EXECUTION COPY
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$3,000,000,000
COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of October 29, 1999
Among
CITIZENS UTILITIES COMPANY
as Borrower
and
THE LENDERS NAMED HEREIN
as Lenders
and
THE CHASE MANHATTAN BANK
as Administrative Agent
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CHASE SECURITIES INC.
Lead Arranger and Book Manager
CITIBANK, N.A.
and
BANK OF AMERICA, N.A.,
as Co-syndication Agents
FIRST UNION NATIONAL BANK,
as Documentation Agent
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms .................................................1
Section 1.02. Terms Generally ..............................................12
ARTICLE II
THE CREDITS
Section 2.01. Commitments ..................................................12
Section 2.02. Loans ........................................................13
Section 2.03. Competitive Bid Procedure ....................................14
Section 2.04. Standby Borrowing Procedure ..................................17
Section 2.05. Conversions...................................................17
Section 2.06. Fees..........................................................18
Section 2.07. Repayment of Loans............................................18
Section 2.08. Interest on Loans ............................................19
Section 2.09. Default Interest .............................................20
Section 2.10. Alternate Rate of Interest....................................20
Section 2.11. Termination and Reduction of Commitments .....................20
Section 2.12. Prepayment....................................................21
Section 2.13. Reserve Requirements; Change in Circumstances.................22
Section 2.14. Change in Legality............................................24
Section 2.15. Indemnity ....................................................24
Section 2.16. Pro Rata Treatment............................................25
Section 2.17. Sharing of Setoffs............................................25
Section 2.18. Payments .....................................................26
Section 2.19. Taxes ........................................................26
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Organization; Powers; Governmental Approvals .................28
Section 3.02. Financial Statements .........................................29
Section 3.03. No Material Adverse Change ...................................29
Section 3.04. Title to Properties; Possession Under Leases .................29
Section 3.05. Ownership of Subsidiaries ....................................30
Section 3.06. Litigation; Compliance with Laws..............................30
Section 3.07. Agreements....................................................30
Section 3.08. Federal Reserve Regulations...................................31
Section 3.09. Investment Company Act; Public Utility Holding Company Act ...31
Section 3.10. Use of Proceeds ..............................................31
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Section 3.11. Tax Returns...................................................31
Section 3.12. No Material Misstatements.....................................31
Section 3.13. Employee Benefit Plans .......................................31
Section 3.14. Insurance ....................................................32
Section 3.15. Year 2000 Matters.............................................32
ARTICLE IV
CONDITIONS OF LENDING
Section 4.01. Each Borrowing ...............................................32
Section 4.02. Effective Date ...............................................33
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Existence; Businesses and Properties .........................34
Section 5.02. Financial Statements, Reports, etc ...........................35
Section 5.03. Litigation and Other Notices .................................36
Section 5.04. Maintaining Records ..........................................36
Section 5.05. Use of Proceeds ..............................................37
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Liens ........................................................37
Section 6.02. Ownership of the Principal Subsidiaries ......................37
Section 6.03. Asset Sales ..................................................37
Section 6.04. Mergers ......................................................38
Section 6.05. Restrictions on Dividends ....................................38
Section 6.06. Transactions with Affiliates .................................38
Section 6.07. Minimum Consolidated Net Worth ...............................38
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices ......................................................44
Section 9.02. Survival of Agreement ........................................44
Section 9.03. Binding Effect ...............................................44
Section 9.04. Successors and Assigns .......................................44
Section 9.05. Expenses; Indemnity ..........................................47
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Section 9.06. Right of Setoff...............................................48
Section 9.07. Applicable Law ...............................................48
Section 9.08. Waivers; Amendment ...........................................48
Section 9.09. Interest Rate Limitation .....................................49
Section 9.10. Entire Agreement .............................................49
Section 9.11. Waiver of Jury Trial .........................................49
Section 9.12. Severability .................................................49
Section 9.13. Counterparts .................................................49
Section 9.14. Headings .....................................................49
Section 9.15. Jurisdiction; Consent to Service of Process ..................50
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject Letter
Exhibit A-5 Form of Standby Borrowing Request
Exhibit A-6 Form of Conversion Request
Exhibit B Form of Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Opinion of Counsel to Borrower
Exhibit E-1 Form of Standby Note
Exhibit E-2 Form of Competitive Note
Schedule 2.01 Lenders' Commitments and Addresses
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COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT, dated as of
October 29, 1999, among CITIZENS UTILITIES COMPANY, a Delaware corporation
(the "Borrower"), the Lenders listed in Schedule 2.01 (the "Lenders") and
THE CHASE MANHATTAN BANK, a New York banking corporation, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent").
The Borrower has requested the Lenders to extend credit to the Borrower in
order to enable it to borrow on a standby revolving credit basis on and after
the date hereof and at any time and from time to time prior to the Revolving
Period Maturity Date (as hereinafter defined) a principal amount not in excess
of $3,000,000,000 at any time outstanding, all or a portion of which may be
converted to one-year term loans on the Revolving Period Maturity Date. The
Borrower has also requested the Lenders to provide a procedure pursuant to which
the Borrower may invite the Lenders to bid on an uncommitted basis on short-term
borrowings by the Borrower. The proceeds of such borrowings are to be used to
backstop commercial paper issued to finance the Acquisitions (as hereinafter
defined) and for other general corporate purposes, including other acquisitions.
The Lenders are willing to extend such credit to the Borrower on the terms and
subject to the conditions herein set forth.
Accordingly, the Borrower, the Lenders and the Administrative Agent agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Standby Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Acquisitions" shall mean the acquisition by the Borrower of telephone
access lines from GTE Corp. and certain of its affiliates and US West
Communications, Inc. pursuant to (i) nine separate Agreements for Purchase and
Sale of Telephone Exchanges, each dated as of June 16, 1999, between the
Borrower and US West Communications, Inc., (ii) an Asset Purchase Agreement,
dated as of May 27, 1999, between GTE California Incorporated and the Borrower,
(iii) an Asset Purchase Agreement, dated as of May 27, 1999, between GTE West
Coast Incorporated and the Borrower and (iv) an Asset Purchase Agreement, dated
as of May 27, 1999, between Contel of Minnesota, Inc. and the Borrower.
"Administrative Fees" shall have the meaning assigned to such term in
Section 2.06(b).
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"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (i) the
Prime Rate in effect on such day and (ii) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability of the Administrative Agent to obtain sufficient
quotations, the Alternate Base Rate shall be determined without regard to clause
(ii) of the first sentence of this definition until the circumstances giving
rise to such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Applicable Rate" shall mean 0.000% with respect to any ABR Loan, and
shall mean, with respect to any Eurodollar Standby Loan or Facility Fee, as the
case may be, at all times during which any "Applicable Rating Level" set forth
below is in effect, the rate per annum set forth below under the appropriate
caption next to such Applicable Rating Level:
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Applicable
Applicable S&P Rate for Applicable
Rating Rating/▇▇▇▇▇'▇ Eurodollar Rate for Utilization
Level Rating Standby Loans Facility Fee Margin
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AA-or
higher/Aa3
I or higher 0.200% 0.050% 0.100%
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II A+/A1 0.240% 0.060% 0.100%
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III A/A2 0.240% 0.060% 0.100%
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IV A-/A3 0.330% 0.070% 0.125%
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V BBB+/Baa1 0.400% 0.100% 0.125%
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VI BBB/Baa2 0.625% 0.125% 0.125%
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VII BBB-/Baa3 0.725% 0.150% 0.250%
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lower than
BBB-/lower than
VIII Baa3 0.800% 0.200% 0.250%
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provided, that the Applicable Rate for Eurodollar Standby Loans and ABR Loans
shall be increased by the rate per annum set forth above under the caption
"Utilization Margin" that corresponds to the Applicable Rating Level used to
determine such Applicable Rates at all times following the effectiveness of the
Term Election or at any time during a Utilization Period.
For purposes of the foregoing, the Applicable Rating Level shall be
determined in accordance with the then applicable S&P Rating and the then
applicable ▇▇▇▇▇'▇ Rating. In the
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event that the S&P Rating and the ▇▇▇▇▇'▇ Rating do not correspond to the same
Applicable Rating Level, then the higher of the two ratings shall determine the
Applicable Rating Level; provided, however, that if there is a difference of two
or more levels between the Applicable Rating Level corresponding to the S&P
Rating and the Applicable Rating Level corresponding to the ▇▇▇▇▇'▇ Rating, then
the Applicable Rating Level that is one level above the Applicable Rating Level
corresponding to the lower of the S&P Rating and the ▇▇▇▇▇'▇ Rating shall apply.
In the event that no S&P Rating or no ▇▇▇▇▇'▇ Rating shall be in effect (other
than by reason of the circumstances referred to in the last sentence of this
definition), then the Applicable Rating Level shall be Applicable Rating Level
VIII. The Applicable Rating Level shall be redetermined on the date of
announcement of a change in the S&P Rating or the ▇▇▇▇▇'▇ Rating. A change in
the Applicable Rate resulting from a change in the Applicable Rating Level shall
become effective on such date. If the rating system of S&P or ▇▇▇▇▇'▇ shall
change, or if either such Person shall cease to be in the business of rating
corporate debt obligations, the Borrower and the Lenders shall negotiate in good
faith to amend this definition to reflect such changed rating system or the
unavailability of ratings from such Person and, pending the effectiveness of any
such amendment, the Applicable Rate shall be determined by reference to the
rating most recently in effect prior to such change or cessation.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit C.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders (or, in the case of a Competitive Borrowing, by the Lender or Lenders
whose Competitive Bids have been accepted pursuant to Section 2.03) or Converted
on a single date and as to which a single Interest Period is in effect. All
Loans of the same Type, having the same Interest Period and made or Converted on
the same day shall be deemed a single Borrowing hereunder until repaid or next
Converted.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City; provided, however, that, when used in connection with
a Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
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A "Change in Control" shall be deemed to have occurred if (a) any Person
or group (within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing more than 49% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Borrower; or (b) a majority of the seats (other than vacant seats) on the
board of directors of the Borrower shall at any time have been occupied by
Persons who were neither (i) nominated by the management of the Borrower, nor
(ii) appointed by directors so nominated; or (c) any Person or group shall
otherwise directly or indirectly Control the Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender hereunder as set forth in Schedule 2.01 hereto, as such Lender's
Commitment may be permanently terminated or reduced from time to time pursuant
to Section 2.11 or Section 2.13(f). Unless earlier terminated pursuant to the
terms of this Agreement, the Commitments shall automatically and permanently
terminate on the Revolving Period Maturity Date.
"Competitive Bid" shall mean an offer by a Lender to make a Competitive
Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a notification made by
the Borrower pursuant to Section 2.03(d) in the form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Lender pursuant to Section 2.03(b), (i) in the case of a Eurodollar Loan, the
Margin, and (ii) in the case of a Fixed Rate Loan, the fixed rate of interest
offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to Section
2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a Competitive
Loan or concurrent Competitive Loans from the Lender or Lenders whose
Competitive Bids for such Borrowing have been accepted by the Borrower under the
bidding procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan from a Lender to the Borrower
pursuant to the bidding procedure described in Section 2.03. Each Competitive
Loan shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"Consolidated Net Worth" shall mean, as at any date of determination, the
consolidated stockholders' equity of the Borrower and its consolidated
Subsidiaries, including mandatorily redeemable convertible preferred securities
and minority equity interests in other persons, as determined on a consolidated
basis in conformity with GAAP consistently applied.
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"Consolidated Tangible Assets" of any Person shall mean total assets of
such Person and its consolidated Subsidiaries, determined on a consolidated
basis, less goodwill, patents, trademarks and other assets classified as
intangible assets in accordance with GAAP.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.
"Conversion", "Convert" or "Converted" shall mean the conversion of any
Standby Loan of one Type into a Standby Loan of another Type, or the selection
of a new, or the renewal of the same, Interest Period for any such Standby Loan,
as the case may be, pursuant to Section 2.05.
"Conversion Request" shall mean a request made pursuant to Section 2.05 in
the form of Exhibit A-6.
"Default" shall mean any event or condition which upon notice, lapse of
time, or both would constitute an Event of Default.
"Dollars" or "$" shall mean lawful money of the United States of America.
"Effective Date" shall mean the date on which the conditions specified in
Section 4.02 are satisfied (or waived in accordance with Section 9.08).
"Environmental Laws" shall mean all national, federal, state, provincial,
municipal or local laws, statutes, ordinances, orders, judgments, decrees,
injunctions, writs, policies and guidelines (having the force of law),
directives, approvals, notices, rules and regulations and other applicable laws
relating to environmental or occupational health and safety matters, including
those relating to the Release or threatened Release of Specified Substances and
to the generation, use, storage or transportation of Specified Substances, each
as in effect as of the date of determination.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time, and the regulations promulgated and
the rulings issued thereunder.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Borrower or a Subsidiary of the Borrower
would be deemed to be a "single employer" within the meaning of Section
4001(b)(1) of ERISA.
"ERISA Termination Event" shall mean (i) a "Reportable Event" described in
Section 4043 of ERISA (other than a "Reportable Event" not subject to the
provision for 30-day notice to the PBGC under such regulations), or (ii) the
withdrawal of the Borrower or any of its ERISA 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
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institution of proceeding to terminate a Plan by the PBGC or (v) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan or Eurodollar
Standby Loan.
"Eurodollar Standby Loan" shall mean any Standby Loan bearing interest at
a rate determined by reference to the LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Existing Facility" shall mean the Credit Agreement, dated as of December
16, 1993, as amended, among the Borrower, the lenders named therein, Bank of
America, N.A., as co-agent thereunder, and The Chase Manhattan Bank, as agent
for said lenders.
"Facility Fee" shall have the meaning assigned to such term in Section
2.06(a).
"Federal Funds Effective Rate" shall mean, for any day, 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 on the
next succeeding 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 the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter" shall mean the letter agreement, dated July 29, 1999, as
amended or supplemented from time to time, among the Borrower, The Chase
Manhattan Bank and Chase Securities Inc. relating to the credit facility
contemplated hereby.
"Fees" shall mean the Facility Fee and the Administrative Fees.
"Financial Officer" of any corporation shall mean the President, Chief
Financial Officer, Chief Executive Officer or Treasurer of such corporation.
"First Mortgage Bond Indentures" shall mean (i) the First Mortgage and
Collateral Trust Indenture, dated as of March 1, 1947, from the Borrower to The
Marine Midland Trust Company of New York, as Trustee, and (ii) the Mortgage and
Deed of Trust Indenture, dated as of June 1, 1962, from the Borrower to
Manufacturers Hanover Trust Company, as Trustee, as the same have been and may
from time to time be amended or supplemented and in effect.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed Rate
Loans.
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"Fixed Rate Loan" shall mean any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"GAAP" shall mean generally accepted accounting principles, applied on a
consistent basis.
"Governmental Approval" shall mean any authorization, consent, order,
approval, license, franchise, lease, ruling, tariff, rate, permit, certificate,
exemption of, or filing or registration with, any Governmental Authority
required in connection with the Borrower's execution, delivery or performance of
this Agreement.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Hostile Acquisition" shall mean any Target Acquisition (as defined below)
involving a tender offer or proxy contest that has not been recommended or
approved by the board of directors (or similar governing body) of the Person
that is the subject of such Target Acquisition prior to the first public
announcement or disclosure relating to such Target Acquisition. As used in this
definition, the term "Target Acquisition" shall mean any transaction, or any
series of related transactions, by which the Borrower and/or any of its
Subsidiaries directly or indirectly (i) acquires any ongoing business or all or
substantially all of the assets of any Person or division thereof, whether
through purchase of assets, merger or otherwise, (ii) acquires (in one
transaction or as the most recent transaction in a series of transactions)
control of at least a majority in ordinary voting power of the securities of a
Person which have ordinary voting power for the election of directors or (iii)
otherwise acquires control of a more that 50% ownership interest in any such
Person.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services, (f)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all Capital Lease Obligations
of such Person, (h) all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements, (i) all obligations of such Person as an
account party in respect of letters of credit and bankers' acceptances and (j)
any obligation, contingent or otherwise, of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, directly or indirectly (i) to purchase or pay (or
advance or supply funds for the purchase
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or payment of) such Indebtedness or to purchase (or to advance or supply funds
for the purchase of) any security for the payment of such Indebtedness, (ii) to
purchase property, securities or services for the purpose of assuring the owner
of such Indebtedness of the payment of such Indebtedness or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that the term Indebtedness shall not include
endorsements for collection or deposit, in either case in the ordinary course of
business.
"Interest Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period applicable thereto and, in the case of a Eurodollar Loan
with an Interest Period of more than three months' duration or a Fixed Rate
Loan, each day that would have been an Interest Payment Date for such Loan had
successive Interest Periods of three months' duration or 90 days duration, as
the case may be, been applicable to such Loan and, in addition, the date of any
Conversion of such Loan to a Loan of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter (or such longer period as may be agreed to by all of
the Lenders), as the Borrower may elect, (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing and ending on the date 90 days
thereafter or, if earlier, on the Termination Date or the date of prepayment of
such Borrowing and (c) as to any Fixed Rate Borrowing, the period commencing on
the date of such Borrowing and ending on the date specified in the Competitive
Bids in which the offer to make the Fixed Rate Loans comprising such Borrowing
were extended, which shall not be earlier than the day after the date of such
Borrowing or later than 364 days (or, subject to the Borrower obtaining all
necessary Governmental Approvals, such longer period as may be agreed to by all
of the Lenders) after the date of such Borrowing; provided, however, that if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of Eurodollar Loans only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the rate at which dollar deposits approximately
equal in principal amount to (i) in the case of a Standby Borrowing, the
Administrative Agent's portion of such Eurodollar Borrowing and (ii) in the case
of a Competitive Borrowing, a principal amount that would have been The Chase
Manhattan Bank's portion of such Competitive Borrowing had such Competitive
Borrowing been a Standby Borrowing, and, in the case of each of clause (i) and
clause (ii) above, for a maturity comparable to such Interest Period, are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 A.M., London time, two Business Days prior to the commencement of such
Interest Period.
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"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge, or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease, or title retention agreement relating to such asset
and (c) in the case of securities, any purchase option, call, or similar right
of a third party with respect to such securities.
"Loan" shall mean a Competitive Loan or a Standby Loan, whether made as a
Eurodollar Loan, an ABR Loan, or a Fixed Rate Loan, as permitted hereby.
"Margin" shall mean, as to any Eurodollar Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to no more
than four decimal places) to be added to or subtracted from the LIBO Rate in
order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"Margin Regulations" shall mean Regulations T, U and X of the Board.
"Material Adverse Effect" shall mean a materially adverse effect on the
business, assets, operations, condition, financial or otherwise, or results of
operations of the Borrower and the Subsidiaries taken as a whole.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"▇▇▇▇▇'▇ Rating" shall mean, on any date of determination, (i) the debt
rating most recently announced by Moody's with respect to the long-term, senior,
unsecured, non-credit enhanced Indebtedness of the Borrower or (ii) if (A) the
Indebtedness of the Borrower under this Agreement shall be credit-enhanced by
any Person other than the Borrower and (B) both Moody's and S&P shall have
assigned a debt rating to such Indebtedness, then such debt rating assigned by
Moody's.
"Net Cash Proceeds" shall mean, with respect to the sale of any Utilities
Assets, the aggregate amount of cash received by the Borrower or any Subsidiary
thereof in connection with such sale after deducting therefrom (i) reasonable
and customary transaction costs that are, at the time of receipt of such cash,
actually paid or reserved for payment (A) to a Person that is not an Affiliate
of the Borrower or (B) to the Borrower or an Affiliate of the Borrower to
reimburse the Borrower or such Affiliate of the Borrower for payments made by
the Borrower or such Affiliate of the Borrower to another Person that is not the
Borrower or an Affiliate of the Borrower in respect of such transaction costs
described above and (ii) the amount of taxes paid or reasonably expected to be
payable in connection with, or as a result of, such transaction.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership, or
government, or any agency or political subdivision thereof.
10
"Plan" shall mean any pension plan (including a multiemployer plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code which
is maintained for or to which contributions are made for employees of the
Borrower or any ERISA Affiliate.
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Administrative Agent as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as effective.
"Principal Subsidiaries" shall mean any Subsidiary of the Borrower, other
than Electric Lightwave, Inc., whose Consolidated Tangible Assets comprise in
excess of 20% of the Consolidated Tangible Assets of the Borrower and its
consolidated Subsidiaries as of the date hereof or at any time hereafter.
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation D" shall mean Regulation D of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Release" shall mean any spilling, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing, including the movement of any
Specified Substance through the air, soil, surface water, groundwater or
property, and when used as a verb has a like meaning.
"Required Lenders" shall mean, at any time, Lenders having Commitments
representing at least 66-2/3% of the Total Commitment or, for purposes of
acceleration pursuant to clause (ii) of Article VII or if the Total Commitment
has terminated, Lenders holding Loans representing at least 66-2/3% of the
aggregate principal amount of the Loans outstanding.
"Revolving Period Maturity Date" shall mean October 27, 2000.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"S&P Rating" shall mean, on any date of determination, (i) the debt rating
most recently announced by S&P with respect to the long-term, senior, unsecured,
non-credit enhanced Indebtedness of the Borrower or (ii) if (A) the Indebtedness
of the Borrower under this
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Agreement shall be credit-enhanced by any Person other than the Borrower and (B)
both S&P and Moody's shall have assigned a debt rating to such Indebtedness,
then such debt rating assigned by S&P.
"Specified Substance" shall mean (i) any chemical, material or substance
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous waste", "restricted
hazardous waste" or "toxic substances" or words of similar import under any
applicable Environmental Laws; (ii) any (A) oil, natural gas, petroleum or
petroleum derived substance, any drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude oil,
natural gas or geothermal fluid, any flammable substances or explosives, any
radioactive materials, any hazardous wastes or substances, any toxic wastes or
substances or (B) other materials or pollutants that, in the case of both (A)
and (B), (1) pose a hazard to the property of the Borrower or any of its
Subsidiaries or any part thereof or to persons on or about such property or to
any other property that may be affected by the Release of such materials or
pollutants from such property or any part thereof or to persons on or about such
other property or (2) cause such property or such other property to be in
violation of any Environmental Law; (iii) asbestos, urea formaldehyde foam
insulation, toluene, polychlorinated biphenyls and any electrical equipment
which contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million; and (iv) any sound, vibration,
heat, radiation or other form of energy and any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority.
"Standby Borrowing" shall mean a Borrowing consisting of simultaneous
Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant to Section
2.04 in the form of Exhibit A-5.
"Standby Loans" shall mean the revolving loans made by the Lenders to the
Borrower pursuant to Section 2.04. Each Standby Loan shall be a Eurodollar
Standby Loan or an ABR Loan. All Standby Loans by a Lender of the same Type,
having the same Interest Period and made or Converted on the same day shall be
deemed to be a single Standby Loan by such Lender until repaid or next
Converted.
"Subsidiary" shall mean, with respect to any Person (herein referred to as
the "parent"), any corporation, partnership, association, or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled, or held by the parent, or (b) which is, at the
time any determination is made, otherwise Controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent. Unless otherwise indicated, all references in this Agreement to
"Subsidiaries" shall be construed as references to Subsidiaries of the Borrower.
"Term Election" shall have the meaning assigned to such term in Section
2.07(b).
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"Term Maturity Date" shall have the meaning assigned to such term in
Section 2.07(b).
"Termination Date" shall mean the earlier to occur of (i) the Revolving
Period Maturity Date or, if the Borrower makes the election described in Section
2.07(b), the Term Maturity Date and (ii) the date of termination or reduction in
whole of the Commitments pursuant to Section 2.11 or Article VII.
"Total Commitment" shall mean at any time the aggregate amount of the
Lenders' Commitments, as in effect at such time.
"Transferee" shall mean any transferee or assignee of all or any portion
of a Lender's interests, rights and obligations hereunder, including any
participation holder.
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, "Rate" shall include the LIBO
Rate, the Alternate Base Rate and the Fixed Rate.
"Utilities Assets" shall mean any assets of the Borrower or any Subsidiary
thereof (including, without limitation, stock in any such Subsidiary) that are
employed in the generation or production, transmission or distribution (as
applicable) of electricity, natural gas, synthetic gas or water, or that are
used to provide wastewater services.
"Utilization Period" shall mean any day or days during which the Loans
outstanding hereunder are equal to or greater than 33% of the Total Commitment
for such day or days.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement,
unless the context shall otherwise require. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of determining compliance with any covenant set
forth in Article VI, such terms shall be construed in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
application used in preparing the Borrower's audited financial statements
referred to in Section 3.02.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly,
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to make Standby Loans to the Borrower, at any time and from time to time on and
after the Effective Date and until the earlier to occur of the Revolving Period
Maturity Date and the termination of the Commitment of such Lender, in an
aggregate principal amount at any time outstanding not to exceed such Lender's
Commitment minus the amount by which the Competitive Loans outstanding at such
time shall be deemed to have used such Commitment pursuant to Section 2.16,
subject however, to the conditions that (a) at no time shall (i) the sum of (x)
the outstanding aggregate principal amount of all Standby Loans made by all
Lenders plus (y) the outstanding aggregate principal amount of all Competitive
Loans made by all Lenders exceed (ii) the Total Commitment, and (b) at all times
the outstanding aggregate principal amount of all Standby Loans made by each
Lender shall equal the product of (i) the percentage which its Commitment
represents of the Total Commitment times (ii) the outstanding aggregate
principal amount of all Standby Loans made pursuant to Section 2.04. Each
Lender's Commitment is set forth opposite its respective name in Schedule 2.01.
Such Commitments may be terminated or reduced from time to time pursuant to
Section 2.11 and Section 2.13(f).
Within the foregoing limits, the Borrower may borrow, pay, or prepay and
reborrow hereunder, on and after the Effective Date and prior to the Revolving
Period Maturity Date, subject to the terms, conditions and limitations set forth
herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their Commitments; provided, however, that the failure of any Lender to make any
Standby Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.03. The Standby Loans or Competitive
Loans comprising any Borrowing shall be in an aggregate principal amount which
is an integral multiple of $1,000,000 and not less than $10,000,000 (or, in the
case of Standby Loans, an aggregate principal amount equal to the remaining
balance of the available Commitments).
(b) Each Competitive Borrowing shall be comprised entirely of Eurodollar
Competitive Loans or Fixed Rate Loans, and each Standby Borrowing shall be
comprised entirely of Eurodollar Standby Loans or ABR Loans, as the Borrower may
request pursuant to Section 2.03 or 2.04, as applicable. Each Lender may at its
option make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time; provided, however, that the Borrower shall
not be entitled to request any Borrowing which, if made, would result in an
aggregate of more than ten separate Standby Loans of any Lender being
outstanding hereunder at any one time. For purposes of the foregoing, Loans
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Loans.
(c) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to the
Administrative Agent in New York, New York, not later than 1:00 P.M., New York
City time, and the Administrative Agent shall by 3:00 P.M., New York City time,
credit the amounts so received to the general deposit
14
account of the Borrower with the Administrative Agent or, if a Borrowing shall
not occur on such date because any condition precedent herein specified shall
not have been met, return the amounts so received to the respective Lenders.
Competitive Loans shall be made by the Lender or Lenders whose Competitive Bids
therefor are accepted pursuant to Section 2.03 in the amounts so accepted and
Standby Loans shall be made by the Lenders pro rata in accordance with Section
2.16. Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing (or, in the case of an ABR Borrowing, prior
to the time of such ABR Borrowing) that such Lender will not make available to
the Administrative Agent such Lender's 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
this paragraph (c) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have made such portion available
to the Administrative Agent and the Administrative Agent has made available to
the Borrower such portion, such Lender and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount,
together with interest thereon for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Effective Rate. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement.
(d) Notwithstanding any other provision of this Agreement, the Interest
Period requested by the Borrower with respect to any Borrowing shall not (unless
otherwise agreed to by all of the Lenders) end after the earlier to occur of (i)
the Termination Date and (ii) the latest date permitted by any Governmental
Approval then in effect for the Borrower to have outstanding Borrowings.
SECTION 2.03. Competitive Bid Procedure. (a) Subject to the terms and
conditions set forth herein, from time to time during the period from and
including the Effective Date to but excluding the earlier to occur of the
Revolving Period Maturity Date and the termination of the Commitments of all
Lenders, the Borrower may request Competitive Bids and may, but shall not have
any obligation to, accept Competitive Bids and borrow Competitive Loans;
provided, that at no time shall the sum of (x) the outstanding aggregate
principal amount of all Standby Loans made by all Lenders plus (y) the
outstanding aggregate principal amount of all Competitive Loans made by all
Lenders exceed the Total Commitment. In order to request Competitive Bids, the
Borrower shall hand deliver or telecopy to the Administrative Agent a duly
completed Competitive Bid Request in the form of Exhibit A-1 hereto, to be
received by the Administrative Agent (i) in the case of a Eurodollar Competitive
Borrowing, not later than 10:00 A.M., New York City time, four Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 A.M., New York City time, one Business Day
before a proposed Competitive Borrowing. No ABR Loan shall be requested in, or
made pursuant to, a Competitive Bid Request. A Competitive Bid Request that does
not conform substantially to the format of Exhibit A-1 may be rejected in the
Administrative Agent's sole discretion, and the Administrative Agent shall
promptly notify the Borrower of such rejection by
15
telecopier. Such request shall in each case refer to this Agreement and specify
(x) whether the Borrowing then being requested is to be a Eurodollar Borrowing
or a Fixed Rate Borrowing, (y) the date of such Borrowing (which shall be a
Business Day) and the aggregate principal amount thereof which shall be in a
minimum principal amount of $10,000,000 and in an integral multiple of
$1,000,000, and (z) the Interest Period(s) with respect thereto (which may not
end after the Revolving Period Maturity Date unless otherwise agreed to by all
of the Lenders). Promptly after its receipt of a Competitive Bid Request that is
not rejected as aforesaid, the Administrative Agent shall invite by telecopier
(in the form set forth in Exhibit A-2 hereto) the Lenders to bid, on the terms
and conditions of this Agreement, to make Competitive Loans pursuant to the
Competitive Bid Request.
(b) Each Lender may, in its sole discretion, make one or more Competitive
Bids to the Borrower responsive to a Competitive Bid Request. Each Competitive
Bid by a Lender must be received by the Administrative Agent via telecopier, in
the form of Exhibit A-3 hereto, (i) in the case of a Eurodollar Competitive
Borrowing, not later than 9:30 A.M., New York City time, three Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 9:30 A.M., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be accepted by the
Administrative Agent. Competitive Bids that do not conform substantially to the
format of Exhibit A-3 may be rejected by the Administrative Agent after
conferring with, and upon the instruction of, the Borrower, and the
Administrative Agent shall notify the Lender making such nonconforming bid of
such rejection as soon as practicable. Each Competitive Bid shall refer to this
Agreement and specify (x) the range of principal amounts (each of which shall be
in a minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000 and, in the case of the larger such amount, may equal the entire
principal amount of the Competitive Borrowing requested by the Borrower) of the
Competitive Loan or Loans that the Lender is willing to make to the Borrower,
(y) the Competitive Bid Rate or Rates at which the Lender is prepared to make
the Competitive Loan or Loans and (z) the Interest Period and the last day
thereof. If any Lender shall elect not to make a Competitive Bid, such Lender
shall so notify the Administrative Agent via telecopier (A) in the case of
Eurodollar Competitive Loans, not later than 9:30 A.M., New York City time,
three Business Days before a proposed Competitive Borrowing, and (B) in the case
of Fixed Rate Loans, not later than 9:30 A.M., New York City time, on the day of
a proposed Competitive Borrowing; provided, however, that the failure by any
Lender to give such notice shall not cause such Lender to be obligated to make
any Competitive Loan as part of such Competitive Borrowing. A Competitive Bid
submitted by a Lender pursuant to this paragraph (b) shall be irrevocable. If
the Administrative Agent shall not have received from any Lender notification of
its election to make a Competitive Bid on or before the times set forth in the
second sentence of this paragraph, such Lender shall be deemed to have elected
not to make a Competitive Bid.
(c) The Administrative Agent shall promptly notify (but in any event no
later than 10:00 A.M., New York City time, on the day any Competitive Bid is
received by the Administrative Agent) the Borrower by telecopier of all the
Competitive Bids made, the Competitive Bid Rate and the principal amount (or
range thereof) of each Competitive Loan in respect of which a Competitive Bid
was made and the identity of the Lender that made each bid. The Administrative
Agent shall send a copy of all Competitive Bids to the Borrower for its records
as soon as practicable after completion of the bidding process set forth in this
Section 2.03.
16
(d) The Borrower may in its sole and absolute discretion, subject only to
the provisions of this paragraph (d), accept or reject all or any portion
(within the range of principal amounts specified therein) of any Competitive Bid
referred to in paragraph (c) above. The Borrower shall notify the Administrative
Agent by telephone, confirmed by telecopier in the form of a Competitive Bid
Accept/Reject Letter, whether and to what extent it has decided to accept or
reject any of or all the bids referred to in paragraph (c) above, (x) in the
case of a Eurodollar Competitive Borrowing, not later than 11:00 A.M., New York
City time, three Business Days before a proposed Competitive Borrowing and (y)
in the case of a Fixed Rate Borrowing, not later than 11:00 A.M., New York City
time, on the day of a proposed Competitive Borrowing; provided, however, that
(i) the failure by the Borrower to give such notice shall be deemed to be a
rejection of all the bids referred to in paragraph (c) above, (ii) the Borrower
shall not accept a bid made at a particular Competitive Bid Rate if the Borrower
has decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the principal amount specified in the Competitive Bid Request, (iv) if
the Borrower shall accept a bid or bids made at the same Competitive Bid Rate
but the amount of such bid or bids shall cause the total amount of bids to be
accepted by the Borrower to exceed the amount specified in the Competitive Bid
Request, then the Borrower shall accept a portion of such bid or bids in an
amount no greater than the amount specified in the Competitive Bid Request less
the amount of all other Competitive Bids at a lower Competitive Bid Rate
accepted with respect to such Competitive Bid Request, which acceptance, in the
case of multiple bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the lowest amount of each such bid at such Competitive Bid Rate,
and (v) except pursuant to clause (iv) above, no bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $5,000,000 and an integral multiple of $1,000,000; provided further, however,
that if a Competitive Loan must be in an amount less than $5,000,000 because of
the provisions of clause (iv) above, such Competitive Loan may be for a minimum
of $1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to
integral multiples of $1,000,000 in a manner which shall be in the discretion of
the Borrower. A notice given by the Borrower pursuant to this paragraph (d)
shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
whether or not its Competitive Bid has been accepted (and if so, in what amount
and at what Competitive Bid Rate) by telecopier sent by the Administrative
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Competitive Loan in respect of
which its bid has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such bid directly to the Borrower not
later than 9:15 A.M., New York City time, on the day on which the other Lenders
are required to submit their bids to the Administrative Agent pursuant to
paragraph (b) above.
(g) All notices required by this Section 2.03 shall be given in accordance
with Section 9.01.
17
SECTION 2.04. Standby Borrowing Procedure. In order to request a Standby
Borrowing (other than a Conversion), the Borrower shall hand deliver or telecopy
to the Administrative Agent a notice in the form of Exhibit A-5 (a) in the case
of a Eurodollar Standby Borrowing, not later than 11:00 A.M., New York City
time, three Business Days before a proposed Borrowing, and (b) in the case of an
ABR Borrowing, not later than 11:00 A.M., New York City time, on the day of a
proposed Borrowing. No Fixed Rate Loan shall be requested or made pursuant to a
Standby Borrowing Request. Such notice shall be irrevocable (unless otherwise
expressly provided herein) and shall in each case specify (i) whether the
Borrowing then being requested is to be a Eurodollar Standby Borrowing or an ABR
Borrowing; (ii) the date of such Standby Borrowing (which shall be a Business
Day) and the amount thereof; and (iii) if such Borrowing is to be a Eurodollar
Standby Borrowing, the Interest Period with respect thereto. If no election as
to the Type of Standby Borrowing is specified in any such notice, then the
requested Standby Borrowing shall be an ABR Borrowing. If no Interest Period
with respect to any Eurodollar Standby Borrowing is specified in any such
notice, then the Borrower shall be deemed to have selected an Interest Period of
one month's duration. The Administrative Agent shall promptly advise (but in any
event no later than 12:00 noon on such date) the Lenders of any notice given
pursuant to this Section 2.04 and of each Lender's portion of the requested
Borrowing.
SECTION 2.05. Conversions. The Borrower may from time to time Convert any
Standby Loan (or portion thereof) of any Type to one or more Standby Loans of
the same or any other Type by delivering (by hand delivery or telecopier) a
request for such Conversion in the form of Exhibit A-6 to the Administrative
Agent no later than (i) 11:00 A.M., New York City time, on the third Business
Day prior to the date of any proposed Conversion into a Eurodollar Standby Loan
and (ii) 11:00 A.M., New York City time, on the day of any proposed Conversion
into an ABR Loan. The Administrative Agent shall give each Lender prompt notice
of each Conversion Request. Each Conversion Request shall be irrevocable (unless
otherwise expressly provided herein) and binding on the Borrower and shall
specify the requested (A) date of such Conversion, (B) Type of, and Interest
Period, if any, applicable to, the Standby Loans (or portions thereof) proposed
to be Converted, (C) Type of Standby Loans to which such Standby Loans (or
portions thereof) are proposed to be Converted, (D) initial Interest Period, if
any, to be applicable to the Standby Loans resulting from such Conversion and
(E) aggregate amount of Standby Loans (or portions thereof) proposed to be
Converted. No Eurodollar Standby Loans may be Converted on a date other than the
last day of the Interest Period applicable thereto, unless the Borrower
reimburses each Lender pursuant to Section 2.15 for all losses or expenses
incurred by such Lender in connection with such Conversion. If the Borrower
shall fail to give a timely Conversion Request pursuant to this subsection in
respect of any Standby Loans, such Standby Loans shall, on the last day of the
then existing Interest Period therefor, automatically Convert into, or remain
as, as the case may be, ABR Loans, unless such Standby Loans are repaid at the
end of such Interest Period. If the Borrower shall fail, in any Conversion
Request that has been timely given, to select the duration of any Interest
Period for Standby Loans to be Converted into Eurodollar Standby Loans, such
Standby Loans shall, on the last day of the then existing Interest Period
therefor, automatically Convert into Eurodollar Standby Loans with an Interest
Period of one months' duration. If, on the date of any proposed Conversion, the
Borrower shall have failed to fulfill any condition set forth in Section 4.01,
all Standby Loans
18
then outstanding shall, on such date, automatically Convert into, or remain as,
as the case may be, ABR Loans.
SECTION 2.06. Fees. (a) The Borrower agrees to pay to each Lender, through
the Administrative Agent, on each March 31, June 30, September 30 and December
31, on the date on which the Commitment of such Lender shall be terminated as
provided herein and on the Termination Date, a facility fee (a "Facility Fee")
at a rate per annum equal to the Applicable Rate from time to time in effect on
(i) the amount of the Commitment of such Lender, whether used or unused, during
the preceding quarter (or shorter period commencing on the date hereof or ending
on the Revolving Period Maturity Date or any other date on which the Commitment
of such Lender shall be terminated) and (ii) in the event that the Commitments
have terminated and/or the Borrower has made the Term Election, the aggregate
amount of the Standby Loans owed by the Borrower to such Lender during the
preceding quarter (or shorter period ending on the later of the Term Maturity
Date and the date on which such Standby Loans are paid in full). All Facility
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 365 or 366 days, as the case may be. The Facility Fee due to each Lender
shall commence to accrue on the date hereof and shall cease to accrue on the
later of the Termination Date and the date of payment in full of the Loans,
accrued interest thereon and all other amounts payable hereunder.
(b) The Borrower agrees to pay the Administrative Agent, for its own
account, the fees (the "Administrative Fees") at the times and in the amounts
agreed upon in the Fee Letter.
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.07. Repayment of Loans. (a) The outstanding principal balance of
each Loan shall be payable, in the case of each Competitive Loan, on the earlier
to occur of the last day of the Interest Period applicable to such Loan and the
Termination Date, and, in the case of each Standby Loan, on the Termination
Date, unless otherwise agreed to by all of the Lenders. Each Competitive Loan
and each Standby Loan shall bear interest from the date thereof on the
outstanding principal balance thereof as set forth in Section 2.08. Each Lender
shall, and is hereby authorized by the Borrower to record in such Lender's
internal records an appropriate notation evidencing the date and amount of each
Competitive Loan or Standby Loan, as applicable, of such Lender, each payment or
prepayment of principal of any Competitive Loan or Standby Loan, as applicable,
and such other relevant information as such Lender records in its internal
records with respect to loans of a type similar to such Loans; provided,
however, that the failure of any Lender to make such a notation or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Competitive Loans or Standby Loans, as applicable, made by such Lender in
accordance with the terms hereof.
(b) The Borrower may elect, by providing written notice of such election
to the Administrative Agent (who shall promptly advise the Lenders of such
notice) at least five but no more than 30 days prior to the Revolving Period
Maturity Date, to have all or a portion of the Standby Loans outstanding on the
Revolving Period Maturity Date mature not later than the first
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anniversary of the Revolving Period Maturity Date (such election being the "Term
Election"). Such notice shall be irrevocable and binding on the Borrower and
shall specify (i) the date (the "Term Maturity Date") on which the Borrower
desires such Standby Loans to mature (which date shall be no later than the
first anniversary of the Revolving Period Maturity Date) and (ii) the Standby
Loans and the amount thereof that shall mature on the Term Maturity Date. The
Term Election shall be effective on the Revolving Period Maturity Date if and
only if on such date no Default or Event of Default shall have occurred and be
continuing or would occur as a result of the Term Election. Upon the
effectiveness of the Term Election, the Borrower shall no longer have the right
to borrow any unfunded portion of the Commitments or reborrow all or any part of
the Loans that have been repaid or prepaid. The Term Election may be made only
once.
(c) Any Lender may request that any Loans made by it be evidenced by one
or more promissory notes. Promptly upon receipt of such request, the Borrower
shall prepare, execute and deliver to such Lender one or more promissory notes
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its assignees) substantially in the form of Exhibit E-1 or E-2, as
appropriate. Thereafter, the Loans evidenced by such promissory notes and
interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein.
SECTION 2.08. Interest on Loans. (a) Subject to the provisions of Section
2.09, the Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to (i) in the case of each Eurodollar Standby
Loan, the LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate, and (ii) in the case of each Eurodollar Competitive Loan,
the LIBO Rate for the Interest Period in effect for such Borrowing plus the
Margin offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03. Interest on each Eurodollar Borrowing shall be payable
on each applicable Interest Payment Date. The LIBO Rate for each Interest Period
shall be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error. The Administrative Agent shall promptly (but
in any event no later than 10:30 A.M., New York City time, two Business Days
prior to the commencement of such Interest Period) (A) advise the Borrower and
each Lender, as appropriate, of such determination and (B) upon the request of
the Borrower, provide the Borrower with the calculations and relevant factors
supporting such determination.
(b) Subject to the provisions of Section 2.09, the Loans comprising each
ABR Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 days when determined with reference to the Prime
Rate and over a year of 360 days in all other cases) at a rate per annum equal
to the Alternate Base Rate plus the Applicable Rate. Interest on each ABR
Borrowing shall be payable on each applicable Interest Payment Date. The
Alternate Base Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error. The Administrative
Agent shall promptly (but in any event no later than 11:30 A.M., New York City
time, on the day of each ABR Borrowing) (A) advise the Borrower and each Lender
of such determination and (B) upon the request of the Borrower, provide the
Borrower with the calculations and relevant factors supporting such
determination.
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(c) Subject to the provisions of Section 2.09, each Fixed Rate Loan shall
bear interest at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the fixed rate of interest
offered by the Lender making such Loan and accepted by the Borrower pursuant to
Section 2.03. Interest on each Fixed Rate Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in this
Agreement.
SECTION 2.09. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration, or otherwise, the Borrower shall on demand from time to time from
the Administrative Agent pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the Alternate
Base Rate plus 2%.
SECTION 2.10. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Eurodollar Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Loan during such Interest Period, or that reasonable
means do not exist for ascertaining the LIBO Rate, the Administrative Agent
shall, as soon as practicable thereafter, give written notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any such request by the Borrower for a Eurodollar Competitive
Borrowing pursuant to Section 2.03 shall be of no force and effect and shall be
denied by the Administrative Agent, (ii) any such request by the Borrower for a
Eurodollar Standby Borrowing pursuant to Section 2.04 shall be deemed to be a
request for an ABR Borrowing (unless the Borrower shall have withdrawn its
request for such Eurodollar Standby Borrowing not later than 10:00 A.M., New
York City time, on the day of the proposed Borrowing) and (iii) any request by
the Borrower for a Conversion to Eurodollar Standby Loans pursuant to Section
2.05 shall be deemed to be a request for a Conversion to ABR Loans (unless the
Borrower shall have withdrawn its request for such Conversion not later than
10:00 A.M., New York City time, on the day of the proposed Conversion). Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.11. Termination and Reduction of Commitments. (a) Upon at least
three Business Days' prior irrevocable written notice to the Administrative
Agent, the Borrower may at any time in whole permanently terminate, or from time
to time in part permanently reduce, the Total Commitment; provided, however,
that (i) each partial reduction of the Total Commitment shall be in an integral
multiple of $1,000,000 and in a minimum principal amount of $10,000,000 and (ii)
no such termination or reduction shall be made which would reduce the Total
Commitment to an amount less than the aggregate outstanding principal amount of
the Competitive Loans.
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(b) The Total Commitment shall be permanently reduced in an amount equal
to the amount of any prepayment required to be made pursuant to Section 2.12(c),
regardless of whether any Loans are outstanding or actually prepaid, such
reduction to be effective on the scheduled date for such prepayment.
(c) Each reduction in the Total Commitment hereunder shall be made ratably
among the Lenders in accordance with their respective Commitments. The Borrower
shall pay to the Administrative Agent for the account of the Lenders, on the
date of each termination or reduction, the Facility Fees on the amount of the
Commitments so terminated or reduced accrued through the date of such
termination or reduction. Subject to Section 2.06(a)(ii), no additional Facility
Fees on the amount of the Commitments so terminated or reduced will accrue.
(d) Unless earlier terminated pursuant to the terms of this Agreement, the
Commitment of each Lender shall automatically and permanently terminate on the
Revolving Period Maturity Date.
(e) Any termination or reduction of the Commitments pursuant to this
Section 2.11 shall be appropriately recorded by the Administrative Agent in the
Register in accordance with Section 9.04(d). In addition, all notices with
respect to any such termination or reduction shall be maintained by the
Administrative Agent with the Register.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Standby Borrowing or Eurodollar
Competitive Borrowing, in whole or in part, upon giving written notice (or
telephone notice promptly confirmed by written notice) to the Administrative
Agent: (i) before 11:00 A.M., New York City time, three Business Days prior to
prepayment, in the case of Eurodollar Loans, and (ii) before 11:00 A.M., New
York City time, on the day of prepayment, in the case of ABR Loans; provided,
however, that each partial prepayment shall be in an amount which is an integral
multiple of $1,000,000 and not less than $5,000,000. The Borrower shall not have
the right to prepay any Fixed Rate Competitive Borrowing.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.11 (other than subsection (b) thereof) or Section 2.13(f),
the Borrower shall pay or prepay so much of the Standby Borrowings as shall be
necessary in order that the aggregate principal amount of the Competitive Loans
and Standby Loans outstanding will not exceed the Total Commitment after giving
effect to such termination or reduction. In the event that the Borrower makes
the Term Election, the Borrower shall pay or prepay on the Revolving Period
Maturity Date so much of the Standby Borrowings as shall be necessary in order
that the aggregate principal amount of the Standby Loans outstanding will not
exceed the amount of the Standby Loans subject to the Term Election.
(c) The Borrower shall, from time to time, prepay Standby Borrowings in an
amount equal to the Net Cash Proceeds received by the Borrower or any Subsidiary
thereof from the sale of any Utilities Assets, such prepayment to be made on the
tenth Business Day following the day on which the Borrower or such Subsidiary
receives such Net Cash Proceeds; provided, that the aggregate amount of such
prepayments made pursuant to this subsection (c) shall not exceed
22
$2,000,000,000 minus the aggregate amount of reductions in the Total Commitment
made pursuant to Section 2.11(a); provided, further, that any prepayment of a
Eurodollar Loan made pursuant to this subsection (c) shall not be required to be
made until the end of the Interest Period applicable to such Eurodollar Loan.
(d) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing (or portion
thereof) by the amount stated therein on the date stated therein. All
prepayments under this Section 2.12 shall be subject to Section 2.15 but
otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances. (a) It is
understood that the cost to each Lender of making or maintaining any of the
Eurodollar Loans may fluctuate as a result of the applicability of reserve
requirements imposed by the Board at the ratios provided for in Regulation D on
the date hereof. The Borrower agrees to pay to each of the Lenders from time to
time such amounts as shall be necessary to compensate such Lender for the
portion of the cost of making or maintaining Eurodollar Loans (other than
Eurodollar Competitive Loans) resulting from any such reserve requirements
provided for in Regulation D as in effect on the date hereof, it being
understood that the rates of interest applicable to Eurodollar Loans have been
determined on the assumption that no such reserve requirements exist or will
exist and that such rates do not reflect costs imposed on the Lenders in
connection with such reserve requirements.
(b) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation (including, without
limitation, Regulation D) or in the interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall change the basis of
taxation of payments to any Lender of the principal of or interest on any
Eurodollar Loan or Fixed Rate Loan made by such Lender or any Fees or other
amounts payable hereunder (other than changes in respect of taxes imposed on the
overall net income of such Lender and franchise taxes imposed on it by the
jurisdiction in which such Lender has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify, or deem
applicable any reserve, special deposit, or similar requirement against assets
of, deposits with or for the account of or credit extended by such Lender, or
shall impose on such Lender or the London interbank market any other condition
affecting this Agreement or any Eurodollar Loan or Fixed Rate Loan made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan or
to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest, or otherwise) by an amount deemed by such
Lender to be material, then the Borrower will pay to such Lender upon demand
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered. Notwithstanding the foregoing,
no Lender shall be entitled to request compensation under this paragraph with
respect to any Competitive Loan if it shall have had actual knowledge of the
change giving rise to such request at the time of submission of the Competitive
Bid pursuant to which such Competitive Loan shall have been made.
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(c) If any Lender shall have determined that the adoption after the date
hereof of any law, rule, regulation, or guideline regarding capital adequacy, or
any change in any existing law, rule, regulation, or guideline regarding capital
adequacy or in the interpretation or administration of any of the foregoing by
any governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank, or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement or
the Loans made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
adoption, change, or compliance (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered.
(d) certificate of a Lender setting forth such amount or amounts as shall
be necessary to compensate such Lender as specified in paragraph (a), (b), or
(c) above, as the case may be, and all of the relevant factors and the
calculations supporting such amount or amounts, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
each Lender the amount shown as due on any such certificate delivered by it
within 10 days after the receipt of the same.
(e) Notwithstanding the provisions of subsections (a), (b) or (c), above,
to the contrary, no Lender shall be entitled to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital to the extent that such compensation relates to any period of
time prior to the date upon which such Lender first notified the Borrower of the
occurrence of the event entitling such Lender to such compensation (unless, and
to the extent, that any such compensation so demanded shall relate to the
retroactive application of any event so notified to the Borrower required by any
governmental authority, central bank or comparable agency).
(f) If any Lender shall have delivered a notice or certificate pursuant to
paragraph (d) above, the Borrower shall have the right, at its own expense, upon
notice to such Lender and the Administrative Agent, to require such Lender to
(i) terminate its Commitment or (ii) transfer and assign without recourse (in
accordance with and subject to the restrictions contained in Section 9.04) all
or a portion of its interest, rights and obligations under this Agreement to
another financial institution which shall assume such obligations; provided that
(A) no such termination or assignment shall conflict with any law, rule, or
regulation or order of any Governmental Authority and (B) the Borrower or the
assignee, as the case may be, shall pay to the affected Lender in immediately
available funds on the date of such termination or assignment the principal of
and interest accrued to the date of payment on the Loans made by it hereunder
and all other amounts accrued for its account or owed to it hereunder (other
than any amounts owed to such Lender pursuant to Section 2.15(c) in connection
with such principal payment).
24
SECTION 2.14. Change in Legality. (a) Notwithstanding any other provision
herein, if any change in any law or regulation or in the interpretation thereof
by any governmental authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any Eurodollar
Loan or to give effect to its obligations as contemplated hereby with respect to
any Eurodollar Loan, then, by written notice to the Borrower and to the
Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon such Lender shall not submit a
Competitive Bid in response to a request for Eurodollar Competitive Loans
and any request by the Borrower for a Eurodollar Standby Borrowing shall,
as to such Lender only, be deemed a request for an ABR Loan (or for a
Conversion thereto pursuant to Section 2.05) unless such declaration shall
be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
Converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically Converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
Converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the Conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.
Section 2.15. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense which such Lender may sustain or incur as a consequence of
(a) any failure by the Borrower to fulfill on the date of any Borrowing
hereunder the applicable conditions set forth in Article IV, (b) any failure by
the Borrower to borrow or to Convert any Loan hereunder after irrevocable notice
of such Borrowing or Conversion has been given pursuant to Section 2.03, 2.04 or
2.05, (c) any payment, prepayment or Conversion of a Eurodollar Loan required by
any other provision of this Agreement or otherwise made or deemed made on a date
other than the last day of the Interest Period applicable thereto, (d) any
default in payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, whether by scheduled maturity, acceleration, irrevocable notice of
prepayment or otherwise), or (e) the occurrence of any Event of Default,
including, in each such case, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurodollar Loan. Such loss or reasonable expense shall include an amount
equal to the excess, if any, as reasonably demonstrated by such Lender, of (i)
its cost of obtaining the funds for the Loan being paid, prepaid, Converted, or
not borrowed (assumed to be the LIBO Rate or, in the case of a Fixed Rate Loan,
the fixed rate of interest
25
applicable thereto) for the period from the date of such payment, prepayment, or
failure to borrow to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow, the Interest Period for such Loan which would
have commenced on the date of such failure) over (ii) the amount of interest (as
reasonably demonstrated by such Lender) that would be realized by such Lender in
reemploying the funds so paid, prepaid, or not borrowed for such period or
Interest Period, as the case may be. A certificate of any Lender setting forth
the factors and calculations supporting any amount or amounts which such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower no later than 30 days following the incurrence of any loss or expense
for which such Lender is seeking indemnification under this Section 2.15 and
shall be conclusive absent manifest error.
SECTION 2.16. Pro Rata Treatment. Except as required or otherwise
permitted under Sections 2.13(f) and 2.14, each Standby Borrowing, each payment
or prepayment of principal of any Standby Borrowing, each payment of interest on
the Standby Loans, each payment of the Facility Fees, each reduction of the
Commitments and each Conversion of any Borrowing with a Standby Borrowing of any
Type, shall be allocated pro rata among the Lenders in accordance with their
respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Standby Loans). Each payment of principal of any Competitive
Borrowing shall be allocated pro rata among the Lenders participating in such
Borrowing in accordance with the respective principal amounts of their
outstanding Competitive Loans comprising such Borrowing. Each payment of
interest on any Competitive Borrowing shall be allocated pro rata among the
Lenders participating in such Borrowing in accordance with the respective
amounts of accrued and unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For purposes of determining the available Commitments
of the Lenders at any time, each outstanding Competitive Borrowing shall be
deemed to have utilized the Commitments of the Lenders (including those Lenders
which shall not have made Loans as part of such Competitive Borrowing) pro rata
in accordance with such respective Commitments. Each Lender agrees that, in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff, or counterclaim
against the Borrower, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency, or other similar law or otherwise, or by any other
means, obtain payment (voluntary or involuntary) in respect of any Standby Loan
or Standby Loans as a result of which the unpaid principal portion of the
Standby Loans of such Lender shall be proportionately less than the unpaid
principal portion of the Standby Loans of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Standby Loans of such other Lender, so that the aggregate unpaid principal
amount of the Standby Loans and participations in the Standby Loans held by each
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all Standby Loans then outstanding as the principal amount of its Standby
Loans prior to such exercise of banker's lien, setoff, or counterclaim or
26
other event was to the principal amount of all Standby Loans outstanding prior
to such exercise of banker's lien, setoff, or counterclaim or other event;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.17 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that, to the maximum extent permitted by law,
any Lender holding a participation in a Standby Loan deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff, or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a Standby Loan
directly to the Borrower in the amount of such participation.
SECTION 2.18. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder not later than 12:00 noon, New York City time, on the date
when due in dollars to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in immediately available funds. All payments
by the Borrower shall be made without deduction for any counterclaim, defense,
recoupment or setoff.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or otherwise
would occur, on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by the Borrower hereunder
shall be made, in accordance with Section 2.18, 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
taxes imposed on the Administrative Agent's or any Lender's (or any
Transferee's) net income and franchise taxes imposed on the Administrative Agent
or any Lender (or Transferee) by the United States or any jurisdiction under the
laws of which it is organized or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders (or any Transferee) or the Administrative Agent, (i)
the sum payable shall be increased by the amount necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.19) such Lender (or Transferee) or the
Administrative Agent (as the case may be) shall receive an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other Governmental Authority in
accordance with applicable law. Each Lender represents and warrants that no
Taxes will be incurred on the date hereof in connection with the execution and
delivery of this Agreement.
(b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with
27
respect to, this Agreement (hereinafter referred to as "Other Taxes"). Each
Lender represents and warrants that no Other Taxes will be incurred on the date
hereof in connection with the execution and delivery of this Agreement.
(c) The Borrower will indemnify each Lender (or Transferee) and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.19) paid by such Lender (or Transferee) 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
or Other Taxes were correctly or legally asserted by the relevant taxing
authority or other Governmental Authority. Payment of such indemnification shall
be made within 30 days after the date any Lender (or Transferee) or the
Administrative Agent, as the case may be, makes written demand therefor. If a
Lender (or Transferee) or the Administrative Agent shall become aware that it is
entitled to receive a refund in respect of Taxes of Other Taxes, it shall
promptly notify the Borrower of the availability of such refund and shall,
within 30 days after receipt of a request by the Borrower, apply for such refund
at the Borrower's expense. If any Lender (or Transferee) or the Administrative
Agent receives a refund in respect of any Taxes or Other Taxes for which such
Lender (or Transferee) or the Administrative Agent has received payment from the
Borrower hereunder, it shall promptly notify the Borrower of such refund and
shall, within 30 days after receipt of a request by the Borrower (or promptly
upon receipt, if the Borrower has requested application for such refund pursuant
hereto), repay such refund to the Borrower, net of all out-of-pocket expenses of
such Lender (or Transferee) or the Administrative Agent and only with interest
received, if any, from the relevant taxing authority or Governmental Authority;
provided that the Borrower, upon the request of such Lender (or Transferee) or
the Administrative Agent, agrees to return such refund (plus penalties,
interest, or other charges) to such Lender (or Transferee) or the Administrative
Agent in the event such Lender (or Transferee) or the Administrative Agent is
required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by the Borrower in respect of any payment to any Lender (or Transferee)
or the Administrative Agent, the Borrower will furnish to the Administrative
Agent, at its address referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.19 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) Each Lender represents and warrants that either (i) it is organized
under the laws of a jurisdiction within the United States or (ii) it has
delivered to the Borrower and the Administrative Agent duly completed copies of
such form or forms prescribed by the Internal Revenue Service indicating that
such Lender is entitled to receive payments without deduction or withholding of
any United States federal income taxes, as permitted by the Code. Each
Transferee agrees that, on or prior to the date upon which it shall become a
party hereto or obtain a participation herein, and upon the reasonable request
from time to time of the Borrower or the Administrative Agent, it will deliver
to the Borrower and the Administrative Agent either (A) a statement that it is
organized under the laws of a jurisdiction within the United States or (B) duly
28
completed copies of such form or forms as may from time to time be prescribed by
the United States Internal Revenue Service, indicating that such Transferee is
entitled to receive payments without deduction or withholding of any United
States federal income taxes, as permitted by the Code. Each Lender that has
delivered, and each Transferee that hereafter delivers, to the Borrower and the
Administrative Agent the form or forms referred to in the two preceding
sentences further undertakes to deliver to the Borrower and the Administrative
Agent, so far as it may legally do so, further copies of such form or forms, or
successor applicable form or forms, as the case may be, as and when any previous
form filed by it hereunder shall expire or shall become incomplete or inaccurate
in any respect. Each Lender and Transferee represents and warrants that each
such form supplied by it to the Administrative Agent and the Borrower pursuant
to this subsection (f), and not superseded by another form supplied by it, is or
will be, as the case may be, complete and accurate.
(g) The Borrower shall not be required to pay any additional amounts to
any Lender (or Transferee) in respect of United States withholding tax pursuant
to paragraph (a) above if the obligation to pay such additional amounts would
not have arisen but for a failure by such Lender (or Transferee) to comply with
the provisions of paragraph (f) above, unless such failure results from (i) a
change in applicable law, regulation, or official interpretation thereof, or
(ii) an amendment, modification, or revocation of any applicable tax treaty or a
change in official position regarding the application or interpretation thereof,
in each case after the Effective Date (and, in the case of a Transferee, after
the date of assignment or transfer); provided, however, that the Borrower shall
be required to pay those amounts to any Lender (or Transferee) which it was
required to pay hereunder prior to the failure of such Lender (or Transferee) to
comply with the provisions of paragraph (f).
(h) Any Lender (or Transferee) claiming any additional amounts payable
pursuant to this Section 2.19 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document requested
by the Borrower or to change the jurisdiction of its applicable lending office
if the making of such a filing or change would avoid the need for or reduce the
amount of any such additional amounts which may thereafter accrue and would not,
in the sole determination of such Lender, be otherwise disadvantageous to such
Lender (or Transferee).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
SECTION 3.01. Organization; Powers; Governmental Approvals. (a) The
Borrower and each Principal Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and (iii) is qualified to
do business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not have a material adverse effect on the
condition, financial or
29
otherwise, results of operations, business, assets, operations, or prospects of
the Borrower and its Subsidiaries taken as a whole. The Borrower's execution,
delivery and performance of this Agreement are within its corporate powers, have
been duly authorized by all necessary action and do not violate or create a
default under law, its constituent documents, or any contractual provision
binding upon it. This Agreement constitutes the legal, valid and binding
obligation of the Borrower enforceable against it in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting the rights of
creditors generally and general principles of equity).
(b) All Governmental Approvals have been duly obtained, are in full force
and effect without having been amended or modified in any manner that may impair
the ability of the Borrower to perform its obligations under this Agreement, and
are not the subject of any pending or overtly threatened appeal, stay or other
challenge. No Interest Period requested with respect to any Borrowing extends
beyond the latest date permitted for Borrowings by any Governmental Approval
then in effect.
SECTION 3.02. Financial Statements. The Borrower has furnished to the
Lenders, for itself and its Subsidiaries, its most recent filings with the
Securities and Exchange Commission on Forms 10-K and 10-Q. Such Forms 10-K and
10-Q do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make any statement therein, in light of the
circumstances under which it was made, not misleading. Each of the financial
statements in such Forms 10-K and 10-Q has been, and each of the financial
statements to be furnished pursuant to Section 5.02 will be, prepared in
accordance with GAAP applied consistently with prior periods, except as therein
noted, and fairly presents or will fairly present in all material respects the
consolidated financial position of the Borrower and its Subsidiaries as of the
date thereof and the results of the operations of the Borrower and its
Subsidiaries for the period then ended.
SECTION 3.03. No Material Adverse Change. Since the date of the Borrower's
most recent financial statements contained in its Annual Report on Form 10-K for
the fiscal year ended December 31, 1998, furnished to the Lenders pursuant to
Section 3.02, there has been no material adverse change in, and there has
occurred no event or condition which is likely to result in a material adverse
change in, the condition, financial or otherwise, results of operations,
business, assets or operations of the Borrower and the Subsidiaries taken as a
whole.
SECTION 3.04. Title to Properties; Possession Under Leases. (a) To the
best of the Borrower's knowledge, each of the Borrower and the Principal
Subsidiaries has good and marketable title to, or valid leasehold interests in,
or other rights to use or occupy, all its material properties and assets, except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.01.
(b) Each of the Borrower and the Principal Subsidiaries has complied with
all obligations under all material leases to which it is a party and all such
leases are in full force and effect, except where such failure to comply or
maintain such leases in full force and effect would not have a Material Adverse
Effect. Each of the Borrower and the Subsidiaries enjoys peaceful and
30
undisturbed possession under all such material leases except where such failure
would not have a Material Adverse Effect.
SECTION 3.05. Ownership of Subsidiaries. The Borrower owns, free and clear
of any Lien (other than Liens expressly permitted by Section 6.01), all of the
issued and outstanding shares of common stock of each of the Principal
Subsidiaries.
SECTION 3.06. Litigation; Compliance with Laws. (a) There is no action,
suit, or proceeding, or any governmental investigation or any arbitration, in
each case pending or, to the knowledge of the Borrower, threatened against the
Borrower or any of the Subsidiaries or any material property of any thereof
before any court or arbitrator or any governmental or administrative body,
agency, or official which (i) challenges the validity of this Agreement or (ii)
except as disclosed in the Borrower's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 or the Borrower's Quarterly Reports on Form 10-Q
for the periods ending March 31, 1999 and June 30, 1999, may have a Material
Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in violation of
any law, rule, or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority, where such violation or
default could reasonably be anticipated to result in a Material Adverse Effect.
(c) Except as set forth in or contemplated by the financial statements or
other reports referred to in Section 3.02 hereof and which have been delivered
to the Lenders on or prior to the date hereof, (i) the Borrower and each of its
Subsidiaries have complied with all Environmental Laws, except to the extent
that failure to so comply is not reasonably likely to have a Material Adverse
Effect, (ii) neither the Borrower nor any of its Subsidiaries has failed to
obtain, maintain or comply with any permit, license or other approval under any
Environmental Law, except where such failure is not reasonably likely to have a
Material Adverse Effect, (iii) neither the Borrower nor any of its Subsidiaries
7has received notice of any failure to comply with any Environmental Law or
become subject to any liability under any Environmental Law, except where such
failure or liability is not reasonably likely to have a Material Adverse Effect,
(iv) no facilities of the Borrower or any of its Subsidiaries are used to manage
any Specified Substance in violation of any law, except to the extent that such
violations, individually or in the aggregate, are not reasonably likely to have
a Material Adverse Effect, and (v) the Borrower is aware of no events,
conditions or circumstances involving any Release of a Specified Substance that
is reasonably likely to have a Material Adverse Effect.
SECTION 3.07. Agreements. (a) Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted, or could reasonably be anticipated to
result, in a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could reasonably be anticipated to result in a
Material Adverse Effect.
31
SECTION 3.08. Federal Reserve Regulations. No part of the proceeds of the
Loans will be used, whether directly or indirectly, and whether immediately,
incidentally, or ultimately, for any purpose which entails a violation of, or
which is inconsistent with, the provisions of the Margin Regulations.
SECTION 3.09. Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any of the Subsidiaries is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
SECTION 3.10. Use of Proceeds. The Borrower will use the proceeds of the
Loan only for the purposes specified in Section 5.05.
SECTION 3.11. Tax Returns. Each of the Borrower and the Subsidiaries has
filed or caused to be filed all Federal, state and local tax returns required to
have been filed by it and has paid or caused to be paid all taxes shown to be
due and payable on such returns or on any assessments received by it, except
taxes that are being contested in good faith by appropriate proceedings and for
which the Borrower shall have set aside on its books adequate reserves.
SECTION 3.12. No Material Misstatements. No statement, information,
report, financial statement, exhibit or schedule furnished by or on behalf of
the Borrower to the Administrative Agent or any Lender in connection with the
syndication or negotiation of this Agreement or included herein or delivered
pursuant hereto contained, contains, or will contain any material misstatement
of fact or intentionally omitted, omits, or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are, or will be made, not misleading.
SECTION 3.13. Employee Benefit Plans. (a) Each Plan is in compliance with
ERISA, except for such noncompliance that has not resulted, and could not
reasonably be anticipated to result, in a Material Adverse Effect.
(b) No Plan has an accumulated or waived funding deficiency within the
meaning of Section 412 or Section 418B of the Code, except for any such
deficiency that has not resulted, and could not reasonably be anticipated to
result, in a Material Adverse Effect.
(c) No proceedings have been instituted to terminate any Plan, except for
such proceedings where the termination of a Plan has not resulted, and could not
reasonably be anticipated to result, in a Material Adverse Effect.
(d) Neither the Borrower nor any Subsidiary or ERISA Affiliate has
incurred any liability to or on account of a Plan under ERISA (other than
obligations to make contributions in accordance with such Plan), and no
condition exists which presents a material risk to the Borrower or any
Subsidiary of incurring such a liability, except for such liabilities that have
not resulted, and could not reasonably be anticipated to result, in a Material
Adverse Effect.
32
SECTION 3.14. Insurance. Each of the Borrower and the Principal
Subsidiaries maintains insurance with financially sound and reputable insurers,
or self-insurance, with respect to its properties and business against loss or
damage of the kind customarily insured against by reputable companies in the
same or similar business and of such types and in such amounts (with such
deductible amounts) as is customary for such companies under similar
circumstances.
SECTION 3.15. Year 2000 Matters. The Borrower has (i) initiated a review
and assessment of all mission critical areas within its and each of its
Subsidiaries' business and operations (including those affected by suppliers and
vendors) that it reasonably believes could be adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications used by the Borrower
or any of its Subsidiaries (or suppliers and vendors) may be unable to recognize
and properly perform date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem all as set forth in the Borrower's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 and the
Borrower's Quarterly Reports on Form 10-Q for the periods ending March 31, 1999
and June 30, 1999, and (iii) to date, implemented that plan substantially in
accordance with that timetable. The Borrower has contingency plans that are
dedicated to ensuring that established and expected levels of customer service
are maintained without interruption, while core business functionality is
preserved during the millenium transition. With respect to its suppliers and
vendors, the foregoing representation and warranty is expressly limited to
matters known to the Borrower after making reasonable inquiries of such
suppliers and vendors. The Borrower makes no representation or warranty with
respect to the receipt or accuracy of any response received from any vendor or
supplier.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Each Borrowing. The obligation of each Lender to make a Loan
on the occasion of any Borrowing, including any Conversion pursuant to Section
2.05, is subject to the satisfaction of the following conditions:
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03, 2.04 or 2.05, as applicable;
(b) The representations and warranties set forth in Article III hereof
(except, in the case of a Conversion, the representations set forth in Sections
3.03 and 3.06(a)) shall be true and correct in all material respects on and as
of the date of such Borrowing with the same effect as though made on and as of
such date, except to the extent such representations and warranties expressly
relate to an earlier date; and
(c) The Borrower shall be in compliance with all of the terms and
provisions set forth herein on its part to be observed or performed, and at the
time of, and immediately after such Borrowing, no Event of Default or Default
shall have occurred and be continuing.
33
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. Effective Date. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.08):
(a) The Borrower shall have entered into all definitive contracts with
respect to the Acquisitions, no default or failure in the satisfaction of a
condition shall have occurred and be continuing under such contracts that could
reasonably be expected to threaten or materially delay the consummation of the
Acquisitions, and the Borrower shall not have agreed to any modification of such
contracts without the consent of the Administrative Agent if the effect of such
modification would be to materially increase the aggregate purchase price of the
assets subject of the Acquisitions or materially decrease the aggregate value of
such assets.
(b) The Administrative Agent shall have received a favorable written
opinion of the general counsel of the Borrower, dated the Effective Date and
addressed to the Lenders, to the effect set forth in Exhibit D hereto, and the
Borrower hereby instructs such counsel to deliver such opinion to the
Administrative Agent;
(c) All legal matters incident to this Agreement and the borrowings
hereunder shall be satisfactory to the Administrative Agent and the Lenders;
(d) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto, of
the Borrower, certified as of a recent date by the Secretary of State of the
state of its organization, and a certificate as to the good standing of the
Borrower as of a recent date, from such Secretary of State; (ii) a certificate
of the Secretary or Assistant Secretary of the Borrower dated the Effective Date
and certifying (A) that attached thereto is a true and complete copy of the
by-laws of the Borrower as in effect on the Effective Date and at all times
since a date prior to the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement and the borrowings hereunder, and
that such resolutions have not been modified, rescinded, or amended and are in
full force and effect, (C) that the certificate or articles of incorporation of
the Borrower have not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to clause (i)
above, and (D) as to the incumbency and specimen signature of each officer
executing this Agreement or any other document delivered in connection herewith
on behalf of the Borrower; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (ii) above; (iv) an irrevocable notice
from the Borrower requesting termination of the "Total Commitment" under the
Existing Facility effective automatically on the Effective Date and (v) such
other documents as the Administrative Agent or the Lenders may reasonably
request;
34
(e) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01 and paragraph (a) of this Section;
(f) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Effective Date;
(g) All "Commitments" (as defined in the Existing Facility) under the
Existing Facility shall have been terminated in accordance with the terms
thereof and all "Loans" (as defined in the Existing Facility) outstanding
thereunder shall have been repaid or prepaid together with accrued interest
thereon and all other amounts payable to the "Lenders" (as defined in the
Existing Facility) under the Existing Facility; and
(h) The Administrative Agent shall have received satisfactory evidence
that the commercial paper of the Borrower is rated at least A2 by S&P and P2 by
▇▇▇▇▇'▇.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with the Administrative Agent and each
Lender that, so long as this Agreement shall remain in effect or the principal
of or interest on any Loan (or any portion thereof), or any other expenses or
amounts payable hereunder, shall be unpaid, the Borrower will:
SECTION 5.01. Existence; Businesses and Properties. (a) Preserve and
maintain, cause each of the Principal Subsidiaries to preserve and maintain, and
cause each other Subsidiary to preserve and maintain (where the failure by any
such other Subsidiary to so preserve and maintain would likely result in a
Material Adverse Effect), its corporate existence, rights and franchises,
provided, however, that the corporate existence of any Principal Subsidiary may
be terminated if such termination is not disadvantageous to the Administrative
Agent or any Lender;
(b) continue to own all of the outstanding shares of common stock of each
Principal Subsidiary;
(c) comply, and cause each of the Subsidiaries to comply, in all material
respects, with all applicable laws, rules, regulations and orders, including,
without limitation, all Environmental Laws;
(d) pay, and cause each of the Subsidiaries to pay, before any such
amounts become delinquent, (i) all taxes, assessments and governmental charges
imposed upon it or upon its property, and (ii) all claims (including without
limitation, claims for labor, materials, supplies, or services) which might, if
unpaid, become a Lien upon its property, unless, in each case, the
35
validity or amount thereof is being disputed in good faith, and the Borrower has
maintained adequate reserves with respect thereto;
(e) keep, and cause each of the Subsidiaries to keep, proper books of
record and account, containing complete and accurate entries of all financial
and business transactions of the Borrower and such Subsidiary;
(f) continue to carry on, and cause each Principal Subsidiary to continue
to carry on, substantially the same type of business as the Borrower or such
Principal Subsidiary conducted as of the date hereof and business reasonably
related thereto, except for changes in such business that result from the sale
of Utilities Assets and the consummation of the Acquisitions; and
(g) maintain or cause to be maintained insurance with financially sound
and reputable insurers, or self-insurance, with respect to its properties and
business and the properties and business of the Subsidiaries against loss or
damage of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance to be of such types and in such
amounts (with such deductible amounts) as is customary for such companies under
similar circumstances;
provided, however, that the foregoing shall not limit the right of the Borrower
or any of its Subsidiaries to engage in any transaction not otherwise prohibited
by Section 6.02, 6.03 or 6.04.
SECTION 5.02. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 110 days after the end of
each fiscal year, consolidated balance sheets and the related statements of
income and cash flows of the Borrower and its Subsidiaries (the Borrower and its
Subsidiaries being collectively referred to as the "Companies") as of the close
of such fiscal year (which requirement shall be deemed satisfied by the delivery
of the Borrower's Annual Report on Form 10-K (or any successor form) for such
year), all audited by KPMG Peat Marwick or other independent public accountants
of recognized national standing and accompanied by an opinion of such
accountants to the effect that such consolidated financial statements fairly
present in all material respects the financial condition and results of
operations of the Companies on a consolidated basis in accordance with GAAP
consistently applied;
(b) within 65 days after the end of each of the first three fiscal
quarters of each fiscal year, consolidated balance sheets and related statements
of income and cash flows of the Companies as of the close of such fiscal quarter
and the then elapsed portion of the fiscal year (which requirement shall be
deemed satisfied by the delivery of the Borrower's Quarterly Report on Form 10-Q
(or any successor form) for such quarter), each certified by a Financial Officer
as fairly presenting the financial condition and results of operations of the
Companies on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
36
(c) promptly upon the mailing or filing thereof, copies of all financial
statements, reports and proxy statements mailed to the Borrower's public
shareholders, and copies of all registration statements (other than those on
Form S-8) and Form 8-K's (to the extent that such Form 8-K's disclose actual or
potential adverse developments with respect to the Borrower or any of its
Subsidiaries that constitute, or could reasonably be anticipated to constitute,
a Material Adverse Effect) filed with the Securities and Exchange Commission (or
any successor thereto) or any national securities exchange;
(d) prompt notice of any reduction in the credit rating given to the
Borrower by S&P or ▇▇▇▇▇'▇;
(e) promptly after (i) the occurrence thereof, notice of any ERISA
Termination Event or "prohibited transaction", as such term is defined in
Section 4975 of the Code, with respect to any Plan that results, or could
reasonably be anticipated to result, in a Material Adverse Effect, which notice
shall specify the nature thereof and the Borrower's proposed response thereto,
and (ii) actual knowledge thereof, copies of any notice of PBGC's intention to
terminate or to have a trustee appointed to administer any Plan; and
(f) promptly, from time to time, such other information, regarding its
operations, business affairs and financial condition, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
Section 5.03. Litigation and Other Notices. Furnish to the Administrative
Agent and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with respect
thereto;
(b) the filing or commencement of, or any threat or notice of intention of
any Person to file or commence, any action, suit or proceeding, whether at law
or in equity or by or before any Governmental Authority, against the Borrower or
any of the Subsidiaries which is reasonably likely to be adversely determined
and which, if adversely determined, could reasonably be anticipated to result in
a Material Adverse Effect;
(c) any development with respect to the Borrower or any Subsidiary that
has resulted in, or could reasonably be anticipated to result in, a Material
Adverse Effect; and
(d) its receipt of any Net Cash Proceeds from the sale of any Utilities
Assets.
SECTION 5.04. Maintaining Records. Maintain all financial records in
accordance with GAAP and, upon reasonable notice, permit any Lender to visit and
inspect the financial records of the Borrower at reasonable times and as often
as requested and to make extracts from and copies of such financial records, and
permit any representatives designated by any Lender to discuss the affairs,
finances and condition of the Borrower with the appropriate officers thereof
and, with the Borrower's consent (which shall not be unreasonably withheld), the
independent accountants therefor; provided, however, that if the Borrower shall
so require, a single
37
representative shall be appointed by Lenders holding at least 50% of the
aggregate outstanding principal balance of the Loans to exercise the rights
granted under this Section 5.04.
SECTION 5.05. Use of Proceeds. Use the proceeds of the Loans only for the
purposes set forth in the preamble of this Agreement; provided, however, that no
such proceeds shall be used directly or indirectly in connection with any
Hostile Acquisition.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender and the Administrative
Agent that, so long as this Agreement shall remain in effect or the principal of
or interest on any Loan (or any portion thereof), or any other expenses or
amounts payable hereunder, shall be unpaid, it will not:
SECTION 6.01. Liens. Create, incur, assume, or suffer to exist, or permit
any of the Principal Subsidiaries to create, incur, assume, or suffer to exist,
any Lien on any of its property now owned or hereafter acquired to secure any
Indebtedness of the Borrower or any such Principal Subsidiary, other than (a)
Liens incurred or deposits made in the ordinary course of business to secure
surety and appeal bonds, leases, return-of-money bonds and other similar
obligations (exclusive of obligations of the payment of borrowed money); (b)
Liens created under or in connection with the First Mortgage Bond Indentures or
any other indentures governing the issuance of mortgage bonds by the Borrower;
(c) pledges or deposits to secure the utility obligations of the Borrower
incurred in the ordinary course of business; (d) Liens upon or in property now
owned or hereafter acquired to secure Indebtedness incurred solely for the
purpose of financing the acquisition, construction or improvement of any
property, provided that such Indebtedness shall not exceed the fair market value
of the property being acquired, constructed or improved; (e) Liens on the assets
of any Principal Subsidiary to secure the repayment of project financing for
such Principal Subsidiary; (f) Liens on the assets of any Person merged or
consolidated with or into (in accordance with Section 6.04) the Borrower or any
Principal Subsidiary that were in effect at the time of such merger or
consolidation; and (g) Liens securing Indebtedness of the Borrower or of any
Principal Subsidiary to the U.S. Rural Electrification Administration (or any
successor agency) or to the U.S. Rural Telephone Bank (or any successor agency);
provided, however, that the Borrower or any Principal Subsidiary may create,
incur, assume or suffer to exist other Liens (in addition to Liens excepted by
the foregoing clauses (a) through (g)) on its assets so long as the assets
subject to such Liens do not represent in the aggregate more than 30% of the
Borrower's Consolidated Tangible Assets.
SECTION 6.02. Ownership of the Principal Subsidiaries. Sell, assign,
pledge, or otherwise transfer or dispose of any shares of common stock, voting
stock, or stock convertible into voting or common stock of any Principal
Subsidiary except to another Subsidiary.
SECTION 6.03. Asset Sales. Permit any Principal Subsidiary to sell,
assign, or otherwise dispose of assets (whether in one transaction or a series
of transactions), if after giving effect to such transaction, such Principal
Subsidiary will have disposed of, in the aggregate, assets representing more
than 25% of such Principal Subsidiary's aggregate Consolidated
38
Tangible Assets as of the date upon which such Principal Subsidiary first became
a Principal Subsidiary; provided that (i) any Principal Subsidiary may transfer
assets representing up to 100% of such Principal Subsidiary's Consolidated
Tangible Assets to any other Subsidiary or to the Borrower, and (ii) any
Subsidiary may dispose of its Utilities Assets.
SECTION 6.04. Mergers. Merge or consolidate with, or sell, assign, lease,
or otherwise dispose of (whether in one transaction or a series of transactions)
all or substantially all of its assets (whether now owned or hereafter
acquired), except for Utilities Assets, to any Person, or permit any Principal
Subsidiary to do so, except that any Subsidiary may merge into or, subject to
Section 6.03, transfer assets to the Borrower or any other Subsidiary and the
Borrower may merge with any Person; provided that, immediately thereafter and
after giving effect thereto, no event shall occur or be continuing which
constitutes an Event of Default or a Default and, in the case of any such merger
to which the Borrower is a party, either the Borrower is the surviving
corporation or the surviving entity (if not the Borrower) has a consolidated net
worth (as determined in accordance with GAAP) immediately subsequent to such
merger at least equal to the Consolidated Net Worth of the Borrower immediately
prior to such merger and expressly assumes the obligations of the Borrower
hereunder; provided, however, that, notwithstanding the foregoing, the Borrower
and any of the Principal Subsidiaries may sell assets in the ordinary course of
its business and may sell or otherwise dispose of worn out or obsolete equipment
on a basis consistent with good business practices.
SECTION 6.05. Restrictions on Dividends. Enter into or permit any
Principal Subsidiary to enter into, any contract or agreement (other than with a
governmental regulatory authority having jurisdiction over the Borrower or such
Principal Subsidiary) restricting the ability of such Principal Subsidiary to
pay dividends or make distributions to the Borrower in any manner that would
impair the ability of the Borrower to meet its present and future obligations
hereunder. The Secretary of the Borrower or another officer of the Borrower
satisfactory to the Administrative Agent shall, prior to entry into any contract
or agreement that could restrict the ability of any Principal Subsidiary to pay
dividends or make distributions to the Borrower, deliver to the Lenders a
certificate certifying (a) to the absence of any Event of Default or Default
after giving effect to the entry by such Principal Subsidiary into such contract
or agreement, and (b) that such contract or agreement will not impair the
ability of the Borrower to meet its present and future obligations hereunder.
SECTION 6.06. Transactions with Affiliates. Sell or transfer any property
or assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that as
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower or any Subsidiary may engage in any of the foregoing transactions
in the ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties or as otherwise may be required
by any Federal or state Governmental Authority.
SECTION 6.07. Minimum Consolidated Net Worth. Permit its Consolidated Net
Worth at any time to be less than $1,500,000,000.
39
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in connection
with this Agreement or the Borrowings hereunder, or any representation,
warranty, statement, or information contained in any written report,
certificate, financial statement, or other instrument furnished in connection
with or pursuant to this Agreement, shall prove to have been false or misleading
in any material respect when so made, deemed made, or furnished;
(b) default shall be made in the payment of any principal of any Loan (or
any portion thereof) when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed or for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan (or
any portion thereof) or any Fee or any other amount (other than an amount
referred to in (b) above) due hereunder, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of five
Business Days;
(d) default shall be made in the due observance or performance of any
covenant, condition, or agreement contained in Section 5.01(f) or Section 5.05
or in Article VI;
(e) default shall be made in the due observance or performance of any
covenant, condition, or agreement contained herein (other than those specified
in (b), (c), or (d) above) or in the Fee Letter and such default shall continue
unremedied for a period of 30 days after the earlier to occur of (i) the
Borrower obtaining knowledge thereof and (ii) the date that written notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower or any Principal Subsidiary, or of a substantial part
of the property or assets of the Borrower or a Principal Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership, or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator, or similar official for the Borrower or any Principal Subsidiary or
for a substantial part of the property or assets of the Borrower or a Principal
Subsidiary, or (iii) the winding-up or liquidation of the Borrower or any
Principal Subsidiary; and such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall be entered;
(g) the Borrower or any Principal Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, receivership, or similar law, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in (f) above,
(iii) apply
40
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator, or similar official for the Borrower or any Principal
Subsidiary or for a substantial part of the property or assets of the Borrower
or any Principal Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability, or fail generally to pay its debts as they become due, or
(vii) take any action for the purpose of effecting any of the foregoing;
(h) the Borrower or any Principal Subsidiary, as the case may be, fails to
pay when due, or within any grace period applicable thereto by the terms
thereof, any other Indebtedness of the Borrower or any Principal Subsidiary
aggregating $50,000,000 or more;
(i) the Borrower or any Principal Subsidiary shall fail to observe or
perform any covenant or agreement contained in any single agreement or
instrument relating to any Indebtedness in excess of (i) $75,000,000 in the
aggregate, with respect to any Indebtedness issued on a tax-exempt basis, and
(ii) $50,000,000 in the aggregate, with respect to all other Indebtedness, in
each case within any applicable grace period, or any other event shall occur if
the effect of such failure or other event is to accelerate, or to permit the
holder of such Indebtedness or any other Person to accelerate, the maturity of
such Indebtedness; or any such Indebtedness shall be required to be prepaid
(other than by a regularly scheduled required prepayment or the exercise by the
Borrower or such Principal Subsidiary of its right to make a voluntary
prepayment) in whole or in part prior to its stated maturity;
(j) a judgment or order for the payment of money in excess of $50,000,000
and having a Material Adverse Effect shall be rendered against the Borrower or
any of the Subsidiaries and such judgment or order shall continue unsatisfied
(in the case of a money judgment) and in effect for a period of 30 days during
which execution shall not be effectively stayed or deferred (whether by action
of a court, by agreement, or otherwise);
(k) a Plan shall fail to maintain the minimum funding standard required by
Section 412(a) of the Code for any plan year or a waiver of such standard is
sought or granted under Section 412(d), or a Plan is or shall have been
terminated or the subject of termination proceedings under ERISA, or the
Borrower or an ERISA Affiliate has incurred a liability to or on account of a
Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall
result from any such event or events a Material Adverse Effect; and
(l) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (f) or (g) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments and (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder, shall
become forthwith due and payable, without presentment,
41
demand, protest, or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein to the contrary
notwithstanding; and in any event with respect to the Borrower described in
paragraph (f) or (g) above, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest, or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein to the
contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this Agreement, The
Chase Manhattan Bank is hereby appointed to act as Administrative Agent on
behalf of the Lenders. Each of the Lenders, and each Transferee by its agreement
to be bound hereby, irrevocably authorizes the Administrative Agent to take such
actions on behalf of such Lender or Transferee and to exercise such powers as
are specifically delegated to the Administrative Agent by the terms and
provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders, without hereby limiting any implied authority, (a) to receive on
behalf of the Lenders all payments of principal of and interest on the Loans and
all other amounts due to the Lenders hereunder, and promptly to distribute to
each Lender its proper share of each payment so received; (b) to promptly give
notice on behalf of each of the Lenders to the Borrower of any Event of Default
specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower pursuant to this Agreement as received by
the Administrative Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees, or agents shall be liable as such for any action taken or omitted by
any of them, except for its or his own gross negligence or willful misconduct,
or be responsible for any statement, warranty, or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms, conditions, covenants, or agreements contained
herein. The Administrative Agent shall not be responsible to the Lenders or any
Transferee for the due execution, genuineness, validity, enforceability, or
effectiveness of this Agreement or any other instruments or agreements. The
Administrative Agent may deem and treat each Lender party hereto as a "Lender"
hereunder and for all purposes hereof until it shall have received notice, given
as provided herein, of the assignment of all of such Lender's rights and
obligations hereunder. The Administrative Agent shall in all cases be fully
protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders and each Transferee. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the
42
proper Person or persons. Neither the Administrative Agent nor any of its
directors, officers, employees, or agents shall have any responsibility to the
Borrower on account of the failure of or delay in performance or breach by any
Lender of any of its obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other Lender or the Borrower
of any of their respective obligations hereunder or in connection herewith. The
Administrative Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor administrative
agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Borrower
shall have the right to appoint a successor, provided that any successor
selected by the Borrower must be approved by all of the Lenders. If no successor
shall have been so appointed by the Borrower and shall have accepted such
appointment within 20 Business Days after the retiring Administrative Agent
gives notice of its resignation, then the Required Lenders shall have the right
to appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 Business
Days after the retiring Administrative Agent gives notice of its resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor administrative agent which shall be a bank with an office in New York,
New York, having a combined capital and surplus of at least $1,000,000,000 or an
Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall 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 hereunder. After the Administrative
Agent's resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.
With respect to the Loans made by it hereunder, the Administrative Agent
in its individual capacity and not as Administrative Agent shall have the same
rights and powers as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the Administrative Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent, on demand,
in the amount of its pro rata share (based on its Commitment hereunder or, if
the Commitments shall have terminated, based on its outstanding Standby Loans
hereunder) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent, including reasonable counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Lenders,
43
which shall not have been reimbursed by the Borrower, and (ii) to indemnify and
hold harmless the Administrative Agent and any of its directors, officers,
employees, or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, cost, expenses, or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against it
in its capacity as the Administrative Agent or any of them in any way relating
to or arising out of this Agreement or any action taken or omitted by it or any
of them under this Agreement, to the extent the same shall not have been
indemnified by the Borrower; provided that no Lender shall be liable to the
Administrative Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting from the gross negligence or willful misconduct of the Administrative
Agent or any of its directors, officers, employees, or agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each 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 from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
None of the Lenders identified on the facing page or signature pages of
this Agreement as a "co-agent" or "documentation agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "co-agent" or "documentation agent" shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders so identified in deciding to enter into this Agreement or in taking or
not taking action hereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by the method, if any,
specified in the relevant provisions of this Agreement and otherwise by hand or
overnight courier service, mailed or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Financial Officer, Vice President
and Treasurer (Telecopy No. 203-614-4625);
(b) if to the Administrative Agent, to it at One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No.
212-552-5658), with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, The Chase Manhattan Bank, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Telecopy No. 212-270-4392); and
44
(c) if to a Lender, to it at its address (or telecopy number) set forth in
Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by certified or
registered mail, if mailed, in each case delivered, sent, or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the Loans, regardless of
any investigation made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount payable under this Agreement is outstanding
and unpaid or so long as the Commitments have not been terminated.
SECTION 9.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each Lender, and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Administrative Agent
and each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior consent of all the Lenders.
Section 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns, of such party; and all covenants, promises and
agreements by or on behalf of the Borrower, the Administrative Agent or the
Lenders that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it; provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, or an assignment to a Federal Reserve Bank, the
Borrower and the Administrative Agent must give their prior written consent to
such assignment, which consent shall not be unreasonably withheld, provided,
further, however, that the consent of the Borrower to any such assignment shall
not be required at any time an Event of Default shall have occurred and be
continuing, (ii) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights or obligations under this
Agreement, (iii) the amount of the Commitment or Loans of the assigning Lender
subject to any such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 and the amount of the
45
Commitment or Loans of such Lender remaining after such assignment shall not be
less than $5,000,000 or shall be zero, (iv) the parties to each such assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 and (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire. Subject to payment in full by the assignee to
the assignor and upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof, (A) the assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, 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 (but shall continue to be entitled
to the benefits of Sections 2.13, 2.15, 2.19 and 9.05, as well as to any Fees
accrued for its account hereunder and not yet paid)). Notwithstanding the
foregoing, any Lender assigning its rights and obligations under this Agreement
may retain any Competitive Loans made by it outstanding at such time, and in
such case shall retain its rights hereunder in respect of any Loans so retained
until such Loans have been repaid in full in accordance with this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Standby Loans and
Competitive Loans (to the extent assigned), in each case without giving effect
to assignments thereof which have not become effective, are as set forth in such
Assignment and Acceptance, (ii) except as set forth in (i) above, 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 or the financial
condition of the Borrower or any Subsidiary or the performance or observance by
the Borrower or any Subsidiary of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.02 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; (v) 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; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as administrative
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)
46
such assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices in The
City of New York a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The Administrative Agent
shall also record in the Register the then scheduled Termination Date and shall
update the Register from time to time upon any change in a Lender's Commitment
and Loans pursuant to the terms of this Agreement. The entries in the Register
shall be conclusive in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower and
the Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register, (iii) give prompt notice thereof to the Lenders and
(iv) send a copy of such Assignment and Acceptance to the Borrower.
(f) Each Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.13, 2.15 and 2.19 to the same extent as if
they were Lenders and (iv) the Borrower, 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
such Lender shall retain the sole right to enforce the obligations of the
Borrower relating to the Loans and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications,
or waivers decreasing any fees payable hereunder or the amount of principal of
or the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans,
or changing or extending the Commitments).
(g) Any Lender may, in connection with any assignment or proposed
assignment pursuant to this Section 9.04, disclose to the assignee or proposed
assignee any information relating to the Borrower furnished to such Lender by or
on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such
47
assignee or proposed assignee shall execute an agreement whereby such assignee
shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information. It is understood that confidential information
relating to the Borrower would not ordinarily be provided in connection with
assignments of Competitive Loans. No Lender may, in connection with any
participation or proposed participation pursuant to this Section 9.04, disclose
to any participant or proposed participant any confidential information relating
to the Borrower without the prior written consent of the Borrower.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank; provided that no such assignment
shall release a Lender from any of its obligations hereunder.
(i) The Borrower shall not assign or delegate any of its rights or duties
hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay (i) all
reasonable legal fees and disbursements incurred by the Administrative Agent in
connection with the preparation of this Agreement and (ii) all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) incurred by
the Administrative Agent and any Lender in connection with any amendments,
modifications or waivers of the provisions hereof or thereof or incurred by the
Administrative Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement.
(b) The Borrower agrees to indemnify the Administrative Agent, each Lender
and each of their respective directors, officers, employees, Affiliates and
agents (each such Person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees and expenses, incurred by or
asserted against any Indemnitee arising out of, (i) the use of the proceeds of
the Loans or (ii) any claim, litigation, investigation, or proceeding relating
to this Agreement, the use of such proceeds or the transactions contemplated
hereby, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities, or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the negligence or willful misconduct of such Indemnitee. Each
Lender shall notify the Borrower promptly after it determines that it will make
a claim for indemnification under this Section 9.05(b). The Borrower shall be
entitled to participate in the defense of the litigation, investigation, or
proceeding giving rise to such claim with counsel satisfactory to the Lender, in
the exercise of its reasonable judgment; provided, however, that any such
participation in such defense shall be conducted by the Borrower and at the
Borrower's expense and in a manner considered by such Lender to be satisfactory
and effective to protect against such claim without causing damage to the
conduct of, or affecting such Lender's control of, such Lender's defense. The
Borrower shall inform such Lender of its intention to participate in the defense
of such claim within 15 days after receipt of notice thereof from such Lender.
(c) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any
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of the Loans, the invalidity or unenforceability of any term or provision of
this Agreement, or any investigation made by or on behalf of the Administrative
Agent or any Lender. All amounts due under this Section 9.05 shall be payable on
written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, 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 Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended, or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on, any Loan, or waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Loan, without the prior written
consent of each Lender, (ii) change or extend the Commitment or decrease or
extend any scheduled payment date for the Facility Fees of any Lender without
the prior written consent of such Lender, or (iii) amend or modify the
provisions of Section 2.16, the provisions of this Section or the definition of
"Required Lenders", without the prior written consent of each Lender; provided
further that no such agreement shall amend, modify, or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior written
consent of the Administrative Agent. Each Lender shall be bound by any waiver,
amendment, or modification authorized by this Section, and any consent by any
Lender pursuant to this Section shall bind any Transferee of its rights and
obligations hereunder.
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SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the applicable interest rate, together with all
fees and charges which are treated as interest under applicable law
(collectively, the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken, or reserved by any Lender, shall exceed the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken, received, or
reserved by such Lender in accordance with applicable law, the rate of interest
payable to such Lender, together with all Charges payable to such Lender, shall
be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement and the Fee Letter
constitute 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 and the Fee Letter.
Nothing in this Agreement or the Fee Letter, expressed or implied, is intended
to confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations, or liabilities under or by reason of this Agreement or
the Fee Letter.
SECTION 9.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR THE FEE LETTER. EACH PARTY HERETO
(a) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (b) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND, IF APPLICABLE, THE FEE LETTER, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal, or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal, or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal, or
unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 9.03.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
50
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits to the nonexclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the
Fee Letter, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in
the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action, or proceeding
arising out of or relating to this Agreement in any New York State court or
Federal court of the United States of America sitting in New York City. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
[Signature pages follow]
S-1
IN WITNESS WHEREOF, the Borrower, the Administrative Agent and the Lenders
have caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
CITIZENS UTILITIES COMPANY
By: ________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer,
Vice President and Treasurer
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: ________________________________________
Name:
Title:
S-2
Lenders:
THE CHASE MANHATTAN BANK
By: ________________________________________
Name:
Title: