CONFORMED COPY
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(three-year)
$272,500,000
CREDIT AGREEMENT
Dated as of July 31, 2002
CAROLINA POWER & LIGHT COMPANY
(Company)
and
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
THE OTHER LENDERS FROM TIME TO TIME
PARTY HERETO
(Lenders)
and
CITIBANK, N.A.
(Administrative Agent)
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WACHOVIA BANK, NATIONAL ASSOCIATION
Syndication Agent
TABLE OF CONTENTS
Section Page
Article I
DEFINITIONS AND ACCOUNTING TERMS........................1
Section 1.01. Certain Defined Terms..............................1
Section 1.02. Computation of Time Periods........................9
Section 1.03. Accounting Terms...................................9
Article II
AMOUNTS AND TERMS OF THE ADVANCES......................10
Section 2.01. The Advances......................................10
Section 2.02. Making the Advances...............................10
Section 2.03. Facility Fee......................................11
Section 2.04. Changes in the Commitments........................12
Section 2.05. Repayment of Advances.............................14
Section 2.06. Evidence of Indebtedness..........................14
Section 2.07. Interest on Advances..............................14
Section 2.08. Additional Interest on Eurodollar Rate Advances...15
Section 2.09. Interest Rate Determination.......................15
Section 2.10. Voluntary Conversion of Advances..................16
Section 2.11. Prepayments of Advances...........................17
Section 2.12. Increased Costs...................................17
Section 2.13. Illegality........................................18
Section 2.14. Payments and Computations.........................18
Section 2.15. Sharing of Payments, Etc..........................19
Article III
CONDITIONS OF LENDING..................................20
Section 3.01. Conditions Precedent to Closing...................20
Section 3.02. Conditions Precedent to Each Borrowing............21
Article IV
REPRESENTATIONS AND WARRANTIES.........................21
Section 4.01. Representations and Warranties of the Company.....21
Article V
COVENANTS OF THE COMPANY...............................23
Section 5.01. Affirmative Covenants.............................23
Section 5.02. Negative Covenants................................25
Article VI
EVENTS OF DEFAULT......................................27
Section 6.01. Events of Default.................................27
Article VII
THE ADMINISTRATIVE AGENT...............................28
Section 7.01. Authorization and Action..........................28
Section 7.02. Administrative Agent's Reliance, Etc..............29
Section 7.03. The Administrative Agent and its Affiliates.......29
Section 7.04. Lender Credit Decision............................29
Section 7.05. Indemnification...................................30
Section 7.06. Successor Administrative Agent....................30
Article VIII
MISCELLANEOUS..........................................30
Section 8.01. Amendments, Etc...................................30
Section 8.02. Notices, Etc......................................31
Section 8.03. No Waiver; Remedies...............................31
Section 8.04. Costs, Expenses and Taxes.........................31
Section 8.05. Right of Set-off..................................34
Section 8.06. Binding Effect....................................34
Section 8.07. Assignments and Participations....................34
Section 8.08. Governing Law.....................................38
Section 8.09. WAIVER OF JURY TRIAL..............................38
Section 8.10. Execution in Counterparts.........................38
Section 8.11. Severability......................................38
Section 8.12. Headings..........................................39
Section 8.13. Entire Agreement..................................39
SCHEDULES
I Existing Facilities
EXHIBITS
A-1 Form of Notice of Borrowing
A-2 Form of Notice of Conversion
B Form of Assignment and Acceptance
C-1 Form of Opinion of General Counsel for the Company
C-2 Form of Opinion of Counsel for the Company
D Form of Opinion of Counsel for the Administrative Agent
E Form of Assumption Agreement
CREDIT AGREEMENT
Dated as of July 31, 2002
CAROLINA POWER & LIGHT COMPANY, a North Carolina corporation (the
"Company"), the banks listed on the signature pages hereof (the "Banks") and
CITIBANK, N.A. ("Citibank"), as administrative agent (the "Administrative
Agent") for the Lenders (as hereinafter defined) hereunder.
Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Administrative Agent" has the meaning specified in the introductory
paragraph hereof.
"Advance" means an advance by a Lender to the Company as part of a
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance,
each of which shall be a "Type" of Advance.
Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with
such Person or is a director or officer of such Person.
"Applicable Lending Office" means, with respect to each Lender, (i)
such Lender's Domestic Lending Office in the case of a Base Rate Advance,
or (ii) such Lender's Eurodollar Lending Office, in the case of a
Eurodollar Rate Advance.
"Applicable Margin" means on any date, the rate per annum set forth
below for the applicable Type of Advance, determined by reference to the
ratings assigned to the Reference Securities:
----------------------------------------------------------------------------------------------------------------------------------
Basis for ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ 5 LEVEL 6
Pricing If the If the If the Reference If the Reference If the Reference If the Reference
Reference Reference Securities are Securities are rated Securities are rated Securities are rated
Securities Securities rated lower than lower than ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇
are rated are rated Level 2 but at but at least BBB by but at least BBB- by or unrated
at least A lower than least BBB+ by Standard & Poor's or Standard & Poor's
by Standard Level 1 but Standard & at least Baa2 by and at least Baa3 by
& Poor's or at least A- Poor's or at Moody's Moody's
at least A2 by Standard least Baa1 by
by Moody's & Poor's or Moody's
at least A3
by Moody's
----------------------------------------------------------------------------------------------------------------------------------
Eurodollar 0.275% 0.500% 0.725% 0.800% 1.000% 1.650%
Rate
----------------------------------------------------------------------------------------------------------------------------------
Base Rate 0.0% 0.0% 0.0% 0.0% 0.000% 0.650%
----------------------------------------------------------------------------------------------------------------------------------
The Applicable Margin will increase by (i) 0.125% for ▇▇▇▇▇▇ ▇, ▇ ▇▇▇ ▇,
(▇▇) 0.25% for Levels 4 and 5 and (iii) 0.50% for Level 6 at any time that
more than 33% of the Commitments are utilized. The Applicable Margin will
be redetermined on the date of any change in the rating assigned by
Standard & Poor's or Moody's, as the case may be, to the Reference
Securities. If and so long as an Event of Default shall have occurred and
shall be continuing, the Applicable Margin will increase by 2.00%. If the
ratings assigned to the Reference Securities by Standard & Poor's and
Moody's are not comparable (i.e., a "split rating"), and (i) the ratings
differential is one category, the higher of such two ratings shall control,
unless either rating is below BBB- (in the case of Standard & Poor's) or
Baa3 (in the case of Moody's), in which case the lower of such two ratings
shall control, or (ii) the ratings differential is two or more categories,
the rating that is one below the higher of the two ratings shall control,
unless either rating is below BBB- (in the case of Standard & Poor's) or
Baa3 (in the case of Moody's), in which case the lower of such two ratings
shall control.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit B hereto.
"Assuming Lender" means any Eligible Assignee not previously a Lender
that becomes a Lender hereunder pursuant to Section 2.04(b).
"Bank" has the meaning specified in the introductory paragraph hereof.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall
at all times be equal to the higher from time to time of:
(i) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate; and
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(ii) 1/2 of one percent per annum above the Federal Funds Rate in
effect from time to time.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a).
"Business Day" means a day of the year on which banks are not
required or authorized to close at the principal office of any Lender
and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London interbank
market.
"Change of Control" means the occurrence, after the date of
this Agreement, of (i) any Person or "group" (within the meaning of
Rule 13(d) or 14(d) of the Securities and Exchange Commission under the
Exchange Act), directly or indirectly, acquiring beneficial ownership
of or control over securities of Progress Energy, Inc., representing in
excess of 30% of the combined voting power of all securities of
Progress Energy, Inc. entitled to vote in the election of directors of
Progress Energy, Inc. or (ii) Progress Energy, Inc. shall fail to own,
directly or indirectly, 95% of all securities of the Company entitled
to vote in the election of directors of the Company.
"Citibank" has the meaning specified in the introductory paragraph
hereof.
"Commitment" has the meaning specified in Section 2.01.
"Commitment Increase" has the meaning assigned to that term in Section
2.04(b).
"Commitment Increase Date" has the meaning set forth in Section
2.04(b).
"Company" has the meaning specified in the introductory paragraph
hereof.
"Consolidated" refers to the consolidation of the accounts of the
Company and the Subsidiaries in accordance with generally accepted
accounting principles, including principles of consolidation, consistent
with those applied in the preparation of the financial statements referred
to in Section 4.01(e).
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type, or the selection of a
new, or the renewal of the same, Interest Period for Eurodollar Rate
Advances, pursuant to Section 2.09 or 2.10.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" below its
name on the signature pages hereof or such other office of such Lender as
such Lender may from time to time specify to the Company and the
Administrative Agent.
"Eligible Assignee" means (i) any other Lender or any Affiliate of a
Lender and (ii) (A) any other commercial bank organized under the laws of
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the United States, or any State thereof, and having a combined capital and
surplus of at least $250,000,000 (as established in its most recent report
of condition to its primary regulator), (B) a savings and loan association
or savings bank organized under the laws of the United States, or any State
thereof, and having a combined capital and surplus of at least $250,000,000
(as established in its most recent report of condition to its primary
regulator), (C) a commercial bank organized under the laws of any other
country which is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow of the Cayman Islands, or a political
subdivision of any such country, and having a combined capital and surplus
of at least $250,000,000 (as established in its most recent report of
condition to its primary regulator); provided that such bank is acting
through a branch or agency located in the United States or in the country
in which it is organized or another country which is described in this
clause (C), (D) the central bank of any country which is a member of the
OECD, and (E) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership or other entity)
which is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business, whose outstanding unsecured
indebtedness is rated AA- or better by S&P or Aa3 or better by Moody's (or
an equivalent rating by another nationally-recognized credit rating agency
of similar standing if neither of such corporations is then in the business
of rating unsecured indebtedness); provided, that, in the case of any such
Person described in this clause (ii), the identity of such Person is
notified by the proposed assignor to the Company and the Administrative
Agent (or by the Company to the Administrative Agent pursuant to Section
8.07(f)) in writing at least ten Business Days prior to the date of the
proposed assignment under Section 8.07 and is consented to in writing by
the Company and the Administrative Agent (each of which shall not
unreasonably withhold their respective consents) at least five Business
Days prior to the date of such proposed assignment.
"Environmental Laws" means any federal, state or local laws,
ordinances or codes, rules, orders, or regulations relating to pollution or
protection of the environment, including, without limitation, laws relating
to hazardous substances, laws relating to reclamation of land and waterways
and laws relating to emissions, discharges, releases or threatened 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, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollution,
contaminants, chemicals, or industrial, toxic or hazardous substances or
wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
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"Eurodollar Lending Office" means, with respect to each Lender, the
office of such Lender specified as its "Eurodollar Lending Office" below
its name on the signature pages hereof (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Company and the Administrative
Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing an interest rate per
annum equal to the average (rounded upward to the nearest whole multiple of
1/8 of 1% per annum, if such average is not such a multiple) of the rates
per annum at which deposits in U.S. dollars are offered by the principal
office of each of the Reference Banks in London, England to prime banks in
the London Interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period for a period equal to such
Interest Period and in an amount substantially equal to the amount of such
Eurodollar Rate Advance comprising part of such Borrowing to be outstanding
during such Interest Period from such Reference Bank. The Eurodollar Rate
for the Interest Period for each Eurodollar Rate Advance comprising part of
the same Borrowing shall be determined by the Administrative Agent on the
basis of the applicable rates furnished to and received by the
Administrative Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
Section 2.08.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(b).
"Eurodollar Rate Reserve Percentage" of any Lender for the Interest
Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those
days in such Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for such
Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"Events of Default" has the meaning assigned to that term in Section
6.01.
"Exchange Act" means the Securities Exchange Act of 1934, and the
regulations promulgated thereunder, in each case as amended and in effect
from time to time.
"Existing Facilities" refers to those credit agreements listed on
Schedule 1 hereto.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
5
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"First Mortgage Bonds" means those bonds issued by the Company
pursuant to the Mortgage.
"Guaranty" of any Person means any obligation, contingent or
otherwise, of such Person (i) to pay any Liability of any other Person or
to otherwise protect, or having the practical effect of protecting, the
holder of any such Liability against loss (whether such obligation arises
by virtue of such Person being a partner of a partnership or participant in
a joint venture or by agreement to pay, to keep well, to purchase assets,
goods, securities or services or to take or pay, or otherwise) or (ii)
incurred in connection with the issuance by a third Person of a Guaranty of
any Liability of any other Person (whether such obligation arises by
agreement to reimburse or indemnify such third Person or otherwise). The
word "Guarantee" when used as a verb has the correlative meaning.
"Increasing Lender" means any Lender that agrees to increase its
Commitment pursuant to Section 2.04(b).
"Indebtedness" of any Person means (i) any obligation of such Person
for borrowed money, (ii) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (iii) any obligation of such
Person to pay the deferred purchase price of property or services, except a
trade account payable that arises in the ordinary course of business but
only if and so long as the same is payable on customary trade terms, (iv)
any obligation of such Person as lessee under a capital lease, (v) any
Mandatorily Redeemable Stock of such Person (the amount of such Mandatorily
Redeemable Stock to be determined for this purpose as the higher of the
liquidation preference and the amount payable upon redemption of such
Mandatorily Redeemable Stock), (vi) any obligation of such Person to
purchase securities or other property that arises out of or in connection
with the sale of the same or substantially similar securities or property,
(vii) any non-contingent obligation of such Person to reimburse any other
Person in respect of amounts paid under a letter of credit or other
Guaranty issued by such other Person to the extent that such reimbursement
obligation remains outstanding after it becomes non-contingent, (viii) any
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) a mortgage, lien, pledge, charge or other encumbrance on any asset of
such Person, (ix) any Liabilities in respect of unfunded vested benefits
under plans covered by Title IV of ERISA, and (x) any Indebtedness of
others Guaranteed by such Person.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Advance or the Conversion of any Advance to such Advance and ending on the
last day of the period selected by the Company pursuant to the provisions
below and, thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last day of the
6
period selected by the Company pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Company may, in the Notice of Borrowing given by the Company
to the Administrative Agent pursuant to Section 2.02, select; provided,
however, that:
(i) the Company may not select any Interest Period that ends
after the Commitment Termination Date;
(ii) Interest Periods commencing on the same date for Advances
comprising the same Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day; provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day.
The Administrative Agent shall promptly advise each Lender by telex,
telecopy transmission or cable of each Interest Period so selected by the
Company.
"Lenders" means the Lenders listed on the signature pages hereof, each
Assuming Lender and each Eligible Assignee that shall become a party hereto
pursuant to Section 8.07.
"Liability" of any Person means any indebtedness, liability or
obligation of or binding upon, such Person or any of its assets, of any
kind, nature or description, direct or indirect, absolute or contingent,
due or not due, contractual or tortious, liquidated or unliquidated,
whether arising under contract, applicable law, or otherwise, whether now
existing or hereafter arising.
"Majority Lenders" means at any time Lenders holding at least 66-2/3%
of the then aggregate unpaid principal amount of the Advances, or, if no
such principal amount is then outstanding, Lenders having at least 66-2/3%
of the Commitments (provided that, for purposes hereof, neither the
Company, nor any of its Affiliates, if a Lender, shall be included in (i)
the Lenders holding such amount of the Advances or having such amount of
the Commitments or (ii) determining the aggregate unpaid principal amount
of the Advances or the total Commitments).
"Mandatorily Redeemable Stock" means, with respect to any Person, any
share of such Person's capital stock to the extent that it is (i)
redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into any Indebtedness or other Liability of
such Person, (ii) at a fixed or determinable date, whether by operation of
a sinking fund or otherwise, (iii) at the option of any Person other than
such Person or (iv) upon the occurrence of a condition not solely within
the control of such Person, such as a redemption required to be made out of
future earnings or (v) convertible into Mandatorily Redeemable Stock.
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"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"Mortgage" means the Mortgage and Deed of Trust, dated as of May 1,
1940, from the Company to The Bank of New York (formerly Irving Trust
Company) and to ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (▇.▇. ▇▇▇▇▇▇▇▇▇▇, successor), as
modified, amended or supplemented from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
"NCUC Order" means the order by the North Carolina Utilities
Commission that authorizes the Company to execute, deliver and perform this
Agreement.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Conversion" has the meaning specified in Section 2.10.
"OECD" means the Organization for Economic Cooperation and
Development.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign
state or political subdivision thereof or any agency of such state or
subdivision.
"Plan" means an employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any of its Affiliates and
covered by Title IV of ERISA.
"Reference Banks" means Citibank and Wachovia Bank, National
Association.
"Reference Securities" means the long-term unsecured senior,
non-credit enhanced debt of the Company.
"Register" has the meaning specified in Section 8.07(c).
"Responsible Officer" means the President, any Vice President,
the Chief Financial Officer, the Treasurer, the Controller or any
Assistant Treasurer of the Company the signatures of whom, in each
case, have been certified to the Administrative Agent and each other
Bank pursuant to Section 3.01(d), or in a certificate delivered to the
Administrative Agent replacing or amending such certificate. Each
Lender may conclusively rely on each certificate so delivered until it
shall have received a copy of a certificate from the Secretary or an
Assistant Secretary of the Company amending, canceling or replacing
such certificate.
"S&P" means Standard & Poor's Ratings Group, or any successor thereto.
8
"SCPSC Order" means the order by the South Carolina Public Service
Commission that authorizes the Company to execute, deliver and perform this
Agreement.
"Subsidiary" means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital
stock (or comparable interest) having ordinary voting power (irrespective
of whether at the time capital stock (or comparable interest) of any other
class or classes of such corporation or entity shall or might have voting
power upon the occurrence of any contingency) is at the time directly or
indirectly owned by said Person (whether directly or through one or more
other Subsidiaries).
"Termination Date" means the earlier to occur of (i) July 31, 2005 and
(ii) the date of termination or reduction in whole of the Commitments
pursuant to Section 2.04(a) or 6.01.
"Termination Event" means (i) a Reportable Event described in Section
4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation under such regulations), or (ii) the
withdrawal of the Company or any of its Affiliates from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to terminate
a Plan or the treatment of a Plan amendment as a termination under Section
4041 of ERISA, or (iv) the institution of proceedings to terminate a Plan
by the Pension Benefit Guaranty Corporation, or (v) any other event or
condition which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Plan.
"Total Capitalization" means the sum of the value of the common stock,
retained earnings, and preferred and preference stock of the Company (in
each case, determined in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e)), plus Consolidated
Indebtedness of the Company.
Section 1.02. Computation of Time Periods.
In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding".
Section 1.03. Accounting Terms.
All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to in Section
4.01(e).
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Article II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01. The Advances.
Each Lender severally agrees, on the terms and conditions hereinafter set
forth, to make Advances to the Company from time to time on any Business Day
during the period from the date hereof to but excluding the Termination Date, in
an aggregate amount outstanding not to exceed at any time the amount set
opposite such Lender's name on the signature pages hereof or, if such Lender has
entered into any Assignment and Acceptance or is an Assuming Lender, set forth
for such Lender in the Register maintained by the Administrative Agent pursuant
to Section 8.07(c), as such amount may be reduced or increased pursuant to
Section 2.04 (such Lender's "Commitment"). Each Borrowing shall be in an
aggregate amount not less than $10,000,000 or an integral multiple of $1,000,000
in excess thereof and shall consist of Advances of the same Type made on the
same day by the Lenders ratably according to their respective Commitments. Until
the Termination Date, within the limits of each Lender's Commitment, the Company
may from time to time borrow, repay pursuant to Section 2.05 or prepay pursuant
to Section 2.11(b) and reborrow under this Section 2.01.
Section 2.02. Making the Advances.
(a) Each Borrowing shall be made on notice, given not later than 11:00 A.M.
(New York City time) on the day of such proposed Borrowing, in the case of a
Borrowing comprised of Base Rate Advances, or on the third Business Day prior to
the date of the proposed Borrowing, in the case of a Borrowing comprised of
Eurodollar Rate Advances, by the Company to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telex, telecopier or cable.
Each such notice of a Borrowing (a "Notice of Borrowing") shall be by telex,
telecopier or cable, confirmed promptly in writing, in substantially the form of
Exhibit A-1 hereto, specifying therein the requested (i) date of such Borrowing,
(ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such
Borrowing, and (iv) in the case of a Borrowing comprised of Eurodollar Rate
Advances, the Interest Period for each such Advance. In the case of a proposed
Borrowing comprised of Eurodollar Rate Advances, the Administrative Agent shall
promptly notify each Lender of the applicable interest rate under Section
2.07(b). Each Lender shall, before 12:00 P.M. (New York City time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at its address referred to in Section 8.02,
in same day funds, such Lender's ratable portion of such Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Company at the Administrative Agent's aforesaid
address.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Company and, in respect of any Borrowing comprised of Eurodollar Rate Advances,
the Company shall indemnify each Lender against any loss or expense incurred by
such Lender as a result of any failure by the Company to fulfill on or before
the date specified for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
10
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Company on such
date a corresponding amount. If and to the extent such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Company severally agree to repay to the Administrative Agent (without
duplication), forthwith on demand, such corresponding amount, together with
interest thereon for each day from the date such amount is made available to the
Company until the date such amount is repaid to the Administrative Agent, (x) in
the case of the Company, at the interest rate applicable at the time to Advances
comprising such Borrowing and (y) in the case of such Lender, at the Federal
Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
(e) If, for any reason, a Borrowing is not made on the date specified in
any Notice of Borrowing, the Administrative Agent hereby agrees to repay to each
Lender the amount, if any, which such Lender has made available to the
Administrative Agent as such Lender's ratable portion of such Borrowing,
together with interest thereon for each day from the date such amount is made
available to the Administrative Agent until the date such amount is repaid to
such Lender, at the Federal Funds Rate.
