Exhibit 10
$500,000,000
364-DAY
CREDIT AGREEMENT
dated as of
April 18, 2002
among
DUKE CAPITAL CORPORATION,
as Borrower
--------
THE BANKS LISTED HEREIN
as Banks
-----
and
BANK ONE, NA
as Administrative Agent
--------------------
BANC ONE CAPITAL MARKETS, INC.
Lead Arranger and Sole Book Runner
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS...................................................1
Section 1.01. Definitions.................................................................1
Section 1.02. Accounting Terms and Determinations........................................10
Section 1.03. Types and Classes of Borrowings............................................10
ARTICLE 2 THE CREDITS.......................................................................10
Section 2.01. Commitments................................................................10
Section 2.02. Notice of Borrowings.......................................................11
Section 2.03. Notice to Banks; Funding of Loans..........................................11
Section 2.04. Registry; Notes............................................................12
Section 2.05. Maturity of Loans..........................................................13
Section 2.06. Interest Rates.............................................................13
Section 2.07. Commitment Fees............................................................14
Section 2.08. Optional Termination or Reduction of Commitments...........................14
Section 2.09. Method of Electing Interest Rates..........................................14
Section 2.10. Mandatory Termination of Commitments.......................................15
Section 2.11. Optional Prepayments.......................................................15
Section 2.12. General Provisions as to Payments..........................................16
Section 2.13. Funding Losses.............................................................16
Section 2.14. Computation of Interest and Fees...........................................16
Section 2.15. Regulation D Compensation..................................................17
Section 2.16. Facility LCs...............................................................17
ARTICLE 3 CONDITIONS........................................................................22
Section 3.01. Effectiveness..............................................................22
Section 3.02. Credit Extensions..........................................................23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES....................................................23
Section 4.01. Organization and Power.....................................................23
Section 4.02. Corporate and Governmental Authorization; No Contravention.................23
Section 4.03. Binding Effect.............................................................24
Section 4.04. Financial Information......................................................24
Section 4.05. Regulation U...............................................................24
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TABLE OF CONTENTS
(Continued)
Page
Section 4.06. Litigation.................................................................24
Section 4.07. Compliance with Laws.......................................................24
Section 4.08. Taxes......................................................................25
Section 4.09. Public Utility Holding Company Act.........................................25
ARTICLE 5 COVENANTS.........................................................................25
Section 5.01. Information................................................................25
Section 5.02. Payment of Taxes...........................................................27
Section 5.03. Maintenance of Property; Insurance.........................................27
Section 5.04. Maintenance of Existence...................................................27
Section 5.05. Compliance with Laws.......................................................27
Section 5.06. Books and Records..........................................................27
Section 5.07. Maintenance of Ownership of Principal Subsidiaries.........................28
Section 5.08. Negative Pledge............................................................28
Section 5.09. Consolidations, Mergers and Sales of Assets................................29
Section 5.10. Use of Proceeds............................................................29
Section 5.11. Transactions with Affiliates...............................................29
Section 5.12. Indebtedness/Capitalization Ratio..........................................30
ARTICLE 6 DEFAULTS..........................................................................30
Section 6.01. Events of Default..........................................................30
Section 6.02. Notice of Default..........................................................33
ARTICLE 7 THE ADMINISTRATIVE AGENT..........................................................33
Section 7.01. Appointment; Nature of Relationship........................................33
Section 7.02. Administrative Agent and Affiliates........................................33
Section 7.03. Action by Administrative Agent.............................................33
Section 7.04. Consultation with Experts..................................................34
Section 7.05. Liability of Administrative Agent..........................................34
Section 7.06. Indemnification............................................................34
Section 7.07. Credit Decision............................................................34
Section 7.08. Successor Administrative Agent.............................................34
Section 7.09. Administrative Agent's Fee.................................................35
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TABLE OF CONTENTS
(Continued)
Page
ARTICLE 8 CHANGE IN CIRCUMSTANCES...........................................................35
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair...................35
Section 8.02. Illegality.................................................................35
Section 8.03. Increased Cost and Reduced Return..........................................36
Section 8.04. Taxes......................................................................37
Section 8.05. Alternate Base Rate Loans Substituted for Affected Euro-Dollar Loans.......39
Section 8.06. Substitution of Bank.......................................................40
ARTICLE 9 MISCELLANEOUS.....................................................................40
Section 9.01. Notices....................................................................40
Section 9.02. No Waivers.................................................................41
Section 9.03. Expenses; Indemnification..................................................41
Section 9.04. Sharing of Set-offs........................................................41
Section 9.05. Amendments and Waivers.....................................................42
Section 9.06. Successors and Assigns.....................................................42
Section 9.07. Collateral.................................................................43
Section 9.08. Confidentiality............................................................43
Section 9.09. Governing Law; Submission to Jurisdiction..................................44
Section 9.10. Counterparts; Integration..................................................44
Section 9.11. WAIVER OF JURY TRIAL.......................................................44
Section 9.12. Payments Set Aside.........................................................44
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COMMITMENTS SCHEDULE
PRICING SCHEDULE
NOTICE ADDRESSES SCHEDULE
EXISTING LCS SCHEDULE
EXHIBIT A - Note
EXHIBIT B-1 - Opinion of Deputy General Counsel of the Borrower
EXHIBIT B-2 - Opinion of Special Counsel for the Borrower
EXHIBIT C - Assignment and Assumption Agreement
EXHIBIT D - Extension Agreement
EXHIBIT E - Facility LC Application
EXHIBIT F - Facility LC
364-DAY CREDIT AGREEMENT
364-DAY CREDIT AGREEMENT dated as of April 18, 2002 among DUKE CAPITAL
CORPORATION, the BANKS listed on the signature pages hereof and BANK ONE, NA, a
national banking association having its principal office in Chicago, Illinois,
as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Definitions. The following terms, as used herein, have the
-----------
following meanings:
"Additional Bank" means any financial institution that becomes a Bank for
---------------
purposes hereof in connection with the replacement of a Bank pursuant to Section
8.06.
"Administrative Agent" means Bank One, NA, in its capacity as
--------------------
administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, the
----------------------------
administrative questionnaire in the form submitted to such Bank by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Bank.
"Affiliate" means, as to any Person (the "specified Person") (i) any Person
---------
that directly, or indirectly through one or more intermediaries, controls the
specified Person (a "Controlling Person") or (ii) any Person (other than the
------------------
specified Person or a Subsidiary of the specified Person) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. Unless otherwise
specified, "Affiliate" means an Affiliate of the Borrower.
"Aggregate Commitment" means the aggregate of the Commitments of all the
--------------------
Banks.
"Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
-------------------------------------
of the Outstanding Credit Exposure of all the Banks.
"Alternate Base Rate" means, for any day, a rate of interest per annum
-------------------
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternate Base Rate Loan" means a Loan which, except as otherwise provided
------------------------
in Section 2.06, bears interest at the Alternate Base Rate.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
-------------------------
case of its Alternate Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Applicable Margin" means, with respect to Euro-Dollar Borrowings at any
-----------------
time, the percentage rate per annum which is applicable to such time with
respect to Euro-Dollar Borrowings as set forth in the Pricing Schedule.
"Approved Officer" means the president, a vice president, the treasurer or
----------------
an assistant treasurer or the controller of the Borrower or such other
representative of the Borrower as may be designated by any one of the foregoing
with the consent of the Administrative Agent.
"Assignee" has the meaning set forth in Section 9.06(c).
--------
"Available Aggregate Commitment" means, at any time, the Aggregate
------------------------------
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank" means each bank or other financial institution listed on the
----
signature pages hereof, each Additional Bank, each Assignee which becomes a Bank
pursuant to Section 9.06(c), and their respective successors.
"Bank One" means Bank One, NA, a national banking association having its
--------
principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means Duke Capital Corporation, a Delaware corporation, and its
--------
successors.
"Borrowing" has the meaning set forth in Section 1.03.
---------
"Cash Equivalents" means (i) securities issued or unconditionally
----------------
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within 30 days from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 30 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by S&P or
at least P-1 or the equivalent thereof by Moody's, (iii) time deposits and
certificates of deposit maturing within 30 days from the date of issuance and
issued by a bank or trust company organized under the laws of the United States
of America or any state thereof that has combined capital and surplus of at
least $500,000,000 and that has (or is a subsidiary of a bank holding company
that has) a long-term unsecured debt rating of at least A or the equivalent
thereof by S&P or at least A2 or the equivalent thereof by Moody's, (iv)
repurchase obligations with a term not exceeding seven (7) days with respect to
underlying securities of the types described in clause (i) above entered into
with any bank or trust company meeting the qualifications specified in clause
(iii) above, and (v) money market funds at least 95% of the assets of which are
continuously invested in securities of the type described in clause (i) above.
"Class" refers to the determination whether a Loan is a Revolving Credit
-----
Loan or a Term Loan.
2
"Collateral Shortfall Amount" is defined in Section 6.01.
---------------------------
"Commitment" means (i) with respect to each Bank listed on the signature
----------
pages hereof, the amount set forth opposite the name of such Bank on the
Commitment Schedule, and (ii) with respect to each Additional Bank or Assignee
which becomes a bank pursuant to Sections 2.01(c) and 9.06(c), the amount of the
Commitment thereby assumed by it, in each case as such amount may from time to
time be reduced pursuant to Section 2.08, 2.10 or 9.06(c) or increased pursuant
to Section 8.06 or 9.06(c).
"Commitment Fee Rate" means, on any day, the percentage rate per annum
-------------------
applicable on such day as set forth in the Pricing Schedule.
"Commitment Schedule" means the Schedule attached hereto identified as
-------------------
such.
"Commitment Termination Date" means, for each Bank, April 17, 2003, as such
---------------------------
date may be extended from time to time pursuant to Section 2.01(c) or, if any
such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar
Business Day.
"Consolidated Capitalization" means the sum of (i) Consolidated
---------------------------
Indebtedness, (ii) consolidated common stockholders' equity as would appear on a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles, (iii) the
aggregate liquidation preference of preferred stocks (other than preferred
stocks subject to mandatory redemption or repurchase) of the Borrower and its
Consolidated Subsidiaries upon involuntary liquidation, (iv) the aggregate
outstanding amount of all Equity Preferred Securities, and (v) minority
interests as would appear on a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries prepared in accordance with generally accepted
accounting principles.
"Consolidated Indebtedness" means, at any date, all Indebtedness of
-------------------------
Borrower and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Consolidated Subsidiary" means, for any Person, at any date any Subsidiary
-----------------------
or other entity the accounts of which would be consolidated with those of such
Person in its consolidated financial statements if such statements were prepared
as of such date; unless otherwise specified "Consolidated Subsidiary" means a
Consolidated Subsidiary of the Borrower.
"Credit Extension" means the issuance of a Facility LC hereunder or the
----------------
making of a Borrowing.
"Credit Rating" is defined in the Pricing Schedule.
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"Default" means any condition or event which constitutes an Event of
-------
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday or other
---------------------
day on which commercial banks in Chicago, Illinois are authorized by law to
close.
3
"Domestic Lending Office" means, as to each Bank, its office located at its
-----------------------
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent.
"Effective Date" means the date this Agreement becomes effective in
--------------
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
------------------
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.
"Equity Preferred Securities" means any securities, however denominated, i)
---------------------------
issued by the Borrower or any Consolidated Subsidiary of the Borrower, (ii) that
are not subject to mandatory redemption or the underlying securities, if any, of
which are not subject to mandatory redemption, (iii) that are perpetual or
mature no less than 20 years from the date of issuance, (iv) the indebtedness
issued in connection with which, including any guaranty, is subordinated in
right of payment to the unsecured and unsubordinated indebtedness of the issuer
of such indebtedness or guaranty, and (v) the terms of which permit the deferral
of interest or distributions thereon to a date occurring after the first
anniversary of the later of (A) the Commitment Termination Date and (B) the
"Commitment Termination Date" under the Three-Year Credit Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"ERISA Group" means all members of a controlled group of corporations and
-----------
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Internal Revenue Code.
"Euro-Dollar Base Rate" has the meaning set forth in Section 2.06(b).
---------------------
"Euro-Dollar Business Day" means any Domestic Business Day on which
------------------------
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
--------------------------
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Administrative Agent.
"Euro-Dollar Loan" means a Loan which, except as otherwise provided in
----------------
Section 2.06, bears interest at the applicable Euro-Dollar Rate.
4
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
----------------
2.06(b) on the basis of a Euro-Dollar Base Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.15.
------------------------------
"Event of Default" has the meaning set forth in Section 6.01.
----------------
"Existing Credit Agreement" means the 364-Day Credit Agreement dated as of
-------------------------
April 19, 2001 among the Borrower, the lenders party thereto and Bank One, NA as
administrative agent.
"Existing LC" means a letter of credit listed on the Existing LCs Schedule.
-----------
"Existing LCs Schedule" means the Schedule attached hereto identified as
---------------------
such.
"Facility LC" means an Existing LC or a letter of credit issued pursuant to
-----------
Section 2.16(a).
"Facility LC Application" is defined in Section 2.16(c).
-----------------------
"Facility LC Collateral Account" is defined in Section 2.16(k).
------------------------------
"Federal Funds Effective 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 on such day, as published for such day (or, if such day is not a
Domestic Business Day, for the immediately preceding Domestic Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Domestic Business Day, the average of the quotations at
approximately 10:00 a.m. (Chicago time) on such day on such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by the Administrative Agent in its sole discretion.
"Final Maturity Date" means the one-year anniversary of the Commitment
-------------------
Termination Date, as such date may be extended pursuant to Section 2.01(c).
"Group of Loans" means at any time a group of Loans of the same Class
--------------
consisting of (i) all Alternate Base Rate Loans of such Class outstanding at
such time or (ii) all Euro-Dollar Loans of such Class having the same Interest
Period at such time, provided that, if a Loan of any particular Bank is
converted to or made as an Alternate Base Rate Loan pursuant to Article 8, such
Loan shall be included in the same Group or Groups of Loans from time to time as
it would have been if it had not been so converted or made.
"Indebtedness" of any Person means at any date, without duplication, (a)
------------
all obligations of such Person for borrowed money, (b) all indebtedness of such
Person for the deferred purchase price of property or services purchased, (c)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired, (d) all indebtedness
under leases which shall have been or should be, in accordance with generally
accepted accounting principles, recorded as capital leases in respect of which
such Person is liable as lessee, (e) the face amount of all outstanding letters
of credit issued for the account of
5
such Person (other than letters of credit relating to indebtedness included in
Indebtedness of such Person pursuant to another clause of this definition) and,
without duplication, the unreimbursed amount of all drafts drawn thereunder, (f)
indebtedness secured by any Lien on property or assets of such Person, whether
or not assumed (but in any event not exceeding the fair market value of the
property or asset), (g) all direct guarantees and sureties in respect of
indebtedness referred to in clauses (a) through (f) above of another Person, (h)
all amounts payable in connection with mandatory redemptions or repurchases of
preferred stock and (i) any obligations of such Person (in the nature of
principal or interest) in respect of acceptances or similar obligations issued
or created for the account of such Person.
