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Exhibit A-5
CG LETTERHEAD
Date _______________________________
Bank Name
Address
Attention: __________________________________
Bid Note Program Letter Agreement
Ladies and Gentlemen:
The Columbia Gas System, Inc. ("COLUMBIA" or the "COMPANY") hereby
offers ________________________________________ (the "BANK") the opportunity to
participate in an uncommitted credit facility for general corporate purposes.
1. Columbia may from time to time request advances ("ADVANCES") from
the Bank, on the terms and conditions set forth below. This letter does not
commit the Bank to lend but rather sets forth the procedures to be used in
connection with Columbia's requests for Advances from the Bank from time to
time on or prior to the termination hereof pursuant to paragraph 11 and, in the
event that the Bank makes Advances to Columbia hereunder, the Company's
obligations to the Bank with respect thereto. The Advances shall be evidenced
by the unsecured "grid" promissory note executed by Columbia in substantially
the form of Exhibit A hereto (the "NOTE").
2. Each Advance shall be $1,000,000 and in integral multiples thereof
and shall be made upon (i) Columbia's request to the Bank by telephone, telex
or letter, given by any of the persons empowered to borrow by Columbia's Board
of Directors and listed on Exhibit B hereto or otherwise designated by Columbia
in writing ("DESIGNATED PERSONS"), that Columbia wishes to borrow money on a
specified date, in a specified amount and for a specified term (which shall, in
no event, be longer than 270 days); and (ii) our agreement with you, and your
agreement with us, as to such date, amount and term, and as to the Quoted Rate
(as defined in the Note) of interest per annum applicable to such Advance. The
Bank agrees to transfer or wire funds only to accounts designated in writing by
Designated Persons. Promptly after the date of each Advance, the Bank will
send Columbia a written confirmation of such Advance and the amount and term
thereof and the interest rate per annum applicable thereto.
3. Columbia will furnish the Bank, as soon as available, the
Company's quarterly financial statements and annual audited financial
statements, and other public information that you may from time to time
reasonably request. The Bank may furnish to purchasers and prospective
purchasers of participations in or assignments of any Advance copies of the
foregoing statements, filings and other information. However, to the extent
that the
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bank requests proprietary and/or confidential information, Columbia may request
the execution of an appropriate confidentiality agreement, if that information
is provided, and in no event shall such information be provided to third
parties.
4. Columbia's request for an Advance shall constitute: (i) a
representation and warranty by us that no payment default has occurred and is
continuing under any agreement or instrument relating to any of Columbia's
indebtedness or would result after giving effect to such Advance and to the
application of the proceeds therefrom (ii) a representation and warranty by
Columbia that no Event of Default (as defined in the Note) or event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both and (iii) a representation and warranty by it that no event
has occurred and no circumstance exists as a result of which the information
which we have provided to the Bank pursuant to paragraph 3 would include an
untrue statement of a material fact or omit to state any material fact or any
fact necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
5. Columbia shall repay, and shall pay interest on, each Advance in
accordance with the terms hereof and of the Note. Columbia shall have no right
to prepay any unpaid amount of any Advance.
6. Columbia shall make each payment hereunder and under the Note on
or before 3:00 P.M. (New York City time) on the day when due in lawful money of
the United States of America to the Bank at its office at
______________________________________________________________________
_______________________________________________________________________, in
same day funds. Columbia hereby authorizes the Bank, if and to the extent that
payment is not made when due hereunder, to charge from time to time against any
or all of Columbia's accounts with the Bank any amount so due. All
computations of interest shall be made by the Bank on the basis of a year of
360 days, for the actual number of days (including the first day but excluding
the last day) elapsed.
7. Whenever any payment to be made hereunder shall be stated to be
due on a Saturday, a Sunday or a public or bank holiday in New York City (any
other day being a "BUSINESS DAY"), such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.
8. The Bank shall incur no liability to Columbia in acting upon any
telephone, telex or letter request or other communication which the Bank
believes in the absence of gross negligence to have been given by a Designated
Person or in otherwise acting in good faith under this letter. Further, all
documents required to be executed in conjunction with Advances under this
letter may be signed by any Designated Person.
9. This letter shall remain in effect until terminated by either
Columbia or the Bank by giving prior written notice of termination hereof to
the other party hereto, but no such
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termination shall affect Columbia's obligations with respect to the Advances
outstanding at the time of such termination.
10. All written communications hereunder shall be mailed, telexed or
delivered to the address specified below for Columbia and for the Bank, or as
to each party, to such other address as shall be designated by such party in a
written notice to the other party.
If to Columbia, Xx. Xxxxxx X. Xxxxxx, Xx.
Assistant Treasurer
Columbia Gas System Service Corporation
Suite 000
Xxxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Bank,
11. The Bank may assign to one or more banks or other entities all or
any part of, or may grant participations to one or more banks or other entities
in or to all or any part of, any Advance or Advances hereunder and under the
Note. Columbia may not assign its rights hereunder or any interest herein
without the Bank's prior written consent and any such assignment without the
Bank's consent shall be null and void.
12. Columbia agrees to pay on demand all reasonable costs and
expenses, if any, incurred by the Bank in connection with the enforcement of
this letter or the Note.
13. Columbia hereby represents and warrants that (i) the execution,
delivery and performance by us of this letter and the Note are within our
corporate powers, have been duly authorized by all necessary corporate action,
and do not contravene (x) our charter or by-laws or (y) law or any contractual
restriction binding on or affecting us or any entity that controls us; (ii) no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is
required for the due execution, delivery and performance by Columbia of this
letter or the Note; and (iii) each of this letter and the Note has been duly
executed and delivered by Columbia, and is its legal, valid and binding
obligation, enforceable against Columbia in accordance with its terms.
14. This letter shall be governed by, and construed in accordance
with, the laws of the State of New York.
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15. Columbia and the Bank each hereby irrevocably waive all right to
trial by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) arising out of or relating to this letter or the
Note or any Advances hereunder.
If the terms of this letter are satisfactory to the Bank, please
indicate your agreement and acceptance thereof by signing a counterpart of this
letter and returning it to us.
Very truly yours,
THE COLUMBIA GAS SYSTEM, INC.
By: _________________________________
Name:
Title:
Agreed and Accepted
____________________________________________
By: ______________________________________
Name:
Title:
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EXHIBIT A
TO
BID NOTE PROGRAM LETTER AGREEMENT
DATED ________________
BETWEEN THE COLUMBIA GAS SYSTEM, INC. AND
______________________________________
SHORT-TERM NOTE
Dated _______________
FOR VALUE RECEIVED, the undersigned (the "BORROWER"), HEREBY PROMISES
TO PAY to the order of __________________________ (the "BANK") the principal
amount of each Advance (as defined below) made by the Bank to the Borrower, on
the date mutually agreed to by the Bank and the Borrower at the time of such
Advance as the maturity date thereof; together with interest (computed on the
basis of a year of 360 days for the actual number of days, including the first
day but excluding the last day, elapsed) on the principal amount of each
Advance outstanding from time to time from and including the date on which such
Advance is made until the maturity date of such Advance, payable on the
maturity date of such Advance at a rate quoted by the Bank and agreed to by the
Borrower at the time of such Advance (the "QUOTED RATE"). If, in accordance
with the Bid Note Program referred to below, the Borrower shall make a timely
objection as to the Quoted Rate for any Advance, such Advance shall be payable
on demand and shall bear interest at a fluctuating interest rate per annum in
effect from time to time equal to 120% of the higher of:
(a) the rate of interest announced publicly by the Bank in New York,
New York, from time to time, as the Bank's base rate; or
(b) 1/2 of one percent above the latest three-week moving average of
secondary market morning offering rates (expressed as an annual rate) in the
United States for three-month certificates of deposit of major United States
money market banks, such three-week moving average being determined weekly on
each Monday (or, if any such day is not a Business Day, on the next scheduled
Business Day) for the three-week period ending on the previous Friday by the
Bank on the basis of such rates reported by certificate of deposit dealers to
and published by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for such rates
received by the Bank from three New York certificate of deposit dealers of
recognized standing selected by the Bank, in either case adjusted to the
nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to
the next higher 1/4 of one percent (the higher of (a) or (b) being the "BASE
RATE").
Any overdue amount of principal, interest, fees or other amounts
payable hereunder or under the Bid Note Program referred to below shall bear
interest, payable on demand, at the Base Rate plus 2% per annum.
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The Borrower shall have no right to prepay any unpaid amount of any
Advance. If any of the following events shall occur and be continuing (each,
and "EVENT OF DEFAULT"):
(a) the Borrower shall fail to pay any principal of, or any interest
on, any Advance when the same becomes due and payable; or
(b) any representation or warranty made by the Borrower (or any of its
officers) pursuant to the Bid Note Agreement shall prove to have been
incorrect in any material respect when made; or
(c) the Borrower shall, without the prior written consent of the Bank,
merge or consolidate with or into, or convey, transfer, lease or
dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets to, any person or entity; or
(d) the Borrower shall fail to pay any principal of or premium or
interest on any indebtedness (excluding indebtedness evidenced by this
Note) in a principal amount of $30,000,000 in aggregate when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in such
agreement or instrument relating to such indebtedness; or any other
event shall occur or condition shall exist under any agreement of
instrument relating to any such indebtedness and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or to permit the acceleration of, the maturity of such indebtedness;
or any such indebtedness shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(e) the Borrower shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Borrower seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or any substantial part of its property; and in the
case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed
for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian
or other similar official for, it or for any substantial part of its
property) shall occur; or the Borrower shall take any corporate action
to authorize any of the actions set forth above in this subsection
(e);
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then, and in any such event, the Bank may declare this Note, all
interest thereon and all other amounts payable hereunder to be
forthwith due and payable, whereupon this Note, all such interest 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 the Borrower hereby expressly waives; provided, however,
that in the event of an actual or deemed entry of an order for relief
with respect to the Borrower under the Federal Bankruptcy Code, this
Note, all such interest and all such amounts 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 Borrower.
The Borrower shall make each payment of principal and interest
hereunder prior to 3:00 P. M. (New York City time) on the day when due in
lawful money of the United States of America to the Bank at its office
at _____________________________________________________________________________
_______________________________________, in same day funds. Whenever any
payment to be made hereunder shall be otherwise due on a Saturday, a Sunday or
a public or bank holiday in New York City (any other day being a "BUSINESS
DAY), such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest.
The Borrower hereby authorizes the Bank to endorse on the grid
attached hereto the date and amount of each Advance made by he Bank to the
Borrower hereunder, the maturity date thereof, all payments made on account of
principal thereof and the interest rate applicable thereto, provide that the
failure to do so shall not affect the obligations of the Borrower to the Bank.
The Borrower also agrees to pay on demand all reasonable costs and
expenses (including fees and expenses of counsel) incurred by the Bank in
enforcing this Note.
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York.
This Note is the Note referred to in, and is entitled to the benefits
of, the Bid Note Program, dated _____________ (the "BID NOTE PROGRAM"), between
the Borrower and the Bank, which Bid Note Program, among other things, sets
forth procedures to be used in connection with the Borrower's periodic requests
that the Bank make advances (the "ADVANCES) to it from time to time.
Capitalized terms used herein but not defined in this Note shall have
the meanings attributed to them in the agreement.
THE COLUMBIA GAS SYSTEM, INC.
By:__________________________
Title:
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