Section 2.03. Facility Fee.
The Company agrees to pay to the Administrative Agent for the account of
each Lender a facility fee on each Lender's Commitment, irrespective of usage,
from the date hereof, in the case of each Bank, and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender,
in the case of each other Lender, until the Termination Date, payable quarterly
in arrears on the last day of each March, June, September and December during
the term of such Lender's Commitment and on the Termination Date, at a rate per
annum determined by reference to the ratings assigned to the Reference
Securities as set forth below:
11
---------------------------------------------------------------------------------------------------------
Basis for ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ 5 LEVEL 6
Pricing If the If the If the If the If the If the
Reference Reference Reference Reference Reference Reference
Securities Securities Securities Securities Securities Securities
are rated at are rated are rated are rated are rated are rated
least A by lower than lower than lower than lower than lower than
Standard & Level 1 but Level 2 but Level 3 but Level 4 but Level 5 or
Poor's or at at least A- at least at least BBB at least by are Unrated
least A2 by by Standard BBB+ by by Standard BBB- and
Moody's & Poor's or Standard & & Poor's or Baa3 by
at least A3 Poor's or at least Moody's
by Moody's at least Baa2 by
Baa1 by Moody's
Moody's
---------------------------------------------------------------------------------------------------------
Facility Fee 0.100% 0.125% 0.150% 0.200% 0.250% 0.350%
---------------------------------------------------------------------------------------------------------
The Facility Fee rate will be redetermined on the date of any change in the
rating assigned by Standard & Poor's or Moody's, as the case may be, to the
Reference Securities. If the ratings assigned to the Reference Securities by
Standard & Poor's and Moody's are not comparable (i.e., a "split rating"), and
(i) the ratings differential is one category, the higher of such two ratings
shall control, unless either rating is below BBB- (in the case of Standard &
Poor's) or Baa3 (in the case of Moody's), in which case the lower of such two
ratings shall control, or (ii) the ratings differential is two or more
categories, the rating that is one below the higher of the two ratings shall
control, unless either rating is below BBB- (in the case of Standard & Poor's)
or Baa3 (in the case of Moody's), in which case the lower of such two ratings
shall control.
Section 2.04. Changes in the Commitments.
(a) Reduction or Termination of the Commitments. The Company shall have the
right, upon at least three Business Days' notice to the Administrative Agent,
irrevocably and permanently to terminate in whole or reduce ratably in part the
respective Commitments of the Lenders; provided that the aggregate amount of the
Commitments of the Lenders shall not be reduced to an amount which is less than
the aggregate principal amount of the Advances then outstanding; and provided
further, that each partial reduction shall be in the aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Increase of the Commitments.
(i) Requests for Increase by Company. The Company may, by notice to
the Administrative Agent, propose that the aggregate amount of the
Commitments be increased (each such proposed increase being a "Commitment
Increase"), effective as of a date (the "Commitment Increase Date") that
shall be specified in such notice; provided that:
(A) the proposed Commitment Increase in respect of the Commitment
of either (i) any Increasing Lender or (ii) any Assuming Lender for
each Commitment Increase Date shall be in the aggregate amount of
$10,000,000 or a multiple of $1,000,000 in excess thereof;
12
(B) in no event shall the aggregate amount of the Commitments
hereunder at any time exceed $287,500,000;
(C) no Event of Default or event that, with the giving of notice
on the passage of time, or both, would constitute an Event of Default
shall have occurred and be continuing on such Commitment Increase Date
or shall result from the proposed Commitment Increase; and
(D) the representations and warranties contained in Article IV
shall be correct on and as of the Commitment Increase Date as if made
on and as of such date.
(ii) Acceptance of Commitment Increase by the Company. The Company
shall deliver the notice described in clause (i) above no later than three
Business Days prior to the relevant Commitment Increase Date, which notice
shall specify the identities of each Increasing Lender and Assuming Lender,
the amount of the new Commitments to be accepted by each Increasing Lender
and Assuming Lender and the relevant Commitment Increase Date (and the
Administrative Agent shall give notice thereof to the Lenders, including
any Assuming Lenders). The Assuming Lenders, if any, shall become Lenders
hereunder as of such Commitment Increase Date, and the Commitments of any
Increasing Lenders and such Assuming Lenders shall be increased as of such
Commitment Increase Date; provided that:
(A) the Administrative Agent shall have received on or prior to
11:00 a.m., New York City time, on such Commitment Increase Date a
certificate of a duly authorized officer of the Company stating that
each of the applicable conditions to such Commitment Increase set
forth in this Section 2.04(b) has been satisfied;
(B) with respect to each Assuming Lender, the Administrative
Agent shall have received, on or prior to 11:00 a.m., New York City
time, on such Commitment Increase Date, an appropriate Assumption
Agreement in substantially the form of Exhibit G, duly executed by
such Assuming Lender and the Company; and
(C) each Increasing Lender shall have delivered to the
Administrative Agent, on or prior to 11:00 a.m., New York City time,
on such Commitment Increase Date, confirmation in writing satisfactory
to the Administrative Agent as to its increased Commitment, with a
copy of such confirmation to the Company.
(iii) Recordation. Upon receipt by the Administrative Agent of
confirmation from a Lender that it is increasing its Commitment hereunder,
together with the certificate referred to in clause (ii)(A) above, the
Administrative Agent shall (A) record the information contained therein in
the Register maintained by the Administrative Agent pursuant to Section
8.07(c) and (B) give prompt notice thereof to the Company. Upon receipt by
the Administrative Agent of an Assumption Agreement executed by an Assuming
Lender, together with the certificate referred to in clause (ii)(A) above,
13
the Administrative Agent shall, if such Assumption Agreement has been
completed and is in substantially the form of Exhibit E, (x) accept such
Assumption Agreement, (y) record the information contained therein in the
Register maintained by the Administrative Agent and (z) give prompt notice
thereof to the Company.
(iv) Adjustments of Borrowings upon Effectiveness of Increase. In the
event that the Administrative Agent shall have received notice from the
Company as to any agreement with respect to a Commitment Increase on or
prior to the relevant Commitment Increase Date and the actions provided for
in clauses (ii)(A) through (ii)(C) above shall have occurred by 11:00 a.m.,
New York City time, on such Commitment Increase Date, the Administrative
Agent shall notify the Lenders (including any Assuming Lenders) of the
occurrence of such Commitment Increase Date promptly on such date by
facsimile transmission or electronic messaging system. On the date of such
increase, the Company shall each prepay the outstanding Advances (if any)
in full, and shall simultaneously borrow new Advances hereunder in an
amount equal to such prepayment, so that, after giving effect thereto, the
Advances of the Lenders are held ratably by the Lenders in accordance with
their respective Commitments (after giving effect to such Commitment
Increase). Prepayments made under this clause (iv) shall not be subject to
the notice requirements of Section 2.11.
Section 2.05. Repayment of Advances.
The Company shall repay the principal amount of each Advance made by each
Lender on the Termination Date.
Section 2.06. Evidence of Indebtedness.
Any Lender may request that any Advances made by it be evidenced by one or
more promissory notes. In such event, the Company shall prepare, execute and
deliver to such Lender one or more notes payable to the order of such Lender (or
if requested by such Lender, to such Lender and its assignees) and in a form
approved by the Administrative Agent. Thereafter, the Advances evidenced by such
notes and interest thereon shall at all times (including after assignment
pursuant to Section 8.07) be represented by one or more notes in such form
payable to the order of the payee named therein.
Section 2.07. Interest on Advances.
The Company shall pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal at all times to the Base Rate in effect from time to time, plus the
Applicable Margin for Base Rate Advances, payable quarterly in arrears on the
last day of each September, December, March, and June and on the date such Base
Rate Advance shall be paid in full.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during the Interest Period for such Advance
14
to the Eurodollar Rate for such Interest Period, plus the Applicable Margin for
Eurodollar Rate Advances, payable on the last day of such Interest Period and,
if such Interest Period has a duration of more than three months, on each day
which occurs during such Interest Period every three months from the first day
of such Interest Period.
Section 2.08. Additional Interest on Eurodollar Rate Advances.
The Company shall pay to each Lender additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance. All claims
for such additional interest shall be submitted by such Lender to the Company
(with a copy to the Administrative Agent) as soon as is reasonably possible and
in all events within ninety days after the first day of such Interest Period;
provided, however, that if a claim is not submitted to the Company within such
ninety day period, such Lender shall thereby waive its claim to such additional
interest incurred during such ninety-day period but not to any such additional
interest incurred thereafter. A certificate as to the amount of such additional
interest, submitted to the Company (with a copy to the Administrative Agent) by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
Section 2.09. Interest Rate Determination.
(a) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining the Eurodollar Rate. If any
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for determination of any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.
(b) The Administrative Agent shall give prompt notice to the Company and
the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.07(a) or (b), and the applicable rate, if any,
furnished by each Reference Bank for determining the applicable interest rate
under Section 2.07(b).
(c) If fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,
(i) the Administrative Agent shall forthwith notify the Company and
the Lenders that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will continue as a Base Rate
Advance), and
(iii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
15
Agent shall notify the Company and the Lenders that the circumstances
causing such suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Company and the Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and
(ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Company and the Lenders that the circumstances
causing such suspension no longer exist.
(e) If the Company shall fail to select the duration of any Interest Period
for any Eurodollar Rate Advances in accordance with the provisions contained in
the definition of "Interest Period" in Section 1.01, the Administrative Agent
will forthwith so notify the Company and the Lenders and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances. If an Event of Default shall have occurred and
be continuing, each Eurodollar Rate Advance shall automatically Convert into a
Base Rate Advance at the end of the Interest Period that is in effect for such
Eurodollar Rate Advance.
(f) On the date on which the aggregate unpaid principal amount of Advances
comprising any Borrowing shall be reduced, by prepayment or otherwise, to less
than $20,000,000, such Advances shall, if they are Eurodollar Rate Advances,
automatically Convert into Base Rate Advances, and on and after such date the
right of the Company to Convert such Advances into Eurodollar Advances shall
terminate; provided, however, that if and so long as each such Advance shall be
of the same Type and have the same Interest Period as Eurodollar Advances
comprising another Borrowing or other Borrowings, and the aggregate unpaid
principal amount of all Eurodollar Rate Advances shall equal or exceed
$20,000,000, the Company shall have the right to continue all such Eurodollar
Rate Advances as Advances having such Interest Period.
Section 2.10. Voluntary Conversion of Advances.