"Interest Period" means, with respect to each Euro-Dollar Loan, the period
---------------
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two, three or six, or, if deposits of a corresponding
maturity are generally available in the London interbank market, nine or twelve,
months thereafter, as the Borrower may elect in such notice; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day; and
(b) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Euro-Dollar Business Day of a calendar month;
provided further that: (x) any Interest Period applicable to any Loan which
begins before the Commitment Termination Date and would otherwise end after the
Commitment Termination Date shall end on the Commitment Termination Date; and
(y) any Interest Period applicable to any Loan which would otherwise end after
the Final Maturity Date shall end on the Final Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended, or any successor statute.
"Investment Grade Status" exists as to any Person at any date if all senior
-----------------------
long-term unsecured debt securities of such Person outstanding at such date
which had been rated by S&P or Moody's are rated BBB- or higher by S&P or Baa3
or higher by Moody's, as the case may be.
"LC Fee" is defined in Section 2.16(d).
------
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
---------
designated by Bank One) in its capacity as issuer of Facility LCs hereunder,
First Union National Bank in its capacity as issuer of Facility LCs hereunder,
any other Bank listed as the issuer of an Existing LC on the Existing LCs
Schedule and any other Bank which accepts a designation by the Borrower and the
Administrative Agent as an LC Issuer hereunder.
6
"LC Obligations" means, at any time, the sum, without duplication, of (i)
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the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.16(e).
---------------
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Loan" means a Revolving Credit Loan or a Term Loan made by a Bank pursuant
----
to Section 2.01.
"Loan Documents" means this Agreement, the Facility LC Applications and any
--------------
Notes issued pursuant to Section 2.04.
"Material Debt" means Indebtedness of the Borrower or any of its
-------------
Subsidiaries in an aggregate principal amount exceeding $150,000,000.
"Material Plan" has the meaning set forth in Section 6.01(i).
-------------
"Material Subsidiary" means at any time any Subsidiary of the Borrower
-------------------
having, together with its Subsidiaries, consolidated assets in excess of 10% of
the total assets of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such time.
"Modify" and "Modification" are defined in Section 2.16(a).
------ ------------
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Notes" means promissory notes of the Borrower, in the form required by
-----
Section 2.04, evidencing the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued hereunder.
"Notice Addresses Schedule" means the Schedule attached hereto identified
-------------------------
as such.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
-------------------
"Notice of Interest Rate Election" has the meaning set forth in Section
--------------------------------
2.09(a).
"Obligations" means all unpaid principal of and accrued and unpaid interest
-----------
on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Borrower to
the Banks or to any Bank, the Administrative Agent, any LC Issuer or any
indemnified party arising under the Loan Documents.
7
"Outstanding Credit Exposure" means, as to any Bank at any time, the sum of
---------------------------
(i) the aggregate principal amount of its Loans outstanding at such time, plus
(ii) an amount equal to its Pro Rata Share of the LC Obligations at such time.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
------
"Participant" has the meaning set forth in Section 9.06(b).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an association,
------
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is covered
----
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Internal Revenue Code and is either (i) maintained by a member of the
ERISA Group for employees of a member of the ERISA Group or (ii) maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which a member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions.
"Pricing Schedule" means the Schedule attached hereto identified as such.
----------------
"Prime Rate" means a rate per annum equal to the prime rate of interest
----------
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Principal Subsidiary" means each of Texas Eastern Transmission Limited
--------------------
Partnership, Algonquin Gas Transmission Company, PanEnergy Corp, and their
respective successors.
"Pro Rata Share" means, with respect to a Bank, a portion equal to a
--------------
fraction the numerator of which is such Bank's Commitment and the denominator of
which is the Aggregate Commitment.
"Quarterly Payment Date" means the first Domestic Business Day of each
----------------------
January, April, July and October.
"Regulation U" means Regulation U of the Board of Governors of the Federal
------------
Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning set forth in Section 2.16(f).
------------------
"Reimbursement Obligations" means, at any time, the aggregate of all
-------------------------
obligations of the Borrower then outstanding under Section 2.16 to reimburse the
LC Issuers for amounts paid by the LC Issuers in respect of any one or more
drawings under Facility LCs.
8
"Required Banks" means at any time Banks (i) having at least 51% of the
--------------
Aggregate Commitment or (ii) if all of the Commitments shall have been
terminated, having at least 51% of the Aggregate Outstanding Credit Exposure.
"Revolving Credit Loan" means a loan made or to be made by a Bank pursuant
---------------------
to Section 2.01(a); provided that, if any such loan or loans (or portions
thereof) are combined or subdivided pursuant to a Notice of Interest Rate
Election, the term "Revolving Credit Loan" shall refer to the combined principal
amount resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.
"Revolving Credit Period" means the period from and including the Effective
-----------------------
Date to but not including the Commitment Termination Date.
"S&P" means Standard & Poor's Rating Services, a division of The
---
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Subsidiary" means, as to any Person, any corporation or other entity of
----------
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"Substantial Assets" means assets sold or otherwise disposed of in a single
------------------
transaction or a series of related transactions representing 25% or more of the
consolidated assets of the Borrower and its Consolidated Subsidiaries, taken as
a whole.
"Term Loan" means a loan made or to be made by a Bank pursuant to Section
---------
2.01(b); provided that, if any such loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the term
"Term Loan" shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
"Three-Year Credit Agreement" means the Three-Year Credit Agreement dated
---------------------------
as of April 19, 2001 among the Borrower, certain lenders and Bank One, NA, as
administrative agent, as such agreement may be amended or modified from time to
time.
"Type" means, with respect to any Loan, its nature as an Alternate Base
----
Rate Loan or a Euro-Dollar Loan.
"United States" means the United States of America, including the States
-------------
and the District of Columbia, but excluding its territories and possessions.
"Unfunded Vested Liabilities" means, with respect to any Plan at any time,
---------------------------
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of a member of the ERISA Group to the PBGC or the Plan under Title IV of ERISA.
9
Section 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks.
Section 1.03. Types and Classes of Borrowings. The term "Borrowing" denotes
-------------------------------
the aggregation of Loans of the Banks to be made to the Borrower pursuant to
Article 2 on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the Class of Loans comprising
such Borrowing (e.g., a "Term Borrowing" is a Borrowing comprised of Term
Loans).
ARTICLE 2
THE CREDITS
Section 2.01. Commitments. (a) Revolving Credit Loans; Facility LCs. During
----------- ------------------------------------
the Revolving Credit Period, each Bank severally agrees, on the terms and
conditions set forth in this Agreement, (i) to make loans to the Borrower and
(ii) to participate in Facility LCs issued upon the request of the Borrower,
from time to time, provided that, after giving effect to the making of each such
Revolving Credit Loan and the issuance of each such Facility LC, such Bank's
Outstanding Credit Exposure shall not exceed its Commitment. Each Borrowing
under this subsection shall be in an aggregate principal amount of $10,000,000
or any larger multiple of $1,000,000 (except that any such Borrowing may be in
the aggregate amount available in accordance with Section 3.02(b)) and shall be
made from the Banks ratably according to their Pro Rata Shares. Within the
foregoing limits, the Borrower may borrow under this subsection (a), or to the
extent permitted by Section 2.11, prepay Loans and reborrow at any time during
the Revolving Credit Period under this subsection (a). The Commitments to extend
credit hereunder shall expire on the Commitment Termination Date. The LC Issuers
will issue Facility LCs hereunder on the terms and conditions set forth in
Section 2.16.
(b) Term Loans. Each Bank severally agrees, on the terms and conditions set
----------
forth in this Agreement, to make a loan to the Borrower on the Commitment
Termination Date in an amount up to but not exceeding the amount of its
Revolving Credit Loans outstanding on the Commitment Termination Date. Each
Borrowing under this subsection (b) shall be made from the Banks ratably
according to their Pro Rata Shares.
(c) Extension of Commitments. On no more than two separate occasions, the
------------------------
Borrower may, upon notice not less than 45 days but no earlier than 60 days
prior to the then current Commitment Termination Date to the Administrative
Agent (which shall notify each Bank of receipt of such request), propose to
extend the Revolving Credit Period for an additional 364 days measured from the
Commitment Termination Date then in effect. Each Bank shall endeavor to respond
to such request, whether affirmatively or negatively (such determination in
10
the sole discretion of such Bank), by notice to the Borrower and the
Administrative Agent not more than 45 days nor less than 30 days prior to the
Commitment Termination Date. Subject to the execution by the Borrower, the
Administrative Agent and such Banks of a duly completed Extension Agreement in
substantially the form of Exhibit D, the Commitment Termination Date applicable
to the Commitment of each Bank so affirmatively notifying the Borrower and the
Administrative Agent shall be extended for the period specified above; provided
that the Commitment Termination Date shall not be extended unless Banks shall
have elected so to extend their Commitments that have Commitments constituting
at least the greater of (i) 66K% in aggregate amount of the Commitments in
effect at the time any such extension is requested and (ii) the Aggregate
Outstanding Credit Exposure on the Commitment Termination Date prior to any
extension thereof and after giving effect to any repayment of Loans and/or
termination of Facility LCs on such date. Any Bank which does not give such
notice to the Borrower and the Administrative Agent shall be deemed to have
elected not to extend as requested, and on the Commitment Termination Date
determined without giving effect to such requested extension, the Commitment of
each non-extending Bank shall terminate, the participations of each
non-extending Bank in Facility LCs shall terminate, and the Borrower shall repay
all Loans and other Obligations owing to such non-extending Bank. The Borrower
may, in accordance with Section 8.06, designate another bank or other financial
institution (which may be, but need not be, an extending Bank) to replace a
non-extending Bank. The Borrower may revoke its proposal to extend the then
current Commitment Termination Date by giving notice of such revocation to the
Administrative Agent (which shall notify each Bank of such revocation) at any
time prior to the then current Commitment Termination Date and prior to
execution by the Borrower of an Extension Agreement.
Section 2.02. Notice of Borrowings. The Borrower shall give the
--------------------
Administrative Agent notice (a "Notice of Borrowing") not later than 10:00 A.M.
-------------------
(Chicago time) on (x) the date of each Alternate Base Rate Borrowing and (y) the
third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day in
the case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear interest
initially at the Alternate Base Rate or a Euro-Dollar Rate,
(d) the Class of Loans comprising such Borrowing, and
(e) in the case of a Euro-Dollar Borrowing, the duration of the initial
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.
Section 2.03. Notice to Banks; Funding of Loans. (a) Upon receipt of a
---------------------------------
Notice of Borrowing, the Administrative Agent shall promptly notify each Bank of
the contents thereof and of such Bank's share of such Borrowing and such Notice
of Borrowing shall not thereafter be revocable by the Borrower.
11
(a) Not later than 12:00 Noon (Chicago time) on the date of each Borrowing,
each Bank shall (except as provided in subsection (c) of this Section) make
available its share of such Borrowing, in Federal or other funds immediately
available in Chicago, to the Administrative Agent at its address specified in or
pursuant to Section 9.01. Unless the Administrative Agent determines that any
applicable condition specified in Article 3 has not been satisfied, the
Administrative Agent will make the funds so received from the Banks available to
the Borrower at the Administrative Agent's aforesaid address.
(b) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection
(b) of this Section 2.03 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Administrative Agent, such Bank and, if such Bank shall not have made
such payment within two Domestic Business Days of demand therefor, the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate
per annum equal to the higher of the Federal Funds Effective Rate and the
interest rate applicable thereto pursuant to Section 2.06 and (ii) in the case
of such Bank, the Federal Funds Effective Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
(c) The failure of any Bank to make the Loan to be made by it as part of
any Borrowing shall not relieve any other Bank of its obligation thereunder to
make a Loan on the date of such Borrowing, but no Bank shall be responsible for
the failure of any other Bank to make a Loan to be made by such other Bank.
Section 2.04. Registry; Notes. (a) The Administrative Agent shall maintain
---------------
a register (the "Register") on which it will record the Commitment of each Bank,
--------
each Loan made by such Bank and each repayment of any Loan made by such Bank.
Any such recordation by the Administrative Agent on the Register shall be
conclusive, absent manifest error. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower's obligations
hereunder.
(b) The Borrower hereby agrees that, promptly upon the request of any Bank
at any time, the Borrower shall deliver to such Bank a duly executed Note, in
substantially the form of Exhibit A hereto, payable to the order of such Bank
and representing the obligation of the Borrower to pay the unpaid principal
amount of the Loans made to the Borrower by such Bank, with interest as provided
herein on the unpaid principal amount from time to time outstanding.
(c) Each Bank shall record the date, amount and maturity of each Loan made
by it and the date and amount of each payment of principal made by the Borrower
with respect thereto, and each Bank receiving a Note pursuant to this Section,
if such Bank so elects in
12
connection with any transfer or enforcement of its Note, may endorse on the
schedule forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding; provided that the
failure of such Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Notes. Such Bank
is hereby irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such schedule as and
when required.
Section 2.05. Maturity of Loans. (a) Each Revolving Credit Loan made by any
-----------------
Bank shall mature, and the principal amount thereof shall be due and payable
together with accrued interest thereon, on the Commitment Termination Date.
(b) The Term Loans of each Bank shall mature, and the principal amount
thereof shall be due and payable, together with accrued interest thereon, on the
Final Maturity Date.
Section 2.06. Interest Rates. (a) Each Alternate Base Rate Loan shall bear
--------------
interest on the outstanding principal amount thereof for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the
Alternate Base Rate for such day. Such interest shall be payable quarterly in
arrears on each Quarterly Payment Date and at maturity. Any overdue principal of
or overdue interest on any Alternate Base Rate Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 1%
plus the Alternate Base Rate for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Applicable Margin for such day plus the
Euro-Dollar Base Rate applicable to such Interest Period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after the first
day thereof, and at maturity.
"Euro-Dollar Base Rate" means, with respect to a Euro-Dollar Borrowing for
---------------------
the relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 A.M. (London time) two Euro-Dollar Business Days prior
to the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, (i) if Reuters Screen FRBD is not available to
the Administrative Agent for any reason, the applicable Euro-Dollar Base Rate
for the relevant Interest Period shall instead be the applicable British
Bankers' Association Interest Settlement Rate for deposits in U.S. dollars as
reported by any other generally recognized financial information service as of
11:00 A.M. (London time) two Euro-Dollar Business Days prior to the first day of
such Interest Period, and having a maturity equal to such Interest Period, and
(ii) if no such British Bankers' Association Interest Settlement Rate is
available to the Administrative Agent, the applicable Euro-Dollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the
Administrative Agent to be the rate at which Bank One or one of its Affiliate
banks offers to place deposits in U.S. dollars with first-class banks in the
London interbank market approximately 11:00 A.M. (London time) two Euro-Dollar
Business Days prior to the first day of such Interest Period, in the approximate
amount of Bank One's relevant Euro-Dollar Loan and having a maturity equal to
such Interest Period.
13
(c) Any overdue principal of or overdue interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 1% plus the higher of (i) the Alternate Base Rate
for such day and (ii) the sum of the Applicable Margin for such day plus the
Euro-Dollar Base Rate for such day.
(d) The Administrative Agent shall determine each interest rate applicable
to the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks by telecopy, telex or cable of each rate of
interest so determined, and its determination thereof shall be conclusive in the
absence of manifest error unless the Borrower raises an objection thereto within
five Domestic Business Days after receipt of such notice.
Section 2.07. Commitment Fees. The Borrower shall pay to the Administrative
---------------
Agent for the account of the Banks ratably according to their Pro Rata Shares a
commitment fee at the Commitment Fee Rate (determined daily in accordance with
the Pricing Schedule). Such commitment fee shall accrue from and including the
Effective Date to but excluding the Commitment Termination Date, on the daily
average Available Aggregate Commitment. Accrued commitment fees under this
Section shall be payable quarterly in arrears on each Quarterly Payment Date and
on the Commitment Termination Date.
