) the Company shall fail to pay any amount payable to the Bank
under any provision of Article I when due except as provided in (b)
below; or
(b) the Company shall fail to pay any amount of an Interest
Advance within one (1) day after such amount becomes due; or
(c) any representation or warranty made by the Company herein or
by the Company (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(d) the Company shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement, and any such failure
shall remain unremedied for 10 days after written notice thereof shall
have been given to the Company by the Bank; or
(e) any material provision of this Agreement shall at any time
for any reason cease to be valid and binding upon the Company, or shall
be declared to be null and void, or the validity or enforceability
thereof shall be contested by the Company, or a proceeding shall be
commenced by any governmental agency or authority having jurisdiction
over the Company seeking to establish the invalidity or unenforceability
thereof, or the Company shall deny that it has any or further liability
or obligation under this Agreement; or
(f) the Company shall (x) fail to make any payment, equal to or
exceeding $10,000,000 of any Obligation or to make any payment, equal to
or exceeding $5,000,000, of any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Obligation, or (y) fail to perform or
observe any term, covenant or condition on its part to be performed or
observed under any agreement or instrument relating to any Obligation
when required to be performed or observed, and such failure shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such failure to perform or
observe is to accelerate, or to permit the acceleration of, the maturity
of any Obligation, the unpaid principal amount of which then equals or
exceeds $10,000,000; or
(g) the Company shall generally not pay its debts as they become
due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or
(h) the Company shall institute any proceeding or voluntary case
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, reorganization or insolvency or relief or
protection of debtors or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property; or the Company shall
take any corporate action to authorize any of the actions described
above in this subsection (h); or
(i) any proceeding shall be instituted against the Company
seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement or adjustment of debts under any
law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief or the
appointment of a trustee, receiver or custodian or other similar
official for it or for any substantial part of its property, and, if
such proceeding is being contested by the Company in good faith, such
proceeding shall remain undismissed or unstayed for a period of 60 days;
or
(j) any judgement or order for the payment of money in excess of
$10,000,000 shall be rendered against the Company and either
(x) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (y) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to the
Company by the Bank, (i) such Termination Event (if correctable) shall
not have been corrected and (ii) the then present value of such Plan's
vested benefits exceeds the then current value of assets accumulated in
such Plan by more than the amount of $15,000,000 (or in the case of a
Termination Event involving the withdrawal of a "substantial employer"
(as defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess exceed such amount); or
(l) any event of default under and as defined in the Indenture,
the Lease or the Sublease shall have occurred and be continuing.
SECTION 5.02. Upon an Event of Default. If any Event of Default shall
have occurred and be continuing, the Bank may (i) by notice to the Company,
declare the obligation of the Bank to issue the Letter of Credit to be
terminated, whereupon the same shall forthwith terminate, or if the Letter of
Credit shall have been issued, (ii) give notice to the Trustee pursuant to
Section 802 of the Indenture directing the Trustee to declare the principal of
all Bonds then outstanding and all interest accrued and unpaid thereon to be
due and payable and (iii) declare the Advances, all amounts payable under any
provision of Article I, all interest thereon and all other amounts payable
hereunder to be forthwith due and payable, whereupon the Advances, all amounts
payable under any provision of Article I, all interest thereon and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by the Company.
ARTICLE VI
DEFINITIONS
SECTION 6.01. Definitions. Unless otherwise indicated in this
Agreement, the capitalized terms used herein shall have the following
meanings:
"Accrued Interest Advance" has the meaning set forth in Section
1.03(a) hereof.
"Advances" means, collectively, Tender Advances, Accrued Interest
Advances, Redemption Advances and Purchase Advances, and an "Advance"
means any of them.
"Affiliate" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a
member and which is under common control within the meaning of the
regulations under Section 414 of the Internal Revenue Code of 1954, as
amended.
"Assessment Rate" for any Interest Period for any CD Bid Advance
or Term CD Bid Advance means the annual assessment rate per annum
estimated by the Bank on the first day of such Interest Period for
determining the then current annual assessment payable by any
participants to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring U.S.
dollar deposits of such participants in the United States.
"Available Amount" in effect at any time means the maximum amount
available to be drawn at such time under the Letter of Credit (the
determination of such maximum amount to assume, throughout this
Agreement, compliance with all conditions for drawing and no reduction
for any amount drawn by an Interest Draft referred to in the Letter of
Credit (unless such amount is not reinstated under the Letter of
Credit)).
"Bonds" means the Issuer's Customized Purchase Pollution Control
Refunding and Improvement Revenue Bonds, Series 1985B (Kansas City
Power & Light Company Project).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or Chicago, and, if the
applicable Business Day relates to any Eurodollar Advance, Term
Eurodollar Advance, or Interest Period therefor, on which dealings are
carried on in the London interbank market.
"CD Bid Advance" means a Tender Advance bearing interest at the CD
Bid Rate.
"CD Bid Rate" during any Interest Period for any CD Bid Advance
means an interest rate per annum equal to (i) 1/2 of 1% per annum above
the CD Bid Formula from and including the Initial Tender Advance Day to
but excluding the sixtieth Interest Day and (ii) 5/8 of 1% per annum
above the CD Bid Formula from and including the sixtieth Interest Day to
but excluding the scheduled Termination Date.
"CD Bid Formula" shall mean a rate equal to the sum of (x) the
rate of interest equal to the per annum rate determined by the Bank at
9:00 a.m. Chicago time (or as soon thereafter as practicable) on the
first day of the applicable Interest Period, of certificates of deposit
with maturities identical to the duration of such Interest Period, plus
(y) the Assessment Rate divided by (z) one hundred percent (100%) minus
the Reserve Percentage.
"Commitment" has the meaning set forth in Section 1.01 hereof.
"Company" means Kansas City Power & Light Company, a corporation
organized and existing under the laws of the State of Missouri.
"Corresponding Accrued Interest Advances" has the meaning set
forth in Section 1.10(c) hereof.
"Custodian" means United States Trust Company of New York, as
custodian under the Custody Agreement.
"Custody Agreement" means the Custody Agreement dated as of
September 1, 1985, between the Company and the Custodian and all
amendments, modifications and supplements thereto.
"Domestic Advance" means a Tender Advance bearing interest at the
Domestic Rate.
"Domestic Rate" means an interest rate equal to the higher of (i)
the Prime Rate and (ii) the Fed Funds Rate plus 1/2 of 1% per annum.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Advance" means a Tender Advance bearing interest at
the Eurodollar Rate.
"Eurodollar Rate" during any Interest Period for any Tender
Advance means an interest rate per annum equal at all times during each
Interest Period for such Tender Advance to (i) 3/8 of 1% per annum above
the LIBO Rate from and including the Initial Tender Advance Day to but
excluding the sixtieth Interest Day and (ii) 1/2 of 1% per annum above
the LIBO Rate from and including the sixtieth Interest Day to but
excluding the Scheduled Termination Date.
"Event of Default" shall have the meaning set forth in Section
5.01 hereof.
"Fed Funds Rate" for any day means the effective federal funds
rate published by the Federal Reserve Bank of New York for such date.
If no such rate is published by the Federal Reserve Bank, such rate
shall be the average of the quotations for such day on overnight Federal
funds transactions received by the Bank from three Federal funds brokers
of recognized standing selected by the Bank. If such day is not a
Business Day, the rate for such day shall be the rate determined for the
immediately preceding Business Day.
"Final Draft" has the meaning set forth in the Letter of Credit.
"Indenture" means the Indenture of Trust dated as of September 1,
1985, between the Issuer and United States Trust Company of New York, as
trustee and all amendments, modifications and supplements thereto.
"Initial Tender Advance Day" means the Interest Day on which the
initial Tender Advance is made.
"Initial Term Advance Day" means the Term Interest Day on which
the initial Term Advance is made.
"Interest Advance" has the meaning set forth in Section 1.05(a)
hereof.
"Interest Day" means a day on which one or more Tender Advances
are outstanding.
"Interest Draft" has the meaning set forth in the Letter of
Credit.
"Interest Period" has the meaning set forth in Section 1.09(a)
hereof.
"Issuance Date" has the meaning set forth in Section 1.11 hereof.
"Interest Payment Date" has the meaning set forth in the
Indenture.
"Issuer" means the City of Burlington, Kansas.
"Lease" means the Equipment Lease Agreement dated as of
September 26, 1985, between the Issuer and the Company, and all
amendments, modifications and supplements thereto.
"Letter of Credit" means the irrevocable, transferable letter of
credit issued by the Bank in substantially the form of Exhibit A hereto
and any successor letter of credit as provided in such letter of credit.
"LIBO Rate" for any Interest Period means the rate of interest per
annum at which deposits in United States dollars are offered to the Bank
at its London, England branch by prime banks in the London Interbank
Market for a period equal to the duration of the Eurodollar Interest
Period relating to any Advance at or about 11:00 a.m. (London time) two
Business Days before the first day of such Interest Period.
"Mortgage" has the meaning set forth in Section 4.02(a) hereof.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Obligation" of any person or entity means (i) indebtedness for
borrowed money or for the deferred purchase price of property or
services in respect of which such person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
such person otherwise assures a creditor against loss, (ii) obligations
under leases in respect of which obligations such person is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such person otherwise assures a creditor
against loss, and (iii) liabilities in respect of unfunded vested
benefits under each Plan maintained for employees of such person and
covered by Title IV of ERISA.
"Official Statement" has the meaning set forth in Section 3.01(g).
"Plan" means an employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any Affiliate and
covered by Title IV of ERISA.
"Preliminary Official Statement" has the meaning set forth in
Section 3.01(g).
"Prime Rate" means the interest rate per annum from time to time
designated by the Bank at its principal office in Chicago, Illinois, as
its prime rate whether or not such prime rate is actually charged by the
Bank, with all charges therein to be effective on the date announced.
"Purchase Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Purchase Draft" has the meaning set forth in the Letter of
Credit.
"Redemption Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Redemption Draft" has the meaning set forth in the Letter of
Credit.
"Related Documents" has the meaning set forth in Section 1.17(i)
hereof.
"Reserve Percentage" for any Interest Period for any CD Bid
Advance or Term CD Bid Advance is that percentage which is specified on
the first day of such Interest Period by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement for the Bank with respect to liabilities consisting
of or including (among other liabilities) U.S. dollar nonpersonal time
deposits in the United States in an amount of $1,000,000 or more and
with a maturity equal to such Interest Period, together with any
marginal, emergency, supplemental, special or other reserve that the
Bank, in its sole discretion, determines that it is required to maintain
on such day for deposits with a maturity equal to such Interest Period.
"Scheduled Termination Date" means the earliest of (i) the date on
which the Trustee surrenders the Letter of Credit for cancellation, (ii)
the date on which the Bank honors a Redemption Draft for all the Bonds,
(iii) the date on which the Bank honors a Final Draft, (iv) the tenth
day after the Bank receives written notice that all the Bonds have been
converted to the Fixed Interest Rate within the meaning of the
Indenture, (v) the date on which the Bank receives notice that there is
no longer any Bond outstanding, (vi) the date the Bank receives written
notice of the substitution of an alternate Letter of Credit in
accordance with the Indenture, and (vii) August 18, 1996, unless
extended pursuant to Section 1.16 hereof.
"Sublease" means the Equipment Sublease Agreement dated as of
September 26, 1985, between the Issuer and the Company and all
amendments, modifications and supplements thereto.
"Tender Advance" has the meaning set forth in Section 1.03(a)
hereof.
"Tender Draft" has the meaning set forth in the Letter of Credit.
"Term Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Term CD Bid Advance" means a Term Advance bearing interest at the
Term CD Bid Rate.
"Term CD Bid Rate" during any Interest Period for any Term CD Bid
Advance means an interest rate per annum equal at all times during each
Interest Period for such Term CD Bid Advance to (i) 3/4 of 1% above the
CD Bid Formula from and including the Initial Term Advance Day to but
excluding the sixtieth Term Interest Day, and (ii) 1% above the CD Bid
Formula from and including the sixtieth Term Interest Day to but
excluding the Scheduled Termination Date.
"Term Eurodollar Advance" means a Term Advance bearing interest at
the Term Eurodollar Rate.
"Term Eurodollar Rate" during any Interest Period for any Term
Advance mans an interest rate per annum equal at all times during each
Interest Period for such Term Advance to (i) 5/8 of 1% per annum above
the LIBO Rate from and including the Initial Term Advance Day to but
excluding the sixtieth Term Interest Day, and (ii) 7/8 of 1% per annum
above the LIBO Rate from and including the sixtieth Term Interest Day to
but excluding the Scheduled Termination Date.
"Term Interest Day" means a day on which one or more Term Advances
are outstanding.
"Term Rate" means an interest rate equal to (i) 1/8 of 1% per
annum above the Prime Rate from and including the Initial Term Advance
Day to but excluding the sixtieth Term Interest Day and (ii) 3/8 of 1%
per annum above the Prime Rate from and including the sixtieth Term
Interest Day to but excluding the Scheduled Termination Date.
"Termination Event" means (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than
a Reportable Event not subject to the provision for 30-day notice to the
PBGC under such regulations), or (ii) the withdrawal of the Company or
any of its Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a Plan by the
PBGC, or (v) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
"Trustee" means United States Trust Company of New York, as
trustee under the Indenture.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Company therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Bank and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. The Company
will give notice to Moody's Investor Service of any material amendment to this
Agreement.
SECTION 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
and mailed, sent or delivered, if to the Company, at its address at 1201
Walnut, Kansas City, Missouri 64106 Attention: Treasurer, facsimile (816)556-
2992 and if to the Bank, at its address at 181 West Madison, Suite 3400,
Chicago, Illinois 60602 Attention: Letter of Credit Operations, facsimile
(312)578-5099 or if to the Trustee, mailed or delivered to it, addressed to it
at 114 West 47th Street, New York, New York, 10036 Attention: Corporate
Trust Department, facsimile: (212)852-1625; or as to each party, to such
other party and/or at such other address as shall be designated by such person
in a written notice to the other party. All such notices and communications
shall be effective when mailed or sent, addressed as aforesaid, except that
notices to the Bank pursuant to the provisions of Article I shall not be
effective until received by the Bank, and any notice to the Trustee pursuant
to Section 5.02(ii) shall not be effective until received by the Trustee.
Notices of any Event of Default shall be sent by the Company to the Bank by
facsimile.
SECTION 7.03. No Waiver; Remedies. No failure on the part of the Bank
to exercise, and no delay in exercising, any right hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted United
States accounting principles consistently applied.
SECTION 7.05. Indemnification. The Company hereby indemnifies and
holds the Bank harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses which the Bank may incur or which may be
claimed against the Bank by any person or entity:
(a) by reason of any inaccuracy in any material respect, or any
untrue statement or alleged untrue statement of any material fact,
contained in the Preliminary Official Statement or the Official
Statement or any amendment or supplement thereto, or by reason of the
omission or alleged omission to state therein a material fact necessary
to make such statements, in the light of the circumstances under which
they were made, not misleading; provided, however, that, in the case of
any action or proceeding alleging an inaccuracy in a material respect,
or an untrue statement, with respect to information supplied by and
describing the Bank in the Preliminary Official Statement or the
Official Statement (the "Bank Information"), or an omission or alleged
omission to state therein a material fact necessary to make the
statements in the Bank Information, in the light of the circumstances
under which they were made, not misleading, (i) indemnification by the
Company pursuant to this Section 7.05(a) shall be limited to the costs
and expenses of the Bank (including reasonable fees and expenses of the
Bank's counsel) of defending itself against such allegation, (ii) if in
any such action or proceeding it is finally determined that the Bank
Information contained an inaccuracy in any material respect or an untrue
statement of a material fact or omitted to state therein a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading, then the
Company shall not be required to indemnify the Bank pursuant to this
Section 7.05(a) for any claims, damages, losses, liabilities, costs or
expenses (including reasonable fees and expenses of counsel) to the
extent caused by such inaccuracy, untrue statement or omission, and
(iii) if any such action or proceeding shall be settled by the Bank
without there being a final determination to the effect described in the
preceding clause (ii), then the Company shall be required to indemnify
the Bank pursuant to this Section 7.05(a) only if such action or
proceeding is settled with the Company's consent; or
(b) by reason of or in connection with the execution, delivery or
performance of the Bonds, the Indenture, the Lease or the Sublease, or
any transaction contemplated by the Indenture, the Lease or the
Sublease; or
(c) by reason of or in connection with the execution and delivery
or transfer of, or payment or failure to make lawful payment under, the
Letter of Credit; provided, however, that the Company shall not be
required to indemnify the Bank pursuant to this section 7.05(c) for any
claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (i) the Bank's willful misconduct or
gross negligence in determining whether documents presented under the
Letter of Credit comply with the terms of the Letter of Credit or
(ii) the Bank's willful failure to make lawful payment under the Letter
of Credit after the presentation to it by the Trustee or a successor
trustee under the Indenture of a draft and certificate strictly
complying with the terms and conditions of the Letter of Credit.
Nothing in this Section 7.05 is intended to limit the Company's obligations
contained in Article I. Without prejudice to the survival of any other
obligation of the Company hereunder, the indemnities and obligations of the
Company contained in this Section 7.05 shall survive the payment in full of
amounts payable pursuant to Article I and the termination of the Letter of
Credit.
SECTION 7.06. Liability of the Bank. The Company assumes all risks of
the acts or omissions of the Trustee and any beneficiary or transferee of the
Letter of Credit with respect to its use of the Letter of Credit. Neither the
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use which may be made of the Letter of Credit or any acts or omissions
of the Trustee and any beneficiary or transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Bank
against presentation of documents which do not comply with the terms of the
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except that the Company shall have a claim against the Bank, and the Bank
shall be liable to the Company, to the extent of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by (i) the Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit comply with the terms
of the Letter of Credit or (ii) the Bank's willful failure to make lawful
payment under the Letter of Credit after the presentation to it by the Trustee
or a successor trustee under the Indenture of a draft and certificate strictly
complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the
contrary.
SECTION 7.07. Costs, Expenses and Taxes. The Company agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery, filing, recording and administration of this Agreement and any other
documents which may be delivered in connection with this Agreement, including,
without limitation, the reasonable costs incurred with each transfer of the
Letter of Credit, the reasonable fees and out-of-pocket expenses of counsel
for the Bank, and local counsel who may be retained by said counsel, with
respect thereto and with respect to advising the Bank as to its rights and
responsibilities under this Agreement and all costs and expenses (including
reasonable counsel fees and expenses) in connection with (i) the enforcement
of this Agreement and such other documents which may be delivered in
connection with this Agreement or (ii) any action or proceeding relating to a
court order, injunction or other process or decree restraining or seeking to
restrain the Bank from paying any amount under the Letter of Credit. In
addition, the Company shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement and such other documents, and
agrees to save the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees except for any penalties incurred as a result of the Bank's failure
to notify the Company of such stamp or other taxes or fees payable by the
Company of which the Bank has knowledge.
SECTION 7.08. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Company and the Bank and thereafter
shall be binding upon and inure to the benefit of the Company and the Bank and
their respective successors and assigns, except that the Company shall not
have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Bank. The Bank may, at its own expense,
assign (by way of participation or otherwise) to any financial institution all
or any part of, or any interest (undivided or divided) in, the Bank's rights
and benefits under this Agreement and the Letter of Credit, and to the extent
of that assignment such assignee shall have the same rights and benefits
against the Company hereunder and under the Letter of Credit as it would have
had if such assignee were the Bank issuing or paying under the Letter of
Credit hereunder.
SECTION 7.09. Waiver. The Bank waives any statutory right or other
right which it may have to set off and apply any deposits of the Company or
other indebtedness of the Company if, when and after there shall be a drawing
under the Letter of Credit during the pendency of any proceeding by or against
the Company seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property.
SECTION 7.10. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
SECTION 7.11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
SECTION 7.12. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
KANSAS CITY POWER & LIGHT COMPANY
By _________________________________
Senior Vice President
SOCIETE GENERALE, CHICAGO BRANCH
By _________________________________
Title:___________________________
By _________________________________
Title:___________________________
EXHIBIT A
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
IRREVOCABLE LETTER OF CREDIT
No. IC70349
August 19, 1993
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Dear Sirs:
We hereby establish at the request and for the account of Kansas City
Power & Light Company, a Missouri corporation (the "Company"), in your favor,
as Trustee under the Indenture of Trust dated as of September 1, 1985, (the
"Indenture") between the City of Burlington, Coffey County, Kansas (the
"Issuer") and you, pursuant to which $50,000,000 in aggregate principal amount
of the Issuer's Customized Purchase Pollution Control Refunding and
Improvement Revenue Bonds, Series 1985B (Kansas City Power & Light Company
Project) (the "Bonds"), are being issued, our Irrevocable Letter of Credit No.
IC70349, in the amount of $56,041,095.89 (as more fully described below),
effective immediately and expiring at the close of business at our 181 West
Madison, Suite 3400, Chicago, Illinois, 60602 office on August 18, 1996 or
such later date as we may agree to extend in writing (the "Scheduled
Termination Date").
We hereby irrevocably authorize you to draw on us, in an aggregate
amount not to exceed the amount of this Letter of Credit as set forth above
and in accordance with the terms and conditions and subject to the reductions
in amount as hereinafter set forth, as follows:
(1) in one or more drawings (subject to the next succeeding
paragraph) by one or more of your drafts, accompanied by your signed and
appropriately completed certificate in the form of Annex A attached
hereto (any such draft accompanied by such certificate being your
"Interest Draft"), an amount not exceeding $6,041,095.89;
(2) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex B attached hereto (any such draft accompanied by such
certificate being your "Tender Draft"), an aggregate amount not
exceeding $56,041,095.89;
(3) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex C attached hereto (any such draft accompanied by such
certificate being your "Redemption Draft"), an aggregate amount not
exceeding $50,000,000;
(4) in one or more drawings by one or more of your drafts,
accompanied by your signed and appropriately completed certificate in
the form of Annex D attached hereto (such draft accompanied by such
certificate being your "Purchase Draft"), an aggregate amount not
exceeding $50,000,000;
(5) in a single drawing by your draft, accompanied by your signed
and appropriately completed certificate in the form of Annex E attached
hereto (such draft accompanied by such certificate being your "Final
Draft"), an amount not exceeding $56,041,095.89.
Upon our honoring any Interest Draft presented by you hereunder, the
amount of this Letter of Credit and the amounts available to be drawn by you
by any subsequent Interest Draft, Tender Draft, or Final Draft shall be
automatically decreased by an amount equal to the amount of such Interest
Draft. If you shall not have received from us within 15 calendar days from
the date of such drawing a notice from us to the effect that we have not been
reimbursed for such drawing in the form of Annex F attached hereto
appropriately completed, your right to draw on us by any Interest Draft,
Tender Draft or Final Draft shall be automatically and irrevocably reinstated
in the amount of such drawing, effective the 16th calendar day from the date
of such drawing.
Upon our honoring any Redemption Draft or Purchase Draft presented by
you hereunder, the amount of this Letter of Credit and the amounts available
to be drawn by you by any subsequent Tender Draft, Redemption Draft, Purchase
Draft and Final Draft shall be automatically decreased by an amount equal to
the amount of such Redemption Draft or Purchase Draft. Upon our honoring any
Tender Draft presented by you hereunder, (i) the amount of this Letter of
Credit and the amounts available to be drawn by any subsequent Tender Draft
and Final Draft shall be automatically decreased by an amount equal to the
amount of such Tender Draft and (ii) the amounts available to be drawn by any
subsequent Redemption Draft and Purchase Draft shall be automatically
decreased by the amount set forth in clause (i) of paragraph 3 of the
Certificate accompanying such Tender Draft.
The amount of this Letter of Credit and the amounts from time to time
available to be drawn by you by any Tender Draft, or Final Draft shall be
increased when and to the extent, but only when and to the extent, that we are
reimbursed by the Company or by you, but only from amounts available to you
under the Indenture, on behalf of the Company for amounts drawn hereunder by
any Tender Draft or Purchase Draft, and that we receive a certificate in the
form of Annex H hereto setting forth the amount of such reimbursement. The
amounts from time to time available to be drawn by you by any Redemption Draft
or Purchase Draft shall be increased by the amount set forth in clause (i) of
paragraph 3 of the Certificate accompanying any Tender Draft or paragraph 3 of
a Certificate accompanying any Purchase Draft when and to the extent, but only
when and to the extent, that we are reimbursed by the Company or by you, but
only from amounts available to you under the Indenture, on behalf of the
Company for such amount drawn hereunder by any such Tender Draft or Purchase
Draft, and that we receive a certificate in the form of Annex H hereto setting
forth the amount of such reimbursement. Any amount received from you on
behalf of the Company in reimbursement of amounts drawn hereunder shall, if
accompanied by an appropriately completed and signed certificate in the form
of Annex H attached hereto from you, be applied to the extent of the amounts
indicated therein in reimbursement of unreimbursed drawings under your Tender
Drafts or Purchase Drafts. Amounts otherwise received from you on behalf of
the Company shall be applied in reimbursement of unreimbursed drawings made by
your Interest Draft.
The amount of this Letter of Credit and the amounts available to be
drawn by you by any Interest Draft, Tender Draft, Redemption Draft, Purchase
Draft, and Final Draft shall be decreased upon our receipt from you, of your
written and appropriately completed certificate signed by you in the form of
Annex G attached hereto, of a redemption or defeasance of less than all of the
Bonds outstanding, to the respective amounts stated in such certificate.
Each draft and certificate shall refer thereon to the number of this
Letter of Credit and shall be dated the date of its presentation, and shall be
drawn and presented at our office located at 181 West Madison, Suite 3400,
Chicago, Illinois, 60602 Attention: Letter of Credit Operations (or any office
which may be designated by us by written notice delivered to you). If we
receive any of your drafts and certificates (including a facsimile instead of
such drafts and certificates) at such office, all in strict conformity with
the terms and conditions of this Letter of Credit, on or prior to the
termination hereof and in any event on or before 12:00 p.m. (Chicago time) on
a Banking Day, we will honor the same by 3:00 p.m. on the same day in
accordance with your payment instructions. If we receive any of your drafts
and certificates (including a facsimile instead of such drafts and
certificates), all in strict conformity with the terms and conditions of this
Letter of Credit, after 12:00 p.m. (Chicago time) on a Banking Day prior to
the termination hereof, we will honor the same on the next succeeding Banking
Day in accordance with your payment instructions. If requested by you,
payment under this Letter of Credit may be made by wire transfer of
immediately available funds to your account in a bank or by deposit of same
day funds into a designated account that you maintain with us. The term
"Banking Day" means any day of the year other than a Saturday, Sunday or a day
on which banks are required or authorized to close in New York City or
Chicago.
Upon the earliest of (i) our honoring your Final Draft presented
hereunder, (ii) the surrender to us by you of this Letter of Credit for
cancellation, (iii) our honoring your Redemption Draft for all of the Bonds,
(iv) the close of business on the tenth day after date on which we receive
written notice from you that all of the Bonds have been converted to the Fixed
Interest Rate within the meaning of the Indenture, (v) the date on which we
receive written notice from you that there is no longer any Bond outstanding,
(vi) the date on which we receive written notice from you of the delivery of
an alternate letter of credit in accordance with the Indenture, and (vii) the
Scheduled Termination Date, this Letter of Credit shall automatically
terminate.
This Letter of Credit is transferable in its entirety, but not in part,
to any transferee who you certify has succeeded you as Trustee under the
Indenture and may be successively transferred by such transferee. Transfer of
the available balance under this Letter of Credit to such transferee shall be
effected by the presentation to us of this Letter of Credit accompanied by a
certificate in the form of Annex I attached hereto appropriately completed.
Upon such presentation we shall forthwith transfer the same to your transferee
or, if so requested by your transferee, issue an irrevocable letter of credit
to your transferee with provisions therein consistent with this Letter of
Credit.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificates and
the drafts referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificates and such drafts.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practice for Documentary Credit, International Chamber of
Commerce, Publication 400 (1983 revision) and, as to matters not covered
therein, by the laws of the State of Illinois, including without limitation
the Uniform Commercial Code as in effect in the State of Illinois.
Communications with respect to this Letter of Credit shall be in writing and
shall be addressed to us at 181 West Madison, Suite 3400, Chicago, Illinois,
60602 Attention: Letter of Credit Operations or fax (312) 578-5099,
specifically referring to the number of this Letter of Credit.
Anything to the contrary in Article 45 of the Uniform Customs
notwithstanding this Letter of Credit is intended to remain in full force and
effect until it expires in accordance with its terms. Any failure by you or
any successor trustee or co-trustee under the Indenture to draw upon this
Letter of Credit with respect to any payment in respect of the Bonds in
accordance with the terms and conditions of the Indenture shall not cause this
Letter of Credit to be unavailable for any future drawing in accordance with
the terms and conditions of the Indenture.
Very truly yours,
SOCIETE GENERALE, CHICAGO BRANCH
By__________________________________
Title:____________________________
By__________________________________
Title:____________________________
Annex A
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS
CUSTOMIZED PURCHASE POLLUTION CONTROL REFUNDING AND
IMPROVEMENT REVENUE BONDS, SERIES 1985B (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS")
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to (a) payments of interest on the Bonds, to the extent
moneys are not available in the Bond Fund from the sources set forth in
clauses (i) through (iii), inclusive of Section 504 of the Indenture,
which payments is [are]*** due on the [date on which this Certificate
and the Interest Draft it accompanies are being presented to the Bank.]*
[Banking Day following the date on which this Certificate and the
Interest Draft it accompanies are being presented to the Bank.]** [CP
Dates (as defined in the Indenture) established for the current calendar
month.]*** No amount is being drawn hereunder for the Bonds held under
the Custody Agreement (as defined in the Indenture) except for drawings
for scheduled interest due to a Bondholder for a Bond which was tendered
for purchase under the Indenture by such Bondholder between the most
recent Interest Accrual Date (as defined in the Indenture) and the next
ensuing Interest Payment Date (as defined in the Indenture) and such
Bonds were not held under the Custody Agreement on the immediately
preceding Interest Accrual Date.
_______________
* To be used if the Certificate and Interest Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Interest Draft are presented after
12:00 p.m. (Chicago time).
*** To be used while the Bonds bear interest at the CP Rate.
(3) The amount of the Interest Draft accompanying this
Certificate is equal to $___________. It was computed in compliance
with the terms and conditions of the Bonds and the Indenture and does
not include any amount of interest on the Bonds which is included in any
Tender Draft or Final Draft presented on the date of this Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By__________________________________
[Name and Title]
Annex B
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
AND INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS,
SERIES 1985B (KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS")
IN SUPPORT OF A TENDER PURSUANT TO SECTION 301, 302, 303, 304 OR 305 OF
THE INDENTURE.