The Company may, on any Business Day prior to the Termination Date, upon
notice given to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion, in the case of any proposed Conversion into Eurodollar Rate
Advances, and on the date of the proposed Conversion, in the case of any
proposed Conversion into Base Rate Advances, and subject to the provisions of
Sections 2.09 and 2.13 and so long as no Event of Default has occurred and is
continuing on the date of such proposed Conversion, Convert all Advances of one
Type comprising the same Borrowing into Advances of another Type; provided,
16
however, that any Conversion of any Eurodollar Rate Advances into Base Rate
Advances shall be made on, and only on, the last day of an Interest Period for
such Eurodollar Rate Advances. Each such notice of a Conversion (a "Notice of
Conversion") shall be by telex, telecopier or cable, confirmed promptly in
writing, in substantially the form of Exhibit A-2 hereto and shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
aggregate amount of, Type of, and Interest Periods (if any) applicable to the
Advances to be Converted, (iii) the Type of Advance to which such Advances (or
portions thereof) are proposed to be Converted, and (iv) if such Conversion is
into Eurodollar Rate Advances, the duration of the Interest Period for each such
Advance.
Section 2.11. Prepayments of Advances.
(a) The Company shall have no right to prepay any principal amount of any
Advances other than as provided in subsection (b) below.
(b) The Company may, upon notice given to the Administrative Agent at least
two Business Days prior to the proposed prepayment, in the case of any
Eurodollar Rate Advance, and on the date of the proposed prepayment, in the case
of any Base Rate Advance, and if such notice is given the Company shall, prepay
the outstanding principal amounts of the Advances comprising the same Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the amount prepaid and, in the case of any Eurodollar Rate
Advance, any amount payable pursuant to Section 8.04(b); provided, however, that
each partial prepayment shall be in an aggregate principal amount not less than
$5,000,000 and in integral multiples of $1,000,000 in excess thereof.
Section 2.12. Increased Costs.
(a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements, in the case of
Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage),
in or in the interpretation of any law or regulation, or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Company shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for account of such Lender additional amounts
sufficient to reimburse such Lender for such increased cost. All claims for
increased cost shall be submitted by such Lender to the Company (with a copy to
the Administrative Agent) as soon as is reasonably possible and in all events
within ninety days after such introduction, such change, or the beginning of
such compliance, the occurrence of which resulted in such increased cost, and
the Company shall make such payment within five Business Days after notice of
such claim is received; provided, however, that if a claim is not submitted to
the Company within such ninety-day period, such Lender shall thereby waive its
claim to such increased cost incurred during such ninety-day period but not to
any such increased cost incurred thereafter. A certificate as to the amount of
such increased cost, submitted to the Company (with a copy to the Administrative
Agent) by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
17
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), the Company shall immediately pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder. All claims for
such additional amounts shall be submitted by such Lender (with a copy to the
Administrative Agent) as soon as is reasonably possible and in all events within
ninety days after such determination by such Lender, and the Company shall make
such payment within five Business Days after notice of such claim is received;
provided, however, that if a claim is not submitted to the Company within such
ninety-day period, such Lender shall thereby waive its claim to such additional
amounts incurred during such ninety-day period but not to any such additional
amounts incurred thereafter. A certificate as to such amounts submitted to the
Company and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
Section 2.13. Illegality.
Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Administrative Agent that the introduction of or any change in or in
the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
(i) the obligation of the Lenders to make Eurodollar Rate Advances, or to
Convert Advances into Eurodollar Rate Advances, shall be suspended until the
Administrative Agent shall notify the Company and the Lenders that the
circumstances causing such suspension no longer exist and (ii) the Company shall
forthwith prepay in full all Eurodollar Rate Advances of all Lenders then
outstanding, together with interest accrued thereon, unless the Company, within
five Business Days of notice from the Administrative Agent, Converts all
Eurodollar Rate Advances of all Lenders then outstanding into Base Rate Advances
in accordance with Section 2.10.
Section 2.14. Payments and Computations.
(a) The Company shall make each payment hereunder not later than 11:00 A.M.
(New York City time) on the day when due in U.S. dollars to the Administrative
Agent at its address referred to in Section 8.02 in same day funds. The
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or fees (other than pursuant to
Section 2.08 or 2.12) ratably to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
18
the information contained therein in the Register pursuant to Section 8.07(d),
from and after the effective date specified in such Assignment and Acceptance,
the Administrative Agent shall make all payments hereunder respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) All computations of interest based on clause (i) of the definition of
"Base Rate" shall be made by the Administrative Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate or on clause (ii) of the definition of "Base Rate" or of
fees payable hereunder shall be made by the Administrative Agent, and all
computations of interest pursuant to Section 2.08 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period of
which such interest or fees are payable. Each determination by the
Administrative Agent (or, in the case of Section 2.08, by a Lender) of an
interest rate hereunder shall be conclusive and binding for all purposes.
(c) Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from the
Company prior to the date on which any payment is due to the Lenders hereunder
that the Company will not make such payment in full, the Administrative Agent
may assume that the Company 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 Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Company shall
not have so made such payment in full to the Administrative Agent, each Lender
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender, together with interest thereon for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent at the Federal Funds Rate.
Section 2.15. Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Advances made by it (other than pursuant to Section 2.08 or 2.12) in excess of
its ratable share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participation in the Advances made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery, together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
19
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Company
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Company in the amount of such participation.
Article III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Closing.
The Commitments of the Lenders shall not become effective unless and until
(i) the conditions precedent set forth in Section 3.01 of the 364-day
$272,500,000 Credit Agreement, dated as of the date hereof, among the Company,
the lenders named therein and Citibank, as administrative agent, shall have been
satisfied, (ii) the Existing Facilities shall have been terminated and all
amounts outstanding thereunder shall have been paid in full and (iii) the
Administrative Agent shall have received the following:
(a) Promissory notes, if requested by any Lender pursuant to Section 2.06.
(b) Certified copies of the resolutions of the Board of Directors of the
Company approving this Agreement, and of all documents evidencing other
necessary corporate action and governmental approvals, including the NCUC Order
and the SCPSC Order, with respect to this Agreement.
(c) A certificate of the Secretary or an Assistant Secretary of the
Company, dated as of the date hereof, certifying the names and true signatures
of the officers of the Company authorized to sign this Agreement and the other
documents to be delivered hereunder.
(d) A certificate of a Responsible Officer of the Company, dated as of the
date hereof, certifying (i) the accuracy of the representations and warranties
contained herein and (ii) that no event has occurred and is continuing which
constitutes an Event of Default or which would constitute an Event of Default
but for the requirement that notice be given or time elapse, or both.
(e) Certified copies of all required governmental approvals and
authorizations.
(f) Certified copy of the restated charter and bylaws of the Company.
(g) Favorable opinions of counsel for the Company, substantially in the
forms of Exhibit C-1 and Exhibit C-2 hereto and as to such other matters as any
Lender through the Administrative Agent may reasonably request.
(h) A favorable opinion of King & Spalding, counsel for the Administrative
Agent, substantially in the form of Exhibit D hereto.
20
Section 3.02. Conditions Precedent to Each Borrowing.
The obligation of each Lender to make an Advance on the occasion of each
Borrowing (including the initial Borrowing) shall be subject to the further
conditions precedent that (i) in the case of the making of an Advance, the
Administrative Agent shall have received the written confirmatory Notice of
Borrowing with respect thereto, and (ii) on the date of such Borrowing, the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing and the acceptance by the Company of the proceeds of such
Borrowing shall constitute a representation and warranty by the Company that, on
the date of such Borrowing, such statements are true):
(a) The representations and warranties contained in Section 4.01
(excluding, in the case of any Borrowing that will not result in an increase in
the aggregate principal amount of Advances outstanding, the representation and
warranty contained in the last sentence of Section 4.01(e)) are correct on and
as of the date of such Borrowing before and after giving effect to such
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date; and
(b) No event has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom, that constitutes an
Event of Default or that would constitute an Event of Default but for the
requirement that notice be given or time elapse, or both.
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Company.
The Company represents and warrants as follows:
(a) The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of North Carolina and is duly
qualified to do business and in good standing under the laws of the State of
South Carolina.
(b) The execution, delivery and performance by the Company of this
Agreement are within the Company's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) the Company's
charter or bylaws or (ii) any law or contractual restriction binding on or
affecting the Company.
(c) No authorization or approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Company of this Agreement, other
than the NCUC Order and the SCPSC Order, each of which has been duly issued, is
final and in full force and effect.
(d) This Agreement is the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
21
(e) The Consolidated balance sheet of the Company and the Subsidiaries as
at December 31, 2001, and the related Consolidated statements of income and
retained earnings of the Company and the Subsidiaries for the fiscal year then
ended, and the Consolidated balance sheet of the Company and the Subsidiaries as
at March 31, 2002, and the related Consolidated statements of income and
retained earnings of the Company and the Subsidiaries for the three-month period
then ended, copies of which have been furnished to each Lender, fairly present
(subject, in the case of such financial statements dated March 31, 2002, to
year-end adjustments) the financial condition of the Company and the
Subsidiaries as at such dates and the results of the operations of the Company
and the Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles consistently applied. Since December
31, 2001, there has been no material adverse change in the financial condition,
operations or properties of the Company.
(f) Except as described in the reports and registration statements which
the Company has filed with the Securities and Exchange Commission prior to the
date of this Agreement, there is no pending or threatened action or proceeding
affecting the Company or any Subsidiary before any court, governmental agency or
arbitrator, which may materially adversely affect the financial condition,
operations or properties of the Company.
(g) No proceeds of any Advance will be used to acquire any security in any
transaction which is subject to Sections 12, 13 and 14 of the Securities
Exchange Act of 1934.
(h) The Company is not engaged in the business of extending credit for the
purpose of buying 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 Advance will be used to buy or carry any margin stock or to extend credit
to others for the purpose of buying or carrying any margin stock.
(i) Following application of the proceeds of each Advance, not more than 5
percent of the value of the assets (either of the Company only or of the Company
and the Subsidiaries on a Consolidated basis) subject to the provisions of
Section 5.02(a) or 5.02(e) will be margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System).
(j) No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan.
(k) The Company is not an "investment company" or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
(l) The Company is in substantial compliance with all applicable laws,
rules, regulations and orders of any governmental authority, the noncompliance
with which would materially and adversely affect the business or condition of
the Company, such compliance to include, without limitation, substantial
compliance with ERISA and Environmental Laws and paying before the same become
delinquent all material taxes, assessments and governmental charges imposed upon
22
it or upon its property, except to the extent compliance with any of the
foregoing is then being contested in good faith by appropriate legal
proceedings.
(m) All written information furnished by the Company to the Administrative
Agent and the Lenders in connection with this Agreement (the "Disclosed
Information") was (and all information furnished in the future by the Company to
the Administrative Agent and the Lenders will be) complete and correct in all
respects material to the creditworthiness of the Company when delivered. As of
the date hereof, the Disclosed Information does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained therein not misleading in light of the circumstances under
which made.
Article V
COVENANTS OF THE COMPANY
Section 5.01. Affirmative Covenants.
So long as any Advances shall remain unpaid or any Lender shall have any
Commitment hereunder, the Company shall, unless the Majority Lenders shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Except to the extent contested in good
faith, comply, and cause each Subsidiary to comply, with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property), the non-compliance with which
would materially adversely affect the Company's business or credit.