Section 2.08. Optional Termination or Reduction of Commitments. The
------------------------------------------------
Borrower may, upon at least three Domestic Business Days' notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no Loans are
outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $10,000,000 or any larger multiple of $1,000,000 the
aggregate amount of the Commitments in excess of the Aggregate Outstanding
Credit Exposure.
Section 2.09. Method of Electing Interest Rates. (a) The Loans included in
---------------------------------
each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Loans (subject in each case to the provisions of Article 8 and the
last sentence of this subsection (a)), as follows:
(A) if such Loans are Alternate Base Rate Loans, the Borrower may
elect to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day; and
(B) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Alternate Base Rate Loans or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period, subject to
Section 2.13 in the case of any such conversion or continuation effective
on any day other than the last day of the then current Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
------------------
Rate Election") to the Administrative Agent not later than 10:00 A.M. (Chicago
-------------
time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans, provided that (i) such portion
is allocated ratably among the Loans comprising such Group and (ii) the portion
to which such notice
14
applies, and the remaining portion to which it does not apply, are each
$10,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection 2.09(a) above;
(iii) if the Loans comprising such Group are to be converted, the new
Type of Loans and, if the Loans being converted are to be Euro-Dollar
Loans, the duration of the next succeeding Interest Period applicable
thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of the term "Interest Period."
(b) Promptly after receiving a Notice of Interest Rate Election from the
Borrower pursuant to subsection 2.09(a) above, the Administrative Agent shall
notify each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower. If no Notice of Interest Rate Election is timely
received prior to the end of an Interest Period for any Group of Loans, the
Borrower shall be deemed to have elected that such Group of Loans be converted
to Alternate Base Rate Loans as of the last day of such Interest Period.
(c) An election by the Borrower to change or continue the rate of interest
applicable to any Group of Loans pursuant to this Section shall not constitute a
"Borrowing" subject to the provisions of Section 3.02.
Section 2.10. Mandatory Termination of Commitments. The Commitment of each
------------------------------------
Bank shall terminate on the Commitment Termination Date, and any Revolving
Credit Loans of such Bank then outstanding (together with accrued interest
thereon) shall be due and payable on such date; provided that such Revolving
Credit Loans shall be paid with the proceeds from the Term Loans if Term Loans
are made on the Commitment Termination Date.
Section 2.11. Optional Prepayments. (a) The Borrower may (i) upon notice to
--------------------
the Administrative Agent not later than 10:00 A.M. (Chicago time) on any
Domestic Business Day prepay on such Domestic Business Day any Group of
Alternate Base Rate Loans and (ii) upon at least three Euro-Dollar Business
Days' notice to the Administrative Agent not later than 10:00 A.M. (Chicago
time) prepay any Group of Euro-Dollar Loans, in each case in whole at any time,
or from time to time in part in amounts aggregating $5,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment and together with any
additional amounts payable pursuant to Section 2.13. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several Banks
included in such Group or Borrowing.
15
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's share of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
Section 2.12. General Provisions as to Payments. (a) The Borrower shall
---------------------------------
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 12:00 Noon (Chicago time) on the date when due, in
Federal or other funds immediately available in Chicago, to the Administrative
Agent at its address referred to in Section 9.01. The Administrative Agent will
promptly distribute to each Bank its ratable share of each such payment received
by the Administrative Agent for the account of the Banks. Whenever any payment
of principal of, or interest on, the Alternate Base Rate Loans, or of fees shall
be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day. If the
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Administrative Agent, at
the Federal Funds Effective Rate.
Section 2.13. Funding Losses. If the Borrower makes any payment of
--------------
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted to a Alternate Base Rate Loan or continued as a Euro-Dollar Loan for a
new Interest Period (pursuant to Article 2, 6 or 8 or otherwise) on any day
other than the last day of an Interest Period applicable thereto, or if the
Borrower fails to borrow, prepay, convert or continue any Euro-Dollar Loans
after notice has been given to any Bank in accordance with Section 2.03(a),
2.09(c) or 2.11(b), the Borrower shall reimburse each Bank within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
conversion or failure to borrow, prepay, convert or continue, provided that such
Bank shall have delivered to the Borrower a certificate setting forth in
reasonable detail the calculation of the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
Section 2.14. Computation of Interest and Fees. Interest based on the Prime
--------------------------------
Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days
in a leap year) and
16
paid for the actual number of days elapsed (including the first day but
excluding the last day). All other interest and fees (including the LC Fees and
fronting fees) shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
Section 2.15. Regulation D Compensation. In the event that a Bank is
-------------------------
required to maintain reserves of the type contemplated by the definition of
"Euro-Dollar Reserve Percentage", such Bank may require the Borrower to pay,
contemporaneously with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Bank at a rate per
annum determined by such Bank up to but not exceeding the excess of (i) (A) the
applicable Euro-Dollar Base Rate divided by (B) one minus the Euro-Dollar
Reserve Percentage over (ii) the applicable Euro-Dollar Base Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Administrative Agent, in which case such additional interest on
the Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after the giving of such notice and (y)
shall notify the Borrower at least three Euro-Dollar Business Days prior to each
date on which interest is payable on the Euro-Dollar Loans of the amount then
due it under this Section. Each such notification shall be accompanied by such
information as the Borrower may reasonably request.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in Chicago with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
Section 2.16. Facility LCs.
------------
(a) Issuance; Existing LCs. Each LC Issuer hereby agrees, on the terms and
------------
conditions set forth in this Agreement, to issue standby and trade letters of
credit and to renew, extend, increase, decrease or otherwise modify each
Facility LC ("Modify," and each such action a "Modification"), from time to time
------ ------------
during the Revolving Credit Period upon the request of the Borrower; provided
that immediately after each such Facility LC is issued or Modified, the
Aggregate Outstanding Credit Exposure shall not exceed the Aggregate Commitment.
No Facility LC shall have an expiry date later than the Final Maturity Date. The
stated account party under any Facility LC may be the Borrower, a Subsidiary of
the Borrower or an Affiliate of the Borrower. By their execution of this
Agreement, the Borrower and each Bank listed as an issuer of an Existing LC on
the Existing LCs Schedule hereby agree that effective as of the Effective Date
(i) such Existing LC shall be a Facility LC under this Agreement and subject to
the terms hereof, (ii) such Bank shall be an LC Issuer hereunder with respect to
such Existing LC, and (iii) the prior reimbursement agreement or letter of
credit application of the Borrower and such Bank relating to such Existing LC is
replaced by this Agreement.
17
(b) Participations. Upon the occurrence of the Effective Date, with respect
--------------
to each Existing LC, and upon the issuance or Modification by an LC Issuer of a
Facility LC in accordance with this Section 2.16, such LC Issuer shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably sold to each Bank, and each Bank shall be deemed, without further
action by any party hereto, to have unconditionally and irrevocably purchased
from such LC Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata Share.
(c) Notice. Subject to Section 2.16(a), the Borrower shall give the
------
applicable LC Issuer and the Administrative Agent notice of the proposed
issuance or Modification of a Facility LC, substantially in the form of Exhibit
E (a "Facility LC Application") specifying the beneficiary, the proposed date of
-----------------------
issuance (or Modification) and the expiry date of such Facility LC, and
describing the proposed terms of such Facility LC, such duly completed Facility
LC Application to be received prior to 10:00 A.M. (Chicago time) on the Business
Day that is at least two Domestic Business Days prior to the proposed date of
issuance or Modification of each Facility LC or in the case of a Facility LC
substantially in the form of Exhibit F, at least one Domestic Business Day prior
to the proposed date of issuance or Modification. Upon receipt of such Facility
LC Application, such LC Issuer shall promptly notify the Administrative Agent,
and the Administrative Agent shall promptly notify each Bank, of the contents
thereof and of the amount of such Bank's participation in such proposed Facility
LC. The issuance or Modification by any LC Issuer of any Facility LC shall, in
addition to the conditions precedent set forth in Article 3 (the satisfaction of
which such LC Issuer shall have no duty to ascertain), be subject to the
condition precedent that such Facility LC shall be satisfactory to such LC
Issuer. In the event of any conflict between the terms of this Agreement and the
terms of any Facility LC Application, the terms of this Agreement shall control.
Subject to the foregoing conditions, the applicable LC Issuer will endeavor to
issue or Modify such Facility LC as soon as practicable after receiving such
Facility LC Application but in any event within two Domestic Business Days after
receiving such Facility LC Application or, in the case of a Facility LC
substantially in the form of Exhibit F, within one Domestic Business Day after
receiving such Facility LC Application.
(d) LC Fees. The Borrower shall pay to the Administrative Agent, for the
-------
account of the Banks ratably in accordance with their respective Pro Rata
Shares, a letter of credit fee at a per annum rate equal to the sum of (i) the
Applicable Margin for Euro-Dollar Loans in effect from time to time plus (ii)
0.125% during any period following the Commitment Termination Date plus (iii) if
an Event of Default exists, 1%, on the average daily undrawn stated amount under
each Facility LC, such fee to be payable in arrears on each Quarterly Payment
Date and the Final Maturity Date (each such fee described in this sentence an
"LC Fee"). The Borrower shall also pay to each LC Issuer for its own account (x)
------
a fronting fee at a per annum rate equal to 0.10% on the average daily undrawn
stated amount under each Facility LC issued by such LC Issuer, such fee to be
payable in arrears on each Quarterly Payment Date and the Final Maturity Date
and (y) documentary and processing charges in connection with the issuance or
Modification or transfer of and draws under Facility LCs issued by such LC
Issuer in accordance with such LC Issuer's standard schedule for such charges as
in effect from time to time (or such other amounts as such LC Issuer and the
Borrower may agree).
18
(e) Administration; Reimbursement by Banks. Upon receipt from the
--------------------------------------
beneficiary of any Facility LC of any demand for payment under such Facility LC,
the applicable LC Issuer shall notify the Administrative Agent and the Borrower
and the Administrative Agent shall promptly notify each other Bank as to the
amount to be paid by such LC Issuer as a result of such demand and the proposed
payment date (the "LC Payment Date"). The responsibility of such LC Issuer to
---------------
the Borrower and each Bank shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall be in conformity in all material respects
with such Facility LC. Each LC Issuer shall endeavor to exercise the same care
in the issuance and administration of its Facility LCs as it does with respect
to letters of credit in which no participations are granted, it being understood
that in the absence of any gross negligence or willful misconduct by such LC
Issuer, each Bank shall be unconditionally and irrevocably liable without regard
to the occurrence of any Default or any condition precedent whatsoever, to
reimburse such LC Issuer on demand for (i) such Bank's Pro Rata Share of the
amount of each payment made by such LC Issuer under each Facility LC to the
extent such amount is not reimbursed by the Borrower pursuant to Section 2.16(f)
below, plus (ii) interest on the foregoing amount to be reimbursed by such Bank,
for each day from the date of such LC Issuer's demand for such reimbursement
(or, if such demand is made after 10:00 A.M. (Chicago time) on such date, from
the next succeeding Domestic Business Day) to the date on which such Bank pays
the amount to be reimbursed by it, at a rate of interest per annum equal to the
Federal Funds Effective Rate for the first three days and, thereafter, at a rate
of interest equal to the rate applicable to Alternate Base Rate Borrowings.
(f) Reimbursement by Borrower. The Borrower shall be irrevocably and
-------------------------
unconditionally obligated to reimburse the applicable LC Issuer for any amounts
to be paid by such LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided that
neither the Borrower nor any Bank shall hereby be precluded from asserting any
claim for direct (but not consequential) damages suffered by the Borrower or
such Bank to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of such LC Issuer in determining whether a
request presented under any Facility LC issued by it complied with the terms of
such Facility LC or (ii) such LC Issuer's failure to pay under any Facility LC
issued by it after the presentation to it of a request strictly complying with
the terms and conditions of such Facility LC. The Borrower shall make such
reimbursement (1) on or before 2:00 P.M. (Chicago time) on the applicable LC
Payment Date if the Borrower receives notice of the related demand for payment
no later than 10:00 A.M. (Chicago time) on such LC Payment Date or (2) if the
Borrower receives notice of the related demand for payment later than 10:00 A.M.
(Chicago time) on such LC Payment Date, on or before 2:00 P.M. (Chicago time) on
the next succeeding Domestic Business Day (such date by which reimbursement must
be made (the LC Payment Date under clause (1) or the next succeeding Domestic
Business Day under clause (2)) being the "Reimbursement Date"). All such amounts
paid by such LC Issuer and remaining unpaid by the Borrower shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Alternate Base Rate Borrowings for such day if such day falls
on or before the applicable Reimbursement Date and (y) the sum of 1% plus the
rate applicable to Alternate Base Rate Borrowings for such day if such day falls
after such Reimbursement Date. Such LC Issuer will pay to each Bank ratably in
accordance with its Pro Rata Share all amounts received by it from the Borrower
for application in payment, in whole or in part, of the Reimbursement Obligation
in
19
respect of any Facility LC issued by such LC Issuer, but only to the extent such
Bank has made payment to such LC Issuer in respect of such Facility LC pursuant
to Section 2.16(e). Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Notice of Borrowing in
compliance with Section 2.02 and the satisfaction of the applicable conditions
precedent set forth in Article 3), the Borrower may request a Borrowing
hereunder for the purpose of satisfying any Reimbursement Obligation.
(g) Obligations Absolute. The Borrower's obligations under this Section
--------------------
2.16 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against any LC Issuer, any Bank or any beneficiary
of a Facility LC. The Borrower further agrees with the LC Issuers and the Banks
that the LC Issuers and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even if such documents should in fact prove to be in
any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or
any financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any of
its Affiliates against the beneficiary of any Facility LC or any such
transferee. No LC Issuer shall be liable for any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Facility LC. The Borrower agrees that any
action taken or omitted by any LC Issuer or any Bank under or in connection with
each Facility LC and the related drafts and documents, if done without gross
negligence or willful misconduct, shall be binding upon the Borrower and shall
not put any LC Issuer or any Bank under any liability to the Borrower. Nothing
in this Section 2.16(g) is intended to limit the right of the Borrower to make a
claim against any LC Issuer for damages as contemplated by the proviso to the
first sentence of Section 2.16(f).
(h) Actions of LC Issuer. Each LC Issuer shall be entitled to rely, and
--------------------
shall be fully protected in relying, upon any Facility LC, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by such LC Issuer.
Each LC Issuer shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first have received such advice or
concurrence of the Required Banks as it reasonably deems appropriate or it shall
first be indemnified to its reasonable satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Notwithstanding any other provision of this
Section 2.16, each LC Issuer shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement in accordance with a request of
the Required Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks and any future holders of a
participation in any Facility LC.
(i) Indemnification. The Borrower hereby agrees to indemnify and hold
---------------
harmless each Bank, each LC Issuer and the Administrative Agent, and their
respective directors, officers, agents and employees from and against any and
all claims and damages, losses, liabilities, costs
20
or expenses which such Bank, such LC Issuer or the Administrative Agent may
incur (or which may be claimed against such Bank, such LC Issuer or the
Administrative Agent by any Person whatsoever), including reasonable fees and
disbursements of counsel, by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay under any
Facility LC or any actual or proposed use of any Facility LC, including, without
limitation, any claims, damages, losses, liabilities, costs or expenses which
any LC Issuer may incur by reason of or in connection with (i) the failure of
any other Bank to fulfill or comply with its obligations to such LC Issuer
hereunder (but nothing herein contained shall affect any rights the Borrower may
have against any defaulting Bank) or (ii) by reason of or on account of any LC
Issuer issuing any Facility LC which specifies that the term "Beneficiary"
included therein includes any successor by operation of law of the named
Beneficiary, but which Facility LC does not require that any drawing by any such
successor Beneficiary be accompanied by a copy of a legal document, satisfactory
to such LC Issuer, evidencing the appointment of such successor Beneficiary;
provided that the Borrower shall not be required to indemnify any Bank, any LC
Issuer or the Administrative Agent for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by (x) the
willful misconduct or gross negligence of such LC Issuer in determining whether
a request presented under any Facility LC complied with the terms of such
Facility LC or (y) any LC Issuer's failure to pay under any Facility LC after
the presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. Nothing in this Section 2.16(i) is intended to
limit the obligations of the Borrower under any other provision of this
Agreement.
(j) Banks' Indemnification. Each Bank shall, ratably in accordance with its
----------------------
Pro Rata Share, indemnify each LC Issuer, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such indemnitees' gross negligence or willful misconduct or such LC
Issuer's failure to pay under any Facility LC of such LC Issuer after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.16 or any action taken or omitted by such indemnitees
hereunder.
(k) Facility LC Collateral Account. The Borrower agrees that it will, upon
------------------------------
the occurrence (i) of an Event of Default and (ii) (A) at the request of the
Administrative Agent with the consent of the Banks having Pro Rata Shares of
more than 66K% pursuant to Section 6.01 or (B) at the request of the Banks
having Pro Rata Shares of more than 66K% pursuant to Section 6.01 and until the
final expiration date of any Facility LC and thereafter as long as any amount is
payable to the LC Issuers or the Banks in respect of any Facility LC, maintain a
special collateral account pursuant to arrangements satisfactory to the
Administrative Agent (the "Facility LC Collateral Account") at the
------------------------------
Administrative Agent's office at the address specified pursuant to Section 9.01,
in the name of the Borrower but under the sole dominion and control of the
Administrative Agent, for the benefit of the Banks and in which such Borrower
shall have no interest other than as set forth in Section 6.01. The Borrower
hereby pledges, assigns and grants to the Administrative Agent, on behalf of and
for the ratable benefit of the Banks and the LC Issuers, a security interest in
all of the Borrower's right, title and interest in and to all funds which may
from time to time be on deposit in the Facility LC Collateral Account and all
investments thereof, interest and returns thereon and proceeds thereof to secure
the prompt and
21
complete payment and performance of the Obligations. The Administrative Agent
will invest any funds on deposit from time to time in the Facility LC Collateral
Account in Cash Equivalents. Interest and returns realized by such investments
shall be credited to the Facility LC Collateral Account and applied as required
by Section 6.01. Nothing in this Section 2.16(k) shall either obligate the
Administrative Agent to require the Borrower to deposit any funds in the
Facility LC Collateral Account or limit the right of the Administrative Agent to
release any funds held in the Facility LC Collateral Account in each case other
than as required by Section 6.01.
(l) Rights as a Bank. In its capacity as a Bank, each LC Issuer shall have
----------------
the same rights and obligations as any other Bank.
ARTICLE 3
CONDITIONS
Section 3.01. Effectiveness. This Agreement shall become effective on the
-------------
date that each of the following conditions shall have been satisfied (or waived
in accordance with Section 9.05):
(a) receipt by the Administrative Agent of counterparts hereof signed by
each of the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Administrative Agent in
form satisfactory to it of telegraphic, telecopy, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party);
(b) receipt by the Administrative Agent of an opinion of the Deputy General
Counsel to the Borrower substantially in the form of Exhibit B-1 hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(c) receipt by the Administrative Agent of an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇, P.A., special counsel for the Borrower, substantially in the form of
Exhibit B-2 hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request.;
(d) receipt by the Administrative Agent of a certificate signed by a Vice
President, the Treasurer or the Controller of the Borrower, dated the Effective
Date, to the effect set forth in clauses (c) and (d) of Section 3.02;
(e) receipt by the Administrative Agent of all documents it may have
reasonably requested prior to the date hereof relating to the existence of the
Borrower, the corporate authority for and the validity of this Agreement and the
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent; and
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
April 30, 2002. The Administrative Agent shall promptly notify the Borrower and
the Banks of the Effective Date, and such notice shall be conclusive and binding
on all parties hereto. The Borrower and the Banks party to the
22
Existing Credit Agreement, comprising the "Required Banks" as defined therein,
hereby agree that (i) the commitments of the lenders under the Existing Credit
Agreement shall terminate in their entirety immediately and automatically upon
the effectiveness of this Agreement, without further action by any party to the
Existing Credit Agreement, (ii) all accrued fees under the Existing Credit
Agreement shall be due and payable at such time, (iii) subject to the funding
loss indemnities in the Existing Credit Agreement, the Borrower may prepay any
and all loans outstanding thereunder on the date of effectiveness of this
Agreement, and (iv) any letters of credit remaining outstanding under the
Existing Credit Agreement shall be Existing LCs under this Agreement.
Section 3.02. Credit Extensions. The obligation of any Bank to make a
-----------------
Credit Extension on the occasion of any Borrowing or issuance of a Facility LC
is subject to the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing or receipt
by the applicable LC Issuer and the Administrative Agent of a Facility LC
Application (except for Existing LCs) as required by Section 2.02 or 2.16, as
the case may be;
(b) the fact that, immediately after such Credit Extension the Aggregate
Outstanding Credit Exposure will not exceed the Aggregate Commitment;
(c) the fact that, immediately after such Credit Extension, no Default
shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except the representations and warranties set forth
in Sections 4.04(b) and 4.06) shall be true on and as of the date of such Credit
Extension.
Each Credit Extension hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Credit Extension as to the facts
specified in clauses (b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
Section 4.01. Organization and Power. The Borrower is duly organized,
----------------------
validly existing and in good standing under the laws of Delaware, and has all
requisite powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and is
duly qualified to do business in each jurisdiction where such qualification is
required, except where the failure so to qualify would not have a material
adverse effect on the business, financial position or results of operations of
the Borrower and its Consolidated Subsidiaries, considered as a whole.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
----------------------------------------------------------
The execution, delivery and performance by the Borrower of this Agreement and
the Notes are within
23
the Borrower's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the articles
of incorporation or by-laws of the Borrower or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Material Subsidiaries.
Section 4.03. Binding Effect. This Agreement constitutes a valid and
--------------
binding agreement of the Borrower and each Note, if and when executed and
delivered in accordance with this Agreement, will constitute a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.
Section 4.04. Financial Information. (a) The consolidated balance sheet of
---------------------
the Borrower and its Consolidated Subsidiaries as of December 31, 2001 and the
related consolidated statements of income, cash flows, capitalization and
retained earnings for the fiscal year then ended, reported on by Deloitte &
Touche, copies of which have been delivered to each of the Banks, fairly
present, in conformity with generally accepted accounting principles, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.
(b) Since December 31, 2001, there has been no material adverse change in
the business, financial position or results of operations of the Borrower and
its Consolidated Subsidiaries, considered as a whole.
Section 4.05. Regulation U. The Borrower and its Material Subsidiaries are
------------
not engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System) and no proceeds of any Credit Extension
by the Borrower will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock. Not
more than 25% of the value of the assets of the Borrower and its Material
Subsidiaries is represented by margin stock.
Section 4.06. Litigation. Except as disclosed in the reports referred to in
----------
Section 4.04, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official which would be likely to be decided adversely to Borrower or
such Subsidiary and, as a result, have a material adverse effect upon the
business, consolidated financial position or results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner draws into question the validity of this Agreement or any Note.
Section 4.07. Compliance with Laws. The Borrower and each Material
--------------------
Subsidiary is in compliance in all material respects with all applicable laws,
ordinances, rules, regulations and requirements of governmental authorities
(including, without limitation, ERISA and
24
Environmental Laws) except where (i) non-compliance would not have a material
adverse effect on the business, financial position or results of operations of
the Borrower and its Consolidated Subsidiaries, considered as a whole, or (ii)
the necessity of compliance therewith is contested in good faith by appropriate
proceedings.
Section 4.08. Taxes. The Borrower and its Material Subsidiaries have filed
-----
all United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Material Subsidiary except (i) where nonpayment would not have a material
adverse effect on the business, financial position or results of operations of
the Borrower and its Consolidated Subsidiaries, considered as a whole or (ii)
where the same are contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of the Borrower and its Material
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.
Section 4.09. Public Utility Holding Company Act. The Borrower is not a
----------------------------------
holding company subject to the registration requirements of the Public Utility
Holding Company Act of 1935, as amended.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable hereunder remains unpaid or any Facility LC remains
outstanding:
Section 5.01. Information. The Borrower will deliver to each of the Banks:
-----------
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, cash flows, capitalization and
retained earnings for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on in a
manner consistent with the requirements of the Securities and Exchange
Commission by Deloitte & Touche or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income and
cash flows for such quarter and for the portion of the Borrower's fiscal year
ended at the end of such quarter, setting forth in each case in comparative form
the figures for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by an Approved Officer of the Borrower;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of an Approved Officer
of the Borrower stating whether
25
any Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(d) within five days after any officer of the Borrower with responsibility
relating thereto obtains knowledge of any Default, if such Default is then
continuing, a certificate of an Approved Officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(e) promptly upon the filing thereof copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the Securities and Exchange Commission;
(f) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Material Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Material Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Material Plan is
in reorganization, is insolvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose material liability (other than for premiums under Section 4007
of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Material Plan under Section 4041(c) of ERISA,
a copy of such notice and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Material Plan pursuant to Section 4063 of ERISA, a
copy of such notice; or (vii) fails to make any payment or contribution to any
Material Plan or makes any amendment to any Material Plan which has resulted or
could result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth details as to such occurrence and action,
if any, which the Borrower or applicable member of the ERISA Group is required
or proposes to take; and
(g) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Administrative
Agent, at the request of any Bank, may reasonably request.
Information required to be delivered pursuant to these Sections 5.01(a),
5.01(b) and 5.01(e) shall be deemed to have been delivered on the date on which
the Borrower provides notice to the Banks that such information has been posted
on the Securities and Exchange Commission website on the Internet at
▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇ or at another website identified in such notice and
accessible by the Banks without charge; provided that (i) such notice may be
included in a certificate delivered pursuant to Section 5.01(c) and (ii) the
Borrower shall deliver paper copies of the information referred to in Sections
5.01(a), 5.01(b) and 5.01(e) to any Bank which requests such delivery.
26
Section 5.02. Payment of Taxes. The Borrower will pay and discharge, and
----------------
will cause each Material Subsidiary to pay and discharge, at or before maturity,
all their tax liabilities, except where (i) nonpayment would not have a material
adverse effect on the business, financial position or results of operations of
the Borrower and its Consolidated Subsidiaries, considered as a whole, or (ii)
the same may be contested in good faith by appropriate proceedings, and will
maintain, and will cause each Material Subsidiary to maintain, in accordance
with generally accepted accounting principles, appropriate reserves for the
accrual of any of the same.
Section 5.03. Maintenance of Property; Insurance. (a) The Borrower will
----------------------------------
keep, and will cause each Material Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each of its Material Subsidiaries to,
maintain (either in the name of the Borrower or in such Subsidiary's own name)
with financially sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts and against at least such
risks (and with such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the same or a similar
business; provided that self-insurance by the Borrower or any such Material
Subsidiary shall not be deemed a violation of this covenant to the extent that
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Material Subsidiary operates
self-insure; and will furnish to the Banks, upon request from the Administrative
Agent, information presented in reasonable detail as to the insurance so
carried.
Section 5.04. Maintenance of Existence. The Borrower will preserve, renew
------------------------
and keep in full force and effect, and will cause each Material Subsidiary to
preserve, renew and keep in full force and effect their respective corporate or
other legal existence and their respective rights, privileges and franchises
material to the normal conduct of their respective businesses; provided that
nothing in this Section 5.04 shall prohibit the termination of any right,
privilege or franchise of the Borrower or any Material Subsidiary or of the
corporate or other legal existence of any Material Subsidiary or the change in
form of organization of the Borrower or any Material Subsidiary if the Borrower
in good faith determines that such termination or change is in the best interest
of the Borrower, is not materially disadvantageous to the Banks and, in the case
of a change in the form of organization of the Borrower, the Administrative
Agent has consented thereto.
Section 5.05. Compliance with Laws. The Borrower will comply, and cause
--------------------
each Material Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, ERISA and Environmental Laws) except
where (i) noncompliance would not have a material adverse effect on the
business, financial position or results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or (ii) the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
Section 5.06. Books and Records. The Borrower will keep, and will cause
-----------------
each Material Subsidiary to keep, proper books of record and account in which
full, true and correct entries shall be made of all financial transactions in
relation to its business and activities in
27
accordance with its customary practices; and will permit, and will cause each
Material Subsidiary to permit, representatives of any Bank at such Bank's
expense (accompanied by a representative of the Borrower, if the Borrower so
desires) to visit any of their respective properties, to examine any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all upon such reasonable notice, at such reasonable times and as
often as may reasonably be desired.
Section 5.07. Maintenance of Ownership of Principal Subsidiaries. The
--------------------------------------------------
Borrower will maintain ownership of all shares of the common equity interests of
each Principal Subsidiary, directly or indirectly through Subsidiaries, free and
clear of all Liens, provided that any Principal Subsidiary may merge or
consolidate with or into the Borrower or another wholly-owned Subsidiary.
Section 5.08. Negative Pledge. The Borrower will not create, assume or
---------------
suffer to exist any Lien on any asset now owned or hereafter acquired by it,
except:
(a) Liens granted by the Borrower existing on the date of this Agreement
securing Indebtedness outstanding on the date of this Agreement in an aggregate
principal amount not exceeding $100,000,000;
(b) any Lien on any asset of any Person existing at the time such Person is
merged or consolidated with or into the Borrower and not created in
contemplation of such event;
(c) any Lien existing on any asset prior to the acquisition thereof by the
Borrower and not created in contemplation of such acquisition;
(d) any Lien on any asset securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with or within 180
days after the acquisition thereof;
(e) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Indebtedness is not
increased and is not secured by any additional assets;
(f) Liens for taxes, assessments or other governmental charges or levies
not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with generally accepted accounting
principles;
(g) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law, created in the ordinary
course of business and for amounts not past due for more than 60 days or which
are being contested in good faith by appropriate proceedings which are
sufficient to prevent imminent foreclosure of such Liens, are promptly
instituted and diligently conducted and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance with
generally accepted accounting principles;
28
(h) Liens incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts;
(i) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and other restrictions, charges or
encumbrances (whether or not recorded) affecting the use of real property;
(j) Liens with respect to judgments and attachments which do not result in
an Event of Default;
(k) Liens, deposits or pledges to secure the performance of bids, tenders,
contracts (other than contracts for the payment of money), leases (permitted
under the terms of this Agreement), public or statutory obligations, surety,
stay, appeal, indemnity, performance or other obligations arising in the
ordinary course of business;
(l) Liens required by Section 2.16(k) and other similar customary cash
collateral requirements with respect to letters of credit upon the occurrence of
a default, including, without limitation, such requirements under the Three-Year
Credit Agreement; and
(m) other Liens including Liens imposed by Environmental Laws arising in
the ordinary course of its business which (i) do not secure Indebtedness, (ii)
do not secure any obligation in an amount exceeding $100,000,000 at any time at
which Investment Grade Status does not exist as to the Borrower and (iii) do not
in the aggregate materially detract from the value of its assets or materially
impair the use thereof in the operation of its business; and
(n) Liens not otherwise permitted by the foregoing clauses of this Section
securing obligations in an aggregate principal or face amount at any date not to
exceed $500,000,000.
Section 5.09. Consolidations, Mergers and Sales of Assets. The Borrower
-------------------------------------------
will not (i) consolidate or merge with or into any other Person or (ii) sell,
lease or otherwise transfer, directly or indirectly, Substantial Assets to any
Person (other than a Subsidiary); provided that the Borrower may merge with
another Person if the Borrower is the corporation surviving such merger and,
after giving effect thereto, no Default shall have occurred and be continuing.
Section 5.10. Use of Proceeds. The proceeds of the Loans made under this
---------------
Agreement will be used by the Borrower for its general corporate purposes,
including liquidity support for outstanding commercial paper and acquisitions.
None of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying any "margin
stock" within the meaning of Regulation U.
Section 5.11. Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit any Subsidiary to, directly or indirectly, pay any funds to or for
the account of, make any investment in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, or
29
participate in, or effect, any transaction with, any Affiliate unless all such
transactions between the Borrower and its Subsidiaries on the one hand and any
Affiliate on the other, taken in the aggregate and not individually, shall be on
an arms-length basis on terms no less favorable to the Borrower or such
Subsidiary than could have been obtained from a third party who was not an
Affiliate; provided that the foregoing provisions of this Section shall not
prohibit the Borrower and each Subsidiary from (i) declaring or paying any
lawful dividend so long as, after giving effect thereto, no Default shall have
occurred and be continuing, (ii) issuing and maintaining letters of credit,
guaranties and sureties as contingent obligations on behalf of Affiliates, or
(iii) the payment of funds and making of capital contributions, loans and other
transfers of money to Affiliates or to other Persons, including payments made
under letters of credit, guarantees and sureties issued and maintained on behalf
of Affiliates, provided that the aggregate amount for all such payments and
transfers does not exceed $200,000,000 at any time outstanding.
Section 5.12. Indebtedness/Capitalization Ratio. The ratio of Consolidated
---------------------------------
Indebtedness to Consolidated Capitalization will at no time exceed 65%.
ARTICLE 6
DEFAULTS
Section 6.01. Events of Default. If one or more of the following events
-----------------
("Events of Default") shall have occurred and be continuing:
-----------------
(a) the Borrower shall fail to pay when due any principal of any Loan or
Reimbursement Obligation or shall fail to pay, within five days of the due date
thereof, any interest, fees or any other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant contained in
Sections 5.04, 5.08, 5.09, 5.12 or the second sentence of 5.10, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those covered by clause (a) or (b)
above) for 30 days after notice thereof has been given to the Borrower by the
Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by the
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been incorrect
in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of Material Debt (other than the Loans) when due or within any
applicable grace period;
(f) any event or condition shall occur and shall continue beyond the
applicable grace or cure period, if any, provided with respect thereto so as to
result in the acceleration of the maturity of Material Debt;
30
(g) the Borrower or any Material Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall admit in writing its inability to, or shall
fail generally to, pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Material Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an order for
relief shall be entered against the Borrower or any Material Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $25,000,000 which it shall have become liable
to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans having aggregate Unfunded Vested Liabilities in excess
of $50,000,000 (collectively, a "Material Plan") shall be filed under Title IV
-------- ----
of ERISA by any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a fiduciary
of any Material Plan against any member of the ERISA Group to enforce Section
515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within 90 days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any Material Plan
must be terminated;
(j) a judgment or other court order for the payment of money in excess of
$50,000,000 shall be rendered against the Borrower or any Material Subsidiary
and such judgment or order shall continue without being vacated, discharged,
satisfied or stayed or bonded pending appeal for a period of 45 days;
(k) the Borrower shall cease to be a Subsidiary or Affiliate of Duke Energy
Corporation; or
(l) an "Event of Default" as defined in the Three-Year Credit Agreement
shall have occurred and be continuing;
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having Pro Rata Shares of more than 66K%, by notice to the
Borrower terminate the Commitments and they shall thereupon terminate, (ii) if
requested by Banks having Pro Rata Shares of more than 66K%, by notice to
the Borrower declare the Loans and all Reimbursement Obligations (together
31
with accrued interest thereon) to be, and the Loans and all Reimbursement
Obligations shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower, and (iii) if requested by Banks having Pro Rata
Shares of more than 66K%, by notice to the Borrower and in addition to the
continuing right to demand payment of all amounts payable under the Loan
Documents, make demand on the Borrower to pay, and the Borrower will, forthwith
upon such demand and without any further notice, act or demand, pay to the
Administrative Agent an amount in immediately available funds, which funds shall
be held in the Facility LC Collateral Account, equal to the difference of (x)
the amount of LC Obligations at such time, less (y) the amount on deposit in the
Facility LC Collateral Account at such time which is free and clear of all
rights and claims of third parties and has not been applied against the
Obligations (such difference, the "Collateral Shortfall Amount"); provided that
---------------------------
in the case of any of the Events of Default specified in clause (g) or (h) above
with respect to the Borrower, without any notice to the Borrower or any other
act by the Administrative Agent or the Banks, the Commitments shall thereupon
terminate and the Loans and all Reimbursement Obligations (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower, and the Borrower will be and become thereby unconditionally
obligated, without any further notice, act or demand, to pay forthwith to the
Administrative Agent the Collateral Shortfall Amount, which funds shall be
deposited in the Facility LC Collateral Account.
If at any time after the Banks have requested the Borrower to pay the
Administrative Agent funds to be held in the Facility LC Collateral Account, the
Administrative Agent determines that the Collateral Shortfall Amount at such
time is greater than zero, the Administrative Agent may make demand on the
Borrower to pay, and the Borrower will, forthwith upon such demand and without
any further notice or act, pay to the Administrative Agent the Collateral
Shortfall Amount, which funds shall be deposited in the Facility LC Collateral
Account.
The Administrative Agent may at any time or from time to time after funds
are deposited in the Facility LC Collateral Account, apply such funds to the
payment of the LC Obligations and any other amounts as shall from time to time
have become due and payable by the Borrower to the Banks or the LC Issuers under
the Loan Documents.
At any time while any Event of Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Facility LC Collateral Account.
After the sooner of (i) the Required Banks waiving the Event(s) of Default that
gave rise to requesting the Borrower to pay funds into the Facility LC
Collateral Account and (ii) all of the LC Obligations have been indefeasibly
paid in full and all Facility LCs have expired or terminated and the Aggregate
Commitment has been terminated, any funds remaining in the Facility LC
Collateral Account, including accrued interest, after application to any other
Obligations then due and owing to the Administrative Agent and the Banks, shall
be returned by the Administrative Agent to the Borrower or paid to whomever may
be legally entitled thereto at such time.
32
Section 6.02. Notice of Default. The Administrative Agent shall give notice
-----------------
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE ADMINISTRATIVE AGENT
Section 7.01. Appointment; Nature of Relationship. Bank One is hereby
-----------------------------------
appointed by each of the Banks as its contractual representative (herein
referred to as the Administrative Agent) hereunder and under each other Loan
Document, and each of the Banks irrevocably authorizes the Administrative Agent
to act as the contractual representative of such Bank with the rights and duties
expressly set forth herein and in the other Loan Documents. The Administrative
Agent agrees to act as such contractual representative upon the express
conditions contained in this Article 7. Notwithstanding the use of the defined
term "Administrative Agent," it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Bank
by reason of this Agreement or any other Loan Document and that the
Administrative Agent is merely acting as the contractual representative of the
Banks with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Banks' contractual
representative, the Administrative Agent (i) does not hereby assume any
fiduciary duties to any of the Banks, (ii) is a "representative" of the Banks
within the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is
acting as an independent contractor, the rights and duties of which are limited
to those expressly set forth in this Agreement and the other Loan Documents.
Each of the Banks hereby agrees to assert no claim against the Administrative
Agent on any agency theory or any other theory of liability for breach of
fiduciary duty, all of which claims each Bank hereby waives.
The Administrative Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Administrative Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Administrative Agent shall have no implied duties to the Banks, or
any obligation to the Banks to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Administrative
Agent.
Section 7.02. Administrative Agent and Affiliates. Bank One shall have the
-----------------------------------
same rights and powers under this Agreement as any other Bank and may exercise
or refrain from exercising the same as though it were not the Administrative
Agent, and Bank One and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or any Subsidiary
or affiliate of the Borrower as if it were not the Administrative Agent
hereunder.
Section 7.03. Action by Administrative Agent. The obligations of the
------------------------------
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in Article 6.
33
Section 7.04. Consultation with Experts. The Administrative Agent may
-------------------------
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
Section 7.05. Liability of Administrative Agent. Neither the Administrative
---------------------------------
Agent nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be liable to any Bank for any action taken or not
taken by it in connection herewith (i) with the consent or at the request of the
Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its affiliates nor any
of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article 3, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in connection
herewith. The Administrative Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) believed by it in good
faith to be genuine or to be signed by the proper party or parties. Without
limiting the generality of the foregoing, the use of the term "agent" in this
Agreement with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom and is intended to create or reflect only an administrative
relationship between independent contracting parties.
Section 7.06. Indemnification. Each Bank shall, ratably in accordance with
---------------
its Commitment, indemnify the Administrative Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees thereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it has,
---------------
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement.
Section 7.08. Successor Administrative Agent. The Administrative Agent may
------------------------------
resign at any time by giving notice thereof to the Banks and the Borrower. Upon
any such resignation, the Borrower, with the consent of the Required Banks (such
consent not to be unreasonably withheld or delayed), shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed, and shall have accepted such appointment,
34
within 30 days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder; provided
that if such successor Administrative Agent is appointed without the consent of
the Borrower, such successor Administrative Agent may be replaced by the
Borrower with the consent of the Required Banks. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent.
Section 7.09. Administrative Agent's Fee. The Borrower shall pay to the
--------------------------
Administrative Agent for its own account fees in the amounts and at the times
previously agreed upon between the Borrower and the Administrative Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
--------------------------------------------------------
on or prior to the first day of any Interest Period for any Euro-Dollar
Borrowing:
(a) the Administrative Agent determines that deposits in dollars (in the
applicable amounts) are not being offered to the Administrative Agent in the
relevant market for such Interest Period, or
(b) in the case of a Euro-Dollar Borrowing, Banks having 66K% or more of
the aggregate amount of the affected Loans advise the Administrative Agent that
the Euro-Dollar Base Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Euro-Dollar Loans or to continue or convert
outstanding Loans as or into Euro-Dollar Loans shall be suspended and (ii) each
outstanding Euro-Dollar Loan shall be converted into a Alternate Base Rate Loan
on the last day of the then current Interest Period applicable thereto. Unless
the Borrower notifies the Administrative Agent at least one Domestic Business
Day before the date of any Euro-Dollar Borrowing for which a Notice of Borrowing
has previously been given that it elects not to borrow on such date, such
Borrowing shall instead be made as a Alternate Base Rate Borrowing.
Section 8.02. Illegality. If, on or after the date of this Agreement, the
----------
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any
35
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 any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Dollar Leading Office) to make, maintain
or fund any of its Euro-Dollar Loans and such Bank shall so notify the
Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank notifies
the Borrower and the Administrative Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans, or to continue or convert outstanding Loans as or into Euro-Dollar Loans,
shall be suspended. Before giving any notice to the Administrative Agent
pursuant to this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not be otherwise disadvantageous to such Bank in the good faith
exercise of its discretion. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Alternate Base Rate Loan
either (a) on the last day of the then current Interest Period applicable to
such Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund
such Loan to such day or (b) immediately if such Bank shall determine that it
may not lawfully continue to maintain and fund such Loan to such day.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after the
---------------------------------
date of this Agreement, in the case of any Loan or Facility LC or any obligation
to make Loans or issue or maintain Facility LCs, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, 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 any Bank (or its
Applicable Lending Office) or any LC Issuer with any request or directive
(whether or not having the force of law) issued on or after such date of any
such authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding with respect to any Euro-Dollar Loan
any such requirement included in an applicable Euro-Dollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or any LC Issuer or shall impose on
any Bank (or its Applicable Lending Office) or any LC Issuer or on the London
interbank market any other condition (other than in respect of Taxes or Other
Taxes) affecting its Euro-Dollar Loans, its Note, any Facility LC Application,
any Facility LCs, its obligation to make Euro-Dollar Loans or its obligation to
issue or to participate in Facility LCs and the result of any of the foregoing
is to increase the cost to such Bank (or its Applicable Lending Office) or such
LC Issuer of making or maintaining any Euro-Dollar Loan or Facility LC, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) or such LC Issuer under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank or such LC Issuer to
be material, then, within 15 days after demand by such Bank or such LC Issuer
(with a copy to the Administrative Agent), the Borrower shall pay to such Bank
or such LC Issuer such additional amount or amounts as will compensate such Bank
or such LC Issuer for such increased cost or reduction; provided that no such
amount shall be payable with respect to any period commencing more than 90 days
prior to the date such Bank or such LC Issuer first notifies the Borrower of its
intention
36
to demand compensation therefor under this Section 8.03(a) unless such increased
cost or reduction is imposed on such Bank or such LC Issuer on a retroactive
basis.
(b) If any Bank or any LC Issuer shall have determined that, on or after
the date of this Agreement, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law, rule or
regulation, 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 any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency given or made after the date of this
Agreement, has or would have the effect of reducing the rate of return on
capital of such Bank or LC Issuer (or its Parent) as a consequence of such
Bank's or LC Issuer's obligations hereunder to a level below that which such
Bank or LC Issuer (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank or LC Issuer to be
material, then from time to time, within 15 days after demand by such Bank or LC
Issuer (with a copy to the Administrative Agent), the Borrower shall pay to such
Bank or LC Issuer such additional amount or amounts as will compensate such Bank
or LC Issuer (or its Parent) for such reduction; provided that no such amount
shall be payable with respect to any period commencing less than 30 days after
the date such Bank or LC Issuer first notifies the Borrower of its intention to
demand compensation under this Section 8.03(b).
(c) Each Bank and LC Issuer will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank or LC Issuer to compensation pursuant
to this Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Bank or LC Issuer, be otherwise
disadvantageous to such Bank or LC Issuer. A certificate of any Bank or LC
Issuer claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank or LC Issuer may use
any reasonable averaging and attribution methods.
Section 8.04. Taxes. (a) For purposes of this Section 8.04, the following
-----
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies, imposts,
-----
deductions, charges or withholdings with respect to any payment by the Borrower
pursuant to this Agreement or any Note or Facility LC Application, and all
liabilities with respect thereto, excluding (i) in the case of each Bank, LC
Issuer and the Administrative Agent, taxes imposed on its income, net worth or
gross receipts and franchise or similar taxes imposed on it by a jurisdiction
under the laws of which such Bank, LC Issuer or the Administrative Agent (as the
case may be) is organized or in which its principal executive office is located
or, in the case of each Bank, in which its Applicable Lending Office is located
and (ii) in the case of each Bank and LC Issuer, any United States withholding
tax imposed on such payments except to the extent that such Bank and LC Issuer
is subject to United States withholding tax by reason of a U.S. Tax Law Change.
37
"Other Taxes" means any present or future stamp or documentary taxes and
-----------
any other excise or property taxes, or similar charges or levies, which arise
from any payment made pursuant to this Agreement or under any Note or Facility
LC Application or from the execution or delivery of, or otherwise with respect
to, this Agreement or any Note or Facility LC Application.
"U.S. Tax Law Change" means with respect to any Bank or Participant the
-------------------
occurrence (x) in the case of each Bank listed on the signature pages hereof,
after the date of its execution and delivery of this Agreement and (y) in the
case of any other Bank, after the date such Bank shall have become a Bank
hereunder, and (z) in the case of each Participant, after the date such
Participant became a Participant hereunder, of the adoption of any applicable
U.S. federal law, U.S. federal rule or U.S. federal regulation relating to
taxation, or any change therein, or the entry into force, modification or
revocation of any income tax convention or treaty to which the United States is
a party.
(b) Any and all payments by the Borrower to or for the account of any Bank,
LC Issuer or the Administrative Agent hereunder or under any Note or Facility LC
Application shall be made without deduction for any Taxes or Other Taxes;
provided that, if the Borrower shall be required by law to deduct any Taxes or
Other Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 8.04) such Bank, LC
Issuer or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank, LC Issuer and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.04) paid by such Bank, LC
Issuer or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days after such Bank, LC
Issuer or the Administrative Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the United
States, on or prior to the date of its execution and delivery of this Agreement
in the case of each Bank listed on the signature pages hereof and on or prior to
the date on which it becomes a Bank in the case of each other Bank, and from
time to time thereafter as required by law (but only so long as such Bank
remains lawfully able to do so), shall provide the Borrower two completed and
duly executed copies of Internal Revenue Service form W-8BEN or W-8ECI, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
or other documentation reasonably requested by the Borrower, certifying that
such Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account of
38
such Bank or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Bank has failed to provide the
Borrower with the appropriate form pursuant to Section 8.04(d) (unless such
failure is due to a U.S. Tax Law Change), such Bank shall not be entitled to
indemnification under Section 8.04(b) or 8.04(c) with respect to any Taxes or
Other Taxes which would not have been payable had such form been so provided,
provided that if a Bank, which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes (it
being understood, however, that the Borrower shall have no liability to such
Bank in respect of such Taxes).
(f) If the Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section 8.04, then such Bank will take such
action (including changing the jurisdiction of its Applicable Lending Office) as
in the good faith judgment of such Bank (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
(g) If any Bank or the Administrative Agent receives a refund (including a
refund in the form of a credit against taxes that are otherwise payable by the
Bank or the Administrative Agent) of any Taxes or Other Taxes for which the
Borrower has made a payment under Section 8.04(b) or (c) and such refund was
received from the taxing authority which originally imposed such Taxes or Other
Taxes, such Bank or the Administrative Agent agrees to reimburse the Borrower to
the extent of such refund, provided that nothing contained in this paragraph (g)
shall require any Bank or the Administrative Agent to seek any such refund or
make available its tax returns (or any other information relating to its taxes
which it deems to be confidential).
Section 8.05. Alternate Base Rate Loans Substituted for Affected
--------------------------------------------------
Euro-Dollar Loans. If (i) the obligation of any Bank to make or to continue or
-----------------
convert outstanding Loans as or into Euro-Dollar Loans has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a) or 8.04 with respect to its Euro-Dollar Loans and the Borrower
shall, by at least five Euro-Dollar Business Days' prior notice to such Bank
through the Administrative Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as (or continued
as or converted to) Euro-Dollar Loans, as the case may be, shall instead be
Alternate Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of
principal which would otherwise be applied to repay such Loans shall be applied
to repay its Alternate Base Rate Loans instead.
39
If such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist, the principal amount of
each such Alternate Base Rate Loan shall be converted into a Euro-Dollar Loan on
the first day of the next succeeding Interest Period applicable to the related
Euro-Dollar Loans of the other Banks.
Section 8.06. Substitution of Bank. If (i) the obligation of any Bank to
--------------------
make or to convert or continue outstanding Loans as or into Euro-Dollar Loans
has been suspended pursuant to Section 8.02, (ii) any Bank has demanded
compensation under Section 8.03 or 8.04, (iii) any Bank exercises its right not
to extend its Commitment Termination Date pursuant to Section 2.01(c), or (iv)
Investment Grade Status ceases to exist as to any Bank, then:
(a) the Borrower shall have the right, with the assistance of the
Administrative Agent, to designate a substitute bank or banks (which may be one
or more of the Banks) mutually satisfactory to the Borrower and the
Administrative Agent (whose consent shall not be unreasonably withheld or
delayed) to purchase for cash, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit C hereto, the outstanding Loans,
Reimbursement Obligations and Facility LC participations of such Bank and assume
the Commitment of such Bank, without recourse to or warranty by, or expense to,
such Bank, for a purchase price equal to the principal amount of all of such
Bank's outstanding Loans and Reimbursement Obligations plus any accrued but
unpaid interest thereon and the accrued but unpaid fees in respect of such
Bank's Commitment and Facility LCs hereunder plus such amount, if any, as would
be payable pursuant to Section 2.13 if the outstanding Loans of such Bank were
prepaid in their entirety on the date of consummation of such assignment, and
the Borrower shall cause the termination or cancellation of all Facility LCs
issued by such Bank, not later than the date of consummation of such assignment;
and
(b) if at the time Investment Grade Status exists as to the Borrower and no
Default and Event of Default then exists, the Borrower may elect to terminate
this Agreement as to such Bank, provided that (i) the Borrower notifies such
Bank through the Administrative Agent of such election at least three
Euro-Dollar Business Days before the effective date of such termination, (ii)
the Borrower repays or prepays the principal amount of all outstanding Loans
made by such Bank and Reimbursement Obligations of such Bank plus any accrued
but unpaid interest thereon and the accrued but unpaid fees in respect of such
Bank's Commitment and Facility LCs hereunder plus all other amounts payable by
the Borrower to such Bank hereunder, not later than the effective date of such
termination and (iii) the Borrower causes the termination or cancellation of all
Facility LCs issued by such Bank not later than the effective date of such
termination. Upon satisfaction of the foregoing conditions, the Commitment of
such Bank shall terminate on the effective date specified in such notice.
ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address or telecopy or
telex number set forth on the Notice Addresses Schedule, (y) in the case of any
Bank or LC Issuer, at its address or telecopy or telex number set forth in its
40
Administrative Questionnaire or the Notice Addresses Schedule or (z) in the case
of any party, such other address or telecopy or telex number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by telecopy or telex, when such telecopy or telex is transmitted to
the telecopy or telex number specified in this Section and the appropriate
answerback or confirmation slip, as the case may be, is received, or (ii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article 2 or
Article 3 shall not be effective until delivered.
Section 9.02. No Waivers. No failure or delay by the Administrative Agent,
----------
any LC Issuer or any Bank in exercising any right, power or privilege hereunder
or under any Note or Facility LC Application shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
Section 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i) all
-------------------------
reasonable out-of-pocket expenses of the Administrative Agent, including
reasonable fees and disbursements of special counsel for the Administrative
Agent, in connection with the preparation of this Agreement, any waiver or
consent hereunder or any amendment hereof or any Default or alleged Default
hereunder and (ii) if an Event of Default occurs, all reasonable out-of-pocket
expenses incurred by the Administrative Agent, any LC Issuer or any Bank,
including reasonable fees and disbursements of counsel, in connection with such
Event of Default and collection and other enforcement proceedings resulting
therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent, each LC
Issuer and each Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an "Indemnitee") and hold
----------
each Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
relating to or arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
Section 9.04. Sharing of Set-offs. Each Bank agrees that if it shall, by
-------------------
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount then due with respect to the Obligations
held by it which is greater than the proportion received by any other Bank in
respect of the aggregate amount then due with respect to the Loans held by such
other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Obligations held by the other Banks, and
such other adjustments shall be made, as may be required so that all such
payments with respect to the Loans held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under this Agreement.
41
Section 9.05. Amendments and Waivers. Any provision of this Agreement or
----------------------
the Notes may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent and, if the rights or duties of an LC Issuer are affected
thereby, by such LC Issuer); provided that no such amendment or waiver shall,
unless signed by all the Banks, (i) increase or decrease the Commitment of any
Bank (except for a ratable decrease in the Commitments of all Banks) or subject
any Bank to any additional obligation, (ii) reduce the principal of or rate of
interest on any Obligations or any fees hereunder, (iii) postpone the date fixed
for any payment of principal of or interest on any Loan or interest thereon or
any fees hereunder or for termination of any Commitment or (iv) change the
percentage of the Commitments or of the aggregate Pro Rata Shares, or the number
of Banks, which shall be required for the Banks or any of them to take any
action under this Section or any other provision of this Agreement.
Section 9.06. Successors and Assigns. (a) The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may, with (unless an Event of Default then exists) the consent
of the Borrower (such consent not to be unreasonably withheld or delayed), at
any time grant to one or more banks or other institutions (each a "Participant")
-----------
participating interests in its Commitment or any or all of its Obligations. In
the event of any such grant by a Bank of a participating interest to a
Participant, whether or not upon notice to the Administrative Agent, such Bank
shall remain responsible for the performance of its obligations hereunder, and
the Borrower and the Administrative Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of
Section 9.05 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article 8 with respect to its participating
interest, subject to the performance by such Participant of the obligations of a
Bank thereunder. An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or more banks or other financial
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
--------
initial Commitment of not less than $10,000,000 (unless the Borrower and the
Administrative Agent shall otherwise agree)) of all, of its rights and
obligations under this Agreement and its Note (if any), and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit C hereto executed by such
Assignee and such transferor Bank, with (and only with and subject to) the prior
written consent of the Borrower (given in its sole discretion), provided that an
Event of Default does not exist, and the
42
Administrative Agent (which shall not be unreasonably withheld or delayed),
provided that unless such assignment is of the entire right, title and interest
of the transferor Bank hereunder, after making any such assignment such
transferor Bank shall have a Commitment of at least $10,000,000 (unless the
Borrower and the Administrative Agent shall otherwise agree). Upon execution and
delivery of such instrument of assumption and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Administrative Agent and the Borrower shall make appropriate
arrangements so that, if required by the Assignee, a Note is issued to the
Assignee. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof it shall, prior to the first date on which
interest or fees are payable hereunder for its account, deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.04. All assignments shall be subject to a transaction fee established by, and
payable by the transferor Bank to, the Administrative Agent for its own account
(which shall not exceed $5,000).
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note (if any) to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder or
modify any such obligations.
(e) No Assignee, Participant or other transferee of any Bank's rights
(including any Applicable Lending Office other than such Bank's initial
Applicable Lending Office) shall be entitled to receive any greater payment
under Section 8.03 or 8.04 than such Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made by reason
of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to designate
a different Applicable Lending Office under certain circumstances or at a time
when the circumstances giving rise to such greater payment did not exist.
Section 9.07. Collateral. Each of the Banks represents to the
----------
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
Section 9.08. Confidentiality. The Administrative Agent and each Bank agree
---------------
to keep any information delivered or made available by the Borrower pursuant to
this Agreement confidential from anyone other than persons employed or retained
by such Bank and its affiliates who are engaged in evaluating, approving,
structuring or administering the credit facility contemplated hereby, provided
that nothing herein shall prevent any Bank from disclosing such information (a)
to any other Bank or to the Administrative Agent, (b) to any other Person if
reasonably incidental to the administration of the credit facility contemplated
hereby, (c) upon the order of any court or administrative agency, (d) upon the
request or demand of any regulatory agency or authority, (e) which had been
publicly disclosed other than as a result of a disclosure by the Administrative
Agent or any Bank prohibited by this Agreement, (f) in connection with
43
any litigation to which the Administrative Agent, any Bank or its subsidiaries
or Parent may be a party, (g) to the extent necessary in connection with the
exercise of any remedy hereunder, (h) to such Bank's or Administrative Agent's
legal counsel and independent auditors and (i) subject to provisions
substantially similar to those contained in this Section 9.08, to any actual or
proposed Participant or Assignee.
Section 9.09. Governing Law; Submission to Jurisdiction. This Agreement and
-----------------------------------------
each Note (if any) shall be construed in accordance with and governed by the law
of the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
Section 9.10. Counterparts; Integration. This Agreement may be signed in
-------------------------
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof.
Section 9.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
--------------------
ADMINISTRATIVE AGENT AND THE BANKS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.12. Payments Set Aside. To the extent that the Borrower makes a
------------------
payment to the Administrative Agent or any Bank, or the Administrative Agent or
any Bank exercises any right of set-off, and such payment or the proceeds of
such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Bank in its
discretion) to be repaid by the Administrative Agent or such Bank (the "Repaying
--------
Party") to a trustee, receiver or any other party, in connection with any
-----
proceeding under any debtor relief law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
severally agrees to pay to the Repaying Party upon demand its applicable share
of any amount so recovered from or repaid by the Repaying Party, plus interest
thereon from the date of such demand to the date such payment is made at a rate
per annum equal to the Federal Funds Effective Rate from time to time in effect.
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
DUKE CAPITAL CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-1
BANK ONE, NA, as Administrative Agent,
LC Issuer and a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-2
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Co-Syndication Agent and a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-3
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as Co-Syndication Agent and a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-4
DEUTSCHE BANK AG NEW YORK BRANCH, as
Co-Documentation Agent and a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-5
UBS AG, STAMFORD BRANCH, as
Co-Documentation Agent and a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-6
ABN AMRO BANK N.V., as
Co-Agent and a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-7
THE BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, as Co-Agent and a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-8
BNP PARIBAS, as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇), INC., as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-10
CREDIT SUISSE FIRST BOSTON, as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-11
CITIBANK, N.A., as a Banks
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-12
MIZUHO CORPORATE BANK LTD.,
as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-13
BARCLAYS BANK PLC, as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-14
JPMORGAN CHASE BANK, as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-15
BANK OF AMERICA, N.A., as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-16
BANCO BILBAO VIZCAYA ARGENTARIA S.A., as
a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-17
WESTPAC BANKING CORPORATION, as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-18
SUNTRUST BANK, as a Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-19
Commitments Schedule
--------------------
Bank Commitment
---- ------------
Bank One, NA $ 50,000,000
Wachovia Bank, National Association $ 50,000,000
Westdeutsche Landesbank Girozentrale $ 50,000,000
Deutsche Bank AG New York Branch $ 50,000,000
UBS AG, Stamford Branch $ 50,000,000
ABN AMRO Bank N.V. $ 37,500,000
The Bank of Tokyo-Mitsubishi Trust Company $ 37,500,000
BNP Paribas $ 25,000,000
Toronto Dominion (Texas), Inc. $ 25,000,000
Credit Suisse First Boston $ 25,000,000
Citibank, N.A. $ 12,500,000
Mizuho Corporate Bank Ltd. $ 12,500,000
Barclays Bank PLC $ 12,500,000
JPMorgan Chase Bank $ 12,500,000
Bank of America, N.A. $ 12,500,000
Banco Bilbao Vizcaya Argentaria S.A. $ 12,500,000
Westpac Banking Corporation $ 12,500,000
SunTrust Bank $ 12,500,000
------------
Total $500,000,000
Pricing Schedule
----------------
The "Commitment Fee Rate" and the "Applicable Margin" for any day are the
respective percentages set forth below in the applicable row under the column
corresponding to the Status that exists on such day:
------------------------------------------------------------------------------------
LEVEL I ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇
------------------------------------------------------------------------------------
Commitment Fee Rate 0.08% 0.09% 0.105% 0.125% 0.15% 0.20%
------------------------------------------------------------------------------------
Applicable Margin 0.50% 0.55% 0.625% 0.75% 1.0% 1.375%
Utilization
A33N%
------------------------------------------------------------------------------------
Applicable Margin 0.5625% 0.6125% 0.6875% 0.8125% 1.0625% 1.4375%
Utilization
>33N% but A66K%
------------------------------------------------------------------------------------
Applicable Margin 0.625% 0.675% 0.75% 0.875% 1.125% 1.5%
Utilization >66K%
------------------------------------------------------------------------------------
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Status" exists at any date if, at such date, the Borrower is rated
"A+" or higher by S&P or "A1" or higher by ▇▇▇▇▇'▇.
"Level II Status" exists at any date if, at such date, (i) the Borrower is
rated "A" or higher by S&P or "A2" or higher by ▇▇▇▇▇'▇ and (ii) Level I Status
does not exist.
"Level III Status" exists at any date if, at such date, (i) the Borrower is
rated "A-" or higher by S&P or "A3" or higher by ▇▇▇▇▇'▇ and (ii) neither Level
I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the Borrower is
rated "BBB+" by S&P or "Baa1" by ▇▇▇▇▇'▇ and (ii) neither Level I Status, Level
II Status nor Level III Status exists.
"Level V Status" exists at any date if, at such date, (i) the Borrower is
rated "BBB" by S&P or "Baa2" by ▇▇▇▇▇'▇ and (ii) neither Level I Status, Level
II Status, Level III Status nor Level IV Status exists.
"Level VI Status" exists at any date if, at such date, no other Status
exists.
"Status" refers to the determination of which of Level I Status, Level II
Status, Level III Status, Level IV Status, Level V Status or Level VI Status
exists at any date.
"Utilization" means, at any date, the percentage equivalent of a fraction
(i) the numerator of which is the Aggregate Outstanding Credit Exposure at such
date and (ii) the denominator of which is the aggregate amount of the
Commitments at such date (or if such date is after the Commitment Termination
Date, the aggregate amount of the Commitments as in effect prior to their
termination on the Commitment Termination Date).
The credit ratings to be utilized for purposes of this Schedule (a "Credit
Rating") are those indicated for or assigned to the senior unsecured long-term
debt securities of the Borrower without third-party credit enhancement, and any
rating indicated for or assigned to any other debt security of the Borrower
shall be disregarded. The ratings in effect for any day are those in effect at
the close of business on such day. A change in credit rating will result in an
immediate change in the applicable Status. In the case of split ratings from S&P
and ▇▇▇▇▇'▇, the rating to be used to determine the applicable Status is the
higher of the two.
2
Notice Addresses Schedule
-------------------------
DUKE CAPITAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇-▇▇▇▇▇▇.▇▇▇
BANK ONE, NA
Administrative Agent's Office, L/C Issuer and Bank One, NA, Lending Office
--------------------------------------------------------------------------
Bank One, NA
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇_▇_▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Account No.: (4811 5286 0000)
Ref: Duke Capital
ABA #▇▇▇-▇▇▇-▇▇▇
WACHOVIA BANK, NATIONAL ASSOCIATION
Credit Contact:
--------------
Wachovia Bank, National Association
c/o ▇▇▇▇▇ ▇▇▇▇▇▇
One Wachovia Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
Wachovia Bank, National Association
c/o Chanue ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chanue ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
WESTDEUTSCHE LANDESBANK GIRONZENTRALE
Credit Contact:
--------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇_▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇_▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
DEUTSCHE BANK AG NEW YORK BRANCH
Credit Contact:
--------------
Deutsche Bank AG New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇.▇▇▇
2
Administrative Contact:
----------------------
Deutsche Bank AG New York Branch
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇.▇▇▇
UBS AG, STAMFORD BRANCH
Credit Contact:
--------------
UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
ABN AMRO BANK N.V.
Credit Contact:
--------------
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
3
Administrative Contact:
----------------------
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Credit Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY
Credit Contact:
--------------
Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
Bank of Tokyo-Mitsubishi Trust Company
BTM Information Services, Inc.
c/o Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇@▇▇▇▇▇.▇▇▇
4
BNP PARIBAS
Credit Contact:
--------------
BNP Paribas
Project Finance & Utilities Group
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
BNP Paribas
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇
TORONTO DOMINION (TEXAS), INC.
Credit Contact:
--------------
TD Securities (USA), Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
TD Securities (USA), Inc.
The Toronto-Dominion Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
5
CREDIT SUISSE FIRST BOSTON
Credit Contact:
--------------
Credit Suisse First Boston
Eleven Madison Avenue
New York, NY 10010
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
Credit Suisse First Boston
Eleven Madison Avenue
New York, NY 10010
Attention: ▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Attention: Nirmala Durgano
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
CITIBANK, N.A.
Credit Contact:
--------------
Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
6
Administrative Contact:
----------------------
Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
MIZUHO CORPORATE BANK LTD.
Credit Contact:
--------------
Mizuho Corporate, Ltd.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇@▇▇.▇▇▇▇▇▇-▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇▇▇-▇▇.▇▇▇
Administrative Contact:
----------------------
Mizuho Corporate, Ltd.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇@▇▇.▇▇▇▇▇▇-▇▇.▇▇▇
7
BARCLAYS BANK PLC
Credit Contact
--------------
Barclays Capital
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
Barclays Group Inc. (USA)
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
JPMORGAN CHASE BANK
Credit Contact:
--------------
JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
JPMorgan ▇▇▇▇▇ ▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Plaza
8th Floor
New York, NY 10081
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
8
BANK OF AMERICA, N.A.
Credit Contact:
---------------
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Code NC1-007-16-13
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
Bank of America, N.A.
Bank of America Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
9
BANCO BILBAO VIZCAYA ARGENTARIA S.A.
Credit Contact:
--------------
Banco Bilbao Vizcaya Argentaria,
New York Branch
1345 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
Banco Bilbao Vizcaya Argentaria,
New York Branch
1345 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
WESTPAC BANKING CORPORATION
Credit Contact:
--------------
Westpac Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇.▇▇
10
Administrative Contact:
----------------------
Westpac Banking Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇.▇▇
SUNTRUST BANK
Credit Contact:
--------------
SunTrust Bank
Mail Code 1929
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Administrative Contact:
----------------------
SunTrust Bank
Mail Code 1941
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
11
Existing LCs Schedule
---------------------
Duke Energy Corporation
Letters of Credit
April 2, 2002
------------------------------------------------------------------------------------------------------------------------
Auto
Obligor For Beneficiary Bank Amount BP Price Effective Expiration Ext.Days
------------------------------------------------------------------------------------------------------------------------
DCC ▇▇▇▇/DETM Cal. P.X. Trading Svcs. WB 1,500,000 40.0 06/11/99 06/01/02 90
DCC ▇▇▇▇ Nevada Power WB 726,000 37.5 04/12/00 04/11/03 60
DCC ▇▇▇▇ Nevada Power WB 726,000 37.5 04/12/00 04/11/03 60
DCC ▇▇▇▇ Nevada Power CM 1,391,500 45.0 08/11/00 08/08/02 60
DCC ▇▇▇▇ Salt River Agricultural Project WB 4,900,000 37.5 06/19/00 06/01/02 No
DCC ▇▇▇▇ ▇▇▇▇▇▇ Pacific Power Co. WB 1,144,000 37.5 04/12/00 04/11/03 60
DCC ▇▇▇▇ ▇▇▇▇▇▇ Pacific Power Co. WB 572,000 37.5 04/12/00 04/11/03 60
----------
10,959,500
------------------------------------------------------------------------------------------
Obligor For Beneficiary Auto ▇▇▇.▇▇▇▇ Comments
------------------------------------------------------------------------------------------
DCC ▇▇▇▇/DETM Cal. P.X. Trading Svcs. 03/03/02 LOC # LC968-111247
DCC ▇▇▇▇ Nevada Power 02/10/03 LOC # LC968-118723
DCC ▇▇▇▇ Nevada Power 02/10/03 LOC # LC968-118724
DCC ▇▇▇▇ Nevada Power 06/09/02 LOC # P-204234
DCC ▇▇▇▇ Salt River Agricultural Project -- LOC # LC968-121937
DCC ▇▇▇▇ ▇▇▇▇▇▇ Pacific Power Co. 02/10/03 LOC # LC968-118614
DCC ▇▇▇▇ ▇▇▇▇▇▇ Pacific Power Co. 03/10/03 LOC # LC968-118679
EXHIBIT A
NOTE New York, New York
, 2002
-------
For value received, Duke Capital Corporation, a Delaware corporation (the
"Borrower"), promises to pay to the order of (the "Bank"), for the account of
its Applicable Lending Office, the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below on
the date specified in the Credit Agreement. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Bank One, NA, 1
Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
All Loans made by the Bank, the respective types and maturities thereof and
all repayments of the principal thereof shall be recorded by the Bank and, the
Bank, if the Bank so elects in connection with any transfer or enforcement of
its Note, may endorse on the schedule attached hereto appropriate notations to
evidence the foregoing information with respect to the Loans then outstanding;
provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the 364-Day Credit Agreement
dated as of April 18, 2002 among the Borrower, the banks listed on the signature
pages thereof and Bank One, NA, as Administrative Agent (as the same may be
amended from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
DUKE CAPITAL CORPORATION
By
---------------------------------
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
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Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
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2
EXHIBIT B-1
Duke Capital Corporation
[LOGO] Duke Capital ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
April 18,2002
To the Banks and the Administrative Agent
Referred to Below
c/o Bank One, NA
as Administrative Agent
1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am the Deputy General Counsel of Duke Capital Corporation (the
"Borrower") and have acted as its counsel in connection with the 364-Day Credit
--------
Agreement (the "Credit Agreement"), dated as of April 18, 2002, among the
----------------
Borrower, the banks listed on the signature pages thereof, and Bank One, NA, as
Administrative Agent. Capitalized terms defined in the Credit Agreement are used
herein as therein defined. This opinion letter is being delivered pursuant to
Section 3.01 (b) of the Credit Agreement.
In such capacity, I or attorneys under my direct supervision have examined
originals or copies, certified or otherwise identified to my satisfaction, of
such documents, corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact and law as I
have deemed necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing and in
good standing under the laws of Delaware and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the Credit
Agreement and any Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or,
to my knowledge, of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or, to my knowledge, result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Material Subsidiaries.
The Banks and the Administrative Agent
Referred to Below
April 18, 2002
Page 2
--------------------------------------
3. The Borrower has duly executed and delivered the Credit Agreement and
the Notes to be signed on the date of this opinion letter.
4. Except as disclosed in the reports referred to in Section 4.04 of the
Credit Agreement, to my knowledge (but without independent investigation), there
is no action, suit or proceeding pending or threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, which would be likely to be decided
adversely to the Borrower or such Subsidiary and, as a result, to have a
material adverse effect upon the business, consolidated financial position or
consolidated results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole or which in any manner draws into question
the validity of the Credit Agreement or any Notes.
5. The Borrower is not a holding company subject to the registration
requirements of the Public Utility Holding Company Act of 1935, as amended.
The phrase "to my knowledge", as used in the foregoing opinion, refers to
my actual knowledge without any independent investigation as to any such
matters.
I am a member of the Bar of the State of North Carolina and do not express
any opinion herein concerning any law other than the law of the State of North
Carolina, the General Corporation Law of the State of Delaware and the federal
law of the United States of America.
This opinion is rendered to you in connection with the above-referenced
matter and may not be relied upon by you for any other purpose, or relied upon
by, or furnished to, any other Person, firm or corporation without my prior
written consent, except for Additional Banks, Assignees and Participants. My
opinions expressed herein are as of the date hereof, and I undertake no
obligation to advise you of any changes of applicable law or any other matters
that may come to my attention after the date hereof that may affect my opinions
expressed herein.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
EXHIBIT B-2
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
Attorneys at Law
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
South Carolina Office
The Guardian Building
▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
April 18, 2002
To the Banks and the Administrative Agent
Referred to Below
c/o Bank One, NA
as Administrative Agent
1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to Duke Capital Corporation, a Delaware
corporation, in connection with the 364-Day Credit Agreement (the "Credit
------
Agreement"), dated as of April 18, 2002, between Duke Capital Corporation, the
---------
banks listed on the signature pages thereof, and Bank One, NA, as Administrative
Agent. Capitalized terms used herein and not defined shall have the meanings
given to them in the Credit Agreement. This opinion letter is being delivered
pursuant to Section 3.01(c) of the Credit Agreement.
In connection with this opinion, we also examined originals, or copies
identified to our satisfaction, of such other documents and considered such
matters of law and fact as we, in our professional judgment, have deemed
appropriate to render the opinions contained herein. Where we have considered it
appropriate, as to certain facts we have relied, without investigation or
analysis of any underlying data contained therein, upon certificates or other
comparable documents of public officials and officers or other appropriate
representatives of the Borrower.
In rendering the opinions contained herein, we have assumed, among other
things, that the Credit Agreement and any Notes to be executed (i) are within
the Borrower's corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) have been duly executed and delivered, (iv) require no
action by or in respect of, or filing with, any governmental body, agency of
official, and (v) do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the Borrower's certificate of
incorporation or by-laws or any agreement, judgment, injunction, order, decree
or other instrument binding upon the Borrower or result in the creation or
imposition of any Lien on any asset of the Borrower. In addition, we have
assumed that the Credit Agreement fully states the agreement between the
Borrower and the Banks with respect to the matters addressed therein, and that
the Credit Agreement constitutes a legal, valid and binding obligation of each
Bank, enforceable in accordance with its respective terms.
The Banks and the Administrative Agent
Referred to Below
April 18, 2002
Page 2
--------------------------------------
The opinions set forth herein are limited to matters governed by the laws
of the State of North Carolina and the federal laws of the United States, and no
opinion is expressed herein as to the laws of any other jurisdiction. For
purposes of our opinions, we have disregarded the choice of law provisions in
the Credit Agreement and, instead, have assumed with your permission that the
Credit Agreement and the Notes are governed exclusively by the internal,
substantive laws and judicial interpretations of the State of North Carolina. We
express no opinion concerning any matter respecting or affected by any laws
other than laws that a lawyer in North Carolina exercising customary
professional diligence would reasonably recognize as being directly applicable
to the Borrower, the Loans, the Facility LCs, or any of them.
Based upon and subject to the foregoing and the further limitations and
qualifications hereinafter expressed, it is our opinion that the Credit
Agreement constitutes the legal, valid and binding obligation of the Borrower
and the Notes, if and when issued, will constitute legal, valid and binding
obligations of the Borrower, in each case, enforceable against the Borrower in
accordance with its terms.
The opinions expressed above are subject to the following qualifications
and limitations:
1. Enforcement of the Credit Agreement and the Notes is subject to the
effect of applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws affecting the enforcement of creditors'
rights generally.
2. Enforcement of the Credit Agreement and the Notes is subject to the
effect of general principles of equity (regardless of whether considered in a
proceeding in equity or at law) by which a court with proper jurisdiction may
deny rights of specific performance, injunction, self-help, possessory remedies
or other remedies.
3. We do not express any opinion as to the enforceability of any provisions
contained in the Credit Agreement or any Note that (i) purport to excuse a party
for liability for its own acts, (ii) purport to make void any act done in
contravention thereof, (iii) purport to authorize a party to act in its sole
discretion, (iv) require waivers or amendments to be made only in writing, (v)
purport to effect waivers of constitutional, statutory or equitable rights or
the effect of applicable laws, (vi) impose liquidated damages, penalties or
forfeiture, or (vii) purport to indemnify a party for its own negligence or
willful misconduct. Indemnification provisions in the Credit Agreement are
subject to and may be rendered unenforceable by applicable law or public policy,
including applicable securities law.
4. We do not express any opinion as to the enforceability of any provisions
contained in the Credit Agreement or the Notes purporting to require a party
thereto to pay or reimburse attorneys' fees incurred by another party, or to
indemnify another party therefor, which may be limited by applicable statutes
and decisions relating to the collection and award of attorneys' fees, including
but not limited to North Carolina General Statutes (S) 6-21.2.
The Banks and the Administrative Agent
Referred to Below
April 18, 2002
Page 3
--------------------------------------
5. We do not express any opinion as to the enforceability of any provisions
contained in the Credit Agreement purporting to waive the right of jury trial.
Under North Carolina General Statutes (S) 22B-10, a provision for the waiver of
the right to a jury trial is unconscionable and unenforceable.
6. We do not express any opinion as to the enforceability of any provisions
contained in the Credit Agreement concerning choice of forum or consent to the
jurisdiction of courts, venue of actions or means of service of process.
7. We assume that the "prime" rate of interest, as prescribed in the Credit
Agreement, is a readily ascertainable rate of interest and that the Borrower
would be able to ascertain the rates so described at all times during the term
of the Loans.
8. It is likely that North Carolina courts will enforce the provisions of
the Credit Agreement providing for interest at a higher rate resulting from a
Default or Event of Default (a "Default Rate") which rate is higher than the
------------
rate otherwise stipulated in the Credit Agreement. The law, however, disfavors
penalties, and it is possible that interest at the Default Rate may be held to
be an unenforceable penalty, to the extent such rate exceeds the rate applicable
prior to a default under the Credit Agreement. Also, since North Carolina
General Statutes (S) 24-10.1 expressly provides for late charges, it is possible
that North Carolina courts, when faced specifically with the issue, might rule
that this statutory late charge preempts any other charge (such as default
interest) by a bank for delinquent payments. The only North Carolina case which
we have found that addresses this issue is a 1978 Court of Appeals decision,
which in our opinion is of limited precedential value, North Carolina National
Bank ▇. ▇▇▇▇▇▇▇▇, 38 N.C. App. 120, 247 S.E.2d 648 (1978), rev'd on other
grounds, 297 N.C. 524, 256 S.E.2d 388 (1979). While the court in that case did
allow interest after default (commencing with the date requested in the
complaint) at a rate six percent in excess of pre-default interest, we are
unable to determine from the opinion that any question was raised as to this
being penal in nature, nor does the court address the possible question of the
statutory late charge preempting a default interest surcharge. Therefore, since
the North Carolina Supreme Court has not ruled in a properly presented case
raising issues of its possible penal nature and those of North Carolina General
Statutes (S) 24-10.1, we are unwilling to express an unqualified opinion that
the Default Rate of interest prescribed in the Credit Agreement is enforceable.
9. We do not express any opinion as to the enforceability of any provisions
contained in the Credit Agreement relating to evidentiary standards or other
standards by which the Credit Agreement are to be construed.
This opinion letter is delivered solely for your benefit in connection with
the Credit Agreement and, except for any Additional Bank, any Assignee which
becomes a Bank pursuant to Section 9.06(c) of the Credit Agreement or any Person
which becomes a Participant pursuant to Section 9.06(b) of the Credit Agreement,
may not be used or relied upon by any other Person or for any other purpose
without our prior written consent in each instance. Our opinions expressed
herein are as of the date hereof, and we undertake no obligation to advise you
of any
The Banks and the Administrative Agent
Referred to Below
April 18, 2002
Page 4
--------------------------------------
changes of applicable law or any other matters that may come to our attention
after the date hereof that may affect our opinions expressed herein.
Very truly yours,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of , 200 among [ASSIGNOR] (the "Assignor"),
--------- -
[ASSIGNEE] (the "Assignee"), DUKE CAPITAL CORPORATION (the "Company") and BANK
ONE, NA, a national banking association having its principal office in Chicago,
Illinois, as Administrative Agent (the "Administrative Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates
to the 364-Day Credit Agreement dated as of April 18, 2002 among the Company,
the Assignor and the other Banks party thereto, as Banks, and the Administrative
Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans and to issue or participate in Facility LCs in an
aggregate principal amount at any time outstanding not to exceed $ ;*
----------
WHEREAS, Loans made to the Borrower by the Assignor under the Credit
Agreement in the aggregate principal amount of $ are outstanding at
----------
the date hereof;
WHEREAS, the Assignor holds participations in Facility LCs under the Credit
Agreement in the aggregate principal amount of $ outstanding on
--------------
the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $ (the "Assigned Amount"),
----------
together with a corresponding portion of its outstanding Committed Loans, and
the Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;*
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
Section 1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Credit Agreement.
Section 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Committed Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, the Company and the
Administrative Agent
----------
* The asterisked provisions shall be appropriately revised in the event of an
assignment after the Commitment Termination Date.
and the payment of the amounts specified in Section 3 required to be paid on the
date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit Agreement
to the extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
Section 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.** It is
understood that facility fees accrued to the date hereof in respect of the
Assigned Amount are for the account of the Assignor and such fees accruing from
and including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Credit Agreement which is for the account of the other party hereto, it shall
receive the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
Section 4. Consent of the Borrower and the Administrative Agent. This
Agreement is conditioned upon the consent of the Borrower and the Administrative
Agent pursuant to Section 9.06(c) of the Credit Agreement. The execution of this
Agreement by the Borrower and the Administrative Agent is evidence of this
consent. Pursuant to Section 2.04(c) of the Credit Agreement the Borrower agrees
to execute and deliver a Note, if required by the Assignee, payable to the order
of the Assignee to evidence the assignment and assumption provided for herein.
Section 5. Non-reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of any Borrower, or the
validity and enforceability of the obligations of any Borrower in respect of the
Credit Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrowers.
Section 6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
Section 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 8. Administrative Questionnaire. Attached is an Administrative
Questionnaire duly completed by the Assignee.
----------
**Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee. It may be preferable in an
appropriate case to specify these amounts generically or by formula rather than
as a fixed sum.
2
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
3
[ASSIGNOR]
By
------------------------------------
Title:
[ASSIGNEE]
By
------------------------------------
Title:
4
DUKE CAPITAL CORPORATION
By
------------------------------------
Title:
BANK ONE, NA., as Administrative Agent
By
------------------------------------
Title:
5
EXHIBIT D
EXTENSION AGREEMENT
Bank One, NA, as Administrative
Agent under the Credit Agreement
referred to below
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Effective as of [date], the undersigned hereby agrees to extend its
Commitment and Commitment Termination Date under the 364-Day Credit Agreement
dated as of April 18, 2002 among Duke Capital Corporation (the "Borrower"), the
banks parties thereto and Bank One, NA, as Administrative Agent (the "Credit
Agreement") for 364 days to [date to which its Commitment Termination Date is to
be extended] pursuant to Section 2.01(c) of the Credit Agreement. Terms defined
in the Credit Agreement are used herein as therein defined.
This Extension Agreement shall be construed in accordance with and governed
by the law of the State of New York. This Extension Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
[NAME OF BANK]
By
------------------------------------
Title:
Agreed and Accepted:
DUKE CAPITAL CORPORATION,
as Borrower
By
--------------------------------
Title:
BANK ONE, NA,
as Administrative Agent
By
--------------------------------
Title:
2
EXHIBIT E
FACILITY LC APPLICATION
Date:
------------
To: Bank One, NA, as Administrative Agent
as LC Issuer
-------------
From: Duke Capital Corporation
Re: 364-Day Credit Agreement dated as of April 18, 2002 (as amended from
time to time, the "Credit Agreement") among Duke Capital Corporation
----------------
(the "Borrower"), the Banks parties thereto and Bank One, NA as
--------
Administrative Agent
The Borrower hereby gives notice pursuant to Section 2.16(c) of the Credit
Agreement that the Borrower requests the above-named LC Issuer to issue on or
before a Facility LC containing the terms attached hereto as
-----------------
Schedule 1 (the "Requested Letter of Credit").
--------------------------
The Requested Letter of Credit will be subject to [UCP 500] [ISP98].
The Borrower hereby represents and warrants to the LC Issuer, the
Administrative Agent and the Banks that:
ARTICLE (a)
immediately after the issuance of the Requested Letter of Credit the
Aggregate Outstanding Credit Exposure will not exceed the Aggregate Commitment;
(b) immediately after the issuance of the Requested Letter of Credit, no
Default shall have occurred and be continuing; and
(c) the representations and warranties contained in the Credit Agreement
(except the representations and warranties set forth in Sections
4.04(c) and 4.06 of the Credit Agreement) shall be true and correct on
and as of the date of issuance of the Requested Letter of Credit.
The Borrower hereby authorizes the LC Issuer to issue the Requested Letter
of Credit with such variations from the above terms as the LC Issuer may, in its
discretion, determine are necessary and are not materially inconsistent with
this Facility LC Application. The opening of the Requested Letter of Credit and
the Borrower's responsibilities with respect thereto are subject to [UCP 500]
[ISP98] as indicated above and the terms and conditions set forth in the Credit
Agreement.
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Credit Agreement.
DUKE CAPITAL CORPORATION
By:
------------------------------------
Title:
---------------------------------
2
SCHEDULE 1
Please issue an Irrevocable Letter of Credit as set forth below and forward same
to the Correspondent for the LC Issuer for delivery to the Beneficiary or, at
the LC Issuer's option, forward same directly to the Beneficiary as indicated
below (by check "X").
Transmit by:
[ ] Courier [ ] Air Mail [ ] Full Telex/SWIFT [ ] Other (specify in detail):
----------
---------------------------------------------------------------------------------------------------------------
Advising Bank (Name and Address) For account of (Name and Address)
(LC Issuer use only unless Borrower designates advising -----------
bank)
------
----------
-----------------------------------------------------
Phone Number (___) Fax Number (___)
------- --------
---------------------------------------------------------------------------------------------------------------
To Beneficiary (Name and Address) Amount (Figures)
----
----------
-----------------------------------------------------
(In Words)
----
-----------------------------------------------------
: +/- %
-------
-----------------------------------------------------
Expiry Date: At the counters of the LC Issuer
------
---------------------------------------------------------------------------------------------------------------
Available against Beneficiary's draft(s) at sight drawn on the LC Issuer and
accompanied by the following document(s).
[ ] Beneficiary's signed and dated statement stating that:
----
[ ] Automatically renewable for months or for days with a final
----- -----
expiration date of
-----
[ ] Copy(ies) of Beneficiary's commercial invoice(s) marked "unpaid":
-----
[ ] Other:
------
[ ] The required letter of credit terms and conditions are attached.
[ ] Special Conditions:
-----
====================================================================================================================================
Complete only when the Beneficiary's bank or Correspondent is to issue its
guarantee or undertaking based on the issued Letter of Credit.
[ ] Request Beneficiary's bank to issue and deliver their (Specify type of bid or performance bond, guarantee, undertaking or
----
other)
[ ] In favor of: Name(s) & Attention
-------
Address/Street
-------
Address/City State Country
----- ----- -----
Telephone( ) Fax Number( )
----------- ------------
For an amount not exceeding that specified above, effective immediately and expiring at their office on
------
(At least 30 days prior to Expiry Date above)
Cover .
------
(specify number or bid or performance bond, etc.)
==================================================================================================================================
Drawings (Check where applicable): [ ] Partial drawings prohibited
[ ] Multiple drawings prohibited
[ ] Tele-facsimile drawings permitted
Charges: (Unless specified, all charges will be for Borrower's account) All
banking charges other than the LC Issuer's are for
[ ] Beneficiary [ ] Borrower
Please include a brief description as to the purpose of the Requested Letter of
Credit:
-------------
Please issue the Requested Letter of Credit subject to: (check one) 0ISP98 or
0UCP 500. If no selection is made, the Requested Letter of Credit shall be
subject to the UCP 500.
DUKE CAPITAL CORPORATION
By:
------------------------------------
Title:
---------------------------------
2
EXHIBIT F
[APPROVED FORM OF FACILITY LC]
IRREVOCABLE STANDBY LETTER OF CREDIT NO.
BENEFICIARY:
LADIES AND GENTLEMEN:
WE HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER ,
---------------
IN FAVOR OF [INSERT BENEFICIARY NAME], BY ORDER AND FOR THE ACCOUNT OF DUKE
CAPITAL CORPORATION, ON BEHALF OF [DUKE ENERGY TRADING AND MARKETING, LLC, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,] AT SIGHT FOR [APPROXIMATELY]
U.S. DOLLARS ([APPROXIMATELY] UNITED
------------------ -------------------
STATES DOLLARS) AGAINST ANY ONE OF THE FOLLOWING DOCUMENTS:
1) A BENEFICIARY'S SIGNED CERTIFICATE STATING "DUKE CAPITAL CORPORATION IS IN
DEFAULT UNDER ONE OR MORE AGREEMENTS BETWEEN DUKE CAPITAL CORPORATION AND
[INSERT BENEFICIARY'S NAME]."
OR
2) A BENEFICIARY'S SIGNED CERTIFICATE STATING "[INSERT BENEFICIARY'S NAME] HAS
REQUESTED ALTERNATE SECURITY FROM DUKE CAPITAL CORPORATION AND DUKE CAPITAL
CORPORATION HAS NOT PROVIDED ALTERNATE SECURITY ACCEPTABLE 1-0 [INSERT
BENEFICIARY'S NAME] AND THIS LETTER OF CREDIT HAS LESS THAN TWENTY DAYS UNTIL
EXPIRY."
SPECIAL CONDITIONS:
1. PARTIAL DRAWINGS ARE PERMITTED.
2. DOCUMENTS MUST BE PRESENTED AT OUR COUNTER NO LATER THAN ,
-----------------
WHICH IS THE EXPIRY DATE OF THIS STANDBY LETTER OF CREDIT.
WE HEREBY ENGAGE WITH YOU THAT ALL DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE
TERMS OF THIS CREDIT WILL BE DULY HONORED IF DRAWN AND PRESENTED FOR PAYMENT AT
OUR OFFICE LOCATED AT ON OR BEFORE THE EXPIRY DATE OF
------------------------
THIS CREDIT.
EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, THIS CREDIT IS SUBJECT TO THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS. 1993 REVISION,
INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500.
COMMUNICATIONS WITH RESPECT TO THIS STANDBY LETTER OF CREDIT SHALL BE IN WRITING
AND SHALL BE ADDRESSED TO US AT , SPECIFICALLY REFERRING
----------------------
TO THE NUMBER OF THIS STANDBY LETTER OF CREDIT.
VERY TRULY YOURS
[LC ISSUER]
2