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment of (i) the purchase price equal to the
unpaid principal amount of the Bonds to be purchased as a result of a
tender on or prior to the effective date of the Fixed Interest Rate (as
defined in the Indenture) pursuant to the terms of Section 301, 302,
303, 304 or 305 of the Indenture (other than as provided below) and
(ii) the purchase price equal to the amount of interest accrued and
unpaid to the purchase date from the immediately preceding Interest
Accrual Date (as defined in the Indenture), to the extent moneys are not
available from the sources set forth in clauses (i) through (iv),
inclusive, of Section 306 of the Indenture, which payment is due on the
[date on which this Certificate and the Tender Draft it accompanies are
being presented to the Bank.]* [Banking Day following the date on which
this certificate and the Tender Draft it accompanies are being presented
to the Bank.]** No amount is being drawn hereunder for the Bonds held
under the Custody Agreement (as defined in the Indenture).
_______________
* To be used if the Certificate and Tender Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Tender Draft are presented after 12:00
p.m. (Chicago time).
(3) The amount of the Tender Draft accompanying this Certificate
is equal to the sum of (i) $__________ being drawn in respect of the
payment of the portion of the purchase price of the Bonds equal to the
unpaid principal of Bonds (other than as provided below) to be purchased
as a result of a tender pursuant to Section 301, 302, 303, 304 or 305 of
the Indenture and (ii) $__________ being drawn in respect of the payment
of the portion of the purchase price of the Bonds equal to the accrued
and unpaid interest on such Bonds and does not include any amount of
interest which is included in any Tender Draft (unless such amount has
been reinstated by the Bank) or Final Draft presented on or prior to the
date of this Certificate. No amount is being drawn hereunder for the
Bonds held under the Custody Agreement (as defined in the Indenture).
(4) The amount of the Tender Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds
and the Indenture and does not exceed the amount available to be drawn
by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex C
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
PRINCIPAL OF THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS
CUSTOMIZED PURCHASE POLLUTION CONTROL REFUNDING AND
IMPROVEMENT REVENUE BONDS, SERIES 1985B (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS") UPON REDEMPTION
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment upon redemption [of all] [less than all]* of
the Bonds on or prior to the effective date of the Fixed Interest Rate
(as defined in the Indenture) of the unpaid principal amount of the
Bonds to be redeemed pursuant to the terms of Sections 310, 311 or 312
of the Indenture (other than as provided below), to the extent moneys
are not available in the Bond Fund from the sources set forth in clauses
(i) through (iii), inclusive, of Section 504 of the Indenture, which
payment is due on the [date on which this Certificate and the Redemption
Draft it accompanies are being presented to the Bank.]** [Banking Day
following the date on which this Certificate and the Redemption Draft it
accompanies are being presented to the Bank.]*** No amount is being
drawn hereunder for the Bonds held under the Custody Agreement (as
defined in the Indenture).
_______________
* Insert appropriate description.
** To be used if the Certificate and Redemption Draft are presented not
later than 12:00 p.m. (Chicago time).
*** To be used if the Certificate and Redemption Draft are presented after
12:00 p.m. (Chicago time).
(3) The amount of the Redemption Draft accompanying this
Certificate is equal to the sum of $_________ being drawn in respect of
the payment of unpaid principal of Bonds (other than Bonds registered in
the name of the Company which are presently held by the Company or the
Custodian on behalf of the Company) to be redeemed, the accrued interest
if any on the Bonds to be paid through an interest draft.
(4) The amount of the Redemption Draft accompanying this
Certificate was computed in accordance with the terms and conditions of
the Bonds and the Indenture and does not exceed the amount available to
be drawn under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ______________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex D
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE
POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985B
(KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS") IN SUPPORT OF
A PURCHASE
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch, (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, on or prior to the effective date of the
Fixed Interest Rate (as defined in the Indenture), of the unpaid
principal amount of the Bonds to be purchased by the Company in lieu of
redemption pursuant to the terms of Section 314 of the Indenture (other
than as provided below), to the extent moneys are not available in the
Bond Fund from the sources set forth in clauses (i) through (iii),
inclusive, of Section 306 of the Indenture, which payment is due on the
[date on which this Certificate and the Purchase Draft it accompanies
are being presented to the Bank.]* [Banking Day following the date on
which this Certificate and the Purchase Draft it accompanies are being
presented to the Bank.]** No amount is being drawn hereunder for the
Bonds held under the Custody Agreement (as defined in the Indenture).
_______________
* To be used if the Certificate and Purchase Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Purchase Draft are presented after
12:00 p.m. (Chicago time).
(3) The amount of the Purchase Draft accompanying this
Certificate is equal to the sum of $__________ being drawn in respect of
the payment of unpaid principal of Bonds (other than Bonds registered in
the name of the Company which are presently held by the Company or the
Custodian on behalf of the Company) to be purchased by the Company in
lieu of redemption.
(4) The amount of the Purchase Draft accompanying this
Certificate was computed in compliance with the terms and conditions of
the Bonds and the Indenture and does not exceed the amount available to
be drawn by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex E
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF PRINCIPAL OF
AND INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REFUNDING AND IMPROVEMENT REVENUE BONDS,
SERIES 1985B (KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE "BONDS"),
UPON STATED OR ACCELERATED MATURITY
Irrevocable Letter of Credit No. IC70349
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon stated or accelerated maturity of the
unpaid principal amount of, and, to the extent such payment is not due
on an Interest Payment Date within the meaning of the Indenture, of
accrued and unpaid interest on, all of the Bonds (other than as provided
below), to the extent moneys are not available in the Bond Fund from the
sources set forth in clauses (i) through (iii), inclusive, of Section
504 of the Indenture, which payment is due on [the date on which this
Certificate and the Final Draft it accompanies are being presented to
the Bank.]* [the Banking Day following the date on which this
certificate and the Final Draft it accompanies are being presented to
the Bank.]** No amount is being drawn hereunder for the Bonds held
under the Custody Agreement (as defined in the Indenture).
_______________
* To be used if the Certificate and Final Draft are presented not later
than 12:00 p.m. (Chicago time).
** To be used if the Certificate and Final Draft are presented after 12:00
p.m. (Chicago time).
(3) The amount of the Final Draft accompanying this Certificate
is equal to the sum of (i) $_________ being drawn in respect of the
payment of unpaid principal of all of the Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or the Custodian on behalf of the Company) and (ii) $________
being drawn in respect of the payment of accrued and unpaid interest on
such Bonds (other than as provided below) and does not include any
amount of interest which is included in any Interest Draft or Tender
Draft (unless such amount has been reinstated by the Bank), presented on
or prior to the date of this Certificate. No amount is being drawn
hereunder for the Bonds held under the Custody Agreement (as defined in
the Indenture).
(4) The amount of the Final Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds
and the Indenture and does not exceed the amount available to be drawn
by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex F
NOTICE THAT TRUSTEE'S RIGHT TO DRAW
UNDER THE LETTER OF CREDIT BY AN
INTEREST DRAFT HAS NOT BEEN REINSTATED
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Irrevocable Letter of Credit No. IC70349
Dear Sirs:
You are hereby advised that Kansas City Power & Light Company has not
reimbursed us in an amount equal to the amount drawn by you under the Interest
Draft dated __________, 19___. Therefore, the amount of our Irrevocable
Letter of Credit No. IC70349 and the amounts available to be drawn by you by
an Interest Draft, Tender Draft or Final Draft (which available amounts have
been decreased by an amount equal to the amount of such Interest Draft) shall
not be reinstated in the amount of such Interest Draft.
____________________________
____________________________
Annex G
CERTIFICATE FOR THE REDUCTION OF AMOUNTS AVAILABLE UNDER
LETTER OF CREDIT NO. IC70349 DATED AUGUST 19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch, (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee hereby notifies you that on or prior to the date
hereof $_________ principal amount of the Bonds have been redeemed or
defeased and paid pursuant to the Indenture.
(3) Following the redemption or the defeasance and payment
referred to in paragraph (2) above, the aggregate principal amount of
all of the Bonds outstanding is $__________.
(4) The maximum amount of interest for 285 days (computed at 15%
per annum), accruing on the Bonds referred to in paragraph (3) above is
$__________.
(5) The amount available to be drawn by the Trustee under the
Letter of Credit by any Interest Draft is reduced to $___________ (such
amount being equal to the amount specified in paragraph (4) above) upon
receipt by the Bank of this Certificate.
(6) The amount available to be drawn by the Trustee under the
Letter of Credit by any Tender Draft is reduced to $_______ (such amount
being equal to the amounts specified in paragraphs (3) and (4) above)
upon receipt by the Bank of this Certificate.
(7) The amount available to be drawn by the Trustee under the
Letter of Credit by any Redemption Draft is reduced to $________ (such
amount being equal to the amount specified in paragraph (3) above).
(8) The amount available to be drawn by the Trustee under the
Letter of Credit by any Purchase Draft is reduced to $_________ (such
amount being equal to the amount specified in paragraph (3) above).
(9) The amount available to be drawn by the Trustee under the
Letter of Credit by its Final Draft is reduced to $_______
(such amount being equal to the amounts specified in paragraph (3) and
(4) above) upon receipt by the Bank of this Certificate.
(10) The amount of the Letter of Credit is reduced to $__________
(such amount being equal to the sum of the amounts specified in
paragraph (3) and (5) above) upon receipt by the Bank of this
Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
Annex H
CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE UNDER
IRREVOCABLE LETTER OF CREDIT NO. IC70349 DATED AUGUST 19,
1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Societe Generale, Chicago Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. IC70349 (the
"Letter of Credit"), the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The amount of $_________ which has been finally paid to you
today by the Trustee on behalf of the Company is a payment made to
reimburse you pursuant to Section 1.08[(c)]* or [(d)]** of the Letter of
Credit and Reimbursement Agreement, dated as of August 19, 1993 (the
"Reimbursement Agreement"), between the Company and the Bank, for
amounts drawn under the Letter of Credit by [Tender Drafts]* [Purchase
Drafts].**
(3) Of the amount referred to in paragraph (2), $____________
represents the principal amount of Bonds to be resold on behalf of the
Company.
[(4) Of the amount referred to in paragraph (2), $__________
represents accrued interest on Bonds calculated in accordance with
clause (ii) of Section 1.08(c) of the Reimbursement Agreement.]*
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By_________________________________
[Name and Title]
* To be used in connection with reimbursement for amounts drawn under
Tender Drafts.
** To be used in connection with reimbursement for amounts drawn under
Purchase Drafts.
Annex I
INSTRUCTION TO TRANSFER
________________, 19___
Attention: Letter of Credit Operations
Re: Irrevocable Letter of Credit No. IC70349
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
________________________________________
[Name of Transferee]
________________________________________
[Address]
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Indenture (as defined in the Letter of
Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however, that
no rights shall be deemed to have been transferred to the transferee until
such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith we
ask that this transfer be effective and that you transfer the same to our
transferee or that, if so requested by the transferee, you issue a new
irrevocable letter of credit in favor of the transferee with provisions
consistent with the Letter of Credit.
Very truly yours,
UNITED STATES TRUST COMPANY OF
NEW YORK,
as predecessor Trustee
By_________________________________
[Name and title]
EXHIBIT B
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF COUNSEL FOR THE COMPANY
August 19, 1993
Societe Generale, Chicago Branch
181 West Madison, Suite 3400
Chicago, IL 60602
Kansas City Power & Light Company
Gentlemen:
I am Chief Legal Officer of Kansas City Power & Light Company, a
Missouri corporation (the "Company"), and am familiar with the matters
relating to the preparation, execution and delivery of a Letter of Credit and
Reimbursement Agreement (the "Reimbursement Agreement") dated as of August 19,
1993, between the Company and Societe Generale, Chicago Branch (the "Bank").
Among other things, I have examined:
(1) a fully executed counterpart of the Reimbursement Agreement;
(2) the fully executed Letter of Credit;
(3) the fully executed Indenture;
(4) the fully executed Lease;
(5) the fully executed Sublease;
(6) the fully executed Custody Agreement and Amendment No. 1
thereto;
(7) the Articles of Incorporation of the Company and all
amendments thereto (the "Charter");
(8) the by-laws of the Company as now in effect (the "By-laws");
and
(9) the Company's corporate proceedings and the proceedings
before the public utility regulatory commissions of the States of
Missouri and Kansas relating to the Reimbursement Agreement and related
matters.
I have also examined the originals, or copies certified to my satis-
faction, of (i) such other corporate records of the Company, certificates of
public officials and of officers of the Company, (ii) the agreements,
instruments and documents which affect or purport to affect the obligations of
the Company under the Reimbursement Agreement, and (iii) such other
agreements, instruments and documents as we have deemed necessary as a basis
for the opinions hereinafter expressed. I have assumed the due execution and
delivery, pursuant to due authorization, of the Reimbursement Agreement by the
Bank. All capitalized terms used herein and defined in the Reimbursement
Agreement are used herein as therein defined.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the opinion that:
(1) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri and is duly
qualified to do business in, and is in good standing under the laws of,
the State of Kansas.
(2) The execution, delivery and performance by the Company of the
Reimbursement Agreement and each Related Document to which it is a party
are within the Company's corporate power, have been duly authorized by
all necessary corporate action, do not contravene (i) the Company's
charter or by-laws, or (ii) any law, rule or regulation applicable to
the Company, or (iii) any contractual or legal restriction (including,
but not limited to, the Indenture) binding on or affecting the Company,
and do not result in or require the creation of any lien, security
interest or other charge or encumbrance (other than pursuant to the
Reimbursement Agreement and the Related Documents) upon or with respect
to any of its properties. The Reimbursement Agreement and each Related
Document to which the Company is a party have been duly executed and
delivered on behalf of the Company.
(3) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into the Reimbursement Agreement, and the commissions
have duly issued previous orders authorizing the Company to enter into
the Lease, the Sublease and any other documents that such commissions
have jurisdiction over and to which the Company is a party and the
Related Documents to which the Company is a party, and such orders
remain in full force and effect in the form issued. Except for the
approvals of the Kansas Department of Economic Development, the Board of
Commissioners of Coffey County, Kansas, and the City Council of the City
of Burlington, Kansas, approving issuance of the Bonds, which approvals
have been duly obtained and are in full force and effect, and the notice
of timely filing with the Board of Tax Appeals of the State of Kansas,
no other authorization, approval or other action by, and no notice to or
filing or registration with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by the
Company of the Reimbursement Agreement or any Related Document to which
it is a party.
(4) The Reimbursement Agreement and each Related Document to
which the Company is a party are the legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with their respective terms.
(5) Except as disclosed in the Company's Form 10-K for the year
1992, Forms 10-Q for the periods March 31, 1993 and June 30, 1993, and
Form 8-K dated August 16, 1993, there is no pending or, to the best of
my knowledge, threatened action or proceeding before any court,
governmental agency or arbitrator against, directly involving or
affecting the Company or any of its subsidiaries, which, in any case,
may materially and adversely affect the financial condition or
operations of the Company.
The opinions set forth above are subject to the following qualifica-
tions:
(a) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a party
is subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally.
(b) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a
party, may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
I am not licensed to practice law in the State of Illinois or the State
of Kansas. With respect to the Reimbursement Agreement and the Related
Documents and any other document to which the laws of either the State of
Illinois or the State of Kansas are applicable, I have assumed for purposes of
this opinion that such laws (other than conflict of laws) are substantially
similar to the laws of the State of Missouri. With respect to the conclusions
set forth herein, I express no opinions as to any laws other than the laws of
the State of Missouri and the Federal laws of the United States.
Very truly yours,
EXHIBIT C
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF BOND COUNSEL
[Letterhead of Chapman and Cutler]
August 19, 1993
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Societe Generale, Chicago Branch
181 West Madison Street
Chicago, Illinois 60602
Re: $50,000,000 City of Burlington, Kansas Customized Purchase Pollution
Control Refunding and Improvement Revenue Bonds, Series 1985B (Kansas
City Power & Light Company Project)
Ladies and Gentlemen:
The above-referenced bonds (the "Bonds") were issued under and are secured
by an Indenture of Trust dated as of September 1, 1985 (the "Indenture"),
between the City of Burlington, Kansas (the "Issuer") and United States Trust
Company of New York, as trustee (the "Trustee"). Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to them in the
Indenture.
Kansas City Power & Light Company (the "Company") has requested we
provide the opinion of Bond Counsel required by Section 4.4(a) of the Series
1985B Equipment Sublease Agreement dated as of September 1, 1985
(the "Sublease") between the Issuer and the Company and Section 505(c) of the
Indenture with respect to the issuance of Letter of Credit No. IC 70349 of
even date herewith (the "Letter of Credit") issued by Societe Generale, Chicago
Branch (the "Bank").
On the basis of our review of the Letter of Credit, the Indenture, the
Sublease, photocopies of various counsel opinions dated September 26, 1985
(which have been identified as authentic copies of the original opinions and
of which we have assumed the authenticity), and such other documents as we
have considered necessary, we are of the opinion that the delivery of the
Letter of Credit is authorized under the Sublease and complies with its terms.
We express no opinion as to whether the Letter of Credit is a legal,
valid, binding and enforceable obligation of the Bank in accordance with its
terms.
Respectfully submitted,
AGBacon
EXHIBIT D
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
ENCUMBRANCES
(a) liens for taxes, assessments or governmental charges not
delinquent, liens for workmen's compensation awards and similar obligations
not delinquent, and liens for labor, materials or supplies not delinquent;
(b) liens of the character specified in subparagraph (a) above, whether
or not delinquent, the validity of which is being contested at the time by the
Company in good faith, unless thereby in the opinion of counsel or of the
Trustees, as defined in the Mortgage, any of the mortgaged property may be
lost or forfeited;
(c) liens, neither assumed by the Company nor on account of which it
customarily pays interest, existing upon real estate or rights in or relating
to real estate now owned or hereafter acquired or now or hereafter leased by
the Company for substation, transmission line, distribution line, pipe line,
conduit, storage or right-of-way purposes;
(d) undetermined liens or charges incidental to construction or current
operations;
(e) the liens of any judgments in an aggregate amount of not in excess
of $50,000, or the lien of any judgment the execution of which has been stayed
or which has been appealed and secured, if necessary, by the filing of an
appeal bond, or the lien of any judgment in respect of which moneys in the
amount of the judgment have been deposited with the Trustee, as defined in the
Mortgage, to be held as part of the trust estate and to be withdrawn only as
provided in subdivision (e) of Section 8.01 of the Mortgage;
(f) easements, rights-of-way, licenses, exceptions, reservations or
restrictions, and agreements for the joint or common use of property, which do
not materially impair the use of the affected property in the operation of the
business of the Company;
(g) the right reserved to, or vested in, any municipality or public
authority by the terms of any franchise, grant, license or permit, or by any
provision of law, to terminate such franchise, grant, license or permit or to
purchase or appropriate or recapture or to designate a purchaser of any of the
mortgaged property, or to demand and collect from the Company any tax or other
compensation for the use of streets, alleys or other public places;
(h) rights reserved to, or vested in, any municipality or public
authority to use, control, remove or regulate any property of the Company;
(i) rights reserved to or vested in others to take or receive any part
of the electricity, gas, steam or water generated or produced by or from any
property of the Company;
(j) zoning laws and ordinances; and
(k) possible adverse rights or interests and inconsequential defects or
irregularities in title which, in the opinion of counsel, may properly be
disregarded.
[1987A] EXHIBIT 10-k
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
between
KANSAS CITY POWER & LIGHT COMPANY
and
THE TORONTO-DOMINION BANK
dated as of August 19, 1993
TABLE OF CONTENTS
Section Page
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
1.01 The Letter of Credit . . . . . . . . . . . . . . . . . . . . .1
1.02 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . .1
1.03 Tender Advances and Accrued Interest Advances . . . . . . . .2
1.04 Redemption Advances and Purchase Advances . . . . . . . . . .2
1.05 Interest Advances . . . . . . . . . . . . . . . . . . . . . .3
1.06 Interest on Overdue Amounts . . . . . . . . . . . . . . . . .3
1.07 Interest Payments . . . . . . . . . . . . . . . . . . . . . .3
1.08 Selection of Interest Rates. . . . . . . . . . . . . . . . . .4
(a) Tender Advances . . . . . . . . . . . . . . . . . . . . .4
(b) Term Advances . . . . . . . . . . . . . . . . . . . . . .4
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . .4
1.10 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . .6
1.11 Other Payments . . . . . . . . . . . . . . . . . . . . . . . .7
1.12 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . .7
1.13 Additional Interest . . . . . . . . . . . . . . . . . . . . .9
1.14 Payments and Computations . . . . . . . . . . . . . . . . . .10
1.15 Payment on Non-Business Days . . . . . . . . . . . . . . . . .10
1.16 Extension of the Letter of Credit and Repayment. . . . . . . .10
1.17 Obligations Absolute . . . . . . . . . . . . . . . . . . . . .11
ARTICLE II
CONDITIONS OF ISSUANCE
2.01 Condition Precedent to Issuance of the
Letter of Credit . . . . . . . . . . . . . . . . . . . . . .11
2.02 Additional Conditions Precedent to Issuance
of the Letter of Credit . . . . . . . . . . . . . . . . . .12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties . . . . . . . . . . . . . . . .12
ARTICLE IV
COVENANTS OF THE COMPANY
4.01 Affirmative Covenants . . . . . . . . . . . . . . . . . . . .14
a. Preservation of Corporate Existence, Etc. . . . . . . . .14
b. Compliance with Laws, Etc. . . . . . . . . . . . . . . . .15
c. Maintenance of Insurance, Etc. . . . . . . . . . . . . . .15
d. Visitation Rights . . . . . . . . . . . . . . . . . . . .15
e. Keeping of Books . . . . . . . . . . . . . . . . . . . . .15
f. Maintenance of Properties . . . . . . . . . . . . . . . .15
g. Reporting Requirements . . . . . . . . . . . . . . . . . .15
h. Officer's Certificate . . . . . . . . . . . . . . . . . .16
i. Other Agreements . . . . . . . . . . . . . . . . . . . . .16
j. Redemption or Defeasance of Bonds . . . . . . . . . . . .16
k. Registration of Bonds . . . . . . . . . . . . . . . . . .16
4.02 Negative Covenants . . . . . . . . . . . . . . . . . . . . . .16
a. Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . .17
b. Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . .17
c. Sales, Etc. of Assets . . . . . . . . . . . . . . . . . .17
d. Compliance with ERISA . . . . . . . . . . . . . . . . . .18
e. Amendment of Indenture or Related Document . . . . . . . .18
ARTICLE V
EVENTS OF DEFAULT
5.01 Events of Default . . . . . . . . . . . . . . . . . . . . . .18
5.02 Upon an Event of Default . . . . . . . . . . . . . . . . . . .19
ARTICLE VI
DEFINITIONS
6.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE VII
MISCELLANEOUS
7.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . .24
7.02 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . .24
7.03 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . .25
7.04 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . .25
7.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . .25
7.06 Liability of the Bank . . . . . . . . . . . . . . . . . . . .26
7.07 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . .27
7.08 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . .27
7.09 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
7.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . .27
7.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .27
7.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . .28
EXHIBIT A - Form of Irrevocable Letter of Credit with Annexes A
through I thereto
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C - Form of Opinions of Bond Counsel
EXHIBIT D - Encumbrances
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT dated as of August 19,
1993, between KANSAS CITY POWER & LIGHT COMPANY, a corporation organized and
existing under the laws of the State of Missouri (the "Company"), and THE
TORONTO-DOMINION BANK (the "Bank"). (Unless otherwise indicated, all
capitalized terms used herein shall have the meaning referred to or set forth
in Article VI hereof.)
WHEREAS, the Company requested the City of Burlington, Coffey County,
Kansas (the "Issuer") to issue pursuant to an Indenture of Trust dated as of
October 1, 1987 (the "Indenture"), naming Chemical Bank, as trustee (the
"Trustee"), $50,000,000 aggregate principal amount of the Issuer's Customized
Purchase Pollution Control Revenue Refunding Bonds, Series 1987A (Kansas City
Power & Light Company Project) (the "Bonds") to various purchasers (the "Bond
Purchasers") to refinance a portion of the costs of acquisition,
construction, and installation of certain air and water pollution control and
sewage and solid waste disposal facilities (the "Project") in Coffey County,
Kansas; and
WHEREAS, pursuant to an Equipment Lease Agreement (the "Lease") dated
as of October 1, 1987, between the Company and the Issuer, the Company has
agreed to use the proceeds of the Bonds for the refinancing of the Project,
and the Company will lease the Project to the Issuer, and pursuant to an
Equipment Sublease Agreement (the "Sublease") dated as of October 1, 1987,
between the Issuer and the Company, the Project will be subleased by the
Issuer to the Company for payments to be made by the Company in such amounts
and at such times as will be sufficient to timely pay the principal and
interest on the Bonds; and
WHEREAS, in order to induce the Bond Purchasers to purchase the Bonds,
the Company has requested the Bank to issue its irrevocable transferable
letter of credit in substantially the form of Exhibit A appropriately
completed (such letter of credit and any successor letter of credit as
provided in such letter of credit being the "Letter of Credit") in the amount
of $54,684,931.51 of which $50,000,000 shall support the payment of the
principal of the Bonds, and $4,684,931.51 shall support the payment of up to
285 days' accrued interest (computed at 12%) on the Bonds.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit, the parties hereto agree as follows:
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
SECTION 1.01. The Letter of Credit. On the terms and conditions
hereinafter set forth, the Bank agrees, upon the request of the Company, to
issue the Letter of Credit dated August 19, 1993, to the Trustee in an amount
not to exceed $54,684,931.51 (the "Commitment") and expiring on or before the
Scheduled Termination Date.
SECTION 1.02. Reimbursement. Subject to Section 1.03 in the case of
a drawing under the Letter of Credit made pursuant to a Tender Draft and
Section 1.04 in the case of a drawing under the Letter of Credit made
pursuant to a Redemption Draft or a Purchase Draft and Section 1.05 in the
case of a drawing under the Letter of Credit made pursuant to an Interest
Draft, the Company hereby agrees to pay to the Bank on demand (i) on and
after the date on which the Bank shall pay any draft presented under the
Letter of Credit a sum equal to the amount so paid under the Letter of
Credit, plus (ii) interest on any amount remaining unpaid by the Company to
the Bank under clause (i) above from and including the date such draft was
paid by the Bank until such amount becomes due, at such fluctuating interest
rate per annum as shall be in effect from time to time pursuant to Section
1.06 herein.
SECTION 1.03. Tender Advances and Accrued Interest Advances. (a) If
the Bank shall make any payment under the Letter of Credit pursuant to a
Tender Draft, that portion of such payment with respect to the amount of
unpaid principal of the Bonds under such Tender Draft shall constitute a
tender advance made by the Bank to the Company on the date and in the amount
of such payment, each such advance being a "Tender Advance" and collectively
the "Tender Advances." The Company shall repay the aggregate unpaid
principal amount of all Tender Advances on the Termination Date - Letter of
Credit. That portion of the payment equal to the accrued interest, if any,
on the Bonds under such Tender Draft shall constitute an accrued interest
advance made by the Bank to the Company on the date and in the amount of such
payment, each such advance being an "Accrued Interest Advance" and
collectively the "Accrued Interest Advances." The Company shall repay the
unpaid principal amount of any Accrued Interest Advance and accrued interest
thereon on the earlier of the first business day of the next calendar month
and the Termination Date - Letter of Credit. If certified to the Bank by the
Company as a payment being made pursuant to this Section 1.03(a), upon such
repayment, the Bank shall reinstate the Letter of Credit in the principal
amount of such Accrued Interest Advance being repaid. The Bank shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Company resulting from each Tender Advance
and each Accrued Interest Advance made from time to time and the amounts of
principal and interest payable and paid from time to time hereunder. In any
legal action or proceeding in respect of this Agreement, the entries made in
such account shall, in the absence of manifest error, be conclusive evidence
of the existence and amounts of the obligations of the Company therein
recorded.
(b) The Company shall pay interest on the unpaid principal amount of
each Tender Advance from the date of such Tender Advance until such principal
amount shall become due, at the Domestic Rate, the Eurodollar Rate, or the CD
Bid Rate, as selected by the Company pursuant to Section 1.08(a). The
Company shall pay interest on the unpaid principal amount of each Accrued
Interest Advance from the date of such Accrued Interest Advance until such
principal amount shall become due, at the Domestic Rate.
SECTION 1.04. Redemption Advances and Purchase Advances. (a) If the
Bank shall make any payment under the Letter of Credit pursuant to a
Redemption Draft, such payment shall constitute a redemption advance made by
the Bank to the Company on the date and in the amount of such payment, each
such redemption advance being a "Redemption Advance" and collectively the
"Redemption Advances." If the Bank shall make any payment under the Letter
of Credit pursuant to a Purchase Draft and the conditions set forth in
Section 2.03 shall have been fulfilled, such payment shall constitute a
purchase advance made by the Bank to the Company on the date and in the
amount of such payment, each such purchase advance being a "Purchase Advance"
and collectively the "Purchase Advances." (Purchase Advances together with
Redemption Advances are hereinafter sometimes referred to individually as a
"Term Advance" and collectively as the "Term Advances.")
(b) The Company shall repay the aggregate unpaid principal amount of
all Term Advances on the Termination Date - Letter of Credit. The Bank shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Company resulting from each Redemption
Advance and Purchase Advance made from time to time and the amounts of
principal and interest payable and paid from time to time hereunder. In any
legal action or proceeding in respect of this Agreement, the entries made in
such account or accounts shall, in the absence of manifest error, be
conclusive evidence of the existence and amounts of the obligations of the
Company therein recorded.
(c) The Company shall pay interest on the unpaid principal amount of
each Term Advance from the date of such Term Advance until such principal
amount shall become due, at the Term Rate, the Term Eurodollar Rate or the
Term CD Bid Rate, as selected by the Company pursuant to Section 1.08(b).
SECTION 1.05. Interest Advances. (a) If the Bank shall make any
payment under the Letter of Credit pursuant to an Interest Draft, such
payment shall constitute an interest advance made by the Bank to the Company
on the date and in the amount of such payment, each such interest advance
being an "Interest Advance" and collectively the "Interest Advances." The
Company shall repay each Interest Advance on the same day such Interest
Advance is made by the Bank.
(b) The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company resulting from
each Interest Advance made from time to time and the amounts of principal and
interest payable and paid from time to time hereunder. In any legal action
or proceeding in respect of this Agreement, the entries made in such account
shall, in the absence of manifest error, be conclusive evidence of the
existence and amounts of the obligations of the Company therein recorded.
SECTION 1.06. Interest on Overdue Amounts. Any amount of any Tender
Advance or any Accrued Interest Advance which is not paid when due, whether
at stated maturity, by acceleration or otherwise, shall bear interest from
and including the date the same becomes due until such amount is paid in
full, payable on demand, at a rate per annum equal to 1-1/2% above the Prime
Rate. Any amount of any Term Advance which is not paid when due, whether at
stated maturity, by acceleration or otherwise, shall bear interest from and
including the date the same becomes due until such amount is paid in full,
payable on demand, at a rate per annum equal to 1-5/8% above the Prime Rate.
Any amount of any Interest Advance which is not paid when due shall bear
interest from and including the date the same becomes due until such amount
is paid in full, payable on demand, at a rate per annum equal to 1-1/2% above
the Prime Rate. Except as provided above, any other amount due hereunder
which is not paid when due shall bear interest from and including the date
the same becomes due until such amount is paid in full at a rate per annum
equal to 1-1/2% above the Prime Rate.
SECTION 1.07. Interest Payments. The Company shall pay interest in
arrears on the unpaid principal amount of each Advance from the date of such
Advance until such principal amount shall become due, payable (i) quarterly
on the last day of each March, June, September and December during the term
thereof, and (ii) in addition, on the last day of each Interest Period (as
hereinafter defined) for such Advance if such Advance is a Eurodollar
Advance, a Term Eurodollar Advance, a CD Bid Advance or a Term CD Bid
Advance. The Company shall pay interest in arrears on the unpaid principal
amount of each Accrued Interest Advance from the date of such Accrued
Interest Advance until such principal amount shall become due, payable on the
first business day of the next calendar month.
SECTION 1.08. Selection of Interest Rates. (a) Tender Advances.
Subject to Sections 1.09(c) and (d) below, the Company may from time to time
select for each Tender Advance in an unpaid principal amount equal to or
greater than $1,000,000 either the Domestic Rate, the Eurodollar Rate or the
CD Bid Rate, provided that the Company shall also select a Business Day on
which the Domestic Rate, the Eurodollar Rate or the CD Bid Rate, as the case
may be, shall begin for such Tender Advance and that telephonic notice
thereof (such notice to be confirmed by the Company immediately in writing)
is given to the Bank on or before such Business Day in the case of selection
of the Domestic Rate and at least two Business Days prior to such Business
Day in the case of selection of the CD Bid Rate or the Eurodollar Rate. The
interest rate selected for any Tender Advance by the Company pursuant to this
Section 1.08(a) shall continue thereafter in effect for such Tender Advance
until the Business Day which the Company shall subsequently select pursuant
hereto as the Business Day on which another interest rate hereunder shall
begin for such Tender Advance. If during the term of any Tender Advance the
Company changes the interest rate for such Tender Advance from the Eurodollar
Rate or the CD Bid Rate to another rate, the Business Day on which such other
rate shall then begin shall be the last day of the Interest Period for such
Tender Advance. In the event that the Tender Advance shall be in an amount
less than $1,000,000 or the Company shall fail to select an interest rate,
the interest rate shall be the Domestic Rate.
(b) Term Advances. Subject to Sections 1.09(c) and (e), the Company
may from time to time select for each Term Advance in an unpaid principal
amount equal to or greater than $1,000,000 either the Term Rate, the Term
Eurodollar Rate or the Term CD Bid Rate, provided that the Company shall also
select a Business Day on which the Term Rate, the Term Eurodollar Rate or the
Term CD Bid Rate, as the case may be, shall begin for such Term Advance and
that telephonic notice thereof (such notice to be confirmed by the Company
immediately in writing) is given to the Bank on or before such Business Day
in the case of selection of the Term Rate and at least two Business Days
prior to such Business Day in the case of selection of the Term CD Bid Rate
or the Term Eurodollar Rate. The interest rate selected for any Term Advance
by the Company pursuant to this Section 1.08(b) shall continue thereafter in
effect for such Term Advance until the Business Day which the Company shall
subsequently select pursuant hereto as the Business Day on which another
interest rate hereunder shall begin for such Term Advance. If during the
term of any Term Advance the Company changes the interest rate for such Term
Advance from the Term Eurodollar Rate or the Term CD Bid Rate to another
rate, the Business Day on which such other rate shall then begin shall be the
last day of the Interest Period for such Term Advance. In the event that the
Term Advance shall be in an amount less than $1,000,000 or the Company shall
fail to select an interest rate, the interest rate shall be the Term Rate.
SECTION 1.09. Interest Periods. (a) If and so long as the Eurodollar
Rate shall be selected for any Tender Advance or the Term Eurodollar Rate
shall be selected for any Term Advance, the period between the Business Day
on which such rate shall then begin for such Eurodollar Advance or Term
Eurodollar Advance, as the case may be, and the date of payment in full of
such Eurodollar Advance or Term Eurodollar Advance, as the case may be, shall
be divided into successive periods, each such period being an "Interest
Period" for such Eurodollar Advance or Term Eurodollar Advance, as the case
may be. The initial Interest Period for such Eurodollar Advance or Term
Eurodollar Advance, as the case may be, at that time shall begin on such
Business Day and each subsequent Interest Period for such Eurodollar Advance
or Term Eurodollar Advance, as the case may be, at the time shall begin on
the last day of the immediately preceding Interest Period. The duration of
each Interest Period for any Eurodollar Advance or Term Eurodollar Advance
shall be one, three or six months as the Company may, upon telephonic notice
given to the Bank at least two Business Days prior to the first day of such
Interest Period (such notice to be confirmed by the Company immediately in
writing), select; provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and
(ii) the duration of any Interest Period which begins prior to
the Scheduled Termination Date and would otherwise end after such date
shall end on such date.
(b) If and so long as the CD Bid Rate shall be selected for any Tender
Advance or the Term CD Bid Rate shall be selected for any Term Advance, the
period between the Business Day on which such rate shall then begin for such
CD Bid Advance or Term CD Bid Advance, as the case may be, and the date of
payment in full of such CD Bid Advance or Term CD Bid Advance, as the case
may be, shall be divided into successive periods, each such period being an
"Interest Period" for such CD Bid Advance or Term CD Bid Advance, as the case
may be. The initial Interest Period for such CD Bid Advance or Term CD Bid
Advance, as the case may be, at that time shall begin on such Business Day
and each subsequent Interest Period for such CD Bid Advance or Term CD Bid
Advance, as the case may be, at the time shall begin on the last day of the
immediately preceding Interest Period. The duration of each Interest Period
for any CD Bid Advance or Term CD Bid Advance shall be one, three or six
months as the Company may, upon telephonic notice given to the Bank (such
notice to be confirmed by the Company immediately in writing) at least two
Business Days prior to the first day of such Interest Period, select;
provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be one
month; and
(ii) the duration of any such Interest Period which begins prior
to the Scheduled Termination Date and would otherwise end after such
date shall end on such date.
(c) If (i) it shall become unlawful for the Bank to obtain funds in
the London interbank market in order to fund or maintain Eurodollar Advances
or Term Eurodollar Advances or otherwise to perform its obligations hereunder
with respect to any such Eurodollar Advances or Term Eurodollar Advances, or
(ii) due to money market conditions or otherwise, the Bank determines that
matching or offsetting deposits for Eurodollar or Term Eurodollar Advances
are not available in the London interbank market or that the Bank is unable
reasonably to quote a rate for such Advances or that the LIBO Rate does not
adequately reflect the cost of funding such Advances, upon notice by the Bank
to the Company, the rate of interest on all Eurodollar Advances shall
thereupon be the Domestic Rate or the CD Bid Rate, as the Company shall
select immediately upon receipt of such notice, and the rate of interest on
all Term Eurodollar Advances shall thereupon be the Term Rate or the Term CD
Bid Rate, as the Company shall select immediately upon receipt of such
notice, and the right of the Company to select the Eurodollar Rate for any
Tender Advance and the Term Eurodollar Rate for any Term Advance shall cease
for the period during which such illegality or such conditions shall occur
and be continuing. In the event that the Company shall fail to select an
alternative rate, the rate of interest on all Eurodollar Advances shall
thereupon be the Domestic Rate and the rate of interest on all Term
Eurodollar Advances shall be the Term Rate.
(d) On and after the date on which the unpaid principal amount of any
Tender Advance shall be reduced, by payment or prepayment or otherwise, to
less than $1,000,000, the rate of interest on the unpaid principal amount of
such Tender Advance shall be the Domestic Rate and the right of the Company
to select a rate other than the Domestic Rate for such Tender Advance shall
terminate; provided, however, that if and so long as such Tender Advance
shall bear the same rate (other than the Domestic Rate) for the same Interest
Period as another Tender Advance or other Tender Advances and the aggregate
unpaid principal amount of all such Tender Advances shall equal or exceed
$1,000,000, the Company shall have the right to select such rate for such
Interest Period for such Tender Advance.
(e) On and after the date on which the unpaid principal amount of any
Term Advance shall be reduced, by payment or prepayment or otherwise, to less
than $1,000,000 the rate of interest on the unpaid principal amount of such
Term Advance shall be the Term Rate and the right of the Company to select a
rate (other than the Term Rate) for such Term Advance shall terminate;
provided, however, that if and so long as such Term Advance shall bear the
same rate (other than the Term Rate) for the same Interest Period as another
Term Advance or other Term Advances and the aggregate unpaid principal amount
of all such Term Advances shall equal or exceed $1,000,000, the Company shall
have the right to select such rate for such Interest Period for such Term
Advance.
SECTION 1.10. Prepayments. (a) The Company may prepay in whole or in
part the outstanding amount of any Accrued Interest Advance with accrued
interest to the date of such prepayment on the amount prepaid; provided,
however, that the Company shall, simultaneously with the making of such
prepayment, give notice to the Bank by telephone (which shall be confirmed
immediately in writing) or telegraph of such prepayment, which notice shall
specify (i) the amount of such prepayment and (ii) the amount of accrued
interest transmitted with such prepayment.
(b) The Company may, upon at least two Business Days' notice to the
Bank, prepay the outstanding amount of any Advance (other than an Accrued
Interest Advance) in whole or in part with accrued interest to the date of
such prepayment on the amount prepaid; provided, however, that any prepayment
of any Eurodollar Advance, Term Eurodollar Advance, CD Bid Advance or Term CD
Bid Advance shall be made on, and only on, the last day of an Interest Period
for such Eurodollar Advance, Term Eurodollar Advance, CD Bid Advance or Term
CD Bid Advance, as the case may be, unless the Company shall pay to the Bank
in accordance with Section 1.12 an amount sufficient to compensate the Bank
for any loss or expenses incurred by it by reason of such prepayment on a day
other than the last day of the relevant Interest Period; provided, further,
that in the case of a prepayment certified to the Bank by the Trustee as a
payment made pursuant to subsection (c) of this Section, the Company shall on
the date of such prepayment pay interest accrued on such Advance to the date
of prepayment, together with an amount sufficient to compensate the Bank for
any loss or expenses in accordance with Section 1.12.
(c) Prior to or simultaneously with the resale of any Bonds held by
the Custodian on behalf of the Company under the Custody Agreement as a
result of a draw or draws under the Letter of Credit by a Tender Draft or
Tender Drafts, the Company shall cause the Trustee to prepay, on behalf of
the Company, in the order in which they were made, by paying to the Bank an
amount equal to the sum of (i) that portion of any Tender Advances equal to
100% of the principal amount of any such Bonds resold or to be resold and
(ii) that portion of the Accrued Interest Advances (the "Corresponding
Accrued Interest Advances") which bears the same ratio to the total unreim-
bursed Accrued Interest Advances as the principal amount of such Bonds sold
or to be resold bears to the principal amount of all such Bonds held by the
Custodian on behalf of the Company under the Custody Agreement. Such
payments shall, if certified to the Bank by the Trustee in a certificate,
completed and signed, by the Trustee, in the form of Annex H to the Letter of
Credit as payments being made pursuant to this Section 1.10(c), be applied by
the Bank in reimbursement of such drawings (and as prepayment of the Tender
Advances and the Corresponding Accrued Interest Advances resulting from such
drawings in the manner described above). The Company irrevocably authorizes
the Bank to rely on such certificate and to reinstate the Letter of Credit in
accordance therewith.
(d) Prior to or simultaneously with the resale of any Bonds held by
the Custodian on behalf of the Company under the Custody Agreement as a
result of a draw or draws under the Letter of Credit by a Purchase Draft or
Purchase Drafts, the Company shall cause the Trustee to prepay, on behalf of
the Company, in the order in which they were made, by paying to the Bank an
amount equal to that portion of any Purchase Advances equal to 100% of the
principal amount of any such Bonds resold or to be resold. Such payments
shall, if certified to the Bank by the Trustee in a certificate, completed
and signed, by the Trustee, in the form of Annex H to the Letter of Credit as
payments being made pursuant to this Section 1.10(d), be applied by the Bank
in reimbursement of such drawings (and as prepayment of the Purchase Advances
resulting from such drawings in the manner described above). The Company
irrevocably authorizes the Bank to rely on such certificate and to reinstate
the Letter of Credit in accordance therewith.
(e) Amounts received by the Bank from the Company or the Trustee on
behalf of the Company in reimbursement for drawings under the Letter of
Credit shall be applied first in reimbursement of any unreimbursed drawings
made by an Interest Draft, unless such amounts are accompanied by a
certificate as described in subsection (c) or (d) of this Section 1.10 or in
Section 1.03(a).
SECTION 1.11. Other Payments. The Company hereby agrees to pay to the
Bank such fees as are set forth in a letter of even date from the Company to
the Bank.
SECTION 1.12. Increased Costs. (a) If either (i) the introduction of
or any change (including, without limitation, any change by way of imposition
or increase of reserve requirements other than those referred to in Section
1.13 below) in or in the interpretation of any law or regulation or (ii) the
compliance by the Bank or a Participant with any guideline or request from
any central bank or other governmental authority (whether or not having the
force of law), shall result in any increase in the cost to the Bank or a
Participant, as the case may be, of making, funding, maintaining or
participating in Eurodollar Advances or CD Bid Advances, then the Company
shall from time to time, upon demand by the Bank, pay to the Bank additional
amounts sufficient to indemnify the Bank or such Participant, as the case may
be, against such increased cost. A certificate as to the amount of such
increased cost and a reasonable explanation thereof, submitted to the Company
by the Bank on its own behalf or on behalf of such Participant shall
constitute such demand and shall, in the absence of manifest error, be
conclusive and binding for all purposes.
(b) If, due to (i) conversions of the type of interest rate pursuant
to Section 1.08, (ii) prepayments pursuant to Section 1.10 (whether by direct
or applied payments), (iii) acceleration of the maturity of the Advances
pursuant to Section 5.02, or (iv) any other reason, the Bank receives
payments of principal of any Eurodollar Advance or CD Bid Advance or is
subject to a conversion of a Eurodollar Advance or CD Bid Advance into
another type of Advance other than on the last day of an Interest Period
relating to such Advance, the Company shall, promptly after demand by the
Bank, pay to the Bank any amounts required to compensate the Bank or any
Participant for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment or conversion, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by the Bank
or such Participant to fund or maintain such Eurodollar Advance or CD Bid
Advance. A certificate setting forth the amount of such additional losses,
costs or expenses and giving a reasonable explanation thereof, submitted by
the Bank on its own behalf or on behalf of such Participant to the Company,
shall constitute such demand and shall, in the absence of manifest error, be
conclusive and binding for all purposes.
(c) If after the date of this Agreement, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank or any Participant with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject the Bank or any Participant to any tax, duty
or other charge with respect to payments to the Bank or such
Participant of any amount due under this Agreement or shall change the
basis of taxation of payments to the Bank or any Participant of any
amount due under this Agreement (except for changes in the rate of tax
on the overall net income of the Bank or such Participant imposed by
the jurisdiction in which the Bank's or such Participant's, as the case
may be, principal executive office is located); or
(ii) shall impose, modify or deem applicable any reserve,
capital adequacy, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System or the Reserve Bank of Canada
or a similar entity with respect to any Participant) against assets of,
deposits with or for the account of, or credit extended by, the Bank or
any Participant or shall impose on the Bank or any Participant any
other condition affecting the Letter of Credit or its participation
therein; and the result of any of the foregoing is to increase the cost
to the Bank or any Participant of issuing or maintaining the Letter of
Credit or its participation therein, or to reduce the amount of any sum
received or receivable by the Bank or any Participant under this
Agreement or a participation agreement, as the case may be, with
respect thereto, then, at the discretion of the Bank or such
Participant, as the case may be, and within 15 days after demand by the
Bank pursuant to paragraph (f) below, the Company shall pay for the
account of the Bank such additional amount or amounts as will
compensate the Bank or such Participant, as the case may be, for such
increased cost or reduction.
(d) If after the date of this Agreement, the Bank or any Participant
shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy of general applicability, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank or any
Participant with any request or directive regarding capital adequacy of
general applicability (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the Bank's or such Participant's capital as a
consequence of the Letter of Credit or its participation therein hereunder to
a level below that which the Bank or such Participant could have achieved but
for such adoption, change or compliance (taking into consideration the Bank's
or such Participant's policies with respect to capital adequacy) then, at the
discretion of the Bank or such Participant, as the case may be, and within 15
days after demand by the Bank pursuant to paragraph (f) below, the Company
shall pay to the Bank such additional amount or amounts as will, in the
opinion of the Bank or such Participant, as the case may be, compensate it
for such reduction.
(e) The Company hereby agrees that each Participant shall have the
same rights and obligations under this Section 1.12 with respect to its
respective participation as if such Participant were named instead of the
Bank in this Section 1.12. The Bank's rights pursuant to this Section 1.12
shall apply only to that portion of the Letter of Credit, the advances made
thereunder, the Bank's rights and obligations under this Agreement and the
amounts payable to the Bank hereunder a participating interest in which has
not been sold to a Participant.
(f) The Bank will promptly notify the Company of any event of which it
has knowledge, occurring after the date hereof, that will entitle the Bank or
any Participant to compensation pursuant to paragraphs (c) or (d) of this
Section. A certificate of the Bank submitted to the Company setting forth
the additional amount or amounts to be paid to it for its own account or for
the account of a Participant and a reasonable explanation thereof shall
constitute demand for such compensation and shall be conclusive in the
absence of manifest error. In determining such amount, the Bank and the
Participants may use any reasonable averaging and attribution methods.
SECTION 1.13. Additional Interest. The Company shall pay to the Bank
additional interest on the unpaid principal amount of each Advance during the
periods such Advance shall be a Eurodollar Advance or Term Eurodollar Advance
until such principal amount is paid in full, payable on each day on which
interest on such Advance is payable under Section 1.07, at an interest rate
per annum equal at all times during each Interest Period for such Advance, to
the excess of (i) the rate obtained by dividing the LIBO Rate for such
Interest Period by a percentage equal to 100% minus the reserve percentage
applicable during such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or if more than
one such percentage is so applicable, minus the daily average for such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any marginal reserve requirement)
for the Bank in respect of liabilities or assets consisting of or including
Eurocurrency liabilities over (ii) the LIBO Rate for such Interest Period.
SECTION 1.14. Payments and Computations. The Company, unless directed
otherwise, shall make each payment hereunder not later than 11:00 a.m.
(Houston time) on the day when due in lawful money of the United States of
America to the Bank, at Morgan Guaranty Trust Company, Account #63000271 for
the credit of The Toronto-Dominion Bank, New York Branch, in same day funds.
All computations of interest at the Domestic Rate and the Term Rate shall be
made by the Bank on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest at the Eurodollar Rate, the Term
Eurodollar Rate, the CD Bid Rate, the Term CD Bid Rate and the letter of
credit commission hereunder shall be made by the Bank on the basis of a year
of 360 days, in each case for the actual number of days (including the first
day but excluding the last day) elapsed.
SECTION 1.15. Payment on Non-Business Days. Whenever any payment to
be made hereunder shall be stated to be due, or whenever the last day of any
Interest Period would otherwise occur, on a day which is not a Business Day,
such payment shall be made, and the last day of such Interest Period shall
occur, on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or
commission, as the case may be; provided, however, if such extension would
cause such payment of a Eurodollar Advance or a Term Eurodollar Advance to be
made or the last day of such Interest Period to occur in a new calendar
month, such payment shall be made and the last day of such Interest Period
shall occur on the next preceding Business Day.
SECTION 1.16. Extension of the Letter of Credit. At least 90 days but
not more than 120 days before each May 15, commencing May 15, 1995, and each
succeeding year thereafter until the Scheduled Termination Date, the Company
may request the Bank in writing (each such request being irrevocable and
binding) to extend for one year the Scheduled Termination Date of the Letter
of Credit. The Bank shall respond to the Company's request for such
extension on or before each June 1 in the year in which the Company has
requested an extension of the Letter of Credit. In the event the Bank does
not respond to the Company's initial request by June 1 of the year the
Company first requests an extension, the Bank shall be deemed to have granted
to the Company an extension of the Letter of Credit from August 18, 1996, to
and including August 18, 1997, on the same terms and conditions as contained
herein. If the Bank fails to respond to any request for an extension of the
Scheduled Termination Date made subsequent to the Company's initial request,
such extension shall be deemed not to have been given. In the event the Bank
responds to the Company's request with an offer of new terms and conditions,
the Company shall have until July 1 of such year to give its consent or
nonconsent in writing to the Bank's offer of new terms and conditions. If
the Company does not consent in writing to such terms and conditions by such
date, the extension shall be deemed not to have been given. Any consent or
offer the Bank may give or any extension that is deemed to be given shall be
conditional upon the preparation, execution and delivery of legal
documentation in form and substance satisfactory to the Bank and its counsel.
SECTION 1.17. Obligations Absolute. The payment obligations of the
Company under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including, without limitation, the following circum-
stances:
(i) any lack of validity or enforceability of the Letter of
Credit, the Bonds, the Indenture, the Lease, the Sublease, or any other
agreement or instrument relating thereto (collectively the "Related
Documents");
(ii) any amendment or waiver of or any consent to departure from
all or any of the Related Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Company may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any persons
or entities for whom the Trustee, any such beneficiary or any such
transferee may be acting), the Bank or any other person or entity,
whether in connection with this Agreement, the transactions
contemplated herein or in the Related Documents or any unrelated
transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of the Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; provided however that such
circumstance or happening shall not have been the result of the gross
negligence or willful misconduct of the Bank.
ARTICLE II
CONDITIONS OF ISSUANCE
SECTION 2.01. Condition Precedent to Issuance of the Letter of Credit.
The obligation of the Bank to issue the Letter of Credit is subject to the
condition precedent that the Bank shall have received on or before the date
of the issuance of the Letter of Credit the following, each dated such day,
in form and substance satisfactory to the Bank:
(a) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the Company to enter into this
Agreement, approving the Letter of Credit and the other matters
contemplated hereby.
(b) Originals (or copies certified by the Secretary or Assistant
Secretary of the Company) of current approvals or orders of the public
utility regulatory commissions of the States of Missouri and Kansas
necessary for the Company with respect to this Agreement.
(c) A certificate of the Secretary or an Assistant Secretary of
the Company, certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the other
documents to be delivered by it hereunder.
(d) Opinions of Samuel P. Cowley, Esq., Senior Vice President
and Chief Legal Officer for the Company, in substantially the form of
Exhibit B hereto and as to such other matters as the Bank may
reasonably request.
(e) Opinions of Chapman and Cutler, Bond Counsel, in
substantially the form of Exhibit C hereto and as to such other matters
as the Bank may reasonably request, including advice from such Bond
Counsel to the Bank that the Bank may rely on such opinion.
(f) A transcript relating to the issuance of the Bonds.
(g) Such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies thereof)
or opinions as the Bank may reasonably request.
SECTION 2.02. Additional Conditions Precedent to Issuance of the
Letter of Credit. The obligation of the Bank to issue the Letter of Credit
shall be subject to the further conditions precedent that on the date of the
issuance of the Letter of Credit:
(a) The following statements shall be true and the Bank shall
have received a certificate signed by a duly authorized officer of the
Company, dated the date of such issuance, stating that:
(i) the representations and warranties contained in
Section 3.01 of this Agreement are correct on and as of the date
of issuance of the Letter of Credit as though made on and as of
such date; and
(ii) no event has occurred and is continuing, or would
result from the issuance of the Letter of Credit, which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both.
(b) The Issuer and the Trustee have duly authorized and executed
the Indenture and the Indenture shall continue to be in full force and
effect.
(c) The Issuer and the Company have duly authorized and executed
the Lease and the Sublease and the Lease and the Sublease shall
continue to be in full force and effect.
(d) The Issuer has duly executed, issued and delivered the
Bonds.
(e) The Bank shall have received such other approvals, opinions
or documents as the Bank may reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties. The Company represents
and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business in, and is in good standing under
the laws of, the State of Kansas.
(b) The execution, delivery and performance by the Company of
this Agreement and each Related Document to which it is a party are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Company's charter
or by-laws (ii) any law or contractual restriction (including, but not
limited to, any restriction in the Indenture) binding on or affecting
the Company, and do not result in or require the creation of any lien,
security interest or other charge or encumbrance (other than pursuant
to this Agreement and the Related Documents) upon or with respect to
any of its properties; or (iii) any other instruments to which the
Company is a party or by which it may be bound or to which any of the
property or assets of the Company may be subject, or any law, order,
rule or regulation applicable to the Company or any court, federal or
state, regulatory body, administrative agency or other governmental
body having jurisdiction over the Company.
(c) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into this Agreement, and the Commissions have duly
issued previous orders authorizing the Company to enter into the Lease,
the Sublease and any other documents that such commissions have
jurisdiction over and to which the Company is a party and the Related
Documents to which it is a party, and such orders remain in full force
and effect in the form issued. Except for the approvals of the Board
of Commissioners of Coffey County, Kansas, and the City Council of the
City of Burlington, Kansas, approving issuance of the Bonds, which
approvals have been duly obtained and are in full force and effect, and
the notice of timely filing with the Board of Tax Appeals of the State
of Kansas, no other authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by the
Company of this Agreement or any Related Document to which it is a
party.
(d) This Agreement is, and each Related Document to which the
Company is a party when delivered hereunder will be, the legal, valid
and binding obligations of the Company enforceable against the Company
in accordance with their respective terms (except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally).
(e) Except as disclosed in the Company's Form 10-K for the year
ended 1992, Form 10-Q for the periods March 31, 1993 and June 30, 1993,
and Form 8-K dated August 16, 1993, there is no pending or, to the best
of the Company's knowledge, threatened action or investigation or
proceeding before any court, governmental agency or arbitrator against
or affecting the Company which may materially adversely affect the
financial condition or total operations of the Company.
(f) The balance sheet of the Company as at December 31, 1992,
and the related statements of income and retained earnings and of
changes in financial position of the Company for the fiscal year then
ended, certified by Coopers & Lybrand, independent public accountants,
copies of which have been furnished to the Bank, and the balance sheet
of the Company as at June 30, 1993, and the related statements of
retained earnings for the six months then ended, signed by the
Controller of the Company, copies of which are contained in the
Company's 10-Q dated as of June 30, 1993, a copy of which has been
furnished to the Bank, fairly present the financial condition of the
Company as at such respective dates and the results of the operations
of the Company for the period ended on such respective dates, all in
accordance with generally accepted accounting principles consistently
applied, and since June 30, 1993, there has been no material adverse
change in the financial condition or total operations of the Company
other than disclosed or contemplated in the notes to the financials in
the Company's 10-Q dated June 30, 1993.
(g) Except for information contained therein describing the
Bank, as to which no representation is made, the Official Statement
(said Official Statement, together with the documents incorporated
therein by reference, being the "Official Statement") dated October 29,
1987, of the Issuer relating to the Bonds is, and the Preliminary
Official Statement (said Preliminary Official Statement, together with
the documents incorporated therein by reference being the "Preliminary
Official Statement") dated October 16, 1986, of the Issuer relating to
the Bonds as of its date of issue was to the best of the Company's
knowledge, and any supplement or amendment to either thereof shall be,
accurate in all material respects for the purposes for which its use
is, was, or shall be, authorized; and the Official Statement does not,
the Preliminary Official Statement as of its date of issue did not to
the best of the Company's knowledge, and any such supplement or
amendment shall not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they are or were
made, not misleading.
(h) No Termination Event has occurred nor is reasonably expected
to occur with respect to any Plan.
(i) The Company does not contribute to any Multiemployer Plan
and has not incurred any withdrawal liability with respect to any such
plan.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants. So long as a drawing is avail-
able under the Letter of Credit or the Bank shall have any Commitment
hereunder or the Company shall have any obligation to pay any amount to the
Bank hereunder, the Company will, unless the Bank shall otherwise consent in
writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights (charter and statutory) and
privileges in the state of its incorporation and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is reasonably necessary in view of its business and
operations or the ownership of its properties.
(b) Compliance with Laws, Etc. Comply in all respects with all
applicable laws, rules, regulations and orders of any governmental
authority, the non-compliance with which would materially and adversely
affect the financial condition or operations of the Company, such
compliance to include, without limitation, paying before the same
become delinquent all material taxes, assessments and governmental
charges imposed upon it or upon its property, except to the extent
compliance with any of the foregoing is then being contested in good
faith.
(c) Maintenance of Insurance. Maintain insurance with
responsible and reputable insurance companies or associations or
through its own program of self-insurance in such amounts and covering
such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in
which the Company operates.
(d) Visitation Rights. At any reasonable time and from time to
time, permit the Bank or any of its agents or representatives at their
own expense to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the
Company and to discuss the affairs, finances and accounts of the
Company with any of its officers.
(e) Keeping of Books. Keep proper books of record and account,
in which full and correct entries shall be made of all financial
transactions and the assets and business of the Company in accordance
with generally accepted accounting principles consistently applied
(except as disclosed in the notes to the balance sheet and related
statements of income and retained earnings).
(f) Maintenance of Properties. Maintain and preserve its
properties that are necessary to maintain its operating system in good
working order and condition, ordinary wear and tear excepted.
(g) Reporting Requirements. Furnish to the Bank the following:
(i) as soon as possible, and in any event within 3 days after the
occurrence of each Event of Default or each event which, with the
giving of notice or lapse of time, or both, would constitute an Event
of Default, continuing on the date of such statement, a statement of
the chief accounting officer (or in his absence, a principal financial
officer) of the Company setting forth details of such Event of Default
or event and the action which the Company proposes to take with respect
thereto; (ii) as soon as available and in any event within 10 days
after the filing of each quarterly report on Form 10-Q by the Company
with the Securities and Exchange Commission, a copy of each such
quarterly report, together with a certificate of the chief accounting
officer (or in his absence, a principal financial officer) of the
Company confirming as of the end of such quarter the truth of the
statement set forth in Section 2.02(a)(ii) of this Agreement; (iii) as
soon as available and in any event within 10 days after the filing of
each annual report on Form 10-K by the Company with the Securities and
Exchange Commission, a copy of each such annual report containing
financial statements for such year certified by nationally recognized
independent public accountants, together with a certificate of the
chief accounting officer (or in his absence, a principal financial
officer) of the Company confirming as of the end of such quarter the
truth of the statement set forth in Section 2.02(a)(ii) of this
Agreement; (iv) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which the
Company sends to any of its stockholders, and copies of all regular,
periodic and special reports and all registration statements, which the
Company files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor; (v) as soon
as possible and in any event within (A) 30 days after the Company or
any of its Affiliates knows or has reason to know that any Termination
Event described in clause (i) of the definition of Termination Event
with respect to any Plan has occurred and (B) within 10 days after the
Company or any of its Affiliates knows or has reason to know that any
other Termination Event with respect to any Plan has occurred, a
statement of the chief accounting officer (or in his absence a
principal financial officer) of the Company describing such Termination
Event and the action, if any, which the Company or such Affiliate
proposes to take with respect thereto; (vi) promptly and in any event
within two Business Days after receipt thereof by the Company or any of
its Affiliates from the Pension Benefit Guaranty Corporation ("PBGC"),
copies of each notice received by the Company or any such Affiliate of
the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan; and (vii) such other information
respecting the business, properties or the condition or operations,
financial or otherwise, of the Company as the Bank may from time to
time reasonably request in writing.
(h) Officer's Certificate. In the event that an Advance is made
pursuant to Sections 1.03 or 1.04 hereunder, the Company shall deliver
to the Bank every ninety (90) days commencing ninety (90) days from the
date such Advance is made until all outstanding Advances have been paid
in full, a certificate signed by a duly authorized officer of the
Company stating that the representations and warranties contained in
Section 3.01 (other than subsection (g)) are correct on and as of such
date as though made on and as of such date and subsection (g) of
Section 3.01 was correct on the date of this Agreement.
(i) Other Agreements. Perform and comply with each of the
terms, provisions and conditions, on its part to be performed or
complied with, contained in the Indenture, the Lease and the Sublease.
(j) Redemption or Defeasance of Bonds. Use its best efforts to
cause the Trustee, (A) upon a redemption or defeasance of less than all
of the Bonds pursuant to the Indenture, to furnish to the Bank a notice
in the form of Annex G to the Letter of Credit, and (B) upon a
redemption or defeasance of all of the Bonds pursuant to the Indenture,
to surrender the Letter of Credit to the Bank for cancellation.
(k) Registration of Bonds. Cause all Bonds which it acquires,
or which it has acquired for its account, to be registered forthwith in
accordance with the Indenture in the name of the Company.
SECTION 4.02. Negative Covenants. So long as a drawing is available
under the Letter of Credit or the Bank shall have any Commitment hereunder or
the Company shall have any obligation to pay any amount to the Bank
hereunder, the Company will not, without the written consent of the Bank:
(a) Liens, Etc. Create, incur, assume or suffer to exist any
lien, security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of its
properties, whether now owned or hereafter acquired, or assign any
right to receive income, in each case to secure any Obligation of any
person, other than (i) purchase money liens or purchase money security
interests upon or in any property acquired or held by the Company in
the ordinary course of business to secure the purchase price of such
property or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such property, (ii) liens or security
interests existing on such property at the time of its acquisition,
(iii) liens, security interests, charges or encumbrances on or over,
gas, oil, coal, fissionable material or other fuel or fuel products as
security for an Obligation incurred by the Company for the sole purpose
of financing the acquisition or storage of such fuel or fuel products
or, with respect to nuclear fuel, the processing, reprocessing,
sorting, storage and disposal thereof, (iv) liens, security interests,
charges or encumbrances on or over all or any part of its undertaking
or assets employed wholly or mainly in or arising directly from any
specific construction project or generating plant as security for an
Obligation incurred by the Company for the purpose of financing all or
any part of such construction project or generating plant, (v) the lien
of the Indenture of Mortgage and Deed of Trust dated as of December 1,
1946, from the Company to Continental Illinois National Bank and Trust
Company of Chicago, and the lien of the General Mortgage Indenture and
Deed of Trust dated December 1, 1986 from the Company to United
Missouri Bank of Kansas City, N.A. (the "Mortgage"), (vi) encumbrances
listed on Exhibit D attached hereto, (vii) security interests granted
in, or sale of, the Company's accounts receivable, (viii) sales or
transfers of property by the Company and renting or leasing back such
property, provided that all such property in the aggregate does not
exceed fifteen percent (15%) of all the Company's assets.
(b) Mergers, Etc. Merge with or into or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) or acquire
all or substantially all of the assets, other than utility assets, of,
any person or entity, except that the Company may merge or consolidate
with any person or entity on condition in each case that, (i)
immediately after giving effect thereto, no event shall occur and be
continuing which constitutes an Event of Default or which with the
giving of notice or lapse of time, or both, would constitute an Event
of Default, (ii) the consolidation or merger shall not materially and
adversely affect the ability of the Company to perform its obligations
hereunder or under the Related Documents, and (iii) the corporation
formed by any such consolidation or into which the Company shall be
merged shall assume the Company's obligations and performance of the
Company's covenants hereunder and under the Related Documents in a
writing satisfactory in form and substance to the Bank.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or, except as otherwise permitted under Section 4.02(a),
pledge or otherwise encumber more than fifteen percent (15%) of its
assets, except in the ordinary course of its business or in connection
with a transaction authorized by subsection (b) of this Section 4.02.
(d) Compliance with ERISA. (i) Voluntarily terminate any Plan,
so as to result in any material liability of the Company to PBGC or
(ii) enter into any Prohibited Transaction (as defined in Section 4975
of the Internal Revenue Code of 1986, as amended, and in ERISA)
involving any Plan which results in any material liability of the
company to PBGC, (iii) cause any occurrence of any Reportable Event
which results in any material liability of the Company to PBGC or (iv)
allow or suffer to exist any other event or condition known to the
Company which results in any material liability of the Company to PBGC.
(e) Amendment of Indenture or Related Document. Enter into or
consent to any amendment or modification of, the Indenture, the Lease,
the Sublease or any other Related Document, which would adversely
affect the Bank, without first obtaining the express prior written
consent of the Bank thereto.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. Events of Default. The occurrence of any of the
following events shall be an "Event of Default" hereunder unless waived by
the Bank pursuant to Section 7.01 hereof:
(a) the Company shall fail to pay any amount payable to the Bank
under any provision of Article I when due except as provided in (b)
below; or
(b) the Company shall fail to pay any amount of an Interest
Advance within one (1) day after such amount becomes due; or
(c) any representation or warranty made by the Company herein or
by the Company (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(d) the Company shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement, and any such failure
shall remain unremedied for 10 days after written notice thereof shall
have been given to the Company by the Bank; or
(e) any material provision of this Agreement shall at any time
for any reason cease to be valid and binding upon the Company, or shall
be declared to be null and void, or the validity or enforceability
thereof shall be contested by the Company, or a proceeding shall be
commenced by any governmental agency or authority having jurisdiction
over the Company seeking to establish the invalidity or unenforce-
ability thereof, or the Company shall deny that it has any or further
liability or obligation under this Agreement; or
(f) the Company shall (x) fail to make any payment, equal to or
exceeding $10,000,000 of any Obligation or to make any payment, equal
to or exceeding $5,000,000, of any interest or premium thereon, when
due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Obligation, or (y) fail to perform or
observe any term, covenant or condition on its part to be performed or
observed under any agreement or instrument relating to any Obligation
when required to be performed or observed, and such failure shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such failure to perform or
observe is to accelerate, or to permit the acceleration of, the
maturity of any Obligation, the unpaid principal amount of which then
equals or exceeds $10,000,000; or
(g) the Company shall generally not pay its debts as they become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors or shall institute any proceeding or voluntary case seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief
or composition of it or its debts under any law relating to bankruptcy,
reorganization or insolvency or relief or protection of debtors or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for
any substantial part of its property; or the Company shall take any
corporate action to authorize any of the actions described above in
this subsection (g); or any proceeding shall be instituted against the
Company seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement or adjustment of
debts under any law relating to bankruptcy, insolvency or reorga-
nization or relief or protection of debtors or seeking the entry of an
order for relief or the appointment of a trustee, receiver or custodian
or other similar official for it or for any substantial part of its
property, and, if such proceeding is being contested by the Company in
good faith, such proceeding shall remain undismissed or unstayed for a
period of 60 days; or
(h) any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Company and either
(x) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (y) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(i) any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to
the Company by the Bank, (i) such Termination Event (if correctable)
shall not have been corrected and (ii) the then present value of such
Plan's vested benefits exceeds the then current value of assets
accumulated in such Plan by more than the amount of $15,000,000 (or in
the case of a Termination Event involving the withdrawal of a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess exceed such
amount); or
(j) any event of default under and as defined in the Indenture,
the Lease or the Sublease shall have occurred and be continuing.
SECTION 5.02. Upon an Event of Default. If any Event of Default shall
have occurred and be continuing, the Bank may (i) by notice to the Company,
declare the obligation of the Bank to issue the Letter of Credit to be
terminated, whereupon the same shall forthwith terminate, or if the Letter of
Credit shall have been issued, (ii) give notice to the Trustee pursuant to
Section 701 of the Indenture of the occurrence and continuance of an Event of
Default hereunder, and (iii) declare the Advances, all amounts payable under
any provision of Article I, all interest thereon and all other amounts
payable hereunder to be forthwith due and payable, whereupon the Advances,
all amounts payable under any provision of Article I, all interest thereon
and all such other amounts shall become and be forthwith due and payable,
without presentment, demand, protest, or further notice of any kind, all of
which are hereby expressly waived by the Company.
ARTICLE VI
DEFINITIONS
SECTION 6.01. Definitions. Unless otherwise indicated in this
Agreement, the capitalized terms used herein shall have the following
meanings:
"Accrued Interest Advance" has the meaning set forth in Section
1.03(a) hereof.
"Advances" means, collectively, Tender Advances, Accrued Interest
Advances, Redemption Advances and Purchase Advances, and an "Advance"
means any of them.
"Affiliate" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a
member and which is under common control within the meaning of the
regulations under Section 414 of the Internal Revenue Code of 1986, as
amended.
"Assessment Rate" for any Interest Period for any CD Bid Advance
or Term CD Bid Advance means the annual assessment rate per annum
estimated by the Bank on the first day of such Interest Period for
determining the then current annual assessment payable by the Bank to
the Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring U.S. dollar deposits of
the Bank in the United States.
"Available Amount" in effect at any time means the maximum amount
available to be drawn at such time under the Letter of Credit (the
determination of such maximum amount to assume, throughout this
Agreement, compliance with all conditions for drawing and no reduction
for any amount drawn by an Interest Draft referred to in the Letter of
Credit (unless such amount is not reinstated under the Letter of
Credit)).
"Bonds" means the Issuer's Customized Purchase Pollution Control
Revenue Refunding Bonds, Series 1987A (Kansas City Power & Light
Company Project).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or Houston and, if the
applicable Business Day relates to any Eurodollar Advance or Interest
Period therefor, on which dealings are carried on in the London
interbank market.
"CD Bid Advance" means a Tender Advance bearing interest at the
CD Bid Rate.
"CD Bid Rate" during any Interest Period for any CD Bid Advance
means an interest rate per annum equal to 5/8 of 1% per annum above the
CD Bid Formula.
"CD Bid Formula" shall mean a rate equal to the sum of (x) the
rate of interest equal to the per annum rate determined by the Bank at
9:00 a.m. Houston time (or as soon thereafter as practicable) on the
first day of the applicable Interest Period, of certificates of deposit
with maturities identical to the duration of such Interest Period, plus
(y) the Assessment Rate divided by (z) one hundred percent (100%) minus
the Reserve Percentage.
"Commitment" has the meaning set forth in Section 1.01 hereof.
"Company" means Kansas City Power & Light Company, a corporation
organized and existing under the laws of the State of Missouri.
"Corresponding Accrued Interest Advances" has the meaning set
forth in Section 1.10(c) hereof.
"Custodian" means Chemical Bank, as custodian under the Custody
Agreement.
"Custody Agreement" means the Custody Agreement dated as of
October 1, 1987, between the Company and the Custodian and all
amendments, modifications and supplements thereto.
"Domestic Advance" means a Tender Advance bearing interest at the
Domestic Rate.
"Domestic Rate" means an interest rate equal to the Prime Rate.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Advance" means a Tender Advance bearing interest at
the Eurodollar Rate.
"Eurodollar Rate" during any Interest Period for any Tender
Advance means an interest rate per annum equal at all times during each
Interest Period for such Tender Advance to 1/2 of 1% per annum above
the LIBO Rate.
"Event of Default" shall have the meaning set forth in Section
5.01 hereof.
"Final Draft" has the meaning set forth in the Letter of Credit.
"Indenture" means the Indenture of Trust dated as of October 1,
1987, between the Issuer and Chemical Bank, as trustee and all
amendments, modifications and supplements thereto.
"Interest Advance" has the meaning set forth in Section 1.05(a)
hereof.
"Interest Draft" has the meaning set forth in the Letter of
Credit.
"Interest Period" has the meaning set forth in Section 1.09(a)
hereof.
"Issuer" means the City of Burlington, Kansas.
"Lease" means the Equipment Lease Agreement dated as of October
1, 1987, between the Issuer and the Company, and all amendments,
modifications and supplements thereto.
"Letter of Credit" means the irrevocable, transferable letter of
credit issued by the Bank in substantially the form of Exhibit A hereto
and any successor letter of credit as provided in such letter of
credit.
"LIBO Rate" for any Interest Period means the rate of interest
per annum at which deposits in United States dollars are offered to the
Bank at its London, England branch by prime banks in the London
Interbank Market for a period equal to the duration of such Interest
Period relating to any Advance at or about 11:00 a.m. (London time) two
Business Days before the first day of such Interest Period.
"Mortgages" has the meaning set forth in Section 4.02(a) hereof.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Obligation" of any person or entity means (i) indebtedness for
borrowed money or for the deferred purchase price of property or
services in respect of which such person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
such person otherwise assures a creditor against loss, (ii) obligations
under leases in respect of which obligations such person is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such person otherwise assures a creditor
against loss, and (iii) liabilities in respect of unfunded vested
benefits under each Plan maintained for employees of such person and
covered by Title IV of ERISA.
"Official Statement" has the meaning set forth in Section
3.01(g).
"Participant" means any bank or other financial institution which
has purchased from the Bank a participation in this Agreement or the
Letter of Credit.
"Plan" means an employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any Affiliate and
covered by Title IV of ERISA.
"Preliminary Official Statement" has the meaning set forth in
Section 3.01(g).
"Prime Rate" means the rate of interest per annum from time to
time designated by the Bank at its principal office in Houston, Texas
as its "prime rate," whether or not such "prime rate" is actually
charged by the Bank, with all changes therein to be effective on the
date announced.
"Purchase Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Purchase Draft" has the meaning set forth in the Letter of
Credit.
"Redemption Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Redemption Draft" has the meaning set forth in the Letter of
Credit.
"Related Documents" has the meaning set forth in Section 1.17(i)
hereof.
"Reserve Percentage" for any Interest Period for any CD Bid
Advance or Term CD Bid Advance is that percentage which is specified on
the first day of such Interest Period by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement for the Bank with respect to liabilities consisting
of or including (among other liabilities) U.S. dollar nonpersonal time
deposits in the United States in an amount of $1,000,000 or more and
with a maturity equal to such Interest Period, together with any
marginal, emergency, supplemental, special or other reserve that the
Bank, in its sole discretion, determines that it is required to
maintain on such day for deposits with a maturity equal to such
Interest Period.
"Scheduled Termination Date" means August 18, 1996, or such later
date to which the term of the Letter of Credit is extended pursuant to
Section 1.16 of this Agreement.
"Sublease" means the Equipment Sublease Agreement dated as of
October 1, 1987, between the Issuer and the Company and all amendments,
modifications and supplements thereto.
"Tender Advance" has the meaning set forth in Section 1.03(a)
hereof.
"Tender Draft" has the meaning set forth in the Letter of Credit.
"Term Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Term CD Bid Advance" means a Term Advance bearing interest at
the Term CD Bid Rate.
"Term CD Bid Rate" during any Interest Period for any Term CD Bid
Advance means an interest rate per annum equal at all times during each
Interest Period for such Term CD Bid Advance to 3/4 of 1% above the CD
Bid Formula.
"Term Eurodollar Advance" means a Term Advance bearing interest
at the Term Eurodollar Rate.
"Term Eurodollar Rate" during any Interest Period for any Term
Eurodollar Advance means an interest rate per annum equal at all times
during each Interest Period for such Term Advance to 5/8 of 1% per
annum above the LIBO Rate.
"Term Rate" means an interest rate equal to 1/8 of 1% per annum
above the Prime Rate.
"Termination Date - Letter of Credit" means the earliest of (i)
the date on which the Trustee surrenders the Letter of Credit for
cancellation, (ii) the date on which the Bank honors a Redemption Draft
for all the Bonds, (iii) the date on which the Bank honors a Final
Draft, (iv) the close of business on the date on which the Bank
receives written notice that all the Bonds have been converted to the
Fixed Interest Rate within the meaning of the Indenture, (v) the date
on which the Bank receives notice that there is no longer any Bond
outstanding, (vi) the date the Bank receives written notice of the
substitution of an alternate Letter of Credit in accordance with the
Indenture, and (vii) the Scheduled Termination Date.
"Termination Event" means (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than
a Reportable Event not subject to the provision for 30-day notice to
the PBGC under such regulations), or (ii) the withdrawal of the Company
or any of its Affiliates from a Plan during a plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a Plan by
the PBGC, or (v) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
"Trustee" means Chemical Bank, as trustee under the Indenture.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Bank and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
SECTION 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
and mailed, sent or delivered, if to the Company, at its address at 1201
Walnut, Kansas City, Missouri 64106 Attention: Treasurer, facsimile:
(816)556-2992; and if to the Bank, at its address at 909 Fannin Street, Suite
1700, Houston, Texas, 77010 Attention: Manager, Agency or facsimile:
(713)951-9921 and a copy to 31 West 52nd Street, New York, New York, 10019,
or if to the Trustee, mailed or delivered to it, addressed to it at 450 W.
33rd Street, New York, New York, 10001, Attention: Corporate Trustee
Administration Department, or facsimile: (212)971-8567; or as to each party,
to such other party and/or at such other address as shall be designated by
such person in a written notice to the other party. All such notices and
communications shall be effective when mailed or sent, addressed as
aforesaid, except that notices to the Bank pursuant to the provisions of
Article I shall not be effective until received by the Bank, and any notice
to the Trustee pursuant to Section 5.02(ii) shall not be effective until
received by the Trustee. Notices of any Event of Default shall be sent by
the Company to the Bank by telex.
SECTION 7.03. No Waiver; Remedies. No failure on the part of the Bank
to exercise, and no delay in exercising, any right hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
United States accounting principles consistently applied and in effect on the
date hereof.
SECTION 7.05. Indemnification. The Company hereby indemnifies and
holds the Bank harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses which the Bank may incur or which may be
claimed against the Bank by any person or entity:
(a) by reason of any inaccuracy in any material respect, or any
untrue statement or alleged untrue statement of any material fact,
contained in the Preliminary Official Statement or the Official
Statement or any amendment or supplement thereto, or by reason of the
omission or alleged omission to state therein a material fact necessary
to make such statements, in the light of the circumstances under which
they were made, not misleading; provided, however, that, in the case of
any action or proceeding alleging an inaccuracy in a material respect,
or an untrue statement, with respect to information supplied by and
describing the Bank in the Preliminary Official Statement or the
Official Statement (the "Bank Information"), or an omission or alleged
omission to state therein a material fact necessary to make the
statements in the Bank Information, in the light of the circumstances
under which they were made, not misleading, (i) indemnification by the
Company pursuant to this Section 7.05(a) shall be limited to the costs
and expenses of the Bank (including reasonable fees and expenses of the
Bank's counsel) of defending itself against such allegation, (ii) if in
any such action or proceeding it is finally determined that the Bank
Information contained an inaccuracy in any material respect or an
untrue statement of a material fact or omitted to state therein a
material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading,
then the Company shall not be required to indemnify the Bank pursuant
to this Section 7.05(a) for any claims, damages, losses, liabilities,
costs or expenses (including reasonable fees and expenses of counsel)
to the extent caused by such inaccuracy, untrue statement or omission,
and (iii) if any such action or proceeding shall be settled by the Bank
without there being a final determination to the effect described in
the preceding clause (ii), then the Company shall be required to
indemnify the Bank pursuant to this Section 7.05(a) only if such action
or proceeding is settled with the Company's consent; or
(b) by reason of or in connection with the execution, delivery
or performance of the Bonds, the Indenture, the Lease or the Sublease,
or any transaction contemplated by the Indenture, the Lease or the
Sublease; or
(c) by reason of or in connection with the execution and
delivery or transfer of, or payment or failure to make lawful payment
under, the Letter of Credit; provided, however, that the Company shall
not be required to indemnify the Bank pursuant to this section 7.05(c)
for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (i) the Bank's wilful
misconduct or gross negligence in determining whether documents
presented under the Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Bank's wilful failure to make lawful
payment under the Letter of Credit after the presentation to it by the
Trustee or a successor trustee under the Indenture of a draft and
certificate strictly complying with the terms and conditions of the
Letter of Credit.
Nothing in this Section 7.05 is intended to limit the Company's obligations
contained in Article I. Without prejudice to the survival of any other
obligation of the Company hereunder, the indemnities and obligations of the
Company contained in this Section 7.05 shall survive the payment in full of
amounts payable pursuant to Article I and the termination of the Letter of
Credit.
SECTION 7.06. Liability of the Bank. The Company assumes all risks of
the acts or omissions of the Trustee and any beneficiary or transferee of the
Letter of Credit with respect to its use of the Letter of Credit. Neither
the Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use which may be made of the Letter of Credit or any acts or
omissions of the Trustee and any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment by the
Bank against presentation of documents which do not comply with the terms of
the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under the
Letter of Credit, except that the Company shall have a claim against the
Bank, and the Bank shall be liable to the Company, to the extent of any
direct, as opposed to consequential, damages suffered by the Company which
the Company proves were caused by (i) the Bank's wilful misconduct or gross
negligence in determining whether documents presented under the Letter of
Credit comply with the terms of the Letter of Credit or (ii) the Bank's
wilful failure to make lawful payment under the Letter of Credit after the
presentation to it by the Trustee or a successor trustee under the Indenture
of a draft and certificate strictly complying with the terms and conditions
of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
SECTION 7.07. Costs, Expenses and Taxes. The Company agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery, filing, recording and administration of this Agreement and any
other documents which may be delivered in connection with this Agreement,
including, without limitation, the reasonable costs incurred with each
transfer of the Letter of Credit, the reasonable fees and out-of-pocket
expenses of counsel for the Bank, and local counsel who may be retained by
said counsel, with respect thereto and with respect to advising the Bank as
to its rights and responsibilities under this Agreement and all costs and
expenses (including reasonable counsel fees and expenses) in connection with
(i) the enforcement of this Agreement and such other documents which may be
delivered in connection with this Agreement or (ii) any action or proceeding
relating to a court order, injunction or other process or decree restraining
or seeking to restrain the Bank from paying any amount under the Letter of
Credit. In addition, the Company shall pay any and all stamp and other taxes
and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement and such other
documents, and agrees to save the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes and fees except for any penalties incurred as a result of
the Bank's failure to notify the Company of such stamp or other taxes or fees
payable by the Company of which the Bank has knowledge.
SECTION 7.08. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Company and the Bank and thereafter
shall be binding upon and inure to the benefit of the Company and the Bank
and their respective successors and assigns, except that the Company shall
not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Bank. The Bank may, at its own
expense, assign (by way of participation or otherwise) to any financial
institution all or any part of, or any interest (undivided or divided) in,
the Bank's rights and benefits under this Agreement and the Letter of Credit,
and to the extent of any such assignment, any such assignee shall have the
same rights and benefits against the Company hereunder and under the Letter
of Credit as it would have had if such assignee were the Bank issuing or
paying under the Letter of Credit hereunder.
SECTION 7.09. Waiver. The Bank waives any statutory right which it
may have to set off and apply any deposits of the Company or other
indebtedness of the Company if, when and after there shall be a drawing under
the Letter of Credit during the pendency of any proceeding by or against the
Company seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property.
SECTION 7.10. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
SECTION 7.11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York.
SECTION 7.12. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
KANSAS CITY POWER & LIGHT COMPANY
By ______________________________________
Senior Vice President
THE TORONTO-DOMINION BANK
By ______________________________________
Title:________________________________
By ______________________________________
Title:________________________________
EXHIBIT A
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
No. 1108
August 19, 1993
Chemical Bank
450 W. 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
Dear Ladies and Gentlemen:
We hereby establish at the request and for the account of Kansas City
Power & Light Company, a Missouri corporation (the "Company"), in your favor,
as Trustee under the Indenture of Trust dated as of October 1, 1987 (the
"Indenture") between the City of Burlington, Coffey County, Kansas (the
"Issuer") and you, pursuant to which $50,000,000 in aggregate principal
amount of the Issuer's Customized Purchase Pollution Control Revenue
Refunding Bonds, Series 1987A (Kansas City Power & Light Company Project)
(the "Bonds"), are being issued, our Irrevocable Letter of Credit No. 1108,
in the amount of $54,684,931.51 (as more fully described below), effective
immediately and expiring at the close of business at our 909 Fannin Street,
Suite 1700, Houston, Texas, 77010, office on August 18, 1996 or such later
date as we may agree upon in a writing delivered to you (the "Scheduled
Termination Date") unless sooner terminated in accordance with the terms
hereof.
We hereby irrevocably authorize you to draw on us, in an aggregate
amount not to exceed the amount of this Letter of Credit as set forth above
and in accordance with the terms and conditions and subject to the reductions
in amount as hereinafter set forth, as follows:
(1) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex A attached hereto (any such draft accompanied by such
certificate being your "Interest Draft"), an amount not exceeding
$4,684,931.51;
(2) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex B attached hereto (any such draft accompanied by such
certificate being your "Tender Draft"), an aggregate amount not
exceeding $54,684,931.51;
(3) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex C attached hereto (any such draft accompanied by such
certificate being your "Redemption Draft"), an aggregate amount not
exceeding $50,000,000;
(4) in one or more drawings by one or more of your drafts, each
accompanied by your signed and appropriately completed certificate in
the form of Annex D attached hereto (such draft accompanied by such
certificate being your "Purchase Draft"), an aggregate amount not
exceeding $50,000,000;
(5) in a single drawing by your draft, accompanied by your
signed and appropriately completed certificate in the form of Annex E
attached hereto (such draft accompanied by such certificate being your
"Final Draft"), an amount not exceeding $54,684,931.51.
Upon our honoring any Interest Draft presented by you hereunder, the
amount of this Letter of Credit and the amounts available to be drawn by you
by any subsequent Interest Draft, Tender Draft, or Final Draft shall be
automatically decreased by an amount equal to the amount of such Interest
Draft. If you shall not have received from us within 15 calendar days from
the date of such drawing a notice from us to the effect that we have not been
reimbursed for such drawing in the form of Annex F attached hereto
appropriately completed, the amount of this Letter of Credit and the amounts
from time to time available to be drawn by you by any Interest Draft, Tender
Draft, or Final Draft shall be automatically and irrevocably reinstated in
the amount of such drawing, effective the 16th calendar day from the date of
such drawing; provided however, this reinstatement shall not apply to amounts
drawn by an Interest Draft in connection with Bonds being redeemed with
amounts drawn by a Redemption Draft.
Upon our honoring any Redemption Draft or Purchase Draft presented by
you hereunder, the amount of this Letter of Credit and the amounts available
to be drawn by you by any subsequent Tender Draft, Redemption Draft, Purchase
Draft and Final Draft shall be automatically decreased by an amount equal to
the amount of such Redemption Draft or Purchase Draft. Upon our honoring any
Tender Draft presented by you hereunder, (i) the amount of this Letter of
Credit and the amounts available to be drawn by any subsequent Tender Draft
and Final Draft shall be automatically decreased by an amount equal to the
amount of such Tender Draft and (ii) the amounts available to be drawn by any
subsequent Redemption Draft and Purchase Draft shall be automatically
decreased by the amount set forth in clause (i) of paragraph 3 of the
Certificate accompanying such Tender Draft.
The amount of this Letter of Credit and the amounts from time to time
available to be drawn by you by any Tender Draft or Final Draft shall be
increased when and to the extent, but only when and to the extent, that we
are reimbursed by you, but only from amounts available to you under the
Indenture, on behalf of the Company for amounts drawn hereunder by any Tender
Draft or Purchase Draft. The amounts from time to time available to be drawn
by you by any Redemption Draft or Purchase Draft shall be increased by the
amount set forth in clause (i) of paragraph 3 of the Certificate accompanying
any Tender Draft or paragraph 3 of a Certificate accompanying any Purchase
Draft when and to the extent, but only when and to the extent, that we are
reimbursed by you, but only from amounts available to you under the
Indenture, on behalf of the Company for amounts drawn hereunder by any such
Tender Draft or Purchase Draft. Any amount received from you on behalf of
the Company in reimbursement of amounts drawn hereunder shall, if accompanied
by an appropriately completed and signed certificate in the form of Annex H
attached hereto from you, be applied to the extent of the amounts indicated
therein in reimbursement of unreimbursed drawings under your Tender Drafts or
Purchase Drafts. Amounts otherwise received from you on behalf of the
Company shall be applied in reimbursement of unreimbursed drawings made by
your Interest Draft.
The amount of this Letter of Credit and the amounts available to be
drawn by you by any Interest Draft, Tender Draft, Redemption Draft, Purchase
Draft, and Final Draft shall be decreased upon our receipt of notice from
you, in the form of your written and appropriately completed certificate
signed by you in the form of Annex G attached hereto, of a redemption or
defeasance of less than all of the Bonds outstanding, to the respective
amounts stated in such certificate.
Each draft and certificate shall refer thereon to the number of this
Letter of Credit and shall be dated the date of its presentation, and shall
be drawn and presented at our office located at 909 Fannin Street, Suite
1700, Houston, Texas, 77010 Attention: Manager, Agency (or any office which
may be designated by us by written notice delivered to you). If we receive
any of your drafts and certificates at such office (including receipt by
facsimile which must be followed by hard copy in overnight mail), all in
strict conformity with the terms and conditions of this Letter of Credit, on
or prior to the termination hereof and in any event on or before 11:00 a.m.
(Houston time) on a Banking Day, we will honor the same on or before 3:00
p.m. (Houston time) the same day in accordance with your payment
instructions. If we receive any of your drafts and certificates at such
office (including receipt by facsimile which must be followed by hard copy in
overnight mail), all in strict conformity with the terms and conditions of
this Letter of Credit, after 11:00 a.m. (Houston time) on a Banking Day prior
to the termination hereof, we will honor the same by 12:00 p.m. (Houston
time) on the next succeeding Banking Day in accordance with your payment
instructions. If requested by you, payment under this Letter of Credit may
be made by wire transfer of immediately available funds to your account in a
bank or by deposit of same day funds into a designated account that you
maintain with us. The term "Banking Day" means any day of the year other
than a Saturday, Sunday or a day on which banks are required or authorized to
close in New York City or Houston, Texas. All payments paid under this
Letter of Credit shall be paid with our own funds.
Upon the earliest of (i) our honoring your Final Draft presented
hereunder, (ii) the surrender to us by you of this Letter of Credit for
cancellation, (iii) our honoring your Redemption Draft for all of the Bonds,
(iv) the close of business on the date on which we receive written notice
from you that all of the Bonds have been converted to the Fixed Interest Rate
within the meaning of the Indenture, (v) the date on which we receive written
notice from you that there is no longer any Bond outstanding, (vi) the date
on which we receive written notice from you of the delivery of an alternate
letter of credit in accordance with the Indenture, and (vii) the Scheduled
Termination Date, this Letter of Credit shall automatically terminate.
This Letter of Credit is transferable in its entirety, but not in part,
to any transferee who you certify has succeeded you as Trustee under the
Indenture and may be successively transferred by such transferee. Transfer
of the available balance under this Letter of Credit to such transferee shall
be effected by the presentation to us of this Letter of Credit accompanied by
a certificate in the form of Annex I attached hereto appropriately completed.
Upon such presentation we shall forthwith transfer the same to your
transferee or, if so requested by your transferee, issue an irrevocable
letter of credit to your transferee with provisions therein consistent with
this Letter of Credit.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificates and
the drafts referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificates and such drafts.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by and construed in accordance with the
Uniform Customs and Practice for Documentary Credit, International Chamber of
Commerce, Publication 400 (1983 revision) and, as to matters not covered
therein, by the laws of the State of New York, including without limitation
the Uniform Commercial Code as in effect in the State of New York.
Communications with respect to this Letter of Credit shall be in writing and
shall be addressed to us at 909 Fannin Street, Suite 1700, Houston, Texas,
77010, Attention: Manager, Agency, specifically referring to the number of
this Letter of Credit.
Anything to the contrary in Article 45 of the Uniform Customs
notwithstanding this Letter of Credit is intended to remain in full force and
effect until it expires in accordance with its terms. Any failure by you or
any successor trustee or co-trustee under the Indenture to draw upon this
Letter of Credit with respect to a scheduled interest payment on the Bonds in
accordance with the terms and conditions of the Indenture shall not cause
this Letter of Credit to be unavailable for any future drawing in accordance
with the terms and conditions of the Indenture.
Very truly yours,
THE TORONTO-DOMINION BANK
By_________________________________
Title:___________________________
By_________________________________
Title:___________________________
Annex A
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
INTEREST ON THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS
CUSTOMIZED PURCHASE POLLUTION CONTROL REVENUE REFUNDING
BONDS, SERIES 1987A (KANSAS CITY POWER & LIGHT COMPANY
PROJECT) (THE "BONDS")
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (the "Letter of
Credit," the terms defined therein and not otherwise defined herein being
used herein as therein defined) issued by the Bank in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to (a) payment(s) of interest on the Bonds, including,
without limitation, accrued interest due upon the redemption of Bonds,
to the extent moneys are not available in the Bond Fund from the
sources set forth in clauses (i) through (iii), inclusive of
Section 404 of the Indenture, which payment(s) is [are]* due on
[__________.]** [CP Dates (as defined in the Indenture) established
for the current calendar month, and this drawing is also with respect
to other amounts to be drawn under Section 405(f) of the Indenture.]*
Payment of such amount is to be made to us on the same Banking Day if
the Certificate and Interest Draft are presented to you no later than
11:00 a.m. (Houston time). If presentation is after 11:00 a.m.
(Houston time), payment of such amount is to be made on the next
Banking Day. None of the Bonds, in respect of which such drawing is
being made, were registered in the name of the Company or were held on
behalf of the Company under the Custody Agreement on the Record Date
within the meaning of the Indenture.
(3) The amount of the Interest Draft accompanying this
Certificate is equal to $___________. It was computed in compliance
with the terms and conditions of the Bonds and the Indenture and does
not include any amount of interest on the Bonds which is included in
any Final Draft presented on the date of this Certificate.
_______________
* To be used while the Bonds bear interest at the CP Rate.
** Insert date; to be used if drawing is not under Section 405(f) of the
Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
Annex B
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
PRINCIPAL OF AND INTEREST ON THE CITY OF BURLINGTON, COFFEY
COUNTY, KANSAS CUSTOMIZED PURCHASE POLLUTION CONTROL
REVENUE REFUNDING BONDS, SERIES 1987A (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS") IN SUPPORT OF A TENDER
PURSUANT TO SECTIONS 301, 302, 303, 304 AND 305 OF THE
INDENTURE.
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (the "Letter of
Credit," the terms defined therein and not otherwise defined herein being
used herein as therein defined) issued by the Bank in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment of (i) the purchase price equal to the
unpaid principal amount of the Bonds to be purchased as a result of a
tender on or prior to the effective date of the Fixed Interest Rate (as
defined in the Indenture) pursuant to the terms of Sections 301, 302,
303, 304 and 305 of the Indenture (other than Bonds registered in the
name of the Company which are presently held by the Company or the
Custodian on behalf of the Company) and (ii) the purchase price equal
to the amount of interest accrued and unpaid to the purchase date from
the immediately preceding Interest Accrual Date (as defined in the
Indenture), to the extent moneys are not available from the sources set
forth in clauses (i) through (iii), inclusive, of Section 306 of the
Indenture, which payment is due on the same Banking Day if the
Certificate and Tender Draft are presented not later than 11:00 a.m.
(Houston time), or which payment is due on the next succeeding Banking
Day if the Certificate and Tender Draft are presented after the time
deadline referred to above.
(3) The amount of the Tender Draft accompanying this Certificate
is equal to the sum of (i) $__________ being drawn in respect of the
payment of the portion of the tender price of the Bonds equal to the
unpaid principal of Bonds (other than Bonds registered in the name of
the Company which are presently held by the Company or the Custodian on
behalf of the Company) to be purchased as a result of a tender pursuant
to Sections 301, 302, 303, 304, and 305 of the Indenture and
(ii) $________ being drawn in respect of the payment of the portion of
the tender price of the Bonds equal to the accrued and unpaid interest
on such Bonds and does not include any amount of interest which is
included in any Tender Draft (unless such amount has been reinstated by
the Bank) or Final Draft presented on or prior to the date of this
Certificate.
(4) The amount of the Tender Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds
and the Indenture and does not exceed the amount available to be drawn
by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
Annex C
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
PRINCIPAL OF THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS
CUSTOMIZED PURCHASE POLLUTION CONTROL REVENUE REFUNDING
BONDS, SERIES 1987A (KANSAS CITY POWER & LIGHT COMPANY
PROJECT) (THE "BONDS") UPON REDEMPTION
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (the "Letter of
Credit," the terms defined therein and not otherwise defined herein being
used herein as therein defined) issued by the Bank in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon redemption [of all] [less than all]*
of the Bonds on or prior to the effective date of the Fixed Interest
Rate (as defined in the Indenture), of the unpaid principal amount of
the Bonds to be redeemed pursuant to the terms of Sections 310, 311 or
312 of the Indenture (other than Bonds registered in the name of the
Company which are presently held by the Company or the Custodian on
behalf of the Company), to the extent moneys are not available in the
Bond Fund from the sources set forth in clauses (i) and (ii), of
Section 404 of the Indenture, which payment is due on the same Banking
Day if the Certificate and Redemption Draft are presented not later
than 11:00 a.m. (Houston time), or which payment is due on the next
succeeding Banking Day if the Certificate and Redemption Draft are
presented after the time deadline referred to above.
(3) The amount of the Redemption Draft accompanying this
Certificate is equal to the sum of $_________ being drawn in respect of
the payment of unpaid principal of Bonds (other than Bonds registered
in the name of the Company which are presently held by the Company or
the Custodian on behalf of the Company) to be redeemed.
(4) The amount of the Redemption Draft accompanying this
Certificate was computed in accordance with the terms and conditions of
the Bonds and the Indenture and does not exceed the amount available to
be drawn under the Letter of Credit.
_______________
* Insert appropriate description.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ______________, 19___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
Annex D
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
PRINCIPAL OF THE CITY OF BURLINGTON, COFFEY COUNTY, KANSAS
CUSTOMIZED PURCHASE POLLUTION CONTROL REVENUE REFUNDING
BONDS, SERIES 1987A (KANSAS CITY POWER & LIGHT COMPANY
PROJECT) (THE "BONDS") IN SUPPORT OF A PURCHASE
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (the "Letter of
Credit," the terms defined therein and not otherwise defined herein being
used herein as therein defined) issued by the Bank in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, on or prior to the effective date of the
Fixed Interest Rate (as defined in the Indenture), of the unpaid
principal amount of the Bonds to be purchased by the Company in lieu of
redemption pursuant to the terms of Section 314 of the Indenture (other
than Bonds registered in the name of the Company which are presently
held by the Company or the Custodian on behalf of the Company), to the
extent moneys are not available in the Bond Fund from the sources set
forth in clauses (i) through (iii) of Section 306 of the Indenture,
which payment is due on the same Banking Day if the Certificate and
Purchase Draft are presented not later than 11:00 a.m. (Houston time),
or which payment is due on the next succeeding Banking Day if the
Certificate and Purchase Draft are presented after the time deadline
referred to above.
(3) The amount of the Purchase Draft accompanying this
Certificate is equal to the sum of $__________ being drawn in respect
of the payment of unpaid principal of Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or the Custodian on behalf of the Company) to be purchased by
the Company in lieu of redemption.
(4) The amount of the Purchase Draft accompanying this
Certificate was computed in compliance with the terms and conditions of
the Bonds and the Indenture and does not exceed the amount available to
be drawn by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
Annex E
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT OF
PRINCIPAL OF AND INTEREST ON THE CITY OF BURLINGTON, COFFEY
COUNTY, KANSAS CUSTOMIZED PURCHASE POLLUTION CONTROL
REVENUE REFUNDING BONDS, SERIES 1987A (KANSAS CITY POWER &
LIGHT COMPANY PROJECT) (THE "BONDS"), UPON STATED OR
ACCELERATED MATURITY
Irrevocable Letter of Credit No. 1108
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank, (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (the "Letter of
Credit," the terms defined therein and not otherwise defined herein being
used herein as therein defined) issued by the Bank in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon stated or accelerated maturity of the
unpaid principal amount of, and, to the extent such payment is not due
on an Interest Payment Date within the meaning of the Indenture, of
accrued and unpaid interest on, all of the Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or the Custodian on behalf of the Company), to the extent
moneys are not available in the Bond Fund from the sources set forth in
clauses (i) through (iii) of Section 404 of the Indenture, which
payment is due on the same Banking Day if the Certificate and Final
Draft are presented not later than 11:00 a.m. (Houston time), or which
payment is due on the next succeeding Banking Day if the Certificate
and Final Draft are presented after the time deadline referred to
above.
(3) The amount of the Final Draft accompanying this Certificate
is equal to the sum of (i) $_________ being drawn in respect of the
payment of unpaid principal of all of the Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or the Custodian on behalf of the Company) and (ii) $________
being drawn in respect of the payment of accrued and unpaid interest on
such Bonds (other than Bonds registered in the name of the Company
which are presently held by the Company or the Custodian on behalf of
the Company) and does not include any amount of interest which is
included in any Interest Draft or Tender Draft (unless such amount has
been reinstated by the Bank), presented on or prior to the date of this
Certificate.
(4) The amount of the Final Draft accompanying this Certificate
was computed in compliance with the terms and conditions of the Bonds
and the Indenture and does not exceed the amount available to be drawn
by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
Annex F
NOTICE THAT TRUSTEE'S RIGHT TO DRAW
UNDER THE LETTER OF CREDIT BY AN
INTEREST DRAFT HAS NOT BEEN REINSTATED
Chemical Bank
450 W. 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
Irrevocable Letter of Credit No. 1108
Dear Sirs:
You are hereby advised that Kansas City Power & Light Company has not
reimbursed us in an amount equal to the amount drawn by you under the
Interest Draft dated __________, 19___. Therefore, the amount of our
Irrevocable Letter of Credit No. 1108 and the amounts available to be drawn
by you by an Interest Draft, Tender Draft, or Final Draft (which available
amounts have been decreased by an amount equal to the amount of such Interest
Draft) shall not be reinstated in the amount of such Interest Draft.
____________________________
_____________________________
Annex G
CERTIFICATE FOR THE REDUCTION OF AMOUNTS AVAILABLE UNDER
LETTER OF CREDIT NO. 1108 DATED AUGUST 19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (the "Letter of
Credit," the terms defined therein and not otherwise defined herein being
used herein as therein defined) issued by the Bank in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee hereby notifies you that on or prior to the date
hereof $_________ principal amount of the Bonds have been redeemed or
defeased and paid pursuant to the Indenture.
(3) Following the redemption or the defeasance and payment
referred to in paragraph (2) above, the aggregate principal amount of
all of the Bonds outstanding is $__________.
(4) The maximum amount of interest (computed at 12% per annum
for a period of 285 days computed on the basis of a 365 day year)
accruing on the Bonds referred to in paragraph (3) above is
$__________.
(5) The amount available to be drawn by the Trustee under the
Letter of Credit by any Interest Draft is reduced to $___________ (such
amount being equal to the amount specified in paragraph (4) above) upon
receipt by the Bank of this Certificate.
(6) The amount available to be drawn by the Trustee under the
Letter of Credit by any Tender Draft is reduced to $_______ (such
amount being equal to the sum of the amounts specified in paragraphs
(3) and (4) above) upon receipt by the Bank of this Certificate.
(7) The amount available to be drawn by the Trustee under the
Letter of Credit by any Redemption Draft is reduced to $________ (such
amount being equal to the amount specified in paragraph (3) above).
(8) The amount available to be drawn by the Trustee under the
Letter of Credit by any Purchase Draft is reduced to $_________ (such
amount being equal to the amount specified in paragraph (3) above).
(9) The amount available to be drawn by the Trustee under the
Letter of Credit by its Final Draft is reduced to $_______ (such amount
being equal to the sum of the amounts specified in paragraphs (3) and
(4) above) upon receipt by the Bank of this Certificate.
(10) The amount of the Letter of Credit is reduced to
$__________ (such amount being equal to the sum of the amounts
specified in paragraph (3) and (5) above) upon receipt by the Bank of
this Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
Annex H
CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE
UNDER IRREVOCABLE LETTER OF CREDIT NO. 1108 DATED AUGUST
19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to The Toronto-Dominion Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. 1108 (the "Letter of
Credit," the terms defined therein and not otherwise defined herein being
used herein as therein defined) issued by the Bank in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The amount of $_________ paid to you today by the Trustee on
behalf of the Company is a payment made to reimburse you pursuant to
Section 1.10[(c)]* [(d)]** of the Letter of Credit and Reimbursement
Agreement, dated as of August 19, 1993 (the "Reimbursement Agreement"),
between the Company and the Bank, for amounts drawn under the Letter of
Credit by [Tender Drafts]* [Purchase Drafts].**
(3) Of the amount referred to in paragraph (2), $____________
represents the principal amount of Bonds.
[(4) Of the amount referred to in paragraph (2), $__________
represents accrued interest on Bonds calculated in accordance with
clause (ii) of Section 1.10(c) of the Reimbursement Agreement.]*
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By_________________________________
[Name and Title]
_______________
* To be used in connection with reimbursement for amounts drawn under
Tender Drafts.
** To be used in connection with reimbursement for amounts drawn under
Purchase Drafts.
Annex I
INSTRUCTION TO TRANSFER
________________, 19___
Attention: Letter of Credit Operations
Re: Irrevocable Letter of Credit No. 1108
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
________________________________________
[Name of Transferee]
________________________________________
[Address]
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Indenture (as defined in the Letter of
Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however,
that no rights shall be deemed to have been transferred to the transferee
until such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith
we ask that this transfer be effective and that you transfer the same to our
transferee or that, if so requested by the transferee, you issue a new
irrevocable letter of credit in favor of the transferee with provisions
consistent with the Letter of Credit.
Very truly yours,
CHEMICAL BANK,
as predecessor Trustee
By_________________________________
[Name and title]
EXHIBIT B
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF COUNSEL FOR THE COMPANY
August 19, 1993
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY 10019-6101
RE: $50,000,000 City of Burlington, Kansas Customized Purchase Pollution
Control Revenue Refunding Bonds (Kansas City Power & Light Project)
Series 1987A
Kansas City Power & Light Company
Gentlemen:
I am Chief Legal Officer of Kansas City Power & Light Company, a
Missouri corporation (the "Company"), and am familiar with the matters
relating to the preparation, execution and delivery of a Letter of Credit and
Reimbursement Agreement which terms shall include the fee letter executed
pursuant to Section 1.11 thereof (the "Reimbursement Agreement") dated as of
August 19, 1993, between the Company and The Toronto-Dominion Bank (the
"Bank"). Among other things, I have examined:
(1) a fully executed counterpart of the Reimbursement Agreement;
(2) the fully executed Letter of Credit;
(3) the fully executed Indenture;
(4) the fully executed Lease;
(5) the fully executed Sublease;
(6) the fully executed Custody Agreement and Amendment No. 1
thereto;
(7) the Articles of Incorporation of the Company and all
amendments thereto (the "Charter");
(8) the by-laws of the Company as now in effect (the "By-laws");
and
(9) the Company's corporate proceedings and the proceedings
before the public utility regulatory commissions of the States of
Missouri and Kansas relating to the Reimbursement Agreement and related
matters.
I have also examined the originals, or copies certified to my satis-
faction, of (i) such other corporate records of the Company, certificates of
public officials and of officers of the Company, (ii) the agreements,
instruments and documents which affect or purport to affect the obligations
of the Company under the Reimbursement Agreement, and (iii) such other
agreements, instruments and documents as we have deemed necessary as a basis
for the opinions hereinafter expressed. I have assumed the due execution and
delivery, pursuant to due authorization, of the Reimbursement Agreement by
the Bank. All capitalized terms used herein and defined in the Reimbursement
Agreement are used herein as therein defined.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the opinion that:
(1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business in, and is in good standing under
the laws of, the State of Kansas.
(2) The execution, delivery and performance by the Company of
the Reimbursement Agreement and each Related Document to which it is a
party are within the Company's corporate power, have been duly
authorized by all necessary corporate action, do not contravene (i) the
Charter or the By-laws, or (ii) any law, rule or regulation applicable
to the Company, or (iii) any contractual or legal restriction
(including, but not limited to, the Indenture) binding on or affecting
the Company, and do not result in or require the creation of any lien,
security interest or other charge or encumbrance (other than pursuant
to the Reimbursement Agreement and the Related Documents) upon or with
respect to any of its properties. The Reimbursement Agreement and each
Related Document to which the Company is a party have been duly
executed and delivered on behalf of the Company.
(3) The public utility regulatory commissions of the States of
Missouri and Kansas have duly current issued orders authorizing the
Company to enter into the Reimbursement Agreement, and the commissions
have duly issued previous orders authorizing the Lease, the Sublease
and any other documents that such commissions have jurisdiction over
and to which the Company is a party and the Related Documents to which
the Company is a party, and such orders remain in full force and effect
in the form issued. Except for the approvals of the Board of
Commissioners of Coffey County, Kansas, and the City Council of the
City of Burlington, Kansas, approving issuance of the Bonds, which
approvals have been duly obtained, and the notice of timely filing with
the Board of Tax Appeals of the State of Kansas, no other
authorization, approval or other action by, and no notice to or filing
or registration with, any governmental authority or regulatory body
(other than for informational purposes) is required for the due
execution, delivery and performance by the Company of the Reimbursement
Agreement or any Related Document to which it is a party.
(4) The Reimbursement Agreement and each Related Document to
which the Company is a party are the legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms.
(5) Except as disclosed on in the Company's Form 10-K for the
year 1992, Forms 10-Q for the quarters March 31, 1993 and June 30,
1993, and Form 8-K dated August 16, 1993, there is no pending or, to
the best of my knowledge, threatened action or proceeding before any
court, governmental agency or arbitrator against, directly involving or
affecting the Company or any of its subsidiaries, which, in any case,
may materially and adversely affect the financial condition or
operations of the Company.
The opinions set forth above are subject to the following qualifica-
tions:
(a) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a
party is subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally.
(b) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a
party, may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
I am not licensed to practice law in the State of New York or the State
of Kansas. With respect to the Reimbursement Agreement and the Related
Documents and any other document to which the laws of either the State of New
York or the State of Kansas are applicable, I have assumed for purposes of
this opinion that such laws (other than conflict of laws) are substantially
similar to the laws of the State of Missouri. With respect to the
conclusions set forth herein, I express no opinions as to any laws other than
the laws of the State of Missouri and the Federal laws of the United States.
Very truly yours,
EXHIBIT C
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF BOND COUNSEL
[Letterhead of Chapman and Cutler]
August 19, 1993
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106
Chemical Bank
450 West 33rd Street
New York, New York 10001
The Toronto-Dominion Bank
31 West 52nd Street
New York, New York 10019-6101
Re: $50,000,000 City of Burlington, Kansas Customized Purchase Pollution
Control Revenue Refunding Bonds, Series 1987A (Kansas City Power &
Light Company Project)
Ladies and Gentlemen:
The above-referenced bonds (the "Bonds") were issued under and are
secured by an Indenture of Trust dated as of October 1, 1987 (the
"Indenture"), between the City of Burlington, Kansas (the "Issuer") and
Chemical Bank, as trustee (the "Trustee"). Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in the
Indenture.
Kansas City Power & Light Company (the "Company") has requested we
provide the opinion of Bond Counsel required by Section 4.4 of the Series
1987A Equipment Sublease Agreement dated as of October 1, 1987 (the
"Sublease") between the Issuer and the Company and Section 405(c) of the
Indenture with respect to the issuance of Letter of Credit No. 1108 of even
date herewith (the "Letter of Credit") issued by The Toronto-Dominion Bank
(the "Bank").
On the basis of our review of the Letter of Credit, the Indenture, the
Sublease, photocopies of various counsel opinions dated October 29, 1987
(which have been identified as authentic copies of the original opinions and
of which we have assumed the authenticity), and such other documents as we
have considered necessary, we are of the opinion that the delivery of the
Letter of Credit is authorized under the Sublease and complies with its
terms.
We express no opinion as to whether the Letter of Credit is a legal,
valid, binding and enforceable obligation of the Bank in accordance with its
terms.
Respectfully submitted,
AGBacon
EXHIBIT D
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
ENCUMBRANCES
(i) the Lien of the Mortgages;
(ii) liens for taxes or assessments by governmental bodies not yet
due or the payment of which is being contested in good faith by the
Company, provided that the Company shall have set aside on its books
reserves deemed by it to be adequate with respect to any such tax or
assessment so being contested;
(iii) any right of any municipal or other governmental body or
agency, by virtue of any franchise, grant, license, contract or statute, to
occupy, purchase or designate a purchaser of, or to order the sale of, any
mortgaged property upon payment of reasonable compensation therefor, or to
terminate any franchise, grant, license, contract or other right, or to
regulate the property and business of the Company;
(iv) liens and charges incidental to construction or current
operations of the Company which are not delinquent or, whether or not
delinquent, are being contested in good faith by the Company;
(v) easements, reservations or right of way, and zoning ordinances,
regulations and restrictions, if they do not, individually or in the
aggregate, impair the utility of the affected property in the operation of
the business of the Company;
(vi) irregularities in or defects of title with respect to any
rights of way acquired by the Company for lines, structures and
appurtenances thereto, if the Company has obtained from the apparent owner
of the real estate traversed by any such right of way a sufficient right,
by the terms of the instrument granting such right of way, to the use
thereof for the purpose of such lines, structures and appurtenances, or the
Company has eminent domain power to remove or cure such irregularities or
deficiencies;
(vii) liens securing obligation neither (A) assumed by the Company
nor (B) on account of which it customarily pays interest, directly or
indirectly, existing upon real estate, or rights in or relating to real
estate acquired by the Company for right of way for lines, structures and
appurtenances thereto;
(viii) party-wall agreements and agreements for and obligations
relating to the joint or common use of property owned solely by the Company
or owned by the Company in common or jointly with one or more parties;
(ix) liens securing indebtedness incurred by a Person, other than
the Company, which indebtedness has been neither assumed nor guaranteed by
the Company nor on which it customarily pays interest, existing on property
which the Company owns jointly or in common with such Person or such Person
and others, if there is an effective bar against partition of such property
which would preclude the sale of such property by such other Person or the
holder of such lien without the consent of the Company;
(x) any attachment, judgment and other similar lien arising in
connection with court proceedings in an amount not in excess of the greater
of $10,000,000 or 5% of the principal amount of the outstanding bonds at
the time such attachment, judgment or lien arises, or the execution of
which has been stayed or which has been appealed and secured, if necessary,
by an appeal bond;
(xi) the burdens of any law or governmental rule, regulation, order
or permit requiring the Company to maintain certain facilities or to
perform certain acts as a condition of its occupancy or use of, or
interference with, any public or private lands or highways or any river,
stream or other waters;
(xii) any duties or obligations of the Company to any federal state
or local or other governmental authority with respect to any franchise,
grant, license or permit which affects any mortgaged property;
(xiii) liens in favor of a governmental or governmental entity
securing (A) payments pursuant to a statute (other than taxes), or (B)
indebtedness incurred to finance all or part of the purchase price or cost
of construction of the property subject to such lien; and
(xiv) possible adverse rights or interests and inconsequential
defects or irregularities in title which, in an opinion of counsel may
properly be disregarded.
[SERIES 1987B] EXHIBIT 10-l
LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
between
KANSAS CITY POWER & LIGHT COMPANY
and
DEUTSCHE BANK AG, ACTING THROUGH ITS
NEW YORK AND CAYMAN ISLANDS BRANCHES
dated as of August 19, 1993
TABLE OF CONTENTS
Section Page
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
1.01 The Letter of Credit . . . . . . . . . . . . . . . . . . . . .1
1.02 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . .1
1.03 Tender Advances and Accrued Interest Advances. . . . . . . . .2
1.04 Redemption Advances and Purchase Advances . . . . . . . . . .2
1.05 Interest Advances . . . . . . . . . . . . . . . . . . . . . .3
1.06 Interest on Overdue Amounts . . . . . . . . . . . . . . . . .3
1.07 Interest Payments . . . . . . . . . . . . . . . . . . . . . .3
1.08 Selection of Interest Rates . . . . . . . . . . . . . . . . .4
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . .4
1.10 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . .5
1.11 Other Payments . . . . . . . . . . . . . . . . . . . . . . . .6
1.12 Increased Costs . . . . . . . . . . . . . . . . . . . . . . .6
1.13 Additional Interest. . . . . . . . . . . . . . . . . . . . . .7
1.14 Payments and Computations. . . . . . . . . . . . . . . . . . .8
1.15 Payment on Non-Business Days . . . . . . . . . . . . . . . . .8
1.16 Extension of the Letter of Credit. . . . . . . . . . . . . . .8
1.17 Obligations Absolute . . . . . . . . . . . . . . . . . . . . .8
1.18 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE II
CONDITIONS OF ISSUANCE
2.01 Condition Precedent to Issuance of the
Letter of Credit . . . . . . . . . . . . . . . . . . . . . .10
2.02 Additional Conditions Precedent to Issuance
of the Letter of Credit . . . . . . . . . . . . . . . . . .10
2.03 Condition Precedent to Each Advance. . . . . . . . . . . . . .11
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties . . . . . . . . . . . . . . . .11
ARTICLE IV
COVENANTS OF THE COMPANY
4.01 Affirmative Covenants . . . . . . . . . . . . . . . . . . . .13
a. Preservation of Corporate Existence, Etc. . . . . . . . .13
b. Compliance with Laws, Etc. . . . . . . . . . . . . . . . .13
c. Maintenance of Insurance, Etc. . . . . . . . . . . . . . .14
d. Visitation Rights . . . . . . . . . . . . . . . . . . . .14
Section Page
e. Keeping of Books . . . . . . . . . . . . . . . . . . . . .14
f. Maintenance of Properties . . . . . . . . . . . . . . . .14
g. Reporting Requirements . . . . . . . . . . . . . . . . . .14
h. Officer's Certificate . . . . . . . . . . . . . . . . . .15
i. Other Agreements . . . . . . . . . . . . . . . . . . . . .15
j. Redemption or Defeasance of Bonds . . . . . . . . . . . .15
k. Registration of Bonds . . . . . . . . . . . . . . . . . .15
l. Continuance of Rating. . . . . . . . . . . . . . . . . . .15
4.02 Negative Covenants . . . . . . . . . . . . . . . . . . . . . .15
a. Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . .15
b. Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . .16
c. Sales, Etc. of Assets . . . . . . . . . . . . . . . . . .16
d. Compliance with ERISA . . . . . . . . . . . . . . . . . .16
e. Amendment of Indenture or Related Document . . . . . . . .17
ARTICLE V
EVENTS OF DEFAULT
5.01 Events of Default . . . . . . . . . . . . . . . . . . . . . .17
5.02 Upon an Event of Default . . . . . . . . . . . . . . . . . . .19
ARTICLE VI
DEFINITIONS
6.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE VII
MISCELLANEOUS
7.01 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . .23
7.02 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . .23
7.03 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . .23
7.04 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . .23
7.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . .23
7.06 Liability of the Bank . . . . . . . . . . . . . . . . . . . .25
7.07 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . .25
7.08 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . .26
7.09 Right of Set-off . . . . . . . . . . . . . . . . . . . . . . .26
7.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . .26
7.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .26
7.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . .26
EXHIBIT A - Form of Irrevocable Letter of Credit with Annexes A
through I thereto
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C - Form of Opinion of Bond Counsel
EXHIBIT D - Encumbrances
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT dated as of August 19,
1993, between KANSAS CITY POWER & LIGHT COMPANY, a corporation organized
and existing under the laws of the State of Missouri (the "Company"), and
DEUTSCHE BANK AG, ACTING THROUGH ITS NEW YORK AND CAYMAN ISLANDS BRANCHES
(the "Bank"). (Unless otherwise indicated, all capitalized terms used
herein shall have the meaning referred to or set forth in Article VI
hereof.)
WHEREAS, the Company requested the City of Burlington, Coffey
County, Kansas (the "Issuer") to issue pursuant to an Indenture of Trust
dated as of October 1, 1987 (the "Indenture"), naming Chemical Bank, as
trustee (the "Trustee"), $40,000,000 aggregate principal amount of the
Issuer's Customized Purchase Pollution Control Revenue Refunding Bonds,
Series 1987B (Kansas City Power & Light Company Project) (the "Bonds") to
various purchasers (the "Bond Purchasers") to refinance a portion of the
costs of acquisition, construction, and installation of certain air and
water pollution control and sewage and solid waste disposal facilities (the
"Project") in Coffey County, Kansas; and
WHEREAS, pursuant to an Equipment Lease Agreement (the "Lease")
dated as of October 1, 1987, between the Company and the Issuer, the
Company agreed to use the proceeds of the Bonds for the refinancing of the
Project, and the Company leased the Project to the Issuer, and pursuant to
an Equipment Sublease Agreement (the "Sublease") dated as of October 1,
1987, between the Issuer and the Company, the Project was subleased by the
Issuer to the Company for payments to be made by the Company in such
amounts and at such times as will be sufficient to timely pay the principal
and interest on the Bonds; and
WHEREAS, in order to induce the Bond Purchasers to purchase the
Bonds, the Company requested Barclays Bank PLC to issue its irrevocable
transferrable letter of credit (the "Original Letter of Credit") in the
amount of $43,747,945.21 of which $40,000,000 supports the payment of
principal of the Bonds, and $3,747,945.21 supports the payment of up to 285
days' accrued interest (computed at 12%) on the Bonds; and
WHEREAS, the Company has requested the Bank through its New
York Branch to issue an Alternate Letter of Credit (the "Letter of Credit")
in accordance with Section 4.4 of the Sublease to replace the Original
Letter of Credit.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Bank to issue the Letter of Credit, the parties hereto agree
as follows:
ARTICLE I
AMOUNT AND TERMS OF THE LETTER OF CREDIT
SECTION 1.01. The Letter of Credit. On the terms and conditions
hereinafter set forth, the Bank agrees, upon the request of the Company, to
issue the Letter of Credit dated August 19, 1993, through its New York
Branch to the Trustee in an amount not to exceed $43,747,945.21 (the
"Commitment") and expiring on or before the Scheduled Termination Date.
SECTION 1.02. Reimbursement. (a) Subject to Section 1.03 in the
case of a drawing under the Letter of Credit made pursuant to a Tender
Draft and Section 1.04 in the case of a drawing under the Letter of Credit
made pursuant to a Redemption Draft or a Purchase Draft and Section 1.05 in
the case of a drawing under the Letter of Credit made pursuant to an
Interest Draft, the Company hereby agrees to pay to the Bank by the close
of business on the date on which the Bank paid any draft presented under
the Letter of Credit (after the Bank shall have paid such draft) a sum
equal to the amount so paid under the Letter of Credit.
(b) The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company resulting
from each Demand Advance made from time to time hereunder and the amounts
of principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account or accounts shall, in the absence of manifest error,
be conclusive evidence of the existence and amounts of the obligations of
the Company therein recorded.
SECTION 1.03. Tender Advances and Accrued Interest Advances. (a) If
the Bank shall make any payment under the Letter of Credit pursuant to a
Tender Draft and the conditions set forth in Section 2.03 shall have been
fulfilled, that portion of such payment with respect to the amount of
unpaid principal of the Bonds under such Tender Draft shall constitute a
tender advance made by the Bank to the Company on the date and in the
amount of such payment, each such advance being a "Tender Advance" and
collectively the "Tender Advances." The Company shall repay the aggregate
unpaid principal amount of all Tender Advances on the Scheduled Termination
Date. If the conditions set forth in Section 2.03 shall have been
fulfilled, that portion of the payment equal to the accrued interest, if
any, on the Bonds under such Tender Draft shall constitute an accrued
interest advance made by the Bank to the Company on the date and in the
amount of such payment, each such advance being an "Accrued Interest
Advance" and collectively the "Accrued Interest Advances." The Company
shall repay the unpaid principal amount of any Accrued Interest Advance and
accrued interest thereon on the first business day of the next calendar
month. If certified to the Bank by the Company as a payment being made
pursuant to this Section 1.03(a), upon such repayment, the Bank shall
reinstate the Letter of Credit in the principal amount of such Accrued
Interest Advance being repaid. The Bank shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of
the Company resulting from each Tender Advance and each Accrued Interest
Advance made from time to time and the amounts of principal and interest
payable and paid from time to time hereunder. In any legal action or
proceeding in respect of this Agreement, the entries made in such account
shall, in the absence of manifest error, be conclusive evidence of the
existence and amounts of the obligations of the Company therein recorded.
(b) The Company shall pay interest on the unpaid principal amount of
each Tender Advance from the date of such Tender Advance until such
principal amount shall become due, at the Domestic Rate or the Eurodollar
Rate as selected by the Company pursuant to Section 1.08. The Company
shall pay interest on the unpaid principal amount of each Accrued Interest
Advance from the date of such Accrued Interest Advance until such principal
amount shall become due, at the Domestic Rate.
SECTION 1.04. Redemption Advances and Purchase Advances. (a) If the
Bank shall make any payment under the Letter of Credit pursuant to a
Redemption Draft and the conditions set forth in Section 2.03 shall have
been fulfilled, such payment shall constitute a redemption advance made by
the Bank to the Company on the date and in the amount of such payment, each
such redemption advance being a "Redemption Advance" and collectively the
"Redemption Advances." If the Bank shall make any payment under the Letter
of Credit pursuant to a Purchase Draft and the conditions set forth in
Section 2.03 shall have been fulfilled, such payment shall constitute a
purchase advance made by the Bank to the Company on the date and in the
amount of such payment, such purchase advance being a "Purchase Advance"
and collectively the "Purchase Advances". (Purchase Advances together with
Redemption Advances are hereinafter sometimes referred to individually as a
"Term Advance" and collectively as the "Term Advances.")
(b) The Company shall repay the aggregate unpaid principal amount of
all Term Advances on the Scheduled Termination Date. The Bank shall
maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Company resulting from each Redemption
Advance and Purchase Advance made from time to time and the amounts of
principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account or accounts shall, in the absence of manifest error,
be conclusive evidence of the existence and amounts of the obligations of
the Company therein recorded.
(c) The Company shall pay interest on the unpaid principal amount of
each Term Advance from the date of such Term Advance until such principal
amount shall become due, at the Domestic Rate or the Eurodollar Rate as
selected by the Company pursuant to Section 1.08.
SECTION 1.05. Interest Advances. (a) If the Bank shall make any
payment under the Letter of Credit pursuant to an Interest Draft, such
payment shall constitute an interest advance made by the Bank to the
Company on the date and in the amount of such payment, each such interest
advance being an "Interest Advance" and collectively the "Interest
Advances." The Company shall repay each Interest Advance on the same day
such Interest Advance is made by the Bank, but in any event after the Bank
honors a draw under the Letter of Credit pursuant to an Interest Draft
related thereto.
(b) The Bank shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Company resulting
from each Interest Advance made from time to time and the amounts of
principal and interest payable and paid from time to time hereunder. In
any legal action or proceeding in respect of this Agreement, the entries
made in such account shall, in the absence of manifest error, be conclusive
evidence of the existence and amounts of the obligations of the Company
therein recorded.
SECTION 1.06. Interest on Overdue Amounts. Any amount payable
pursuant to this Agreement which is not paid when due, whether at stated
maturity, by acceleration or otherwise, shall bear interest from and
including the date the same becomes due until such amount is paid in full,
payable on demand, at such fluctuating interest rate at all times equal to
the Alternate Base Rate plus 2%.
SECTION 1.07. Interest Payments. The Company shall pay interest in
arrears on the unpaid principal amount of each Advance (other than an
Accrued Interest Advance) from the date of such Advance until such
principal amount shall become due, payable (i) quarterly on the last day of
each March, June, September and December during the term thereof and on the
Scheduled Termination Date, and (ii) in addition, on the last day of each
Interest Period (as hereinafter defined) for such Advance if such Advance
is a Eurodollar Advance. The Company shall pay interest in arrears on the
unpaid principal amount of each Accrued Interest Advance from the date of
such Accrued Interest Advance until such principal amount shall become due,
payable on the first business day of the next calendar month.
SECTION 1.08. Selection of Interest Rates. Subject to Section
1.09(c) below, the Company may from time to time select for each Tender
Advance or for each Term Advance in an unpaid principal amount equal to or
greater than $1,000,000 either the Domestic Rate or the Eurodollar Rate,
provided that the Company shall also select a Business Day on which the
Domestic Rate or the Eurodollar Rate, as the case may be, shall begin for
such Tender Advance or for such Term Advance and that telephonic notice
thereof (such notice to be confirmed by the Company immediately in writing)
is given to the Bank on or before such Business Day in the case of
selection of the Domestic Rate, and at least four Business Days prior to
such Business Day in case of selection of the Eurodollar Rate. The
interest rate selected for any Tender Advance or for any Term Advance by
the Company pursuant to this Section 1.08 shall continue thereafter in
effect for such Tender Advance or for such Term Advance until the Business
Day which the Company shall subsequently select pursuant hereto as the
Business Day on which another interest rate hereunder shall begin for such
Tender Advance or for such Term Advance. If during the term of any Tender
Advance or any Term Advance the Company changes the interest rate for such
Tender Advance or such Term Advance from the Eurodollar Rate to the
Domestic Rate, the Business Day on which the Domestic Rate shall then begin
shall be the last day of the Interest Period for such Tender Advance or
such Term Advance. In the event that the Tender Advance or the Term
Advance shall be in an amount less than $1,000,000 or the Company shall
fail to select an interest rate, the interest rate shall be the Domestic
Rate.
SECTION 1.09. Interest Periods. (a) If and so long as the
Eurodollar Rate shall be selected for any Tender Advance or Term Advance,
the period between the Business Day on which such rate shall then begin for
such Eurodollar Advance and the date of payment in full of such Eurodollar
Advance shall be divided into successive periods, each such period being an
"Interest Period" for such Eurodollar Advance. The initial Interest Period
for such Eurodollar Advance at that time shall begin on such Business Day
and each subsequent Interest Period for such Eurodollar Advance at the time
shall begin on the last day of the immediately preceding Interest Period.
The duration of each Interest Period for any Eurodollar Advance shall be
30, 90, or 180 days as the Company may, upon telephonic notice given to the
Bank at least two Business Days prior to the first day of such Interest
Period (such notice to be confirmed by the Company immediately in writing),
select; provided, however, that:
(i) if the Company fails so to select the duration of any
Interest Period, the duration of such Interest Period shall be 30
days; and
(ii) the duration of any Interest Period which begins prior to
the Scheduled Termination Date and would otherwise end after such
date shall end on such date.
(b) If it shall become unlawful for the Bank to obtain funds in the
London interbank market in order to fund or maintain Eurodollar Advances or
otherwise to perform its obligations hereunder with respect to any such
Eurodollar Advances, upon notice by the Bank to the Company, the rate of
interest on all Eurodollar Advances shall thereupon be the Domestic Rate.
The right of the Company to select the Eurodollar Rate for any Tender
Advance and for any Term Advance shall cease for the period during which
such illegality shall occur and be continuing. The rate of interest on all
Eurodollar Advances shall thereupon be the Domestic Rate.
(c) On and after the date on which the unpaid principal amount of
any Tender Advance or any Term Advance shall be reduced, by payment or
prepayment or otherwise, to less than $1,000,000, the rate of interest on
the unpaid principal amount of such Tender Advance or such Term Advance
shall be the Domestic Rate and the right of the Company to select a rate
other than the Domestic Rate for such Tender Advance or such Term Advance
shall terminate; provided, however, that if and so long as such Tender
Advance or Term Advance shall bear the same rate (other than the Domestic
Rate) for the same Interest Period as other Tender Advances or other Term
Advances and the aggregate unpaid principal amount of all such Tender
Advances and Term Advances shall equal or exceed $1,000,000, the Company
shall have the right to select such rate for such Interest Period for such
Tender Advance and such Term Advance.
SECTION 1.10. Prepayments. (a) The Company may prepay in whole or
in part the outstanding amount of any Accrued Interest Advance with accrued
interest to the date of such prepayment on the amount prepaid; provided,
however, that the Company shall, simultaneously with the making of such
prepayment, give notice to the Bank by telephone (which shall be confirmed
immediately in writing) or telegraph of such prepayment, which notice shall
specify (i) the amount of such prepayment and (ii) the amount of accrued
interest transmitted with such prepayment.
(b) The Company may, upon at least two Business Days' notice to the
Bank, prepay the outstanding amount of any Advance (other than an Accrued
Interest Advance) in whole or in part with accrued interest to the date of
such prepayment on the amount prepaid and once notice is given the Company
shall prepay such amount; provided, however, that any prepayment of any
Eurodollar Advance shall be made on, and only on, the last day of an
Interest Period for such Eurodollar Advance, unless the Company shall pay
to the Bank in accordance with Section 1.12 an amount sufficient to
compensate the Bank for any loss or expenses incurred by it by reason of
such prepayment on a day other than the last day of the relevant Interest
Period; provided, further, that in the case of a prepayment certified to
the Bank by the Trustee as a payment made pursuant to subsection (c) of
this Section, the Company shall on the date of such prepayment pay interest
accrued on such Advance to the date of prepayment, together with an amount
sufficient to compensate the Bank for any loss or expenses in accordance
with Section 1.12.
(c) Prior to or simultaneously with the resale of any Bonds held by
the Custodian on behalf of the Company under the Custody Agreement as a
result of a draw or draws under the Letter of Credit by a Tender Draft or
Tender Drafts, the Company shall cause the Trustee to prepay Tender
Advances, on behalf of the Company, in the order in which they were made,
by paying to the Bank an amount equal to the sum of (i) that portion of any
Tender Advances equal to 100% of the principal amount of any such Bonds
resold or to be resold and (ii) that portion of the Accrued Interest
Advances (the "Corresponding Accrued Interest Advances") which bears the
same ratio to the total unreimbursed Accrued Interest Advances as the
principal amount of such Bonds sold or to be resold bears to the principal
amount of all such Bonds held by the Custodian on behalf of the Company
under the Custody Agreement. Such payments shall, if certified to the Bank
by the Trustee in a certificate, completed and signed, by the Trustee, in
the form of Annex H to the Letter of Credit as payments being made pursuant
to this Section 1.10(c), be applied by the Bank in reimbursement of such
drawings (and as prepayment of the Tender Advances and the Corresponding
Accrued Interest Advances resulting from such drawings in the manner
described above). The Company irrevocably authorizes the Bank to rely on
such certificate and to reinstate the Letter of Credit in accordance
therewith.
(d) Prior to or simultaneously with the resale of any Bonds held by
the Custodian on behalf of the Company under the Custody Agreement as a
result of a draw under the Letter of Credit by a Purchase Draft or Purchase
Drafts, the Company shall cause the Trustee to prepay Purchase Advances, on
behalf of the Company, in the order in which they were made by paying to
the Bank an amount equal to that portion of any Purchase Advances equal to
100% of the principal amount of any such Bonds resold or to be resold.
Such payments shall, if certified to the Bank by the Trustee in a
certificate, completed and signed, by the Trustee, in the form of Annex H
to the Letter of Credit as payments being made pursuant to this Section
1.10(d), be applied by the Bank in reimbursement of such drawings (and as
prepayment of the Purchase Advances resulting from such drawings in the
manner described above). The Company irrevocably authorizes the Bank to
rely on such certificate and to reinstate the Letter of Credit in
accordance therewith.
(e) Amounts received by the Bank from the Company or the Trustee on
behalf of the Company in reimbursement for drawings under the Letter of
Credit shall be applied first in reimbursement of any unreimbursed drawings
made by an Interest Draft, unless such amounts are accompanied by a
certificate as described in subsection (c) or (d) of this Section 1.10, or
in Section 1.03(a).
SECTION 1.11. Other Payments. The Company hereby agrees to pay to
the Bank such fees as are set forth in a letter of even date from the
Company to the Bank.
SECTION 1.12. Increased Costs. (a) If either (i) the introduction
of or any change (including, without limitation, any change by way of
imposition or increase of reserve requirements other than those referred to
in Section 1.13 below) in or in the interpretation of any law or regulation
or (ii) the compliance by the Bank with any guideline or request from any
central bank or other governmental authority (whether or not having the
force of law), shall result in any increase in the cost to the Bank of
making, funding or maintaining Eurodollar Advances, then the Company shall
from time to time, upon demand by the Bank, pay to the Bank additional
amounts sufficient to indemnify the Bank against such increased cost. A
certificate as to the amount of such increased cost and a reasonable
explanation thereof, submitted to the Company by the Bank, shall constitute
such demand and shall, in the absence of manifest error, be conclusive and
binding for all purposes.
(b) If, due to (i) conversions of the type of interest rate pursuant
to Section 1.08, (ii) prepayments pursuant to Section 1.10 (whether by
direct or applied payments), (iii) acceleration of the maturity of the
Advances pursuant to Section 5.02, or (iv) any other reason, the Bank
receives payments of principal of any Eurodollar Advance or is subject to a
conversion of a Eurodollar Advance into another type of Advance other than
on the last day of an Interest Period relating to such Advance, the Company
shall, promptly after demand by the Bank, pay to the Bank any amounts
required to compensate the Bank for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment or
conversion, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by the Bank to fund or maintain such Eurodollar Advance. A
certificate setting forth the amount of such additional losses, costs or
expenses and giving a reasonable explanation thereof, submitted by the Bank
to the Company, shall constitute such demand and shall, in the absence of
manifest error, be conclusive and binding for all purposes.
(c) In the event that after the date of this Agreement the
implementation of or any change in any law, rule, regulation, guideline or
directive (whether or not having the force of law) or the interpretation or
administration thereof by any court, central bank or administrative or
governmental authority charged with the administration thereof shall:
(i) subject the Bank to any tax or shall change the basis of
taxation of the Bank (other than a change in the rate of tax based on
the overall net income of the Bank);
(ii) impose, modify or deem applicable any reserve, special
deposit, capital adequacy or similar requirement (including without
limitation a requirement which affects the manner in which the Bank
allocates capital resources to its commitments, including its
obligations hereunder); or
(iii) impose upon the Bank any other condition regarding this
Agreement or the Letter of Credit;
and as a result of any of the foregoing (x) the cost to the Bank of issuing
or maintaining the Letter of Credit or maintaining any Advances hereunder
is increased, (y) any amounts payable by the Company hereunder are reduced
or (z) the rate of return on the Bank's capital as a consequence of its
obligations hereunder or its issuance and maintenance of the Letter of
Credit or Advances hereunder is reduced to a level below that which the
Bank could have achieved but for such above circumstances, then and in each
such case, the Bank will promptly notify the Company of such event by a
certificate of the Bank setting forth in reasonable detail an explanation
of the additional amount or amounts to be paid. Within 15 days after
receipt of such certificate the Company shall pay for the account of the
Bank such additional amount or amounts to compensate the Bank.
SECTION 1.13. Additional Interest. The Company shall pay to the
Bank additional interest on the unpaid principal amount of each Advance
during the periods such Advance shall be a Eurodollar Advance until such
principal amount is paid in full, payable on each day on which interest on
such Advance is payable under Section 1.07, at an interest rate per annum
equal at all times during each Interest Period for such Advance, to the
excess of (i) the rate obtained by dividing the LIBO Rate for such Interest
Period by a percentage equal to 100% minus the reserve percentage
applicable during such Interest Period under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or if more
than one such percentage is so applicable, minus the daily average for such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any marginal reserve
requirement) for the Bank in respect of liabilities or assets consisting of
or including Eurocurrency liabilities over (ii) the LIBO Rate for such
Interest Period.
SECTION 1.14. Payments and Computations. Except as otherwise
provided herein, the Company shall make each payment hereunder not later
than 12:00 P.M. (New York time) on the day when due in lawful money of the
United States of America to the Bank ABA #026003780 for credit to
Syndication Clearing Account No. 100440240008 with the reference to Kansas
City or such other account as the Bank may indicate in writing from time to
time. The Company hereby authorizes the Bank, if and to the extent payment
is not made when due hereunder, to charge from time to time against any or
all of the Company's accounts with the Bank any amount so due. All
computations of interest at the Domestic Rate or the Eurodollar Rate, and
the letter of credit commission hereunder shall be made by the Bank on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) elapsed.
SECTION 1.15. Payment on Non-Business Days. Whenever any payment to
be made hereunder shall be stated to be due, or whenever the last day of
any Interest Period would otherwise occur, on a day which is not a Business
Day, such payment shall be made, and the last day of such Interest Period
shall occur, on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest or commission, as the case may be; provided, however, if such
extension would cause such payment of a Eurodollar Advance to be made or
the last day of such Interest Period to occur in a new calendar month, such
payment shall be made and the last day of such Interest Period shall occur
on the next preceding Business Day.
SECTION 1.16. Extension of the Letter of Credit. If the Company, at
least eighteen months prior to the Scheduled Termination Date of the Letter
of Credit, has requested the Bank to extend the Letter of Credit, and the
Bank is willing to extend the Letter of Credit, the Bank shall give written
notice thereof to the Company (together with the conditions to such
extension) at least twelve months prior to the Scheduled Termination Date.
If the Bank shall not so notify the Company, the Bank shall be deemed not
to have consented. The Company acknowledges that the Bank has no
obligation to, and has given no assurance, undertaking or commitment that
it will, extend (or consider extending) the Letter of Credit.
SECTION 1.17. Obligations Absolute. The payment obligations of the
Company under this Agreement shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including, without limitation, the following circum-
stances and regardless of the use of proceeds of any drawing under the
Letter of Credit or any defense to payment related thereto:
(i) any lack of validity or enforceability of the Letter of
Credit, the Bonds, the Indenture, the Lease, the Sublease, or any
other agreement or instrument relating thereto (collectively the
"Related Documents");
(ii) any amendment or waiver of or any consent to departure
from all or any of the Related Documents;
(iii) the existence of any claim, set-off, defense or other
right which the Company may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any persons
or entities for whom the Trustee, any such beneficiary or any such
transferee may be acting), the Bank or any other person or entity,
whether in connection with this Agreement, the transactions
contemplated herein or in the Related Documents or any unrelated
transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of the Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; provided however that such
circumstance or happening shall not have been the result of the gross
negligence or willful misconduct of the Bank.
SECTION 1.18. Taxes. All payments hereunder are payable free and
clear of any and all present and future taxes, levies, imposts, duties,
deductions, withholdings, fees, liabilities and similar charges (the
"Taxes"). For so long as it remains lawfully able to do so, the Bank shall
furnish to the Company such Internal Revenue Service forms as are
appropriate to permit the Company to make payments hereunder free of United
States income tax withholding tax. If, as a result of any change in
applicable law or regulations or in the interpretation thereof by any
governmental authority charged with the administration thereof, or the
introduction of any law or regulation, any Taxes are required to be
withheld or deducted from any amount payable to the Bank hereunder, the
amount payable will be increased to the amount which, after deduction from
such increased amount of all Taxes required to be withheld or deducted
therefrom, will yield to the Bank the amount stated to be payable
hereunder. Notwithstanding the foregoing, the Company shall not be
required to pay any increased amounts pursuant to this Section 1.18 on
account of any income taxes of general applicability imposed on the Bank by
the United States of America or any political subdivision thereof in which
the Bank is organized, qualified to do business or has an office. The
Company will execute and deliver to the Bank at its request such further
instruments as may be necessary or desirable to give full force and effect
to any such increase. The Company will, upon the request of the Bank,
provide the Bank with evidence satisfactory to it of the payment of any
Taxes. If any of the Taxes required to be borne by the Company pursuant to
this Section 1.18 are paid by the Bank, the Company will, upon demand of
the Bank, reimburse the Bank for such payments, together with any interest,
penalties and expenses in connection therewith.
ARTICLE II
CONDITIONS OF ISSUANCE
SECTION 2.01. Condition Precedent to Issuance of the Letter of
Credit. The obligation of the Bank to issue the Letter of Credit is
subject to the condition precedent that the Bank shall have received on or
before the date of the issuance of the Letter of Credit the following, each
dated such day, in form and substance satisfactory to the Bank:
(a) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the Company to enter into this
Agreement, approving the Letter of Credit and the other matters
contemplated hereby.
(b) Originals (or copies certified by the Secretary or
Assistant Secretary of the Company) of approvals or orders of the
public utility regulatory commissions of the States of Missouri and
Kansas necessary for the Company with respect to this Agreement.
(c) A certificate of the Secretary or Assistant Secretary of
the Company, certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the other
documents to be delivered by it hereunder.
(d) Opinion of Samuel P. Cowley, Esq., Senior Vice President
and Chief Legal Officer for the Company, in substantially the form of
Exhibit B hereto and as to such other matters as the Bank may
reasonably request.
(e) Opinion of Chapman and Cutler, Bond Counsel, in
substantially the form of Exhibit C hereto and as to such other
matters as the Bank may reasonably request, including advice from
such Bond Counsel to the Bank that the Bank may rely on such opinion.
(f) A transcript relating to the issuance of the Bonds.
(g) Such other documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies
thereof) or opinions as the Bank may reasonably request.
SECTION 2.02. Additional Conditions Precedent to Issuance of the
Letter of Credit. The obligation of the Bank to issue the Letter of Credit
shall be subject to the further conditions precedent that on the date of
the issuance of the Letter of Credit:
(a) The following statements shall be true and the Bank shall
have received a certificate signed by a duly authorized officer of
the Company, dated the date of such issuance, stating that:
(i) the representations and warranties contained in
Section 3.01 of this Agreement are correct on and as of the
date of issuance of the Letter of Credit as though made on and
as of such date; and
(ii) no event has occurred and is continuing, or would
result from the issuance of the Letter of Credit, which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both.
(b) The Issuer and the Trustee have duly authorized and
executed the Indenture and the Indenture continues to be in full
force and effect.
(c) The Issuer and the Company have duly authorized and
executed the Lease and the Sublease and the Lease and the Sublease
continue to be in full force and effect.
(d) The Issuer has duly executed, issued and delivered the
Bonds.
(e) The Bank shall have received such other approvals,
opinions or documents as the Bank may reasonably request.
SECTION 2.03. Condition Precedent to Each Advance. Each payment
made by the Bank pursuant to a Tender Draft, a Redemption Draft or a
Purchase Draft under the Letter of Credit shall constitute an Advance
hereunder only if it shall be true on the date of such payment that no
event has occurred and is continuing, or would result from such Advance,
which constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both. Unless the Company shall have otherwise previously advised the Bank
in writing, payment by the Bank pursuant to a Tender Draft, a Redemption
Draft or a Purchase Draft shall be deemed to constitute a representation
and warranty by the Company that on the date of such payment the above
statement is true.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties. The Company
represents and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business in, and is in good standing
under the laws of, the State of Kansas.
(b) The execution, delivery and performance by the Company of
this Agreement and each Related Document to which it is a party are
within the Company's corporate powers, have been duly authorized by
all necessary corporate action, do not contravene (i) the Company's
charter or by-laws (ii) any law or contractual restriction
(including, but not limited to, any restriction in the Indenture)
binding on or affecting the Company, and do not result in or require
the creation of any lien, security interest or other charge or
encumbrance (other than pursuant to this Agreement and the Related
Documents) upon or with respect to any of its properties; or
(iii) any other instruments to which the Company is a party or by
which it may be bound or to which any of the property or assets of
the Company may be subject, or any law, order, rule or regulation
applicable to the Company or any court, federal or state, regulatory
body, administrative agency or other governmental body having
jurisdiction over the Company.
(c) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into this Agreement, and the Commissions have duly
issued previous orders authorizing the Company to enter into the
Lease, the Sublease and any other documents that such commissions
have jurisdiction over and to which the Company is a party and the
Related Documents to which it is a party, and such orders remain in
full force and effect in the form issued. Except for the approvals
of the Board of Commissioners of Coffey County, Kansas, and the City
Council of the City of Burlington, Kansas, approving issuance of the
Bonds, which approvals have been duly obtained and are in full force
and effect, and the notice of timely filing with the Board of Tax
Appeals of the State of Kansas, which has been given, no other
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the
Company of this Agreement or any Related Document to which it is a
party.
(d) This Agreement is, and each Related Document to which the
Company is a party is the legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their
respective terms (except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally).
(e) Except as disclosed on in the Company's Form 10-K for the
year 1992, Forms 10-Q for the periods March 31, 1993 and June 30,
1993, and Form 8-K dated August 16, 1993, there is no pending or, to
the best of the Company's knowledge, threatened action or
investigation or proceeding before any court, governmental agency or
arbitrator against or affecting the Company which may materially
adversely affect the financial condition or total operations of the
Company.
(f) The balance sheet of the Company as at December 31, 1992,
and the related statements of income and retained earnings and of
changes in financial position of the Company for the fiscal year then
ended, certified by Coopers & Lybrand, independent public
accountants, copies of which have been furnished to the Bank, and the
balance sheet of the Company as at June 30, 1993, and the related
statements of retained earnings for the six months then ended, signed
by the Controller of the Company, copies of which are contained in
the Company's 10-Q dated as of June 30, 1993, a copy of which has
been furnished to the Bank, fairly present the financial condition of
the Company as at such respective dates and the results of the
operations of the Company for the period ended on such respective
dates, all in accordance with generally accepted accounting
principles consistently applied, and since June 30, 1993, there has
been no material adverse change in the financial condition or total
operations of the Company other than disclosed or contemplated in the
notes to the financials in the Company's 10-Q dated June 30, 1993.
(g) Except for information contained therein describing any
bank, as to which no representation is made, the Official Statement
(said Official Statement, together with the documents incorporated
therein by reference, being the "Official Statement") dated October
29, 1987, of the Issuer relating to the Bonds is, and the Preliminary
Official Statement (said Preliminary Official Statement, together
with the documents incorporated therein by reference being the
"Preliminary Official Statement") dated October 16, 1986, of the
Issuer relating to the Bonds as of its date of issue was to the best
of the Company's knowledge, and any supplement or amendment to either
thereof shall be, accurate in all material respects for the purposes
for which its use is, was, or shall be, authorized; and the Official
Statement does not, the Preliminary Official Statement as of its date
of issue did not to the best of the Company's knowledge, and any such
supplement or amendment shall not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make
the statements made therein, in the light of the circumstances under
which they are or were made, not misleading.
(h) No Termination Event has occurred nor is reasonably
expected to occur with respect to any Plan.
(i) The Company does not contribute to any Multiemployer Plan
and has not incurred and does not expect to incur any withdrawal
liability with respect to any such plan.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants. So long as a drawing is avail-
able under the Letter of Credit or the Bank shall have any Commitment
hereunder or the Company shall have any obligation to pay any amount to the
Bank hereunder, the Company will, unless the Bank shall otherwise consent
in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights (charter and statutory) and
privileges in the state of its incorporation and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is reasonably necessary in view of its business and
operations or the ownership of its properties.
(b) Compliance with Laws, Etc. Comply in all respects with
all applicable laws, rules, regulations and orders of any govern-
mental authority, the non-compliance with which would materially and
adversely affect the financial condition or operations of the
Company, such compliance to include, without limitation, paying
before the same become delinquent all material taxes, assessments and
governmental charges imposed upon it or upon its property, except to
the extent compliance with any of the foregoing is then being
contested in good faith.
(c) Maintenance of Insurance. Maintain insurance with
responsible and reputable insurance companies or associations or
through its own program of self-insurance in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Company operates.
(d) Visitation Rights. At any reasonable time and from time
to time, permit the Bank or any of its agents or representatives at
their own expense to examine and make copies of and abstracts from
the records and books of account of, and visit the properties of, the
Company and to discuss the affairs, finances and accounts of the
Company with any of its officers.
(e) Keeping of Books. Keep proper books of record and
account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company in
accordance with generally accepted accounting principles consistently
applied (except as disclosed in the notes to the balance sheet and
related statements of income and retained earnings).
(f) Maintenance of Properties. Maintain and preserve its
properties that are necessary to maintain its operating system in
good working order and condition, ordinary wear and tear excepted.
(g) Reporting Requirements. Furnish to the Bank the
following: (i) as soon as possible, and in any event within 3 days
after the occurrence of each Event of Default or each event which,
with the giving of notice or lapse of time, or both, would constitute
an Event of Default, continuing on the date of such statement, a
statement of the chief financial officer (or in his absence, a
principal financial officer) of the Company setting forth details of
such Event of Default or event and the action which the Company
proposes to take with respect thereto; (ii) as soon as available and
in any event within 10 days after the filing of each quarterly report
on Form 10-Q by the Company with the Securities and Exchange
Commission, a copy of each such quarterly report, together with a
certificate of the chief accounting officer (or in his absence, a
principal financial officer) of the Company confirming as of the end
of such quarter the truth of the statement set forth in Section
2.02(a)(ii) of this Agreement; (iii) as soon as available and in any
event within 10 days after the filing of each annual report on Form
10-K by the Company with the Securities and Exchange Commission, a
copy of each such annual report containing financial statements for
such year certified by nationally recognized independent public
accountants, together with a certificate of the chief accounting
officer (or in his absence, a principal financial officer) of the
Company confirming as of the end of such quarter the truth of the
statement set forth in Section 2.02(a)(ii) of this Agreement;
(iv) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Company
sends to any of its stockholders, and copies of all regular, periodic
and special reports and all registration statements, which the
Company files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor; (v) as soon
as possible and in any event within (A) 30 days after the Company or
any of its Affiliates knows or has reason to know that any
Termination Event described in clause (i) of the definition of
Termination Event with respect to any Plan has occurred and
(B) within 10 days after the Company or any of its Affiliates knows
or has reason to know that any other Termination Event with respect
to any Plan has occurred, a statement of the chief accounting officer
(or in his absence a principal financial officer) of the Company
describing such Termination Event and the action, if any, which the
Company or such Affiliate proposes to take with respect thereto;
(vi) promptly and in any event within two Business Days after receipt
thereof by the Company or any of its Affiliates from the Pension
Benefit Guaranty Corporation ("PBGC"), copies of each notice received
by the Company or any such Affiliate of the PBGC's intention to
terminate any Plan or to have a trustee appointed to administer any
Plan; and (vii) such other information respecting the business,
properties or the condition or operations, financial or otherwise, of
the Company as the Bank may from time to time reasonably request in
writing.
(h) Officer's Certificate. In the event that an Advance is
made pursuant to Sections 1.03 or 1.04 hereunder, the Company shall
deliver to the Bank every ninety (90) days commencing ninety (90)
days from the date such Advance is made until all outstanding
Advances have been paid in full, a certificate signed by a duly
authorized officer of the Company stating that the representations
and warranties contained in Section 3.01 are correct on and as of
such date as though made on and as of such date.
(i) Other Agreements. Perform and comply with each of the
terms, provisions and conditions, on its part to be performed or
complied with, contained in the Indenture, the Lease and the
Sublease.
(j) Redemption or Defeasance of Bonds. Use its best efforts
to cause the Trustee, (A) upon a redemption or defeasance of less
than all of the Bonds pursuant to the Indenture, to furnish to the
Bank a notice in the form of Annex G to the Letter of Credit, and (B)
upon a redemption or defeasance of all of the Bonds pursuant to the
Indenture, to surrender the Letter of Credit to the Bank for
cancellation.
(k) Registration of Bonds. Cause all Bonds which it acquires,
or which it has acquired for its account, to be registered forthwith
in accordance with the Indenture in the name of the Company.
(l) Continuance of Rating. Use its best efforts to cause the
Bonds to continue to be rated by Moody's Investors Service or
Standard & Poor's Corporation.
SECTION 4.02. Negative Covenants. So long as a drawing is available
under the Letter of Credit or the Bank shall have any Commitment hereunder
or the Company shall have any obligation to pay any amount to the Bank
hereunder, the Company will not, without the written consent of the Bank:
(a) Liens, Etc. Create, incur, assume or suffer to exist any
lien, security interest or other charge or encumbrance, or any other
type of preferential arrangement, upon or with respect to any of its
properties or assets, whether now owned or hereafter acquired, or
assign any right to receive income, in each case to secure any
Obligation of any person, other than (i) purchase money liens or
purchase money security interests upon or in any property acquired or
held by the Company in the ordinary course of business to secure the
purchase price of such property or to secure indebtedness incurred
solely for the purpose of financing the acquisition of such property,
(ii) liens or security interests existing on such property at the
time of its acquisition, (iii) liens, security interests, charges or
encumbrances on or over, gas, oil, coal, fissionable material or
other fuel or fuel products as security for an Obligation incurred by
the Company for the sole purpose of financing the acquisition or
storage of such fuel or fuel products or, with respect to nuclear
fuel, the processing, reprocessing, sorting, storage and disposal
thereof, (iv) liens, security interests, charges or encumbrances on
or over all or any part of its undertaking or assets employed wholly
or mainly in or arising directly from any specific construction
project or generating plant as security for an Obligation incurred by
the Company for the purpose of financing all or any part of such
construction project or generating plant, (v) the lien of the
Indenture of Mortgage and Deed of Trust dated as of December 1, 1946,
from the Company to Continental Illinois National Bank and Trust
Company of Chicago and the lien of the General Mortgage Indenture and
Deed of Trust dated December 1, 1986, from the Company to United
Missouri Bank of Kansas City, N.A. (the "Mortgages"), (vi)
encumbrances listed on Exhibit D attached hereto, (vii) security
interests granted in, or sale of, the Company's accounts receivable,
and (viii) sales or transfers of property by the Company and renting
or leasing back such property, provided that all such property in the
aggregate does not exceed fifteen percent (15%) of all the Company's
assets.
(b) Mergers, Etc. Merge with or into or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) or
acquire all or substantially all of the assets, other than utility
assets, of, any person or entity, except that the Company may merge
or consolidate with any person or entity on condition in each case
that, (i) immediately after giving effect thereto, no event shall
occur and be continuing which constitutes an Event of Default or
which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, (ii) the consolidation or merger
shall not materially and adversely affect the ability of the Company
to perform its obligations hereunder or under the Related Documents,
and (iii) the corporation formed by any such consolidation or into
which the Company shall be merged shall assume the Company's obliga-
tions and performance of the Company's covenants hereunder and under
the Related Documents in a writing satisfactory in form and substance
to the Bank.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or, except as otherwise permitted under Section 4.02(a),
pledge or otherwise encumber more than fifteen percent (15%) of its
assets, except in the ordinary course of its business or in
connection with a transaction authorized by subsection (b) of this
Section 4.02.
(d) Compliance with ERISA. (i) Voluntarily terminate any
Plan, so as to result in any material liability of the Company to
PBGC or (ii) enter into any Prohibited Transaction (as defined in
Section 4975 of the Internal Revenue Code of 1986, as amended, and in
ERISA) involving any Plan which results in any material liability of
the Company, (iii) cause any occurrence of any Reportable Event which
results in any material liability of the Company to PBGC or (iv)
allow or suffer to exist any other event or condition known to the
Company which results in any material liability of the Company to
PBGC.
(e) Amendment of Indenture or Related Document. Enter into or
consent to any amendment or modification of, the Indenture, the
Lease, the Sublease or any other Related Document, which would
adversely affect the Bank or change its obligations under the Letter
of Credit, without first obtaining the express prior written consent
of the Bank thereto.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. Events of Default. The occurrence of any of the
following events shall be an "Event of Default" hereunder unless waived by
the Bank pursuant to Section 7.01 hereof:
(a) the Company shall fail to pay any amount payable to the
Bank under any provision of Article I when due except as provided in
(b) below; or
(b) the Company shall fail to pay any amount of an Interest
Advance within one (1) day after such amount becomes due; or
(c) any representation or warranty made by the Company herein
or by the Company (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(d) the Company shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement, and any such
failure shall remain unremedied for 10 days after written notice
thereof shall have been given to the Company by the Bank; or
(e) any material provision of this Agreement or the letter
referred to in Section 1.11 hereof shall at any time for any reason
cease to be valid and binding upon the Company, or shall be declared
to be null and void, or the validity or enforceability thereof shall
be contested by the Company, or a proceeding shall be commenced by
any governmental agency or authority having jurisdiction over the
Company seeking to establish the invalidity or unenforceability
thereof, or the Company shall deny that it has any or further
liability or obligation under this Agreement or the letter referred
to in Section 1.1 hereof; or
(f) the Company shall (x) fail to make any payment, equal to
or exceeding $10,000,000 of any Obligation or to make any payment,
equal to or exceeding $5,000,000, of any interest or premium thereon,
when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Obligation, or (y) fail to perform or
observe any term, covenant or condition on its part to be performed
or observed under any agreement or instrument relating to any
Obligation when required to be performed or observed, and such
failure shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such
failure to perform or observe is to accelerate, or to permit the
acceleration of, the maturity of any Obligation, the unpaid principal
amount of which then equals or exceeds $10,000,000; or
(g) the Company shall generally not pay its debts as they
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors or shall institute any proceeding or voluntary case seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to
bankruptcy, reorganization or insolvency or relief or protection of
debtors or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property; or the
Company shall take any corporate action to authorize any of the
actions described above in this subsection (g); or any proceeding
shall be instituted against the Company seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement or adjustment of debts under any law
relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief or
the appointment of a trustee, receiver or custodian or other similar
official for it or for any substantial part of its property, and, if
such proceeding is being contested by the Company in good faith, such
proceeding shall remain undismissed or unstayed for a period of 60
days; or
(h) any judgment or order for the payment of money in excess
of $10,000,000 shall be rendered against the Company and either
(x) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (y) there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(i) any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to
the Company by the Bank, (i) such Termination Event (if correctable)
shall not have been corrected and (ii) the then present value of such
Plan's vested benefits exceeds (when aggregated with the amount of
any such excess under all other Plans to which a Termination Event
shall have occurred) the then current value of assets accumulated in
such Plan by more than the amount of $15,000,000 (or in the case of a
Termination Event involving the withdrawal of a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess exceed such
amount); or
(j) any event of default under and as defined in the
Indenture, the Lease or the Sublease shall have occurred and be
continuing.
SECTION 5.02. Upon an Event of Default. If any Event of Default
shall have occurred and be continuing, the Bank may (i) by notice to the
Company, declare the obligation of the Bank to issue the Letter of Credit
to be terminated, whereupon the same shall forthwith terminate, or if the
Letter of Credit shall have been issued, (ii) give notice to the Trustee
pursuant to Section 701 of the Indenture of the occurrence and continuance
of an Event of Default hereunder, and (iii) declare the Advances, all
amounts payable under any provision of Article I, all interest thereon and
all other amounts payable hereunder to be forthwith due and payable,
whereupon the Advances, all amounts payable under any provision of Article
I, all interest thereon and all such other amounts shall become and be
forthwith due and payable, without presentment, demand, protest, or further
notice of any kind, all of which are hereby expressly waived by the
Company; provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to the Company under the Federal
Bankruptcy Code, (i) the obligation of the Bank to issue the Letter of
Credit shall automatically be terminated and (ii) the Advances, all amounts
payable under any provision of Article I, all interest thereon and all
other amounts payable hereunder shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Company.
ARTICLE VI
DEFINITIONS
SECTION 6.01. Definitions. Unless otherwise indicated in this
Agreement, the capitalized terms used herein shall have the following
meanings:
"Accrued Interest Advance" has the meaning set forth in Section
1.03(a) hereof.
"Advances" means, collectively, Tender Advances, Accrued
Interest Advances, Redemption Advances and Purchase Advances, and an
"Advance" means any of them.
"Affiliate" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a
member and which is under common control within the meaning of the
regulations under Section 414 of the Internal Revenue Code of 1986,
as amended.
"Alternate Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum
shall at all times be equal to the higher of:
(a) the rate of interest announced by the Bank in New
York City as the Bank's Prime Lending Rate for such day; and
(b) the sum of (i) .50%, plus (ii) the Federal Funds
Rate for such day.
The Banks' Prime Lending Rate is the fluctuating interest rate
announced by the Bank in New York City from time to time as its prime
lending rate for unsecured commercial loans to borrowers located in
the United States. The Bank's Prime Lending Rate is a reference rate
and does not necessarily represent the lowest or best rate actually
charged to any customer. The Bank may make commercial loans or
advances at rates of interest at, above or below its Prime Lending
Rate.
"Available Amount" in effect at any time means the maximum
amount available to be drawn at such time under the Letter of Credit
(the determination of such maximum amount to assume, throughout this
Agreement, compliance with all conditions for drawing and no
reduction for any amount drawn by an Interest Draft referred to in
the Letter of Credit (unless such amount is not reinstated under the
Letter of Credit)).
"Bonds" means the Issuer's Customized Purchase Pollution
Control Revenue Refunding Bonds, Series 1987B (Kansas City Power &
Light Company Project).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the
applicable Business Day relates to any Eurodollar Advance or Interest
Period therefor, on which dealings are carried on in the London
interbank market.
"Commitment" has the meaning set forth in Section 1.01 hereof.
"Company" means Kansas City Power & Light Company, a
corporation organized and existing under the laws of the State of
Missouri.
"Corresponding Accrued Interest Advances" has the meaning set
forth in Section 1.10(c) hereof.
"Custodian" means Chemical Bank, as custodian under the Custody
Agreement.
"Custody Agreement" means the Custody Agreement dated as of
October 1, 1987, between the Company and the Custodian and all
amendments, modifications and supplements thereto.
"Demand Advance" means a payment made by the Bank under the
Letter of Credit which is due pursuant to Section 1.02 hereof.
"Domestic Advance" means an Advance bearing interest at the
Domestic Rate.
"Domestic Rate" means an interest rate equal to 1/4 of 1% per
annum above the Alternate Base Rate.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Advance" means an Advance bearing interest at the
Eurodollar Rate.
"Eurodollar Interest Period" means an Interest Period in
respect of an Advance bearing interest at the Eurodollar Rate.
"Eurodollar Rate" during any Interest Period for any Advance
means an interest rate per annum equal at all times during each
Interest Period for such Advance to 3/4 of 1% per annum above the
LIBO Rate.
"Event of Default" shall have the meaning set forth in Section
5.01 hereof.
"Federal Funds Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Bank
from three Federal funds brokers of recognized standing selected by
it.
"Final Draft" has the meaning set forth in the Letter of
Credit.
"Indenture" means the Indenture of Trust dated as of October 1,
1987, between the Issuer and Chemical Bank, as trustee and all
amendments, modifications and supplements thereto.
"Interest Advance" has the meaning set forth in Section 1.05(a)
hereof.
"Interest Draft" has the meaning set forth in the Letter of
Credit.
"Interest Period" has the meaning set forth in Section 1.09(a)
hereof.
"Issuer" means the City of Burlington, Kansas.
"Lease" means the Equipment Lease Agreement dated as of
October 1, 1987, between the Issuer and the Company, and all
amendments, modifications and supplements thereto.
"Letter of Credit" means the irrevocable, transferable letter
of credit issued by the Bank in substantially the form of Exhibit A
hereto and any successor letter of credit as provided in such letter
of credit.
"LIBO Rate" for any Interest Period for any Advance means the
rate of interest per annum at which deposits in United States dollars
are offered by the principal office of Deutsche Bank AG in London,
England to prime banks in the London interbank market for a period
equal to the duration of the Eurodollar Interest Period relating to
such Advance at (or about) 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period.
"Mortgages" has the meaning set forth in Section 4.02(a)
hereof.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Obligation" of any person or entity means (i) indebtedness for
borrowed money or obligations evidenced by notes, bonds, debentures
or similar instruments or for the deferred purchase price of property
or services in respect of which such person is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in respect of
which such person otherwise assures a creditor against loss,
(ii) obligations under leases in respect of which obligations such
person is liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such person otherwise
assures a creditor against loss, and (iii) liabilities in respect of
unfunded vested benefits under each Plan maintained for employees of
such person and covered by Title IV of ERISA.
"Official Statement" has the meaning set forth in Section
3.01(g).
"Plan" means an employee benefit plan (other than a
Multiemployer Plan) maintained for employees of the Company or any
Affiliate and covered by Title IV of ERISA.
"Preliminary Official Statement" has the meaning set forth in
Section 3.01(g).
"Purchase Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Purchase Draft" has the meaning set forth in the Letter of
Credit.
"Redemption Advance" has the meaning set forth in Section
1.04(a) hereof.
"Redemption Draft" has the meaning set forth in the Letter of
Credit.
"Related Documents" has the meaning set forth in Section
1.17(i) hereof.
"Scheduled Termination Date" means August 18, 1996, except as
extended hereunder.
"Sublease" means the Equipment Sublease Agreement dated as of
October 1, 1987, between the Issuer and the Company and all
amendments, modifications and supplements thereto.
"Tender Advance" has the meaning set forth in Section 1.03(a)
hereof.
"Tender Draft" has the meaning set forth in the Letter of
Credit.
"Term Advance" has the meaning set forth in Section 1.04(a)
hereof.
"Termination Event" means (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other
than a Reportable Event not subject to the provision for 30-day
notice to the PBGC under such regulations), or (ii) the withdrawal of
the Company or any of its Affiliates from a Plan during a plan year
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of
proceedings to terminate a Plan by the PBGC, or (v) any other event
or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Trustee" means Chemical Bank, as trustee under the Indenture.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Bank and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
SECTION 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
and mailed, sent or delivered, if to the Company, at its address at 1201
Walnut, Kansas City, Missouri 64106 Attention: Treasurer, facsimile:
816-556-2992; and if to the Bank, at its address at 31 West 52nd Street,
New York, New York 10019 Attention: Trade Finance Department, facsimile:
212-474-8256, or if to the Trustee, mailed or delivered to it, addressed to
it at 450 W. 33rd Street, New York, New York 10001, Attention: Corporate
Trustee Administration Department, facsimile: 212-971-8567; or as to each
party, to such other party and/or at such other address as shall be
designated by such party in a written notice to the other party. All such
notices and communications shall be effective when mailed or sent,
addressed as aforesaid, except that notices to the Bank pursuant to the
provisions of Article I shall not be effective until received by the Bank,
and any notice to the Trustee pursuant to Section 5.02(ii) shall not be
effective until received by the Trustee. Notices of any Event of Default
shall be sent by the Company to the Bank by facsimile.
SECTION 7.03. No Waiver; Remedies. No failure on the part of the
Bank to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 7.04. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted United States accounting principles consistently applied and in
effect on the date hereof.
SECTION 7.05. Indemnification. The Company hereby indemnifies and
holds the Bank harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses which the Bank may incur or which
may be claimed against the Bank by any person or entity:
(a) by reason of any inaccuracy in any material respect, or
any untrue statement or alleged untrue statement of any material
fact, contained in the Preliminary Official Statement or the Official
Statement or any amendment or supplement thereto, or by reason of the
omission or alleged omission to state therein a material fact
necessary to make such statements, in the light of the circumstances
under which they were made, not misleading; provided, however, that,
in the case of any action or proceeding alleging an inaccuracy in a
material respect, or an untrue statement, with respect to information
supplied by and describing the Bank in the Preliminary Official
Statement or the Official Statement (the "Bank Information"), or an
omission or alleged omission to state therein a material fact
necessary to make the statements in the Bank Information, in the
light of the circumstances under which they were made, not
misleading, (i) indemnification by the Company pursuant to this
Section 7.05(a) shall be limited to the costs and expenses of the
Bank (including reasonable fees and expenses of the Bank's counsel)
of defending itself against such allegation, (ii) if in any such
action or proceeding it is finally determined that the Bank
Information contained an inaccuracy in any material respect or an
untrue statement of a material fact or omitted to state therein a
material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not
misleading, then the Company shall not be required to indemnify the
Bank pursuant to this Section 7.05(a) for any claims, damages,
losses, liabilities, costs or expenses (including reasonable fees and
expenses of counsel) to the extent caused by such inaccuracy, untrue
statement or omission, and (iii) if any such action or proceeding
shall be settled by the Bank without there being a final
determination to the effect described in the preceding clause (ii),
then the Company shall be required to indemnify the Bank pursuant to
this Section 7.05(a) only if such action or proceeding is settled
with the Company's consent; or
(b) by reason of or in connection with the execution, delivery
or performance of the Bonds, the Indenture, the Lease or the
Sublease, or any transaction contemplated by the Indenture, the Lease
or the Sublease; or
(c) by reason of or in connection with the execution and
delivery or transfer of, or payment or failure to make lawful payment
under, the Letter of Credit; provided, however, that the Company
shall not be required to indemnify the Bank pursuant to this section
7.05(c) for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the
Bank's wilful misconduct or gross negligence in determining whether
documents presented under the Letter of Credit comply with the terms
of the Letter of Credit or (ii) the Bank's wilful failure to make
lawful payment under the Letter of Credit after the presentation to
it by the Trustee or a successor trustee under the Indenture of a
draft and certificate strictly complying with the terms and
conditions of the Letter of Credit.
Nothing in this Section 7.05 is intended to limit the Company's obligations
contained in Article I. Without prejudice to the survival of any other
obligation of the Company hereunder, the indemnities and obligations of the
Company contained in this Section 7.05 shall survive the payment in full of
amounts payable pursuant to Article I and the termination of the Letter of
Credit.
SECTION 7.06. Liability of the Bank. The Company assumes all risks
of the acts or omissions of the Trustee and any beneficiary or transferee
of the Letter of Credit with respect to its use of the Letter of Credit.
Neither the Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use which may be made of the Letter of Credit or
any acts or omissions of the Trustee and any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should
prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by the Bank against presentation of documents which do
not comply with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to
make payment under the Letter of Credit, except that the Company shall have
a claim against the Bank, and the Bank shall be liable to the Company, to
the extent of any direct, as opposed to consequential, damages suffered by
the Company which the Company proves were caused by (i) the Bank's willful
misconduct or gross negligence in determining whether documents presented
under the Letter of Credit comply with the terms of the Letter of Credit or
(ii) the Bank's wilful failure to make lawful payment under the Letter of
Credit after the presentation to it by the Trustee or a successor trustee
under the Indenture of a draft and certificate strictly complying with the
terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Bank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 7.07. Costs, Expenses and Taxes. The Company agrees to pay
on demand all costs and expenses in connection with the preparation,
execution, delivery, filing, recording, administration and amendments
and/or modifications (made upon the request of the Company) of this
Agreement and any other documents which may be delivered in connection with
this Agreement, including, without limitation, the reasonable costs
incurred with each transfer of the Letter of Credit, the reasonable fees
and out-of-pocket expenses of counsel for the Bank, and local counsel who
may be retained by said counsel, with respect thereto and with respect to
advising the Bank as to its rights and responsibilities under this
Agreement and all costs and expenses (including reasonable counsel fees and
expenses) in connection with (i) the enforcement of this Agreement and such
other documents which may be delivered in connection with this Agreement or
(ii) any action or proceeding relating to a court order, injunction or
other process or decree restraining or seeking to restrain the Bank from
paying any amount under the Letter of Credit. In addition, the Company
shall pay any and all stamp and other taxes and fees payable or determined
to be payable in connection with the execution, delivery, filing and
recording of this Agreement and such other documents, and agrees to save
the Bank harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes and
fees except for any penalties incurred as a result of the Bank's failure to
notify the Company of such stamp or other taxes or fees payable by the
Company of which the Bank has knowledge.
SECTION 7.08. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Company and the Bank and thereafter
shall be binding upon and inure to the benefit of the Company and the Bank
and their respective successors and assigns, except that the Company shall
not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Bank. The Bank may, at its own
expense, assign (by way of participation or otherwise) to any financial
institution all or any part of, or any interest (undivided or divided) in,
the Bank's rights, benefits and obligations under this Agreement and the
Letter of Credit, and to the extent of any such assignment, any such
assignee shall have the same rights and benefits against the Company
hereunder and under the Letter of Credit as it would have had if such
assignee were the Bank issuing or paying under the Letter of Credit
hereunder.
SECTION 7.09. Right of Set-Off. (a) Upon the occurrence and during
the continuance of any Event of Default, the Bank is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by the Bank to or for the credit or the account of the Company
against any and all of the obligations of the Company now or hereafter
existing under this Agreement, whether or not the Bank shall have made any
demand hereunder and although such obligations may be contingent or
unmatured.
(b) The Bank agrees promptly to notify the Company after any such
set-off and application referred to in this Section 7.09(a) above, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Bank under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Bank may have.
SECTION 7.10. Severability. Any provision of this Agreement which
is prohibited, unenforceable or not authorized in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
SECTION 7.11. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
SECTION 7.12. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
KANSAS CITY POWER & LIGHT COMPANY
By_______________________________
Senior Vice President
DEUTSCHE BANK AG, ACTING THROUGH ITS
NEW YORK AND CAYMAN ISLANDS BRANCHES
By_______________________________
Title:___________________________
By_______________________________
Title:___________________________
EXHIBIT A
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
[SERIES 1987B]
August 19, 1993
Chemical Bank
450 W. 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
Dear Ladies and Gentlemen:
We hereby establish at the request and for the account of Kansas City
Power & Light Company, a Missouri corporation (the "Company"), in your
favor, as Trustee under the Indenture of Trust dated as of October 1, 1987
(the "Indenture"), between the City of Burlington, Coffey County, Kansas
(the "Issuer") and you, pursuant to which $40,000,000 in aggregate
principal amount of the Issuer's Customized Purchase Pollution Control
Revenue Refunding Bonds, Series 1987B (Kansas City Power & Light Company
Project) (the "Bonds"), have been issued, our Irrevocable Letter of Credit
No. , in the amount of $43,747,945.21 (as more fully described
below), effective immediately and expiring at the close of business at our
31 West 52nd Street, New York, New York 10019 offices on August 18, 1996,
or such later date as we may agree upon in a writing delivered to you (the
"Scheduled Termination Date") unless sooner terminated in accordance with
the terms hereof.
We hereby irrevocably authorize you to draw on us, in an aggregate
amount not to exceed the amount of this Letter of Credit as set forth above
and in accordance with the terms and conditions and subject to the
reductions in amount as hereinafter set forth, as follows:
(1) in one or more drawings by one or more of your drafts,
each accompanied by your signed and appropriately completed
certificate in the form of Annex A attached hereto (any such draft
accompanied by such certificate being your "Interest Draft"), an
amount not exceeding $3,747,945.21;
(2) in one or more drawings by one or more of your drafts,
each accompanied by your signed and appropriately completed
certificate in substantially the form of Annex B attached hereto (any
such draft accompanied by such certificate being your "Tender
Draft"), an aggregate amount not exceeding $43,747,945.21;
(3) in one or more drawings by one or more of your drafts,
each accompanied by your signed and appropriately completed
certificate in substantially the form of Annex C attached hereto (any
such draft accompanied by such certificate being your "Redemption
Draft"), an aggregate amount not exceeding $40,000,000;
(4) in one or more drawings by one or more of your drafts,
each accompanied by your signed and appropriately completed
certificate in the form of Annex D attached hereto (such draft
accompanied by such certificate being your "Purchase Draft"), an
aggregate amount not exceeding $40,000,000;
(5) in a single drawing by your draft, accompanied by your
signed and appropriately completed certificate in substantially the
form of Annex E attached hereto (such draft accompanied by such
certificate being your "Final Draft"), an amount not exceeding
$43,747,945.21.
Upon our honoring any Interest Draft presented by you hereunder, the
amount of this Letter of Credit and the amounts available to be drawn by
you by any subsequent Interest Draft, Tender Draft, or Final Draft shall be
automatically decreased by an amount equal to the amount of such Interest
Draft. If you shall not have received from us within 15 calendar days from
the date of such drawing a notice from us to the effect that we have not
been reimbursed for such drawing in the form of Annex F attached hereto
appropriately completed, the amount of this Letter of Credit and the
amounts from time to time available to be drawn by you by any Interest
Draft, Tender Draft, or Final Draft shall be automatically and irrevocably
reinstated in the amount of such drawing, effective the 16th calendar day
from the date of such drawing; provided however, this reinstatement shall
not apply to amounts drawn by an Interest Draft in connection with Bonds
being redeemed with amounts drawn by a Redemption Draft.
Upon our honoring any Redemption Draft or Purchase Draft presented by
you hereunder, the amount of this Letter of Credit and the amounts avail-
able to be drawn by you by any subsequent Tender Draft, Redemption Draft,
Purchase Draft and Final Draft shall be automatically decreased by an
amount equal to the amount of such Redemption Draft or Purchase Draft.
Upon our honoring any Tender Draft presented by you hereunder, (i) the
amount of this Letter of Credit and the amounts available to be drawn by
any subsequent Tender Draft and Final Draft shall be automatically
decreased by an amount equal to the amount of such Tender Draft and
(ii) the amounts available to be drawn by any subsequent Redemption Draft
and Purchase Draft shall be automatically decreased by the amount set forth
in clause (i) of paragraph 3 of the Certificate accompanying such Tender
Draft.
The amount of this Letter of Credit and the amounts from time to time
available to be drawn by you by any Tender Draft or Final Draft shall be
increased when and to the extent, but only when and to the extent, that we
are reimbursed by you on behalf of the Company for amounts drawn hereunder
by any Tender Draft or Purchase Draft. The amounts from time to time
available to be drawn by you by any Redemption Draft or Purchase Draft
shall be increased by the amount set forth in clause (i) of paragraph 3 of
the Certificate accompanying any Tender Draft or paragraph 3 of a
Certificate accompanying any Purchase Draft when and to the extent, but
only when and to the extent, that we are reimbursed by you on behalf of the
Company for amounts drawn hereunder by any such Tender Draft or Purchase
Draft. Any amount received from you on behalf of the Company in
reimbursement of amounts drawn hereunder shall, if accompanied by an
appropriately completed and signed certificate in the form of Annex H
attached hereto from you, be applied to the extent of the amounts indicated
therein in reimbursement of unreimbursed drawings under your Tender Drafts
or Purchase Drafts. Amounts otherwise received from you on behalf of the
Company shall be applied in reimbursement of unreimbursed drawings made by
your Interest Draft.
The amount of this Letter of Credit and the amounts available to be
drawn by you by any Interest Draft, Tender Draft, Redemption Draft,
Purchase Draft, and Final Draft shall be decreased upon our receipt of
notice from you, in the form of your written and appropriately completed
certificate signed by you in the form of Annex G attached hereto, of a
redemption or defeasance of less than all of the Bonds outstanding, to the
respective amounts stated in such certificate.
Each draft and certificate shall refer thereon to the number of this
Letter of Credit and shall be dated the date of its presentation, and shall
be drawn and hand delivered or delivered by mail to our office located at
31 West 52nd Street, New York, New York 10019, Attention: Trade Finance
Department (or any other office in the City and State of New York which may
be designated by us by written notice delivered to you) or by telecopy at
212-474-7989 (or such other number which may be designated by us by written
notice to you). If we receive any of your drafts and certificates at such
office, all in strict conformity with the terms and conditions of this
Letter of Credit, on or prior to the termination hereof and in any event on
or before 12:00 noon (New York City time) on a Banking Day, we will honor
the same on or before 4:00 p.m. (New York City time) on the same day in
accordance with your payment instructions. If we receive any of your
drafts and certificates at such office, all in strict conformity with the
terms and conditions of this Letter of Credit, after the times specified in
the preceding sentence on a Banking Day prior to the termination hereof, we
will honor the same on the next succeeding Banking Day in accordance with
your payment instructions. If requested by you, payment under this Letter
of Credit may be made by wire transfer of Federal Reserve Bank of New York
funds to your account in a bank on the Federal Reserve wire system or by
deposit of same day funds into a designated account that you maintain with
us. The term "Banking Day" means any day of the year other than a
Saturday, Sunday or a day on which banks are required or authorized to
close in New York City. All times of day referred to herein shall be New
York City time. All payments paid under this Letter of Credit shall be
paid with our own funds.
Upon the earliest of (i) our honoring your Final Draft presented
hereunder, (ii) the surrender to us by you of this Letter of Credit for
cancellation, (iii) our honoring your Redemption Draft for all of the
Bonds, (iv) the close of business on the date on which we receive written
notice from you that the Bonds have been converted to the Fixed Interest
Rate within the meaning of the Indenture, (v) the date on which we receive
written notice from you that there is no longer any Bond outstanding,
(vi) the date on which we receive written notice from you of the substi-
tution of an alternate letter of credit in accordance with the Indenture,
and (vii) the Scheduled Termination Date, this Letter of Credit shall
automatically terminate.
This Letter of Credit is transferable in its entirety to any
transferee who you certify has succeeded you as Trustee under the Indenture
and may be successively transferred. Transfer of the available balance
under this Letter of Credit to such transferee shall be effected by the
presentation to us of this Letter of Credit accompanied by a certificate in
the form of Annex I attached hereto. Upon such presentation we shall
forthwith transfer the same to your transferee or, if so requested by your
transferee with provisions therein consistent with this Letter of Credit.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificates
and the drafts referred to herein; and any such reference shall not be
deemed to incorporate herein by reference any document, instrument or
agreement except for such certificates and such drafts.
This Letter of Credit shall be governed by the Uniform Customs and
Practice for Documentary Credit (1983 Revision), International Chamber of
Commerce No. 400, and to the extent matters are not covered thereby, the
laws of the State of New York, including the Uniform Commercial Code as in
effect in the State of New York. Communications with respect to this
Letter of Credit, including a certificate in the form of Annex I attached
hereto, other than presentation of drafts and certificates shall be in
writing and shall be addressed to us at 31 West 52nd Street, New York, New
York 10019, Attention: Trade Finance Department, specifically referring
to the number of this Letter of Credit.
Very truly yours,
DEUTSCHE BANK AG, NEW YORK BRANCH
By______________________________
Title:__________________________
By______________________________
Title:__________________________
Annex A
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE
PAYMENT OF INTEREST ON THE CITY OF BURLINGTON,
COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE POLLUTION
CONTROL REVENUE REFUNDING BONDS, SERIES 1987B
(KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE
"BONDS")
Irrevocable Letter of Credit No.
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Deutsche Bank AG, New York Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. (the
"Letter of Credit," the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to (a) payment(s) of interest on the Bonds, including,
without limitation, accrued interest due upon the redemption of
Bonds, to the extent moneys are not available in the Bond Fund from
the sources set forth in clauses (i) through (iii), inclusive of
Section 404 of the Indenture, which payment(s) is [are]* due on
____________.** [CP Dates (as defined in the Indenture) established
for the current calendar month, and this drawing is also with respect
to other amounts to be drawn under Section 405(f) of the Indenture.]*
Payment of such amount is to be made to us on the same Banking Day if
the Certificate and Interest Draft are presented to you no later than
12:00 noon (New York City time). If presentation is after 12:00 noon
(New York City time), payment of such amount is to be made on the
next Banking Day. None of the Bonds, in respect of which such
drawing is being made, were registered in the name of the Company or
were held on behalf of the Company under the Custody Agreement on the
Record Date within the meaning of the Indenture.
(3) The amount of the Interest Draft accompanying this
Certificate is equal to $___________. It was computed in compliance
with the terms and conditions of the Bonds and the Indenture and does
not include any amount of interest on the Bonds which is included in
any Final Draft presented on the date of this Certificate and does
not exceed the amount available to be drawn by the Trustee under the
Letter of Credit.
________________
* To be used while the Bonds bear interest at the CP Rate.
** Insert date; to be used if drawing is not under Section 405(f) of the
Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By____________________________________
[Name and Title]
Annex B
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE
PAYMENT OF PRINCIPAL OF AND INTEREST ON THE CITY OF
BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REVENUE REFUNDING BONDS,
SERIES 1987B (KANSAS CITY POWER & LIGHT COMPANY
PROJECT) (THE "BONDS") IN SUPPORT OF A TENDER
PURSUANT TO SECTIONS 301, 302, 303, 304, AND 305 OF
THE INDENTURE.
Irrevocable Letter of Credit No.
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Deutsche Bank AG, New York Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. (the
"Letter of Credit," the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment of (i) the purchase price equal to the
unpaid principal amount of the Bonds to be purchased as a result of a
tender on or prior to the effective date of the Fixed Interest Rate
(as defined in the Indenture) pursuant to the terms of Sections 301,
302, 303, 304 and 305 of the Indenture (other than Bonds registered
in the name of the Company which are presently held by the Company or
Bonds held by the Custodian on behalf of the Company) and (ii) the
purchase price equal to the amount of interest accrued and unpaid to
the purchase date from the immediately preceding Interest Accrual
Date (as defined in the Indenture), to the extent moneys are not
available from the sources set forth in clauses (i) through (iii),
inclusive, of Section 306 of the Indenture, which payment is due on
such Banking Day if the Certificate and Tender Draft are presented
not later than 12:00 noon (New York City time), or which payment is
due on the next succeeding Banking Day if the Certificate and Tender
Draft are presented after the time deadline referred to above.
(3) The amount of the Tender Draft accompanying this
Certificate is equal to the sum of (i) $__________ being drawn in
respect of the payment of the portion of the tender price of the
Bonds equal to the unpaid principal of Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or Bonds held by the Custodian on behalf of the Company) to
be purchased as a result of a tender pursuant to Sections 301, 302,
303, 304, and 305 of the Indenture and (ii) $__________ being drawn
in respect of the payment of the portion of the tender price of the
Bonds equal to the accrued and unpaid interest on such Bonds and does
not include any amount of interest which is included in any Tender
Draft (unless such amount has been reinstated by the Bank) or Final
Draft presented on or prior to the date of this Certificate.
(4) The amount of the Tender Draft accompanying this
Certificate was computed in compliance with the terms and conditions
of the Bonds and the Indenture and does not exceed the amount
available to be drawn by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By______________________________
[Name and Title]
Annex C
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE
PAYMENT OF PRINCIPAL OF THE CITY OF BURLINGTON,
COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE POLLUTION
CONTROL REVENUE REFUNDING BONDS, SERIES 1987B
(KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE
"BONDS") UPON REDEMPTION
Irrevocable Letter of Credit No.
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Deutsche Bank AG, New York Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. 806678 (the
"Letter of Credit," the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon redemption [of all] [less than
all]* of the Bonds on or prior to the effective date of the Fixed
Interest Rate (as defined in the Indenture), of the unpaid principal
amount of the Bonds to be redeemed pursuant to the terms of Sections
310, 311 or 312 of the Indenture (other than Bonds registered in the
name of the Company which are presently held by the Company or Bonds
held by the Custodian on behalf of the Company), to the extent moneys
are not available in the Bond Fund from the sources set forth in
clauses (i) and (ii), of Section 404 of the Indenture, which payment
is due on such Banking Day if the Certificate and Redemption Draft
are presented not later than 12:00 noon (New York City time), or
which payment is due on the next succeeding Banking Day if the
Certificate and Redemption Draft are presented after the time
deadline referred to above.
(3) The amount of the Redemption Draft accompanying this
Certificate is equal to the sum of $_________ being drawn in respect
of the payment of unpaid principal of Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or Bonds held by the Custodian on behalf of the Company) to
be redeemed.
(4) The amount of the Redemption Draft accompanying this
Certificate was computed in accordance with the terms and conditions
of the Bonds and the Indenture and does not exceed the amount
available to be drawn under the Letter of Credit.
_______________
* Insert appropriate description.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ______________, 19___.
CHEMICAL BANK,
as Trustee
By______________________________
[Name and Title]
Annex D
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE
PAYMENT OF PRINCIPAL OF THE CITY OF BURLINGTON,
COFFEY COUNTY, KANSAS CUSTOMIZED PURCHASE POLLUTION
CONTROL REVENUE REFUNDING BONDS, SERIES 1987B
(KANSAS CITY POWER & LIGHT COMPANY PROJECT) (THE
"BONDS") IN SUPPORT OF A PURCHASE
Irrevocable Letter of Credit No.
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Deutsche Bank AG, New York Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. (the
"Letter of Credit," the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, on or prior to the effective date of the
Fixed Interest Rate (as defined in the Indenture), of the unpaid
principal amount of the Bonds to be purchased by the Company in lieu
of redemption pursuant to the terms of Section 314 of the Indenture
(other than Bonds registered in the name of the Company which are
presently held by the Company or Bonds held by the Custodian on
behalf of the Company), to the extent moneys are not available in the
Bond Fund from the sources set forth in clauses (i) through (iii) of
Section 306 of the Indenture, which payment is due on such Banking
Day if the Certificate and Purchase Draft are presented not later
than 12:00 noon (New York City time), or which payment is due on the
next succeeding Banking Day if the Certificate and Purchase Draft are
presented after the time deadline referred to above.
(3) The amount of the Purchase Draft accompanying this
Certificate is equal to the sum of $__________ being drawn in respect
of the payment of unpaid principal of Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or Bonds held by the Custodian on behalf of the Company) to
be purchased by the Company in lieu of redemption.
(4) The amount of the Purchase Draft accompanying this
Certificate was computed in compliance with the terms and conditions
of the Bonds and the Indenture and does not exceed the amount
available to be drawn by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By______________________________
[Name and Title]
Annex E
CERTIFICATE FOR DRAWING IN CONNECTION WITH THE
PAYMENT OF PRINCIPAL OF AND INTEREST ON THE CITY OF
BURLINGTON, COFFEY COUNTY, KANSAS CUSTOMIZED
PURCHASE POLLUTION CONTROL REVENUE REFUNDING BONDS,
SERIES 1987B (KANSAS CITY POWER AND LIGHT COMPANY
PROJECT) (THE "BONDS"), UPON STATED OR ACCELERATED
MATURITY
Irrevocable Letter of Credit No.
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Deutsche Bank AG, New York Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. (the
"Letter of Credit", the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment, upon stated or accelerated maturity of
the unpaid principal amount of, and, to the extent such payment is
not due on an Interest Payment Date within the meaning of the
Indenture, of accrued and unpaid interest on, all of the Bonds (other
than Bonds registered in the name of the Company which are presently
held by the Company or Bonds held by the Custodian on behalf of the
Company), to the extent moneys are not available in the Bond Fund
from the sources set forth in clauses (i) through (iii) of Section
404 of the Indenture, which payment is due on such Banking Day if the
Certificate and Final Draft are presented not later than 12:00 noon
(New York City time), or which payment is due on the next succeeding
Banking Day if the Certificate and Final Draft are presented after
the time deadline referred to above.
(3) The amount of the Final Draft accompanying this
Certificate is equal to the sum of (i) $________ being drawn in
respect of the payment of unpaid principal of all of the Bonds (other
than Bonds registered in the name of the Company which are presently
held by the Company or Bonds held by the Custodian on behalf of the
Company) and (ii) $_______ being drawn in respect of the payment of
accrued and unpaid interest on such Bonds (other than Bonds
registered in the name of the Company which are presently held by the
Company or Bonds held by the Custodian on behalf of the Company) and
does not include any amount of interest which is included in any
Interest Draft or Tender Draft (unless such amount has been
reinstated by the Bank), presented on or prior to the date of this
Certificate.
(4) The amount of the Final Draft accompanying this
Certificate was computed in compliance with the terms and conditions
of the Bonds and the Indenture and does not exceed the amount
available to be drawn by the Trustee under the Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ________________, 19___.
CHEMICAL BANK,
as Trustee
By_______________________________
[Name and Title]
Annex F
NOTICE THAT TRUSTEE'S RIGHT TO DRAW
UNDER THE LETTER OF CREDIT BY AN
INTEREST DRAFT HAS NOT BEEN REINSTATED
Chemical Bank
450 W. 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
Irrevocable Letter of Credit No.
Dear Sirs:
You are hereby advised that Kansas City Power & Light Company has not
reimbursed us in an amount equal to the amount drawn by you under the
Interest Draft dated __________, 19___. Therefore, the amount of our
Irrevocable Letter of Credit No. and the amounts available to be
drawn by you by an Interest Draft, Tender Draft, or Final Draft (which
available amounts have been decreased by an amount equal to the amount of
such Interest Draft) shall not be reinstated in the amount of such Interest
Draft.
Deutsche Bank AG, New York Branch
__________________________________
__________________________________
Annex G
CERTIFICATE FOR THE REDUCTION OF AMOUNTS AVAILABLE
UNDER LETTER OF CREDIT NO. DATED AUGUST
19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Deutsche Bank AG, New York Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. (the
"Letter of Credit," the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The Trustee hereby notifies you that on or prior to the
date hereof $_________ principal amount of the Bonds has been
redeemed or defeased and paid pursuant to the Indenture.
(3) Following the redemption or the defeasance and payment
referred to in paragraph (2) above, the aggregate principal amount of
all of the Bonds outstanding is $__________.
(4) The maximum amount of interest (computed at 12% per annum
for a period of 285 days computed on basis of 365 days per year)
accruing on the Bonds referred to in paragraph (3) above is
$__________.
(5) The amount available to be drawn by the Trustee under the
Letter of Credit by any Interest Draft is reduced to $___________
(such amount being equal to the amount specified in paragraph (4)
above) upon receipt by the Bank of this Certificate.
(6) The amount available to be drawn by the Trustee under the
Letter of Credit by any Tender Draft is reduced to $________ (such
amount being equal to the sum of the amounts specified in paragraphs
(3) and (4) above) upon receipt by the Bank of this Certificate.
(7) The amount available to be drawn by the Trustee under the
Letter of Credit by any Redemption Draft is reduced to $_________
(such amount being equal to the amount specified in paragraph (3)
above).
(8) The amount available to be drawn by the Trustee under the
Letter of Credit by any Purchase Draft is reduced to $_______ (such
amount being equal to the amount specified in paragraph (3) above).
(9) The amount available to be drawn by the Trustee under the
Letter of Credit by its Final Draft is reduced to $___________ (such
amount being equal to the sum of the amounts specified in paragraphs
(3) and (4) above) upon receipt by the Bank of this Certificate.
(10) The amount of the Letter of Credit is reduced to
$__________ (such amount being equal to the sum of the amounts
specified in paragraph (3) and (5) above) upon receipt by the Bank of
this Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By________________________________
[Name and Title]
Annex H
CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS
AVAILABLE UNDER IRREVOCABLE LETTER OF CREDIT NO.
DATED AUGUST 19, 1993
The undersigned, a duly authorized officer of the undersigned Trustee
(the "Trustee"), hereby certifies to Deutsche Bank AG, New York Branch (the
"Bank"), with reference to Irrevocable Letter of Credit No. (the
"Letter of Credit," the terms defined therein and not otherwise defined
herein being used herein as therein defined) issued by the Bank in favor of
the Trustee, that:
(1) The Trustee is the Trustee under the Indenture for the
holders of the Bonds.
(2) The amount of $_________ paid to you today by the Trustee
on behalf of the Company is a payment made to reimburse you pursuant
to Section 1.10[(c)]* [(d)]** of the Letter of Credit and
Reimbursement Agreement, dated as of August 19, 1993 (the
"Reimbursement Agreement"), between the Company and the Bank, for
amounts drawn under the Letter of Credit by [Tender Drafts]*
[Purchase Drafts]**.
(3) Of the amount referred to in paragraph (2), $____________
represents the principal amount of Bonds.
[(4) Of the amount referred to in paragraph (2), $__________
represents accrued interest on Bonds calculated in accordance with
clause (ii) of Section 1.10(c) of the Reimbursement Agreement.]*
_______________________
* To be used in connection with reimbursement for amounts drawn
under Tender Drafts.
** To be used in connection with reimbursement for amounts drawn
under Purchase Drafts.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate this _____ day of ____________, 19___.
CHEMICAL BANK,
as Trustee
By______________________________
[Name and Title]
Annex I
INSTRUCTION TO TRANSFER
________________,19___
Deutsche Bank AG, New York Branch
31 West 52nd Street
New York, New York 10019
Attention: CLAD
Re: Irrevocable Letter of Credit No.
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
________________________________________
[Name of Transferee]
________________________________________
[Address]
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded
the undersigned as Trustee under the Indenture (as defined in the Letter of
Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however,
that no rights shall be deemed to have been transferred to the transferee
until such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith
we ask that this transfer be effective and that you transfer the same to
our transferee or that, if so requested by the transferee, you issue a new
irrevocable letter of credit in favor of the transferee with provisions
consistent with the Letter of Credit.
Very truly yours,
CHEMICAL BANK,
as predecessor Trustee
By_______________________________
[Name and title]
EXHIBIT B
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF COUNSEL FOR THE COMPANY
August 19, 1993
Deutsche Bank AG, acting through
its New York and Cayman Islands Branches
31 West 52nd Street
New York, New York 10019
Kansas City Power & Light Company
Gentlemen:
I am Chief Legal Officer of Kansas City Power & Light Company, a
Missouri corporation (the "Company"), and am familiar with the matters
relating to the preparation, execution and delivery of a Letter of Credit
and Reimbursement Agreement (the "Reimbursement Agreement") dated as of
August 19, 1993, between the Company and Deutsche Bank AG, acting through
its New York and Cayman Islands Branches (the "Bank"). Among other things,
I have examined:
(1) a fully executed counterpart of the Reimbursement
Agreement;
(2) the fully executed Letter of Credit;
(3) the fully executed Indenture;
(4) the fully executed Lease;
(5) the fully executed Sublease;
(6) the fully executed Custody Agreement and Amendment No. 1
thereto;
(7) the Articles of Incorporation of the Company and all
amendments thereto (the "Charter");
(8) the by-laws of the Company as now in effect (the
"By-laws"); and
(9) the Company's corporate proceedings and the proceedings
before the public utility regulatory commissions of the States of
Missouri and Kansas relating to the Reimbursement Agreement and
related matters.
I have also examined the originals, or copies certified to my satis-
faction, of (i) such other corporate records of the Company, certificates
of public officials and of officers of the Company, (ii) the agreements,
instruments and documents which affect or purport to affect the obligations
of the Company under the Reimbursement Agreement, and (iii) such other
agreements, instruments and documents as we have deemed necessary as a
basis for the opinions hereinafter expressed. I have assumed the due
execution and delivery, pursuant to due authorization, of the Reimbursement
Agreement by the Bank. All capitalized terms used herein and defined in
the Reimbursement Agreement are used herein as therein defined.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the opinion that:
(1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business in, and is in good standing
under the laws of, the State of Kansas.
(2) The execution, delivery and performance by the Company of
the Reimbursement Agreement and each Related Document to which it is
a party are and were at the time of execution within the Company's
corporate power, have been duly authorized by all necessary corporate
action, do not and did not at the time of execution contravene
(i) Charter or By-laws, or (ii) any law, rule or regulation
applicable to the Company, or (iii) any contractual or legal
restriction (including, but not limited to, the Indenture) binding on
or affecting the Company, and do not result in or require the
creation of any lien, security interest or other charge or
encumbrance (other than pursuant to the Reimbursement Agreement and
the Related Documents) upon or with respect to any of its properties.
The Reimbursement Agreement and each Related Document to which the
Company is a party have been duly executed and delivered on behalf of
the Company.
(3) The public utility regulatory commissions of the States of
Missouri and Kansas have duly issued current orders authorizing the
Company to enter into the Reimbursement Agreement, and the
commissions have duly issued previous orders authorizing the Lease,
the Sublease and any other documents that such commissions have
jurisdiction over and to which the Company is a party and the Related
Documents to which the Company is a party, and such orders remain in
full force and effect in the form issued. Except for the approvals
of the Board of Commissioners of Coffey County, Kansas, and the City
Council of the City of Burlington, Kansas, approving issuance of the
Bonds, which approvals have been duly obtained, and the notice of
timely filing with the Board of Tax Appeals of the State of Kansas
which has been given, no other authorization, approval or other
action by, and no notice to or filing or registration with, any
governmental authority or regulatory body (other than for
informational purposes) is required for the due execution, delivery
and performance by the Company of any Related Document to which it is
a party.
(4) Based on Missouri law the Reimbursement Agreement and each
Related Document to which the Company is a party are the legal, valid
and binding obligations of the Company enforceable against the
Company in accordance with their respective terms.
(5) Except as disclosed in the Company's Form 10-K for the
year 1992, Forms 10-Q for the quarters March 31, 1993 and June 30,
1993, and Form 8-K dated August 16, 1993, there is no pending or, to
the best of my knowledge, threatened action or proceeding before any
court, governmental agency or arbitrator against, directly involving
or affecting the Company or any of its subsidiaries, which, in any
case, may materially and adversely affect the financial condition or
operations of the Company.
The opinions set forth above are subject to the following qualifica-
tions:
(a) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a
party is subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally.
(b) The enforceability of the Company's obligations under the
Reimbursement Agreement and each Related Document to which it is a
party, may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
I am not licensed to practice law in the State of New York or the
State of Kansas. With respect to the conclusions set forth herein, I
express no opinions as to any laws other than the laws of the State of
Missouri and the Federal laws of the United States. I know of no reason
why the choice of law set forth in the Reimbursement Agreement and the
Related Documents would not be upheld in the courts of Missouri.
Very truly yours,
EXHIBIT C
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
OPINION OF BOND COUNSEL
[Letterhead of Chapman and Cutler]
August 19, 1993
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106
Chemical Bank
450 West 33rd Street
New York, New York 10001
Deutsche Bank AG, New York Branch
31 West 52nd Street
New York, New York 10019
Re: $40,000,000 City of Burlington, Kansas Customized Purchase Pollution
Control Revenue Refunding Bonds, Series 1987B (Kansas City Power &
Light Company Project)
Ladies and Gentlemen:
The above-referenced bonds (the "Bonds") were issued under and are
secured by an Indenture of Trust dated as of October 1, 1987 (the
"Indenture"), between the City of Burlington, Kansas (the "Issuer") and
Chemical Bank, as trustee (the "Trustee"). Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to them in the
Indenture.
Kansas City Power & Light Company (the "Company") has requested we
provide the opinion of Bond Counsel required by Section 4.4 of the Series
1987B Equipment Sublease Agreement dated as of October 1, 1987 (the
"Sublease") between the Issuer and the Company and Section 405(c) of the
Indenture with respect to the issuance of Letter of Credit No. _______ of
even date herewith (the "Letter of Credit") issued by Deutsche Bank AG, New
York Branch (the "Bank").
On the basis of our review of the Letter of Credit, the Indenture,
the Sublease, photocopies of various counsel opinions dated October 29,
1987 (which have been identified as authentic copies of the original
opinions and of which we have assumed the authenticity), and such other
documents as we have considered necessary, we are of the opinion that the
delivery of the Letter of Credit is authorized under the Sublease and
complies with its terms.
We express no opinion as to whether the Letter of Credit is a legal,
valid, binding and enforceable obligation of the Bank in accordance with
its terms.
Respectfully submitted,
AGBacon
EXHIBIT D
TO LETTER OF CREDIT
AND REIMBURSEMENT
AGREEMENT
ENCUMBRANCES
(i) the Lien of the Mortgages;
(ii) liens for taxes or assessments by governmental bodies not yet
due or the payment of which is being contested in good faith by the
Company, provided that the Company shall have set aside on its books
reserves deemed by it to be adequate with respect to any such tax or
assessment so being contested;
(iii) any right of any municipal or other governmental body or
agency, by virtue of any franchise, grant, license, contract or statute, to
occupy, purchase or designate a purchaser of, or to order the sale of, any
mortgaged property upon payment of reasonable compensation therefor, or to
terminate any franchise, grant, license, contract or other right, or to
regulate the property and business of the Company;
(iv) liens and charges incidental to construction or current
operations of the Company which are not delinquent or, whether or not
delinquent, are being contested in good faith by the Company;
(v) easements, reservations or right of way, and zoning ordinances,
regulations and restrictions, if they do not, individually or in the
aggregate, impair the utility of the affected property in the operation of
the business of the Company;
(vi) irregularities in or defects of title with respect to any
rights of way acquired by the Company for lines, structures and
appurtenances thereto, if the Company has obtained from the apparent owner
of the real estate traversed by any such right of way a sufficient right,
by the terms of the instrument granting such right of way, to the use
thereof for the purpose of such lines, structures and appurtenances, or the
Company has eminent domain power to remove or cure such irregularities or
deficiencies;
(vii) liens securing obligation neither (A) assumed by the Company
nor (B) on account of which it customarily pays interest, directly or
indirectly, existing upon real estate, or rights in or relating to real
estate acquired by the Company for right of way for lines, structures and
appurtenances thereto;
(viii) party-wall agreements and agreements for the obligations
relating to the joint or common use of property owned solely by the Company
or owned by the Company in common or jointly with one or more parties;
(ix) liens securing indebtedness incurred by a Person, other than
the Company, which indebtedness has been neither assumed nor guaranteed by
the Company nor on which it customarily pays interest, existing on property
which the Company owns jointly or in common with such Person or such Person
and others, if there is an effective bar against partition of such property
which would preclude the sale of such property by such other Person or the
holder of such lien without the consent of the Company;
(x) any attachment, judgment and other similar lien arising in
connection with court proceedings in an amount not in excess of the greater
of $10,000,000 or 5% of the principal amount of outstanding bonds or other
indebtedness at the time such attachment, judgment or lien arises, or the
execution of which has been stayed or which has been appealed and secured,
if necessary, by an appeal bond;
(xi) the burdens of any law or governmental rule, regulation, order
or permit requiring the Company to maintain certain facilities or to
perform certain acts as a condition of its occupancy or use of, or
interference with, any public or private lands or highways or any river,
stream or other waters;
(xii) any duties or obligations of the Company to any federal state
or local or other governmental authority with respect to any franchise,
grant, license or permit which affects any mortgaged property;
(xiii) liens in favor of a governmental or governmental entity
securing (A) payments pursuant to a statute (other than taxes), or (B)
indebtedness incurred to finance all or part of the purchase price or cost
of construction of the property subject to such lien; and
(xiv) possible adverse rights or interests and inconsequential
defects or irregularities in title which, in an opinion of counsel may
properly be disregarded.
Exhibit 12
KANSAS CITY POWER & LIGHT COMPANY
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Year Ended December 31
1993 1992 1991 1990 1989
(Thousands)
Income from continuing
operations $ 105,772 $ 86,334 $ 103,893 $ 102,732 $ 108,618
Add:
Taxes on income 67,953 52,196 60,278 57,062 65,885
Kansas City earnings tax 495 382 242 376 390
Total taxes on income 68,448 52,578 60,520 57,438 66,275
Interest on value of
leased property 7,273 6,366 5,075 4,357 3,787
Interest on long-term debt 50,118 54,266 63,057 68,853 78,570
Interest on short-term notes 750 2,749 3,299 6,199 6,531
Other interest expense
and amortization 4,113 2,173 2,665 2,492 1,985
Total fixed charges 62,254 65,554 74,096 81,901 90,873
Earnings before taxes on
income and fixed charges $ 236,474 $ 204,466 $ 238,509 $ 242,071 $ 265,766
Ratio of earnings to fixed
charges 3.80 3.12 3.22 2.96 2.92
Exhibit 23-a
OPINION AND CONSENT OF COUNSEL
As Senior Vice President and Chief Legal Officer of Kansas City Power & Light
Company, I have reviewed the statements as to matters of law and legal
conclusions in the Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, and consent to the incorporation by reference of such
statements in the Company's previously-filed Form S-3 Registration Statements
(Registration No. 33-54196 and Registration No. 33-51799) and Form S-8
Registration Statements and (Registration No. 33-45618 and Registration
No. 33-62942).
/s/Samuel P. Cowley
Samuel P. Cowley
Kansas City, Missouri
March 25, 1993
Exhibit 23-b
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report, which includes an explanatory paragraph to
acknowledge the Company's change in method of accounting for incremental
nuclear refueling outage costs in 1992, dated January 28, 1994, appearing in
the Annual Report on Form 10-K of Kansas City Power & Light Company for the
fiscal year ended December 31, 1993, into the Company's previously filed Form
S-3 Registration Statements (Registration No. 33-54196 and 33-51799) and Form
S-8 Registration Statements (Registration No. 33-45618 and Registration No.
33-62942).
/s/Coopers & Lybrand
Coopers & Lybrand
Kansas City, Missouri
March 25, 1994
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/William H. Clark
William H. Clark
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared William H.
Clark, to be known to be the person described in and who executed
the foregoing instrument, and who, being by me first duly sworn,
acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/Robert J. Dineen
Robert J. Dineen
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared Robert J.
Dineen, to be known to be the person described in and who
executed the foregoing instrument, and who, being by me first
duly sworn, acknowledged that he executed the same as his free
act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/Arthur J. Doyle
Arthur J. Doyle
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared Arthur J.
Doyle, to be known to be the person described in and who executed
the foregoing instrument, and who, being by me first duly sworn,
acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/W. Thomas Grant II
W. Thomas Grant II
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared W. Thomas Grant
II, to be known to be the person described in and who executed
the foregoing instrument, and who, being by me first duly sworn,
acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/George E. Nettels, Jr.
George E. Nettels, Jr.
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared George E.
Nettels, Jr., to be known to be the person described in and who
executed the foregoing instrument, and who, being by me first
duly sworn, acknowledged that he executed the same as his free
act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/George A. Russell
George A. Russell
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared George A.
Russell, to be known to be the person described in and who
executed the foregoing instrument, and who, being by me first
duly sworn, acknowledged that he executed the same as his free
act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/Linda H. Talbott
Linda H. Talbott
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared Linda H.
Talbott, to be known to be the person described in and who
executed the foregoing instrument, and who, being by me first
duly sworn, acknowledged that he executed the same as his free
act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power &
Light Company, a Missouri corporation, does hereby constitute and
appoint Drue Jennings, his true and lawful attorney and agent,
with full power and authority to execute in the name and on
behalf of the undersigned as such director an Annual Report on
Form 10-K; hereby granting unto such attorney and agent full
power of substitution and revocation in the premises; and hereby
ratifying and confirming all that such attorney and agent may do
or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 1st day of February, 1994.
/s/Robert H. West
Robert H. West
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 1st day of February, 1994, before me the
undersigned, a Notary Public, personally appeared Robert H. West,
to be known to be the person described in and who executed the
foregoing instrument, and who, being by me first duly sworn,
acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year last above written.
/s/Janee C. Rosenthal
Notary Public for State of
Missouri, Clay County
My Commission Expires:
February 25, 1995