(b) Preservation of Corporate Existence, Etc. Preserve and maintain its
corporate existence, rights (charter and statutory) and franchises.
(c) Visitation Rights. At any reasonable time and from time to time, permit
the Administrative Agent or any of the Lenders or any agents or representatives
thereof to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Company and any of the
Subsidiaries, and to discuss the affairs, finances and accounts of the Company
and any of the Subsidiaries with any of their respective officers or directors.
(d) Keeping of Books. Keep, and cause each Subsidiary to keep, proper books
of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company and such
Subsidiary in accordance with generally accepted accounting principles
consistently applied.
(e) Maintenance of Properties, Etc. Maintain and preserve, and cause each
Subsidiary to maintain and preserve, all of its properties which are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
(f) Maintenance of Insurance. Maintain, and cause each Subsidiary to
maintain, insurance with responsible and reputable insurance companies or
23
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Company or such Subsidiary operates.
(g) Taxes. File, and cause each Subsidiary to file, all tax returns
(federal, state and local) required to be filed and paid and pay all taxes shown
thereon to be due, including interest and penalties, or provide adequate
reserves for payment thereof other than such taxes that the Company or such
Subsidiary is contesting in good faith by appropriate legal proceedings.
(h) Material Obligations. Pay, and cause each Subsidiary to pay, promptly
as the same shall become due each material obligation of the Company or such
Subsidiary.
(i) Reporting Requirements. Furnish to the Lenders:
(i) 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 Company, a
Consolidated balance sheet of the Company and the Subsidiaries as at the
end of such quarter and Consolidated statements of income and retained
earnings of the Company and the Subsidiaries for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, certified by the treasurer or the chief financial officer of the
Company, together with a certificate of the treasurer or chief financial
officer of the Company, setting forth in reasonable detail the calculation
of the Company's compliance with Section 5.01(j) and stating that no Event
of Default and no event that, with the giving of notice or lapse of time or
both, would constitute an Event of Default has occurred and is continuing,
or if an Event of Default or such event has occurred and is continuing, a
statement setting forth details of such Event of Default or event and the
action that the Company has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event within 100 days after the
end of each fiscal year of the Company, a copy of the annual report for
such year for the Company and the Subsidiaries, containing Consolidated
financial statements for such year certified by Deloitte & Touche or other
independent public accountants acceptable to the Majority Lenders, together
with a certificate of the treasurer or chief financial officer of the
Company, setting forth in reasonable detail the calculation of the
Company's compliance with Section 5.01(j) and stating that no Event of
Default and no event that, with the giving of notice or lapse of time or
both, would constitute an Event of Default has occurred and is continuing,
or if an Event of Default or such event has occurred and is continuing, a
statement setting forth details of such Event of Default or event and the
action that the Company has taken and proposes to take with respect
thereto;
(iii) promptly after the sending or filing thereof, copies of all
reports which the Company sends to any of its security holders, and copies
of all reports and registration statements which the Company or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange to the extent not delivered by the Company
pursuant to clause (i) or (ii) of this Section 5.01(i);
24
(iv) immediately upon any Responsible Officer's obtaining knowledge of
the occurrence of any Event of Default or any event which, with the giving
of notice or lapse of time, or both, would constitute an Event of Default,
a statement of the chief financial officer or treasurer of the Company
setting forth details of such Event of Default or event and the action
which the Company proposes to take with respect thereto;
(v) immediately upon any Responsible Officer's obtaining knowledge
thereof, notice of any change in any rating assigned by Standard & Poor's
or Moody's to the Reference Securities;
(vi) as soon as possible and in any event within five days after the
commencement thereof or any adverse determination or development therein,
notice of all actions, suits and proceedings that may adversely affect the
Company's ability to perform its obligations under this Agreement;
(vii) as soon as possible and in any event within five days after the
occurrence of a Termination Event, notice of such Termination Event; and
(viii) such other information respecting the condition or operations,
financial or otherwise, of the Company or any Subsidiary as any Lender
through the Administrative Agent may from time to time reasonably request.
(j) Indebtedness to Total Capitalization. Maintain at all times a
ratio of Consolidated Indebtedness of the Company and its Subsidiaries to
Total Capitalization of not more than .65:1.0.
(k) Use of Proceeds. Use the proceeds of each Advance solely for
general corporate purposes (including, without limitation, as a commercial
paper back-up). No proceeds of any Advance will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Exchange Act or any security in any transaction that is subject to Sections
13 or 14 of the Exchange Act.
Section 5.02. Negative Covenants.
So long as any Advances shall remain unpaid or any Lender shall have any
Commitment hereunder, the Company will not, without the written consent of the
Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any Subsidiary to assign, any right to
receive income, in each case to secure any Indebtedness of any Person, other
than (i) liens, mortgages and security interests created by the Mortgage, (ii)
liens and security interests affecting the fuel used by the Company in its power
generating operations, and (iii) liens, mortgages and security interests
securing other Indebtedness not exceeding $100,000,000; provided, however, that,
in the event that and for so long as the First Mortgage Bonds are rated lower
than BBB- or Baa3 by S&P or Moody's, respectively, or, in the event that neither
of such credit rating agencies is in the business of rating the First Mortgage
25
Bonds, lower than an equivalent rating of the First Mortgage Bonds by another
nationally-recognized credit rating agency of similar standing, the Company's
right to continue to create, incur and suffer to exist liens, mortgages and
security interests securing other Indebtedness pursuant to the foregoing clause
(iii) shall be suspended.
(b) Indebtedness. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any Indebtedness other
than (i) Indebtedness hereunder, (ii) Indebtedness secured by liens and security
interests permitted pursuant to clauses (ii) and (iii) of subsection 5.02(a),
(iii) Indebtedness evidenced by the First Mortgage Bonds and (iv) unsecured
Indebtedness, including guarantees issued in connection with the financing of
pollution control facilities operated by the Company, guarantees of Indebtedness
incurred by any wholly-owned Subsidiary and guarantees of debt securities issued
by any financing Subsidiary established to secure debt financing in the offshore
markets.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or permit
any Subsidiary to create, incur, assume or suffer to exist, any obligations for
the payment of rental for any property under leases or agreements to lease
having a term of one year or more which would cause the direct or contingent
Consolidated liabilities of the Company and the Subsidiaries in respect of all
such obligations payable in any calendar year to exceed 10% of the Consolidated
operating revenues of the Company and the Subsidiaries for the immediately
preceding calendar year.
(d) Mergers, Etc. Merge with or into or consolidate with or into, or
acquire all or substantially all of the assets or securities of, any Person,
unless, in each case, (i) immediately after giving effect thereto, no event
shall occur and be continuing which constitutes an Event of Default or an event
which with the giving of notice or lapse of time, or both, would constitute an
Event of Default, and (ii) in the case of any such merger to which the Company
is a party, such other Person is a utility company and the resulting or
surviving corporation, if not the Company, (x) is organized and existing under
the laws of the United States of America or any State thereof, (y) is a
corporation satisfactory to the Majority Lenders, and (z) shall have expressly
assumed, by an instrument satisfactory in form and substance to the Majority
Lenders, the due and punctual payment of all amounts due under this Agreement
and the performance of every covenant and undertaking of the Company contained
in this Agreement.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of,
or permit any Subsidiary to sell, lease, transfer or otherwise dispose of, any
of its assets, other than the following sales: (i) sales of generating capacity
to the Company's wholesale customers, (ii) sales of nuclear fuel, (iii) sales of
accounts receivable, (iv) sales in connection with a transaction authorized by
subsection (d) of this Section, (v) sales of investments in securities with a
maturity of less than one year, or (vi) other sales not exceeding $150,000,000
in the aggregate in any fiscal year of the Company.
(f) Margin Stock. Use any proceeds of any Advance to buy or carry margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
26
Article VI
EVENTS OF DEFAULT
Section 6.01. Events of Default.
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) The Company shall fail to pay any principal of any Advance when due, or
shall fail to pay any interest on any Advance or any fees or other amounts
payable hereunder within five Business Days after such interest or fees shall
become due; or
(b) Any representation or warranty made by the Company herein or by the
Company (or any of its officers) in connection with this Agreement shall prove
to have been incorrect in any material respect when made; or
(c) The Company shall fail to perform or observe any other term, covenant
or agreement contained in Sections 5.01(b), 5.01(i)(iv), 5.01(j) or 5.02 on its
part to be performed or observed; or the Company shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement on its
part to be performed or observed and any such failure shall remain unremedied
for 30 days after written notice thereof shall have been given to the Company by
the Administrative Agent or any Lender; or
(d) The Company or any of the Subsidiaries shall fail to pay any amount in
respect of any Indebtedness in excess of $10,000,000 (but excluding Indebtedness
hereunder) of the Company or such Subsidiary (as the case may be), or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness; or any other default under any
agreement or instrument relating to any such Indebtedness, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(e) The Company or any of the Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Company or
any of the Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or the
Company or any of the Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of $10,000,000
shall be rendered against the Company or any of the Subsidiaries and either (i)
27
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) Any Termination Event with respect to a Plan shall have occurred, and,
30 days after notice thereof shall have been given to the Company by the
Administrative Agent, (i) such Termination Event (if correctable) shall not have
been corrected and (ii) the then present value of such Plan's vested benefits
exceeds the then current value of assets accumulated in such Plan by more than
the amount of $20,000,000 (or in the case of a Termination Event involving the
withdrawal of a "substantial employer" (as defined in Section 4001(a)(2) of
ERISA), the withdrawing employer's proportionate share of such excess shall
exceed such amount); or
(h) The Company or any of its Affiliates as employer under a Multiemployer
Plan shall have made a complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a withdrawal liability in
an annual amount exceeding $20,000,000; or
(i) A Change of Control shall occur;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Company, (i)
declare the Commitments and the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Company; provided, however, that in the event
of an actual or deemed entry of an order for relief with respect to the Company
or any of the Subsidiaries under the Federal Bankruptcy Code, (A) the obligation
of each Lender to make Advances shall automatically be terminated and (B) the
Advances, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Company.
Article VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action.
Each Lender hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably provided for by this Agreement
(including, without limitation, enforcement or collection of the Advances), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders;
provided, however, that the Administrative Agent shall not be required to take
28
any action which exposes the Administrative Agent to personal liability or which
is contrary to this Agreement or applicable law.
Section 7.02. Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may consult with legal counsel
(including counsel for the Company), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement; (iii) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on the part of the
Company or to inspect the property (including the books and records) of the
Company; (iv) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; and (v)
shall incur no liability under or in respect of this Agreement by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
Section 7.03. The Administrative Agent and its Affiliates.
With respect to its Commitment and the Advances made by it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not the
Administrative Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Citibank in its individual capacity. Citibank, and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Company,
any of the Subsidiaries and any Person who may do business with or own
securities of the Company or any Subsidiary, all as if Citibank were not the
Administrative Agent and without any duty to account therefor to the Lenders.
Section 7.04. Lender Credit Decision.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on the financial
statements referred to in Section 4.01(e) and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender 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 action under this Agreement.
29
Section 7.05. Indemnification.
The Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed by the Company), ratably according to the respective amounts of the
Commitments then held by each of them, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative Agent under this Agreement; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent in
connection with the preparation, execution, administration, or enforcement of,
or legal advice in respect of rights or responsibility under, this Agreement, to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Company.
Section 7.06. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Company and may be removed at any time with or
without cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Administrative Agent, appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of any
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, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
Article VIII
MISCELLANEOUS
Section 8.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement, nor consent to
any departure by the Company therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
30
or consent shall, unless in writing and signed by all of the Lenders, do any of
the following: (a) waive any of the conditions specified in Section 3.01 or 3.02
(b) change the Commitment of any Lender or subject any Lender to any additional
obligations (other than pursuant to Section 2.04), (c) reduce the principal of,
or interest on, the Advances or any fees hereunder, (d) postpone any date fixed
for any payment of principal of, or interest on, the Advances or any fees
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Lenders, which shall
be required for the Lenders or any of them to take any action under this
Agreement, and (f) amend, waive, or in any way modify or suspend any provision
of this Section 8.01; and provided, further, that no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required hereinabove to take such action, affect the
rights or duties of the Administrative Agent under this Agreement.
Section 8.02. Notices, Etc.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telegraphic communication) and
mailed, telecopied, telegraphed or delivered, if to the Company, at its address
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Manager of
Financial Operations; if to any Lender, at its Domestic Lending Office set forth
under its name on the signature pages hereof; and if to the Administrative
Agent, at its address at ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Bank Loan Syndications; or, as to each party, at such other address
as shall be designated by such party in a written notice to the other parties.
All such notices and communications shall be effective when received by the
addressee thereof.
Section 8.03. No Waiver; Remedies.
No failure on the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof of the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 8.04. Costs, Expenses and Taxes.
(a) The Company agrees to pay on demand all costs and expenses of the
Administrative Agent in connection with (i) the preparation, execution and
delivery of this Agreement and the other documents to be delivered hereunder,
(ii) the first Borrowing under this Agreement, (iii) any modification, amendment
or supplement to this Agreement and the other documents to be delivered
hereunder and (iv) the enforcement of the rights and remedies of the Lenders and
the Administrative Agent under this Agreement and the other documents to be
delivered hereunder (whether through negotiations or legal proceedings), all the
above costs and expenses to include, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent and each of the
Lenders with respect thereto. In addition, the Company shall pay any and all
stamp and other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement and the other documents to be delivered
hereunder, and agrees to save the Administrative Agent and each Lender harmless
31
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.
(b) If, due to payments made by the Company due to acceleration of the
maturity of the Advances pursuant to Section 6.01, or adjustments of the
Borrowings pursuant to Section 2.04(b)(iv), or due to any other reason, any
Lender receives payments of principal of any Eurodollar Rate Advance based upon
the Eurodollar Rate other than on the last day of the Interest Period for such
Advance, the Company shall, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(c) Any and all payments by the Company hereunder shall be made, in
accordance with Section 2.14, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8.04) such Lender 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 Company shall make such deductions and (iii) the Company shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(d) The Company will indemnify each Lender and the Administrative Agent for
the full amount of Taxes (including, without limitation, any Taxes imposed by
any jurisdiction on amounts payable under this Section 8.04) paid by such Lender
or the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.
(e) Prior to the date of the initial Borrowing or on the date of the
Assignment and Acceptance pursuant to which it became a Lender, in the case of
each Lender that becomes a Lender by virtue of entering into an Assignment and
Acceptance, and from time to time thereafter if requested by the Company or the
Administrative Agent, each Lender organized under the laws of a jurisdiction
outside the United States shall provide the Administrative Agent and the Company
32
with the forms prescribed by the Internal Revenue Service of the United States
certifying that such Lender is exempt from United States withholding taxes with
respect to all payments to be made to such Lender hereunder. If for any reason
during the term of this Agreement, any Lender becomes unable to submit the forms
referred to above or the information or representations contained therein are no
longer accurate in any material respect, such Lender shall notify the
Administrative Agent and the Company in writing to that effect. Unless the
Company and the Administrative Agent have received forms or other documents
satisfactory to them indicating that payment hereunder are not subject to United
States withholding tax, the Company or the Administrative Agent shall withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Lender organized under the laws of a jurisdiction outside
the United States.
(f) Any Lender claiming any additional amounts payable pursuant to Section
8.04(c) or (d) shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) (i) to change the jurisdiction of
its Applicable Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender and (ii) to otherwise minimize the
amounts due, or to become due, under Sections 8.04(c) and (d).
(g) If the Company makes any additional payment to any Lender pursuant to
Section 8.04(c) or (d) in respect of any Taxes, and such Lender determines that
it has received (i) a refund of such Taxes or (ii) a credit against or relief or
remission for, or a reduction in the amount of, any tax or other governmental
charge solely as a result of any deduction or credit for any Taxes with respect
to which it has received payments under Sections 8.04(c) and (d), such Lender
shall, to the extent that it can do so without prejudice to the retention of
such refund, credit, relief, remission or reduction, pay to the Company such
amount as such Lender shall have determined to be attributable to the deduction
or withholding of such Taxes. If such Lender later determines that it was not
entitled to such refund, credit, relief, remission or reduction to the full
extent of any payment made pursuant to the first sentence of this Section
8.04(g), the Company shall upon demand of such Lender promptly repay the amount
of such overpayment. Any determination made by such Lender pursuant to this
Section 8.04(g) shall in the absence of bad faith or manifest error be
conclusive, and nothing in this Section 8.04(g) shall be construed as requiring
any Lender to conduct its business or to arrange or alter in any respect its tax
or financial affairs so that it is entitled to receive such a refund, credit or
reduction or as allowing any Person to inspect any records, including tax
returns, of any Lender.
(h) The Company hereby agrees to indemnify and hold harmless each Lender,
the Administrative Agent, counsel to the Administrative Agent and their
respective officers, directors, partners, employees, Affiliates and advisors
(each, an "Indemnified Person") from and against any and all claims, damages,
losses, liabilities, costs or expenses (including reasonable attorney's fees and
expenses, whether or not such Indemnified Person is named as a party to any
proceeding or is otherwise subjected to judicial or legal process arising from
any such proceeding), joint and several, that may actually be incurred by or
asserted or awarded against any Indemnified Person (including, without
limitation, in connection with any investigation, litigation or proceeding or
the preparation of a defense in connection therewith) in each case by reason of
or in connection with the execution, delivery, or performance of this Agreement,
except to the extent that such claims, damages, losses, liabilities, costs, or
expenses are determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of the party seeking indemnification. (i) Without prejudice
33
to the survival of any other agreement of the Company hereunder, the agreements
and obligations of the Company contained in this Section 8.04 shall survive the
payment in full of principal and interest hereunder and the termination of
Commitments.
Section 8.05. Right of Set-off.
Upon (i) the occurrence and during the continuance of any Event of Default
and (ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Advances due
and payable pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Company now
or hereafter existing under this Agreement, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Company
after any such set-off and application made by such Lender; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
Section 8.06. Binding Effect.
This Agreement shall become effective when it shall have been executed by
the Company and the Administrative Agent and when the Administrative Agent shall
have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Company, the
Administrative Agent and each Lender and their respective successors and
assigns, except that the Company shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of each
Lender.
Section 8.07. Assignments and Participations.
(a) Each Lender may (i) with notice to the Company and to the
Administrative Agent, assign to any of its Affiliates all or a portion of its
rights and obligations under this Agreement, and (ii) with the consent of the
Agent and the Company (such consent not to be unreasonably withheld and, in the
case of the Company, such consent shall not be required if an Event of Default
has occurred and is continuing), assign to one or more banks or other entities
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the Advances owing to
it; provided, however, that (A) each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations under this Agreement,
(B) each such assignment shall be to an Eligible Assignee, (C) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, an Assignment and Acceptance and
34
(D) such parties shall also deliver to the Administrative Agent a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or the performance or observance by the Company of any of its obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.01(e)
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender 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 action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance (and copies of the related
consents of the Company and the Administrative Agent to such assignment)
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders (including, without limitation, the Assuming
Lenders) and the Commitment of, and principal amount of the Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
35
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Company.
(e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment to the
Company hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Advances for all purposes
of this Agreement, (iv) the Company, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(v) the holder of any such participation, other than an Affiliate of such
Lender, shall not be entitled to require such Lender to take or omit to take any
action hereunder, except action (A) extending the time for payment of interest
on, or the final maturity of any portion of the principal amount of, the
Advances or (B) reducing the principal amount of or the rate of interest payable
on the Advances. Without limiting the generality of the foregoing: (i) such
participating banks or other entities shall be entitled to the cost protection
provisions contained in Sections 2.08, 2.12 and 8.04(b) only if, and to the same
extent, the Lender from which such participating banks or other entities
acquired its participation would, at the time, be entitled to claim thereunder;
and (ii) such participating banks or other entities shall also, to the fullest
extent permitted by law, be entitled to exercise the rights of set-off contained
in Section 8.05 as if such participating banks or other entities were Lenders
hereunder.
(f) If any Lender (or any bank, financial institution, or other entity to
which such Lender has sold a participation) shall make any demand for payment
under Section 2.12(b), then within 30 days after any such demand (if, but only
if, such demanded payment has been made by the Company), the Company may, with
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) and provided that no Event of Default or event which,
with the passage of time or the giving of notice, or both, would constitute an
Event of Default shall then have occurred and be continuing, demand that such
Lender assign in accordance with this Section 8.07 to one or more Eligible
Assignees designated by the Company all (but not less than all) of such Lender's
Commitment (if any) and the Advances owing to it within the period ending on the
later to occur of such 30th day and the last day of the longest of the then
current Interest Periods for such Advances. If such Eligible Assignee designated
by the Company is not a Lender on the date of such demand by the Company, the
Company shall pay the $3,500 processing and recordation fee described in Section
8.07(a). If any such Eligible Assignee designated by the Company shall fail to
consummate such assignment on terms acceptable to such Lender, or if the Company
shall fail to designate any such Eligible Assignees for all or part of such
Lender's Commitment or Advances, then such demand by the Company shall become
ineffective; it being understood for purposes of this subsection (g) that such
assignment shall be conclusively deemed to be on terms acceptable to such
Lender, and such Lender shall be compelled to consummate such assignment to an
Eligible Assignee designated by the Company, if such Eligible Assignee (i) shall
36
agree to such assignment by entering into an Assignment and Acceptance in
substantially the form of Exhibit B hereto with such Lender and (ii) shall offer
compensation to such Lender in an amount equal to all amounts then owing by the
Company to such Lender hereunder, whether for principal, interest, fees, costs
or expenses (other than the demanded payment referred to above and payable by
the Company as a condition to the Company's right to demand such assignment), or
otherwise.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Company furnished to such Lender by or on behalf of the Company;
provided that, prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the confidentiality of
any confidential information relating to the Company received by it from such
Lender.
(h) Anything in this Section 8.07 to the contrary notwithstanding, any
Lender may assign and pledge all or any portion of its Commitment and the
Advances owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Lender from its obligations
hereunder.
(i) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Company, the option to
provide to the Company all or any part of any Advance that such Granting Lender
would otherwise be obligated to make to the Company pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any such SPC
to make any Advance, (ii) if such SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting Lender
shall be obligated to make such Advance pursuant to the terms hereof and (iii)
no SPC or Granting Lender shall be entitled to receive any greater amount
pursuant to Section 2.08 or 2.12 than the Granting Lender would have been
entitled to receive had the Granting Lender not otherwise granted such SPC the
option to provide any Advance to the Company. The making of an Advance by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Advance were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would otherwise be
liable so long as, and to the extent that, the related Granting Lender provides
such indemnity or makes such payment. In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against or join any other person in
instituting against such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the Company, the Administrative Agent and
each Lender against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be incurred by or asserted against the Company, the
Administrative Agent or such Lender, as the case may be, in any way relating to
37
or arising as a consequence of any such forbearance or delay in the initiation
of any such proceeding against its SPC. Each party hereto hereby acknowledges
and agrees that no SPC shall have the rights of a Lender hereunder, such rights
being retained by the applicable Granting Lender. Accordingly, and without
limiting the foregoing, each party hereby further acknowledges and agrees that
no SPC shall have any voting rights hereunder and that the voting rights
attributable to any Advance made by an SPC shall be exercised only by the
relevant Granting Lender and that each Granting Lender shall serve as the
administrative agent and attorney-in-fact for its SPC and shall on behalf of its
SPC receive any and all payments made for the benefit of such SPC and take all
actions hereunder to the extent, if any, such SPC shall have any rights
hereunder. In addition, notwithstanding anything to the contrary contained in
this Agreement any SPC may with notice to, but without the prior written consent
of any other party hereto, assign all or a portion of its interest in any
Advances to the Granting Lender. This Section may not be amended without the
prior written consent of each Granting Lender, all or any part of whose Advance
is being funded by an SPC at the time of such amendment.
Section 8.08. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York. The Company (i) irrevocably submits to the
non-exclusive jurisdiction of any New York State court or Federal court sitting
in New York City in any action arising out of this Agreement, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum
and (iv) consents to the service of process by mail. A final judgment in any
such action shall be conclusive and may be enforced in other jurisdictions.
Nothing herein shall affect the right of any party to serve legal process in any
manner permitted by law or affect its right to bring any action in any other
court.
Section 8.09. WAIVER OF JURY TRIAL.
THE COMPANY, THE ADMINISTRATIVE AGENT AND EACH LENDER EACH HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY AND LAWFULLY DO SO,
ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THIS AGREEMENT IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
Section 8.10. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 8.11. Severability.
Any provision of this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
38
Section 8.12. Headings.
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
Section 8.13. Entire Agreement.
This Agreement constitutes the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement. Except as
is expressly provided for herein, nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
39
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CAROLINA POWER & LIGHT
COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Treasurer
CITIBANK, N.A., as Administrative Agent
and as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
S-2
WACHOVIA BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
S-3
CITIBANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
S-4
JPMORGAN CHASE BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
Managing Director
S-5
BANK ONE, NA
By /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇
Director
S-6
MELLON BANK, N.A.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
S-7
NORDDEUTSCHE LANDESBANK
GIROZENTRALE, New York/Cayman Islands
Branch
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
EVP
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
VP
S-8
SUNTRUST BANK, ATLANTA
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
S-9
BARCLAYS BANK PLC
By /s/ Sydney ▇. ▇▇▇▇▇▇
-------------------------------------
Sydney ▇. ▇▇▇▇▇▇
Director
S-10
BANK OF AMERICA, N.A.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Managing Director
SCHEDULE I
Existing Facilities
$200,000,000 364-Day Revolving Credit Agreement, dated as of June 30, 1998, as
amended and restated as of June 29, 1999, and as amended June 7, 2002,
among the Company, certain lenders and Citibank, as agent.
Five Year Revolving Credit Agreement, dated as of June 30, 1998, among the
Company, certain lenders and Citibank, as agent.
EXHIBIT A-1
NOTICE OF BORROWING
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, CAROLINA POWER & LIGHT COMPANY, refers to the three-year
Credit Agreement, dated as of July 31, 2002 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
certain Lenders from time to time parties thereto and CITIBANK, N.A., as
Administrative Agent for said Lenders, and hereby gives you notice pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ____________, 20__.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances][Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$______________.
(iv) The Interest Period for each Eurodollar Rate Advance that is an
Advance made as part of the Proposed Borrowing is _____ months.
Very truly yours,
CAROLINA POWER & LIGHT COMPANY
By
--------------------------------------
Name:
Title:
EXHIBIT A-2
NOTICE OF CONVERSION
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referred to below
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▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, CAROLINA POWER & LIGHT COMPANY, refers to the three-year
Credit Agreement, dated as of July 31, 2002 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
certain Lenders from time to time parties thereto and CITIBANK, N.A., as
Administrative Agent for said Lenders, and hereby gives you notice pursuant to
Section 2.10 of the Credit Agreement that the undersigned hereby requests a
Conversion under the Credit Agreement, and in that connection sets forth the
terms on which such Conversion (the "Proposed Conversion") is requested to be
made:
(i) The Business Day of the Proposed Conversion is ______________,
20__.
(ii) The Type of, and Interest Period (if any) applicable to, the
Advances (or portions thereof) proposed to be Converted: _________________.
(iii) The Type of Advance to which such Advances (or portions thereof)
are proposed to be Converted: ________________________.
(iv) Except in the case of a Conversion to Base Rate Advances, the
initial Interest Period to be applicable to the Advances resulting from
such Conversion: ______________________________.
(v) The aggregate amount of Advances (or portions thereof) proposed to
be Converted is $________.
The undersigned hereby certifies that, on the date hereof, and on the date
of the Proposed Conversion, no event has occurred and is continuing, or would
result from such Proposed Conversion, which constitutes an Event of Default.
Very truly yours,
CAROLINA POWER & LIGHT COMPANY
By
--------------------------------------
Name:
Title:
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Dated ___________, 20__
Reference is made to the three-year Credit Agreement, dated as of July 31,
2002 (the "Credit Agreement"), among CAROLINA POWER & LIGHT COMPANY, a North
Carolina corporation (the "Company"), the Lenders (as defined in the Credit
Agreement) from time to time parties thereto and CITIBANK, N.A., as
Administrative Agent for the Lenders (the "Administrative Agent"). Terms defined
in the Credit Agreement are used herein with the same meaning.
______________ (the "Assignor") and ____________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof which represents the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Credit Agreement, including,
without limitation, such interest in the Assignor's Commitment (to the extent it
has not been terminated) and the Advances owing to the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment (if any) and the
amount of the Advances owing to the Assignee will be as set forth in Section 2
of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
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 action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; [and] (vi)
specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof [and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement or
such other documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax treaty].(1)
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto (the
"Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
---------------------------
(1) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
Schedule 1
to
Assignment and Acceptance
Dated __________, 20
Section 1
Percentage Interest Assigned: %
------
Section 2
Assignee's Commitment: $
Aggregate Outstanding Principal
Amount of Advances owing to Assignee: $
Section 3
Effective Date(1)
[NAME OF ASSIGNOR]
By
--------------------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By
--------------------------------------
Name:
Title:
Domestic Lending Office
(and address for notices):
---------------------
(1) This date should be no earlier than the date of acceptance by the
Administrative Agent.
[Address]
Eurodollar Lending Office:
[Address]
Accepted this _____ day of
______________, 20__
CITIBANK, N.A.,
as Administrative Agent
By_______________________
Name:
Title:
CAROLINA POWER & LIGHT
COMPANY
By_______________________
Name:
Title:
EXHIBIT C-1
FORM OF OPINION OF COUNSEL FOR THE COMPANY
[Date]
To each of the Lenders parties to the Agreement
referred to below and Citibank, N.A., as
Administrative Agent
Re: Carolina Power & Light Company
Ladies and Gentlemen:
This opinion is furnished to you by us as counsel for Carolina Power &
Light Company (the "Borrower") pursuant to Section 3.01(g) of the three-year
Credit Agreement, dated as of July 31, 2002 (the "Agreement", the terms defined
therein being used herein as therein defined), among the Borrower, certain
lenders thereunder (the "Lenders") and Citibank, N.A., as administrative agent
for the Lenders.
In connection with the preparation, execution and delivery of the
Agreement, we have examined:
(1) The Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Agreement.
(3) The opinion letter of even date herewith, addressed to you by
____________, General Counsel to the Company and delivered in connection with
the transactions contemplated by the Agreement (the "Company Opinion Letter").
We have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Borrower or its officers or
of public officials. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals (other
than those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Agreement by the Lenders and the Administrative Agent and
the validity and binding effect thereof on such parties. Whenever the phrase "to
our knowledge" is used in this opinion it refers to the actual knowledge of the
attorneys of this firm involved in the representation of the Borrower without
independent investigation.
We are qualified to practice law in the States of North Carolina and New
York, and the opinions expressed herein are limited to the law of the States of
North Carolina and New York and the federal law of the United States. To the
extent that our opinions expressed herein depend upon opinions expressed in
paragraphs 1 through 4 of the Company Opinion Letter, we have relied without
independent investigation on the accuracy of the opinions expressed in the
Company Opinion Letter, subject to the assumptions, qualifications and
limitations set forth in the Company Opinion Letter.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the opinion that the Agreement constitutes the legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms except as enforcement may be limited or otherwise
affected by (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws affecting the rights of creditors generally and
(b) principles of equity, whether considered at law or in equity.
The opinion set forth above is subject to the following qualifications:
(a) In addition to the application of equitable principles described above,
courts have imposed an obligation on contracting parties to act reasonably and
in good faith in the exercise of their contractual rights and remedies, and may
also apply public policy considerations in limiting the right of parties seeking
to obtain indemnification under circumstances where the conduct of such parties
is determined to have constituted negligence.
(b) No opinion is expressed herein as to (i) Section 8.05 of the Agreement,
(ii) the enforceability of provisions purporting to grant to a party conclusive
rights of determination, (iii) the availability of specific performance or other
equitable remedies, (iv) the enforceability of rights to indemnity under federal
or state securities laws or (v) the enforceability of waivers by parties of
their respective rights and remedies under law.
(c) No opinion is expressed herein as to provisions, if any, in the
Agreement, which (A) purport to excuse, release or exculpate a party for
liability for or indemnify a party against the consequences of its own acts, (B)
purport to make void any act done in contravention thereof, (C) purport to
authorize a party to make binding determinations in its sole discretion, (D)
relate to the effects of laws which may be enacted in the future, (E) require
waivers, consents or amendments to be made only in writing, (F) purport to waive
rights of offset or to create rights of set off other than as provided by
statute, or (G) purport to permit acceleration of indebtedness and the exercise
of remedies by reason of the occurrence of an immaterial breach of the Agreement
or any related document. Further, we express no opinion as to the necessity for
any Lender, by reason of such Lender's particular circumstances, to qualify to
transact business in the State of New York or as to any Lender's liability for
taxes in any jurisdiction.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than (i) any other Person that may become a Lender
under the Agreement after the date hereof in accordance with the provisions
thereof and (ii) King & Spalding, in connection with its opinion delivered on
the date hereof under Section 3.01 of the Agreement.
Very truly yours,
EXHIBIT C-2
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY
[Date]
To each of the Lenders parties to the
Agreement referred to below and Citibank, N.A.,
as Administrative Agent
Re: Carolina Power & Light Company
Ladies and Gentlemen:
This opinion is furnished to you by me as Vice President of Progress Energy
Supply Company, LLC and counsel to Carolina Power & Light Company (the
"Borrower") pursuant to Section 3.01(g) of the three-year Credit Agreement,
dated as of July 31, 2002 (the "Agreement", the terms defined therein being used
herein as therein defined), among the Borrower, certain lenders thereunder (the
"Lenders") and Citibank, N.A., as administrative agent for the Lenders.
In connection with the preparation, execution and delivery of the
Agreement, I have examined:
(1) The Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Agreement.
(3) The Restated Charter of the Borrower (the "Charter").
(4) The Bylaws of the Borrower and all amendments thereto (the "ByLaws").
(5) The NCUC Order and the SCPSC Order.
I have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as I have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, I have, when relevant facts were not independently
established by me, relied upon certificates of the Borrower or its officers or
of public officials. I have assumed the authenticity of all documents submitted
to me as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of signatures (other than
those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Agreement by the Lenders and the Administrative Agent and
the validity and binding effect thereof on such parties. For purposes of my
opinions expressed in paragraph 1 below as to existence and good standing, I
have relied as of their respective dates on certificates of public officials,
copies of which are attached hereto as Exhibit A. Whenever the phrase "to my
knowledge" is used in this opinion it refers to my actual knowledge and the
actual knowledge of the attorneys who work under my supervision and who were
involved in the representation of the Borrower in connection with the
transactions contemplated by the Agreement.
I or attorneys working under my supervision are qualified to practice law
in the State of North Carolina, and the opinions expressed herein are limited to
the law of the State of North Carolina and the federal law of the United States
and, in reliance on a certificate issued by the Secretary of State of South
Carolina and attached hereto as part of Exhibit A, the laws of the State of
South Carolina for purposes of the first sentence of opinion paragraph 1 below,
and for purposes of the opinion expressed in paragraph 4 of this opinion, the
public utility laws of the State of South Carolina.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the following opinion:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of North Carolina, and is duly
qualified to do business and in good standing in the State of South Carolina.
The Borrower has the corporate power and authority to enter into the
transactions contemplated by the Agreement.
2. The execution, delivery and performance of the Agreement by the Borrower
have been duly authorized by all necessary corporate action on the part of the
Borrower and the Agreement has been duly executed and delivered by the Borrower.
3. The execution, delivery and performance of the Agreement by the Borrower
will not (i) violate the Charter or the Bylaws or any law, rule or regulation
applicable to the Borrower (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System) or (ii) result in a breach of,
or constitute a default under, any judgment, decree or order binding on the
Borrower, or any indenture, mortgage, contract or other instrument to which it
is a party or by which it is bound.
4. No authorization, approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Agreement, other
than the NCUC Order and SCPSC Order, each of which has been duly issued and is
in full force and effect. All periods for review and approval of the SCPSC Order
have expired, and no such request for review or appeal has been filed and is
pending. The period for appeal or review of the NCUC Order has not expired, but
as of the date of this opinion, no such request for review or appeal has been
filed; moreover, the validity of the obligations incurred under the Agreement
would not be affected by any supplemental order modifying the NCUC Order on
appeal or otherwise.
5. To my knowledge, except as described in the reports and registration
statements that the Borrower has filed with the Securities and Exchange
Commission, there are no pending or overtly threatened actions or proceedings
against the Borrower or any of the Subsidiaries before any court, governmental
agency or arbitrator, that purport to affect the legality, validity, binding
effect, or enforceability of the Agreement or that are likely to have a material
adverse effect upon the financial condition or operations of the Borrower or any
of the Subsidiaries.
The opinions set forth above are subject to the qualification that, except
as provided in paragraph 4 above, no opinion is expressed herein as to the
enforceability of the Agreement or any other document.
The foregoing opinions are solely for your benefit and may not be relied
upon by any other Person other than (i) any other Person that may become a
Lender under the Agreement after the date hereof and (ii) Hunton & ▇▇▇▇▇▇▇▇ and
▇▇▇▇ & ▇▇▇▇▇▇▇▇, in connection with their respective opinions delivered on the
date hereof under Section 3.01 of the Agreement.
Very truly yours,
EXHIBIT D
FORM OF OPINION OF COUNSEL
TO THE ADMINISTRATIVE AGENT
[DATE]
To Citibank, N.A. ("Citibank"), as
Administrative Agent for the Lenders
referred to below, and to each of the
Lenders parties to the three-year
Credit Agreement, dated as of July 31,
2002, among Carolina Power & Light
Company, said Lenders and Citibank,
as Administrative Agent
Re: Carolina Power & Light Company
Ladies and Gentlemen:
We have acted as your counsel in connection with the preparation, execution
and delivery of, and the closing on July 31, 2002 under, the three-year Credit
Agreement, dated as of July 31, 2002 (the "Credit Agreement"), among Carolina
Power & Light Company (the "Company"), the Lenders from time to time parties
thereto and Citibank, N.A. ("Citibank"), as Administrative Agent for the
Lenders. Terms defined in the Credit Agreement are used herein as therein
defined.
In this connection, we have examined the following documents:
1. a counterpart of the Credit Agreement, executed by the parties thereto;
2. the documents furnished by or on behalf of the Company pursuant to
subsections (a) through (g) of Section 3.01 of the Credit Agreement, including,
without limitation, the opinion of the General Counsel to the Company (the
"Company Opinion").
In our examination of the documents referred to above, we have assumed the
authenticity of all such documents submitted to us as originals, the genuineness
of all signatures, the due authority of the parties executing such documents and
the conformity to the originals of all such documents submitted to us as copies.
We have also assumed that you have independently evaluated, and are satisfied
with, the creditworthiness of the Company and the business terms reflected in
the Credit Agreement. We have relied, as to factual matters, on the documents we
have examined.
To the extent that our opinions expressed below involve conclusions as to
matters governed by law other than the law of the State of New York, we have
relied upon the Company Opinion and have assumed without independent
investigation the correctness of the matters set forth therein, our opinions
expressed below being subject to the assumptions, qualifications and limitations
set forth in the Company Opinion.
Based upon and subject to the foregoing, and subject to the qualifications
set forth below, we are of the opinion that the Credit Agreement is the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
Our opinion is subject to the following qualifications:
(a) The enforceability of the Company's obligations under the Credit
Agreement is subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar law affecting
creditors' rights generally.
(b) The enforceability of the Company's obligations under the Credit
Agreement is subject to the effect of general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in equity or at
law). Such principles of equity are of general application, and, in applying
such principles, a court, among other things, might not allow a contracting
party to exercise remedies in respect of a default deemed immaterial, or might
decline to order an obligor to perform covenants.
(c) We note further that, in addition to the application of equitable
principles described above, courts have imposed an obligation on contracting
parties to act reasonably and in good faith in the exercise of their contractual
rights and remedies, and may also apply public policy considerations in limiting
the right of parties seeking to obtain indemnification under circumstances where
the conduct of such parties is determined to have constituted negligence.
(d) We express no opinion herein as to (i) the enforceability of Section
8.05 of the Credit Agreement, (ii) the enforceability of provisions purporting
to grant to a party conclusive rights of determination, (iii) the availability
of specific performance or other equitable remedies, (iv) the enforceability of
rights to indemnity under federal or state securities laws or (v) the
enforceability of waivers by parties of their respective rights and remedies
under law.
(e) Our opinions expressed above are limited to the law of the State of New
York, and we do not express any opinion herein concerning any other law.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other person or entity.
Very truly yours,
MEO:PKS:um
EXHIBIT E
FORM OF ASSUMPTION AGREEMENT
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To Citibank, N.A., as Administrative
Agent under the Credit Agreement
referred to below
Ladies and Gentlemen:
We make reference to the three-year Credit Agreement (the "Credit
Agreement"), dated as of July 31, 2002, among Carolina Power & Light Company
(the "Borrower"), the lenders named therein and Citibank, N.A., as
Administrative Agent. Terms defined in the Credit Agreement are used herein as
defined therein.
The Borrower and _______________ (the "Assuming Lender") each hereby agree as
follows:
1. The Assuming Lender proposes to become an Assuming Lender pursuant to
Section 2.04(b) of the Credit Agreement and, in that connection,
hereby agrees with the Administrative Agent and the Borrower that it
shall become a Lender for all purposes of the Credit Agreement on the
applicable Commitment Increase Date.
2. The Assuming Lender (a) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements
referred to in Section 4.01(e) thereof and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assumption Agreement; (b)
agrees that it will, independently and without reliance upon the
Administrative Agent or any other Lender 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 action under the
Credit Agreement; (c) appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers
and discretion under the Credit Agreement as are delegated to the
Administrative Agent by the terms thereof, together with such powers
and discretion as are reasonably incidental thereto; and (d) agrees
that it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are required to
be performed by it as a Lender.
3. Following the execution hereof, this Assumption Agreement will be
delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent. The effective date for this Assumption
Agreement (the "Effective Date") shall be the applicable Commitment
Increase Date.
4. Upon satisfaction of the applicable conditions set forth in Section
2.04(b) of the Credit Agreement and upon such acceptance and recording
by the Administrative Agent, as of the Effective Date, the Assuming
Lender shall be a party to the Credit Agreement and have all of the
rights and obligations of a Lender thereunder.
5. This Assumption Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
6. This Assumption Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Assumption
Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Assumption Agreement.
IN WITNESS WHEREOF, the Borrower and the Assuming Lender have caused this
letter to be duly executed and delivered as of the date first above written.
Very truly yours,
CAROLINA POWER & LIGHT COMPANY
By_____________________
Name:
Title:
[NAME OF ASSUMING LENDER]
By________________________
Name:
Title:
Accepted this __ day of
-------------, ----:
CITIBANK, N.A.,
As Administrative Agent
By___________________________
Name:
Title: