Exhibit 99.1
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CREDIT AGREEMENT
dated as of
November 14, 2002
among
TUCSON ELECTRIC POWER COMPANY
The Lenders Party Hereto
The Issuing Banks Party Hereto
THE BANK OF NEW YORK
UNION BANK OF CALIFORNIA
as Co-Syndication Agents
CREDIT SUISSE FIRST BOSTON
as Documentation Agent
and
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
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TD SECURITIES (USA) INC.,
CREDIT SUISSE FIRST BOSTON
as Co-Lead Arrangers and Joint Bookrunners
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms.............................................1
SECTION 1.02. Classification of Loans and Borrowings...................15
SECTION 1.03. Terms Generally..........................................15
SECTION 1.04. Accounting Terms; GAAP...................................16
ARTICLE II
The Credits
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SECTION 2.01. Revolving Commitments....................................16
SECTION 2.02. Loans and Borrowings.....................................16
SECTION 2.03. Requests for Revolving Borrowings........................17
SECTION 2.04. Extension of Revolving Maturity Date.....................17
SECTION 2.05. Letters of Credit........................................18
SECTION 2.06. Credit-Linked Deposit Account............................23
SECTION 2.07. Funding of Borrowings....................................24
SECTION 2.08. Interest Elections.......................................24
SECTION 2.09. Termination and Reduction of Commitments;
Return of Tranche B Credit-Linked Deposits..........25
SECTION 2.10. Repayment of Loans; Evidence of Debt.....................26
SECTION 2.11. Prepayment of Loans......................................27
SECTION 2.12. Fees.....................................................27
SECTION 2.13. Interest.................................................29
SECTION 2.14. Alternate Rate of Interest...............................29
SECTION 2.15. Increased Costs..........................................30
SECTION 2.16. Break Funding Payments...................................31
SECTION 2.17. Taxes....................................................31
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs.................................32
SECTION 2.19. Mitigation Obligations; Replacement of
Lenders.............................................33
SECTION 2.20. Certain Regulatory Events................................34
ARTICLE III
Representations and Warranties
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SECTION 3.01. Organization; Powers.....................................35
SECTION 3.02. Authorization; Enforceability............................35
SECTION 3.03. Governmental Approvals; No Conflicts.....................35
SECTION 3.04. Financial Condition; No Material Adverse
Change..............................................35
SECTION 3.05. Properties...............................................36
SECTION 3.06. Litigation and Environmental Matters.....................36
SECTION 3.07. Compliance with Laws and Agreements......................36
SECTION 3.08. Investment and Holding Company Status....................37
SECTION 3.09. Taxes....................................................37
SECTION 3.10. ERISA....................................................37
ii
SECTION 3.11. Security Documents.......................................37
SECTION 3.12. Disclosure...............................................38
ARTICLE IV
Conditions
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SECTION 4.01. Effective Date...........................................38
SECTION 4.02. Each Credit Event........................................39
ARTICLE V
Affirmative Covenants
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SECTION 5.01. Financial Statements and
Other Information...................................40
SECTION 5.02. Notices of Material Events...............................42
SECTION 5.03. Existence; Conduct of Business...........................42
SECTION 5.04. Payment of Obligations...................................42
SECTION 5.05. Maintenance of Properties; Insurance.....................43
SECTION 5.06. Books and Records; Inspection Rights.....................43
SECTION 5.07. Compliance with Laws.....................................43
SECTION 5.08. Use of Proceeds and Letters of Credit....................43
SECTION 5.09. Environmental Laws.......................................43
SECTION 5.10. Further Assurances.......................................44
ARTICLE VI
Negative Covenants
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SECTION 6.01. Indebtedness.............................................44
SECTION 6.02. Liens....................................................44
SECTION 6.03. Fundamental Changes......................................45
SECTION 6.04. Sale of Assets...........................................46
SECTION 6.05. Restricted Payments......................................47
SECTION 6.06. Consolidated Tangible Net Worth..........................47
SECTION 6.07. Cash Coverage Ratio......................................47
SECTION 6.08. Leverage Test............................................47
SECTION 6.09. Amendments to Documents..................................48
SECTION 6.10. Sale Leaseback Transactions..............................48
SECTION 6.11. Release of Collateral under the Second Indenture.........48
SECTION 6.12. Transactions with Affiliates.............................48
ARTICLE VII
Events of Default..........................48
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ARTICLE VIII
The Administrative Agent.....................50
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iii
ARTICLE IX
Miscellaneous
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SECTION 9.01. Notices.................................................52
SECTION 9.02. Waivers; Amendments.....................................53
SECTION 9.03. Expenses; Indemnity; Damage Waiver......................54
SECTION 9.04. Successors and Assigns..................................55
SECTION 9.05. Survival................................................57
SECTION 9.06. Counterparts; Integration; Effectiveness................57
SECTION 9.07. Severability............................................57
SECTION 9.08. Right of Setoff.........................................57
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process.................................58
SECTION 9.10. WAIVER OF JURY TRIAL....................................58
SECTION 9.11. Headings................................................58
SECTION 9.12. Confidentiality.........................................58
SECTION 9.13. Interest Rate Limitation................................59
SCHEDULES:
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Schedule 2.01 -- Commitments
Schedule 2.05 -- Letters of Credit
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Bond Delivery Agreement
Exhibit C -- Form of Revenue Bond Pledge Agreement
Exhibit D -- Form of Second Supplemental Indenture
Exhibit E-1 -- Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel for the
Borrower
Exhibit E-2 -- Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, New York
Counsel for the Borrower
Exhibit E-3 -- Form of Opinion of ▇▇▇▇▇, Dickason, Sloan, Akin & ▇▇▇▇, PA,
special New Mexico counsel for the Borrower
iv
CREDIT AGREEMENT dated as of November 14, 2002, among
TUCSON ELECTRIC POWER COMPANY, the LENDERS party hereto, the
ISSUING BANKS party hereto, THE BANK OF NEW YORK and UNION
BANK OF CALIFORNIA, as Co-Syndication Agents, CREDIT SUISSE
FIRST BOSTON, as Documentation Agent, and TORONTO DOMINION
(TEXAS), INC., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ACC" means the Arizona Corporation Commission.
"Adjusted Consolidated Capital Expenditures" means, for any fiscal
period, Consolidated Capital Expenditures for such period minus any amount of
such Consolidated Capital Expenditures related to the construction of the
Borrower's Nogales transmission line.
"Adjusted LIBO Rate" means, 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 (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means Toronto Dominion (Texas), Inc., in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, 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.
"Agents" means the Administrative Agent, the Documentation Agent
and the Co-Syndication Agents.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of
such change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate, respectively.
"Amortization Date" has the meaning assigned to such term in
Section 2.20.
"Applicable Percentage" means (a) with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment, (b) with respect to any Tranche A Lender, the
percentage of the total Tranche A Commitments represented by such Lender's
Tranche A Commitment and (c) with respect to any Tranche B Lender, the
percentage of the total Tranche B Credit-Linked Deposits represented by such
Lender's Tranche B Credit-Linked Deposit. If any such Commitments have
terminated or expired, the Applicable Percentages shall be determined based
upon such Commitments most recently in effect, giving effect to any
assignments. If the Tranche B Credit-Linked Deposits shall have been applied
in full to reimburse LC Disbursements, the Applicable Percentages shall be
determined based upon the Tranche B Credit-Linked Deposits most recently in
effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to any ABR Loan
or Eurodollar Loan, or with respect to the commitment fees payable hereunder,
as the case may be, the applicable rate per annum set forth below under the
caption "ABR Spread", "Eurodollar Spread" or "Commitment Fee Rate", as the
case may be, based upon the Reference Ratings on such date:
ABR Eurodollar Commitment
Reference Ratings: Spread Spread Fee Rate
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Category 1
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BBB/Baa2 or better 2.50% 3.50% 0.250%
Category 2
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BBB- /Baa3 2.75% 3.75% 0.300%
Category 3
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BB+/Ba1 3.00% 4.00% 0.350%
Category 4
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BB/Ba2 or lower or unrated 3.25% 4.25% 0.400%
For purposes of the foregoing, (i) if any Rating Agency shall not have in
effect a Reference Rating (other than by reason of the circumstances referred
to in the last sentence of this definition), then such Rating Agency shall be
deemed to have established a Reference Rating in Category 4; (ii) if the
Reference Ratings in effect or deemed to be in effect shall be in different
Categories, then the Applicable Rate shall be based on the Category
corresponding to the lower of the highest two Reference Ratings (or, if such
Reference Ratings differ by two or more Categories, the Category next above
that corresponding to the lower of the highest two Reference Ratings); and
(iii) if the Reference Rating of any Rating Agency shall be changed (other
than as a result of a change in the rating system of such Rating Agency),
such change shall be effective as of the date on which it is first announced
by the applicable Rating Agency. Each change in the Applicable Rate shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change. If the rating system of any Rating Agency shall change, or if any
Rating Agency 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 a Reference Rating from such Rating Agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined
using the Reference Rating of such Rating Agency most recently in effect
prior to such change or cessation.
"Approved Fund" means, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender
or by an Affiliate of such investment advisor.
"Arrangers" means TD Securities (USA) Inc. and Credit Suisse First
Boston, as Co-Lead Arrangers and Joint Bookrunners for the credit facilities
established by this Agreement.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R.
Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such Corporation of time deposits made in
dollars at the offices of such member in the United States; PROVIDED that if,
as a result of any change in any law, rule or regulation, it is no longer
possible to determine the Assessment Rate as aforesaid, then the Assessment
Rate shall be such annual rate as shall be determined by the Administrative
Agent to be representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment
Rate.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Bond Delivery Agreement" means the Bond Delivery Agreement between
the Borrower and the Administrative Agent, substantially in the form of
Exhibit B.
"Bonds" means the First Mortgage Bonds and the Second Mortgage
Bonds.
"Borrower" means Tucson Electric Power Company, an Arizona
corporation.
"Borrowing" means Revolving Loans of the same Type, made, converted
or continued on the same date and, in the case of Eurodollar Loans, as to
which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Revolving
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to remain closed; PROVIDED 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 Investment" of any Person means the aggregate
outstanding capitalized amount of Capital Lease Obligations of the Borrower
and the Consolidated Subsidiaries that are owned by such Person and in
respect of which such Person has the right to receive all future payments to
be made.
"Capital Lease Obligations" of any Person means 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 the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule
or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by
any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any
lending office of such Lender or by such Lender's or such Issuing Bank's
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means the Collateral Mortgage Bonds and any and all
"Collateral", as defined in any applicable Security Document.
"Collateral Mortgage Bonds" means Second Mortgage Bonds, Collateral
Series C, substantially in the form attached to the Fourth Supplemental
Indenture.
"Commitment" means, with respect to each Lender, each of such
Lender's Revolving Commitment, Tranche A LC Commitment and Tranche B
Credit-Linked Deposit.
"Consolidated Capital Expenditures" means, for any fiscal period,
the aggregate of all expenditures by the Borrower and the Consolidated
Subsidiaries for such period that, in accordance with GAAP, are or should be
included in "construction expenditures" or similar items for additions to
property, plant or equipment reflected in the statement of cash flows for the
Borrower and the Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated EBITDA" means, for any fiscal period, with respect to
the Borrower and the Consolidated Subsidiaries, Consolidated Net Income for
such period PLUS, to the extent deducted in computing such Consolidated Net
Income, without duplication, the sum of (a) income tax expense, (b) interest
expense, (c) depreciation and amortization expense, (d) any extraordinary or
non-recurring losses and (e) other noncash items reducing Consolidated Net
Income, MINUS, to the extent added in computing such Consolidated Net Income,
without duplication, the sum of (i) interest income, (ii) any extraordinary
or non-recurring gains and (iii) other noncash items increasing Consolidated
Net Income, all as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" means, for any fiscal period, the
aggregate of all payments by the Borrower and the Consolidated Subsidiaries
for such period that, in accordance with GAAP, are or should be included in
"interest paid, net of amounts capitalized" and "capital lease interest paid"
reflected in the statement of cash flows for the Borrower and the
Consolidated Subsidiaries, less the amount of capital lease interest income
paid to the Borrower or any Consolidated Subsidiary for such period that is
not reflected in Consolidated EBITDA for such period, all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any fiscal period, net income
of the Borrower and the Consolidated Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means, at any date, each Subsidiary the
accounts of which would be consolidated with those of the Borrower in the
Borrower's consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date.
"Consolidated Tangible Net Worth" means, as of the last day of any
fiscal quarter, (a) common stock equity of the Borrower as of such day MINUS
(b) the aggregate amount of all intangible assets (other than intangible
assets eligible for cost recovery through regulatory rates) on the
consolidated balance sheet of the Borrower and the Consolidated Subsidiaries
as of such day, all as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Total Indebtedness" means, as of the last day of any
fiscal quarter, (a) the sum for the Borrower and the Consolidated
Subsidiaries as of such day of (i) the aggregate outstanding principal amount
of the Loans and LC Disbursements, (ii) the aggregate outstanding principal
amount of other Indebtedness for borrowed money (including Guarantees
thereof), (iii) the principal amount of all obligations in respect of Hedging
Agreements of the Borrower and the Consolidated Subsidiaries (computed as set
forth in the penultimate sentence of the definition of "Material
Indebtedness") and (iv) the aggregate outstanding capitalized amount of
Capital Lease Obligations, MINUS (b) the aggregate outstanding capitalized
amount of the Capital Lease Investments of the Borrower and the Consolidated
Subsidiaries as of such day, all as determined on a consolidated basis in
accordance with GAAP.
"Control" means 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 ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Co-Syndication Agent" means each of The Bank of New York and Union
Bank of California, in its capacity as syndication agent for the Lenders.
"Credit Exposure" means, with respect to any Lender at any time,
the sum of such Lender's Revolving Credit Exposure, its Tranche A LC Exposure
and its Tranche B LC Exposure at such time.
"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosure Documents" means the Borrower's Annual Report on
Form 10-K for the fiscal year ended December 31, 2001, and the Borrower's
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
June 30 and September 30, 2002, and the Current Reports on Form 8-K dated
August 9, 2002 and November 1, 2002, of UniSource Energy Corporation, in each
case as filed with the Securities and Exchange Commission.
"Documentation Agent" means Credit Suisse First Boston, in its
capacity as documentation agent for the Lenders.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived);
(b) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code
or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Borrower
or any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Borrower or
any ERISA Affiliate from the PBGC of any notice of its intent to institute
proceedings to terminate any Plan or to appoint a trustee to administer any
Plan or the receipt by the Borrower or any ERISA Affiliate from a plan
administrator of any notice relating to the administrator's intent to
terminate any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made
by or on account of any obligation of the Borrower hereunder or, for purposes
of Section 2.17 only, by or on account of any obligation of the
Administrative Agent pursuant to Section 2.06(b) (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which such recipient is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.19(b)), any withholding tax that is
imposed by the United States of America on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.17(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.17(a) or Section 2.17(b).
"Existing Agreement" means, the Credit Agreement dated as of
December 30, 1997, among the Borrower, the Lenders Party thereto, the Issuing
Banks party thereto, The Bank of New York, as Syndication Agent, Societe
Generale as Documentation Agent and Toronto Dominion (Texas), Inc., as
Administrative Agent.
"Existing Revolving Maturity Date" has the meaning assigned to such
term in Section 2.04.
"Fair Value" means, with respect to any assets or property owned by
the Borrower or any of the Consolidated Subsidiaries, the fair market value
thereof as determined from time to time by the Board of Directors (or a duly
constituted committee thereof) of the Borrower or such Consolidated
Subsidiary in good faith.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations for such
day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"First Indenture" means the Indenture dated as of April 1, 1941, of
the Tucson Gas, Electric Light and Power Company, a predecessor to the
Borrower, to The Chase National Bank of the City of New York, as trustee, a
predecessor to JPMorgan Chase Bank, as amended, supplemented or otherwise
modified from time to time.
"First Mortgage Bonds" means the Borrower's First Mortgage Bonds
issued under the First Indenture.
"Fitch" means Fitch Investors Service, Inc., and its successors.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than the United States of America.
"Fourth Supplemental Indenture" means Supplemental Indenture No. 4
under the Second Indenture, substantially in the form of Exhibit D.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; PROVIDED, that
the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrange
ment.
"Indebtedness" of any Person means, 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 acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business),
(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
Indebtedness secured thereby has been assumed, (g) all Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and
(j) all obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as
a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indentures" means the First Indenture and the Second Indenture.
"Information Memorandum" means the Confidential Information
Memorandum dated October 2002 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.08.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each
day prior to the last day of such Interest Period that occurs at intervals of
three months' duration after the first day of such Interest Period.
"Interest Period" means (a) with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing (which
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing) and ending on the numerically corresponding day in the
calendar month that is one, three or six months thereafter, as the Borrower
may elect, and (b) with respect to the Tranche B Credit Linked Deposits, each
period commencing on the date the Tranche B Credit-Linked Deposits are
initially funded by the Tranche B Lenders or on the last day of the preceding
Interest Period applicable thereto, as the case may be, and ending on the
numerically corresponding day in the calendar month that is one month
thereafter; PROVIDED, that (i) a single Interest Period shall at all times
apply to all the Tranche B Credit-Linked Deposits, and an Interest Period
shall be deemed to be in effect for the Tranche B Credit-Linked Deposits at
all times prior to the final return of the Tranche B Credit-Linked Deposits
to the Tranche B Lenders, including at times when the Tranche B Credit-Linked
Deposits shall have been applied to reimburse Tranche B LC Disbursements,
(ii) 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 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 and (iii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period.
"Issuing Bank" means The Toronto-Dominion Bank and each other
Person executing this Agreement as an Issuing Bank, in its capacity as issuer
of Letters of Credit hereunder, and each of their successors in such capacity
as provided in Section 2.05(i).
"LC Disbursement" means a payment made by an Issuing Bank pursuant
to a Letter of Credit.
"Lenders" means the Revolving Lenders, the Tranche A Lenders and
the Tranche B Lenders whose names appear on the signature pages hereof and
any other Person that shall have become a party hereto pursuant to an
Assignment and Acceptance, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.
"Letter of Credit" means a Tranche A Letter of Credit or a
Tranche B Letter of Credit.
"LIBO Rate" means, with respect to any Eurodollar Borrowing or the
Tranche B Credit-Linked Deposits for any Interest Period, the rate appearing
on Page 3750 of the Telerate Service (or on any successor or substitute page
of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page
of such Service, as determined by the Administrative Agent from time to time
for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as
the rate for dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing or the
Tranche B Credit-Linked Deposit for such Interest Period shall be the rate at
which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 12:00 noon, London time, two Business Days prior to
the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of
the foregoing) 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.
"Lien of the Second Indenture" has the meaning assigned to the
phrases "Lien of this Indenture" and "lien hereof" in the Second Indenture.
"Loan Documents" means this Agreement, the Bond Delivery Agreement,
the Fourth Supplemental Indenture, the Collateral Mortgage Bonds, the Revenue
Bond Pledge Agreements and the other Security Documents.
"Loans" means the Revolving Loans made by the Revolving Lenders to
the Borrower pursuant to this Agreement.
"Material Adverse Effect" means a material adverse effect on
(a) the financial condition, results of operations, business or prospects of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under any Loan Document or the
Second Indenture or (c) the rights of or benefits available to the Lenders
under any Loan Document or the Second Indenture.
"Material Indebtedness" means Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Significant
Subsidiaries in an aggregate principal amount exceeding $15,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"Material Indebtedness" shall not include at any time any Indebtedness that
is non-recourse to the Borrower and the Subsidiaries.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its
successors.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Non-Extending Lender" has the meaning assigned to such term in
Section 2.04.
"Obligations" means (a)(i) the principal of and premium, if any,
and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding) on the Loans and
LC Disbursements, when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, (ii) each other payment
required to be made by the Borrower under this Agreement in respect of any
Letter of Credit, when and as due, and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrower under this Agreement and the other Loan
Documents and (b) the due and punctual performance of all other covenants,
agreements, obligations and liabilities of the Borrower under or pursuant to
this Agreement and the other Loan Documents.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum adopted from time
to time by The Toronto-Dominion Bank at its principal office in New York City
as its prime commercial lending rate; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as
being effective.
"Proposed Modifications" has the meaning assigned to such term in
Section 2.20.
"Rating Agencies" means Fitch, Moody's and S&P.
"Reference Ratings" means the ratings of the credit facilities
established by this Agreement by the Rating Agencies.
"Register" has the meaning set forth in Section 9.04.
"Regulatory Event" means any change in applicable law or any
adoption of or change in any rule, regulation or order of the ACC or any
other Governmental Authority having jurisdiction over the Borrower as a
result of which the Borrower is or will be required (a) to sell or transfer
all or a substantial portion of its generating assets (other than to a wholly
owned subsidiary of the Borrower if such assets remain subject at all times
after such sale or transfer to the Lien of the Second Indenture) or (b) to
purchase in open market transactions any substantial portion of its power
requirements (other than requirements that cannot be satisfied by the
Borrower's own generating assets).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, trustees, officers,
employees, agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Credit
Exposures and unused Revolving Commitments representing a majority of the sum
of the total Credit Exposures and the unused Revolving Commitments at such
time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancelation
or termination of any such shares of capital stock of the Borrower or any
option, warrant or other right to acquire any such shares of capital stock of
the Borrower.
"Revenue Bond Indenture" means, with respect to any Letter of
Credit, the Revenue Bond Indenture, as amended and supplemented from time to
time, in respect of the Revenue Bonds referenced on Schedule 2.05 for such
Letter of Credit.
"Revenue Bond Loan Agreement" means, with respect to any Letter of
Credit, the Revenue Bond Loan Agreement in respect of the Revenue Bonds
referenced on Schedule 2.05 for such Letter of Credit, as applicable.
"Revenue Bonds" means, with respect to any Letter of Credit, the
Revenue Bonds referenced on Schedule 2.05 for such Letter of Credit.
"Revenue Bond Trustee" means, with respect to any Letter of Credit,
the trustee and/or agent, as applicable, named in such Letter of Credit's
Revenue Bond Indenture, and any successor or assign thereof.
"Revolving Availability Period" means the period from and including
the Effective Date to but excluding the earlier of the Revolving Maturity
Date and the date of the termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Revolving
Lender, the commitment of such Lender to make Revolving Loans hereunder,
expressed as an amount representing the maximum aggregate permitted amount of
such Revolving Lender's Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.09 or
2.20 and (b) reduced or increased from time to time pursuant to assignments
by or to such Lender pursuant to Section 9.04. The initial amount of each
Revolving Lender's Revolving Commitment is set forth on Schedule 2.01, or in
the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Revolving Commitment, as applicable. The initial aggregate
amount of the Revolving Lenders' Revolving Commitments is $60,000,000.
"Revolving Credit Exposure" means, with respect to any Revolving
Lender at any time, the aggregate outstanding principal amount of such
Revolving Lender's Revolving Loans at such time.
"Revolving Lender" means a Lender having a Revolving Commitment.
"Revolving Loan" means a Loan made pursuant to Sections 2.01 and
2.03.
"Revolving Maturity Date" means November 13, 2003.
"Sale Leaseback" shall mean any transaction or series of related
transactions pursuant to which the Borrower or any of its Subsidiaries sells,
transfers or otherwise disposes of any property, real or personal, whether
now owned or hereafter acquired, and thereafter rents or leases such property
or other property that it intends to use for substantially the same purpose
or purposes as the property being sold, transferred or disposed of.
"San ▇▇▇▇▇▇" means San ▇▇▇▇▇▇ Resources Inc., an Arizona
corporation.
"S&P" means Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Second Indenture" means the Indenture of Mortgage and Deed of
Trust dated as of December 1, 1992, of the Borrower to The Bank of New York,
as trustee, as amended, supplemented or otherwise modified from time to time.
"Second Mortgage Bonds" means the Borrower's Second Mortgage Bonds
issued under the Second Indenture.
"Security Documents" means the Second Indenture, the Fourth
Supplemental Indenture, the Collateral Mortgage Bonds, the Bond Delivery
Agreement, the Revenue Bond Pledge Agreements, and each other security
agreement or other instrument or document executed and delivered pursuant to
Section 5.10 or pursuant to any of the foregoing documents to secure any of
the Obligations.
"Significant Subsidiary" means (a) San ▇▇▇▇▇▇, (b) any Subsidiary
that directly or indirectly owns or Controls any other Significant Subsidiary
and (c) any other Subsidiary the Borrower's direct or indirect proportionate
share of consolidated total assets of which as of the end of the most recent
fiscal quarter for which financial statements have been delivered pursuant to
Section 5.01 was greater than or equal to 10% of the consolidated total
assets as of such date of the Borrower and the Consolidated Subsidiaries,
taken as a whole. For purposes of making the determinations required by this
definition, revenues and assets of foreign Subsidiaries shall be converted
into dollars at the rates used in preparing the consolidated balance sheet of
the Borrower included in the applicable financial statements.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board (a) with respect to the Base CD Rate, for
new negotiable nonpersonal time deposits in dollars of over $100,000 with
maturities approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to
any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company, partnership,
association or other 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, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, 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.
"Subsidiary" means any subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of
the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day) or, if such rate is not
so reported on such day or such next preceding Business Day, the average of
the secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
11:00 a.m., New York City time, on such day (or, if such day is not a
Business Day, on the next preceding Business Day) by the Administrative Agent
from three negotiable certificate of deposit dealers of recognized standing
selected by it.
"Total Tranche B Credit-Linked Deposit" means, at any time, the sum
of all the Tranche B Lenders' Tranche B Credit-Linked Deposits, as the same
may be reduced from time to time pursuant to Section 2.09.
"Tranche A LC Commitment" means, with respect to each Tranche A
Lender, the commitment of such Lender to acquire participations in Tranche A
Letters of Credit hereunder, expressed as an amount representing the maximum
aggregate permitted amount of such Lender's Tranche A LC Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial
amount of each Tranche A Lender's Tranche A LC Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Tranche A LC Commitment, as applicable. The
initial aggregate amount of the Tranche A Lenders' Tranche A LC Commitments
is $134,694,445.
"Tranche A LC Disbursement" means a payment made by an Issuing Bank
pursuant to a Tranche A Letter of Credit.
"Tranche A LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Tranche A Letters of Credit at
such time plus (b) the aggregate amount of all Tranche A LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such
time minus (c) the aggregate amount of cash collateral held by the
Administrative Agent as security for the Borrower's reimbursement obligations
in respect of Tranche A Letters of Credit pursuant to Section 2.20. The
Tranche A LC Exposure of any Tranche A Lender at any time shall be its
Applicable Percentage of the total Tranche A LC Exposure at such time.
"Tranche A Lender" means a Lender having Tranche A Commitments.
"Tranche A Letters of Credit" means the Letters of Credit issued
pursuant to Section 2.05(a).
"Tranche A Maturity Date" means the date that is the earlier of (a)
the day corresponding to the Effective Date (or, if there is no corresponding
day, the last Business Day) in the 39th month following the month in which
the Effective Date shall have occurred and (b) January 31, 2006.
"Tranche B Credit-Linked Deposit" shall mean, as to each Tranche B
Lender, the cash deposit made by such Lender pursuant to Section 2.05(d)(ii),
as such deposit may be (a) reduced from time to time pursuant to Section 2.09
and (b) reduced or increased from time to time pursuant to assignments by or
to such Lender pursuant to Section 9.04. The initial amount of each Tranche
B Lender's Tranche B Credit-Linked Deposit is set forth on Schedule 2.01, or
in the Assignment and Acceptance pursuant to which such Lender shall have
acquired its Tranche B Credit-Linked Deposit, as applicable. The initial
aggregate amount of the Tranche B Lenders' Tranche B Credit-Linked Deposits
is $205,892,602.
"Tranche B Credit-Linked Deposit Account" shall mean the account
established by the Administrative Agent under its sole and exclusive control
maintained at the office of The Toronto-Dominion Bank at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, designated as the "Tucson Tranche B Credit-Linked
Deposit Account" that shall be used solely to hold the Tranche B Credit-
Linked Deposits.
"Tranche B LC Disbursement" means a payment made by an Issuing Bank
pursuant to a Tranche B Letter of Credit.
"Tranche B LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Tranche B Letters of Credit at
such time plus (b) the aggregate amount of all Tranche B LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such
time. The Tranche B LC Exposure of any Tranche B Lender at any time shall be
its Applicable Percentage of the total Tranche B LC Exposure at such time.
"Tranche B Lender" means a Lender having a Tranche B Credit-Linked
Deposit.
"Tranche B Letters of Credit" means, the letters of credit issued
pursuant to Section 2.05(a).
"Tranche B Maturity Date" means November 14, 2006.
"Transactions" means the execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents, the borrowing of
Loans, the use of the proceeds thereof, the issuance of Letters of Credit and
the issuance of the Collateral Mortgage Bonds to the Administrative Agent
under the Fourth Supplemental Indenture and the Bond Delivery Agreement.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Utility Business" means the business of producing, developing,
generating, transmitting, distributing, selling or supplying electrical
energy for any purpose, or any business incidental thereto or necessary in
connection therewith, or any business reasonably desirable in connection
therewith which the ACC or other utility regulatory body shall have
authorized the Borrower to enter.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans may be classified and referred to by Type
(e.g., a "Eurodollar Loan"). Borrowings also may be classified and referred
to by Type (e.g., a "Eurodollar Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein
shall apply equally to 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". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed
to include such Person's successors and assigns, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. 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 that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the appli
cation thereof, then such provision shall be interpreted on the basis of GAAP
as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.
ARTICLE II
The Credits
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SECTION 2.01. REVOLVING COMMITMENTS. Subject to the terms and
conditions set forth herein, each Revolving Lender agrees to make Revolving
Loans to the Borrower from time to time during the Revolving Availability
Period in an aggregate principal amount that will not result in (a) such
Revolving Lender's Revolving Credit Exposure exceeding its Revolving
Commitment or (b) the aggregate Revolving Credit Exposures exceeding the
aggregate Revolving Commitments. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay
and reborrow Revolving Loans.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Revolving Loan
shall be made as part of a Borrowing consisting of Revolving Loans made by
the Revolving Lenders ratably in accordance with their respective Revolving
Commitments. The failure of any Revolving Lender to make any Revolving Loan
required to be made by it shall not relieve any other Revolving Lender of its
obligations hereunder; PROVIDED that the Revolving Commitments of the
Revolving Lenders are several and no Revolving Lender shall be responsible
for any other Revolving Lender's failure to make Revolving Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Revolving Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Revolving 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.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is
not less than $5,000,000. At the time that each ABR Revolving Borrowing is
made, such Borrowing shall be in an aggregate amount that is not less than
$5,000,000 in increments of $1,000,000; PROVIDED that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e).
Borrowings of more than one Type may be outstanding at the same time;
PROVIDED that there shall not at any time be more than a total of five
Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date.
SECTION 2.03. REQUESTS FOR REVOLVING BORROWINGS. To request a
Revolving Borrowing, the Borrower shall notify the Administrative Agent of
such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 12:00 noon, New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not
later than 12:00 noon, New York City time, one Business Day before the date
of the proposed Borrowing; PROVIDED that any such notice of an ABR Revolving
Borrowing to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e) may be given not later than 11:00 a.m., New York City
time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written Borrowing Request in a
form approved by the Administrative Agent and signed by the Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest
Period is specified with respect to any requested Eurodollar Revolving
Borrowing, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall
advise each Revolving Lender of the details thereof and of the amount of such
Revolving Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. EXTENSION OF REVOLVING MATURITY DATE. The Borrower
may, by notice to the Administrative Agent (which shall promptly deliver a
copy to each of the Revolving Lenders) given not less than 45 days and not
more than 60 days prior to the Revolving Maturity Date at any time in effect,
request that the Lenders extend the Revolving Maturity Date for an additional
period of not more than 364 days as specified in such notice. Each Revolving
Lender shall, by notice to the Borrower and the Administrative Agent given
not earlier than the 30th day and not later than the 25th day prior to the
Revolving Maturity Date then in effect, advise the Borrower whether or not it
agrees to such extension on the terms set forth in such notice. Any
Revolving Lender that has not so advised the Borrower and the Administrative
Agent by such day shall be deemed to have declined to agree to such
extension. If the Borrower shall have requested and Revolving Lenders
representing more than 50% of the aggregate Revolving Commitments shall have
agreed to an extension of the Revolving Maturity Date, then the Revolving
Maturity Date shall be extended for the additional period and on the terms
specified in the Borrower's notice. The decision to agree or withhold
agreement to any extension of the Revolving Maturity Date hereunder shall be
at the sole discretion of each Revolving Lender. The Revolving Commitment of
any Revolving Lender that has declined to agree to any requested extension of
the Revolving Maturity Date (a "Non-Extending Lender") shall terminate on the
Revolving Maturity Date in effect prior to giving effect to any such
extension (the "Existing Revolving Maturity Date"), and the principal amount
of any outstanding Revolving Loans made by such Lender, together with any
accrued interest thereon, and any accrued fees and other amounts payable to
or for the account of such Revolving Lender hereunder, shall be due and
payable on the Existing Revolving Maturity Date. Notwithstanding the
foregoing provisions of this paragraph, the Borrower shall have the right,
pursuant to Section 2.19(b), to replace a Non-Extending Lender with a Lender
or other financial institution that will agree to an extension of the
Revolving Maturity Date.
SECTION 2.05. LETTERS OF CREDIT. (a) ISSUANCE AND AMENDMENT.
Subject to the terms and conditions set forth in Section 2.06 and elsewhere
herein, each Issuing Bank agrees to issue on the Effective Date the Tranche A
and Tranche B Letters of Credit set forth opposite its name on Schedule 2.05
hereto in the respective forms attached to such Schedule 2.05. If requested
by any Issuing Bank, the Borrower shall submit a letter of credit application
on such Issuing Bank's standard form in connection with the issuance of any
Letter of Credit to be issued by such Issuing Bank. In the event of any
inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
any Issuing Bank relating to any Letter of Credit, the terms and conditions
of this Agreement shall control. Any Letter of Credit may be amended by the
applicable Issuing Bank at the request of the Borrower and with the consent
of the Administrative Agent; PROVIDED, that no such amendment shall increase
the stated amount of a Letter of Credit or extend the expiration date thereof
beyond the last permissible date referred to in paragraph (c) below. To
request an amendment to an outstanding Letter of Credit, the Borrower shall
hand deliver or telecopy to the applicable Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of
amendment) a notice identifying the Letter of Credit to be amended and
specifying the date of amendment (which shall be a Business Day), the amount
of such Letter of Credit, the name and address of the beneficiary thereof and
such other information as shall be necessary to amend such Letter of Credit.
(b) LIMITATION OF AMOUNT. A Letter of Credit shall be issued,
amended or extended only if (and upon issuance, amendment or extension of
each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment or extension (i) the
Tranche A LC Exposure will not exceed the aggregate amount of the Tranche A
LC Commitments and (ii) the Tranche B LC Exposure will not exceed the
aggregate amount of the Total Tranche B Credit-Linked Deposits (including any
amount of such Tranche B Credit-Linked Deposits that shall have been applied
to reimburse outstanding Tranche B LC Disbursements).
(c) EXPIRATION DATE. Each Tranche A Letter of Credit shall expire
not later than the close of business on the Tranche A Maturity Date and each
Tranche B Letter of Credit shall expire not later than the close of business
on the Tranche B Maturity Date.
(d) (i) PARTICIPATIONS OF TRANCHE A LENDERS. On the Effective
Date, without any further action on the part of any Issuing Bank or the
Tranche A Lenders, each Issuing Bank issuing one or more Tranche A Letters of
Credit hereby grants to each Tranche A Lender, and each Tranche A Lender
hereby acquires from such Issuing Bank, a participation in each such
Tranche A Letter of Credit equal to such Tranche A Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Tranche A
Letter of Credit. In consideration and in furtherance of the foregoing, each
Tranche A Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the applicable Issuing Bank, such
Tranche A Lender's Applicable Percentage of each Tranche A LC Disbursement
made by such Issuing Bank and not reimbursed by the Borrower on the date due
as provided in paragraph (e)(i) of this Section or, with respect to any
Tranche A LC Disbursement referred to in paragraph (e)(ii) of this Section,
on the date reimbursement would have been due had such Tranche A LC
Disbursement been governed by paragraph (e)(i), or of any reimbursement
payment in respect of a Tranche A LC Disbursement required to be refunded to
the Borrower for any reason.
(ii) PARTICIPATIONS OF TRANCHE B LENDERS. On the Effective Date,
without any further action on the part of any Issuing Bank or the Tranche B
Lenders, each Issuing Bank issuing one or more Tranche B Letters of Credit
hereby grants to each Tranche B Lender, and each Tranche B Lender hereby
acquires from such Issuing Bank, a participation in each such Tranche B
Letter of Credit equal to such Tranche B Lender's Applicable Percentage of
the aggregate amount available to be drawn under such Tranche B Letter of
Credit. The aggregate purchase price for the participations of each Tranche
B Lender in Tranche B Letters of Credit shall equal the amount of the
Tranche B Credit-Linked Deposit of such Tranche B Lender. Each Tranche B
Lender shall pay to the Administrative Agent its Tranche B Credit-Linked
Deposit in full on the Effective Date. Each Tranche B Lender hereby
absolutely and unconditionally agrees that if an Issuing Bank makes a Tranche
B LC Disbursement which is not reimbursed by the Borrower on the date due as
provided in paragraph (e)(i) of this Section or, with respect to any Tranche
B LC Disbursement referred to in paragraph (e) (ii) of this Section, on the
date reimbursement would have been due had such Tranche B LC Disbursement
been governed by paragraph (e)(i), or is required to refund any reimbursement
payment in respect of a Tranche B LC Disbursement to the Borrower for any
reason, the Administrative Agent shall reimburse the applicable Issuing Bank
for the amount of such Tranche B LC Disbursement from such Tranche B Lender's
Tranche B Credit-Linked Deposit on deposit in the Tranche B Credit-Linked
Deposit Account. In the event the Tranche B Credit-Linked Deposit Account is
charged by the Administrative Agent to reimburse the applicable Issuing Bank
for an unreimbursed Tranche B LC Disbursement, the Borrower shall have the
right, at any time prior to the Tranche B Maturity Date, to pay over to the
Administrative Agent in reimbursement thereof an amount equal to the amount
so charged for deposit in the Tranche B Credit-Linked Deposit Account. In
the event that any reimbursement shall be due to an Issuing Bank under the
preceding provisions of this paragraph on a day other than the last day of an
Interest Period in effect for the Tranche B Credit-Linked Deposits, the
Administrative Agent shall have the right, but not the obligation, to advance
its own funds to cover the amount due to such Issuing Bank, in which case (i)
title to an amount of each Tranche B Lender's Tranche B Credit-Linked Deposit
equal to its Applicable Percentage of the amount so advanced by the
Administrative Agent (together with the interest accruing thereon) shall
automatically be transferred to the Administrative Agent, which shall
reimburse itself for the amount advanced by it through the liquidation of
such amounts of the Tranche B Credit-Linked Deposits at the end of the
applicable Interest Period, and (ii) the Borrower shall pay to the
Administrative Agent, upon the Administrative Agent's request therefor, the
amount, if any, by which the Administrative Agent's cost of funds for the
period from the date of such reimbursement of the Issuing Bank through the
end of the applicable Interest Period, as determined by the Administrative
Agent (such determination to be conclusive absent manifest error) and set
forth in the request for payment delivered to the Borrower, shall exceed the
interest accrued on a like amount of the Tranche B Credit-Linked Deposits at
the LIBO Rate for such Interest Period. In the event the Borrower shall fail
to pay any amount due under clause (ii) of the preceding sentence, the
interest payable by the Administrative Agent to the Tranche B Lenders on
their Tranche B Credit-Linked Deposits under Section 2.06(b) shall be
correspondingly reduced and the Tranche B Lenders shall without further act
succeed, ratably in accordance with their Applicable Percentages, to the
rights of the Administrative Agent with respect to such amount.
(iii) OBLIGATIONS UNCONDITIONAL. Each Tranche A Lender and
Tranche B Lender acknowledges and agrees that its obligation to acquire and
fund participations in respect of Letters of Credit pursuant to the preceding
subparagraphs (i) and (ii) is absolute, unconditional and irrevocable and
shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or the reduction or termination of the Tranche A
LC Commitments or the return of the Tranche B Credit-Linked Deposits, and
that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Without limiting the foregoing, each
Tranche B Lender irrevocably authorizes the Administrative Agent to apply
amounts of its Tranche B Credit-Linked Deposit as provided in the preceding
subparagraph (ii).
(e) REIMBURSEMENT. (i) If any Issuing Bank shall make any
LC Disbursement in respect of a Letter of Credit, the Borrower shall, except
as provided in paragraph (ii) below, reimburse such LC Disbursement by paying
to the Administrative Agent an amount equal to such LC Disbursement not later
than 1:00 p.m., New York City time, on the date that such LC Disbursement is
made, if the Borrower shall have received notice of such LC Disbursement
prior to 11:00 a.m., New York City time, on such date, or, if such notice has
not been received by the Borrower prior to such time on such date, then not
later than 1:00 p.m., New York City time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to
11:00 a.m., New York City time, on the day of receipt, or (ii) the Business
Day immediately following the day that the Borrower receives such notice, if
such notice is not received prior to such time on the day of receipt;
PROVIDED that the Borrower may, subject to the conditions to borrowing set
forth herein, request in accordance with Sections 2.01 and 2.03 that such
payment be financed with an ABR Revolving Borrowing in an equivalent amount
and, to the extent so financed, the Borrower's obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing.
(ii) In the case of any LC Disbursement to fund the payment of the
purchase price (to the extent such purchase price is attributable to the
principal of a Revenue Bond) of any Revenue Bond that the Borrower is unable
to remarket prior to the day on which payment of the purchase price of such
Revenue Bond is due to the holder or owner thereof (a "Purchase Price
Disbursement"), the Borrower shall reimburse such Purchase Price Disbursement
on or prior to the Tranche A Maturity Date or Tranche B Maturity Date, as the
case may be; PROVIDED that (A) such Revenue Bond shall be promptly delivered
and pledged to the applicable Issuing Bank under a pledge agreement in
substantially the form of Exhibit C and otherwise satisfactory to such
Issuing Bank and the Administrative Agent, (B) any portion of such Purchase
Price Disbursement may be reimbursed at any time by or on behalf of the
Borrower on one Business Day's notice stating the amount to be reimbursed
(which shall be $100,000 or a whole multiple thereof) and directing such
Issuing Bank to deliver Revenue Bonds held by or for the account of such
Issuing Bank to or upon the order of the Borrower against repayment of the
portion of such Purchase Price Disbursement attributable to such Revenue
Bonds with the proceeds of the remarketing of such Revenue Bonds and
specifying the principal amount of Revenue Bonds to be so delivered, and
(C) upon payment to the Administrative Agent for the account of such Issuing
Bank of the amount of any such repayment, together with accrued interest to
the date of such repayment on the amount of the Purchase Price Disbursement
to be reimbursed, the outstanding obligations of the Borrower in respect of
such Purchase Price Disbursement shall be reduced by the amount of such
reimbursement, interest shall cease to accrue on the amount so reimbursed and
such Issuing Bank shall release to or upon the order of the Borrower from the
pledge and security interest created by the applicable pledge agreement a
principal amount of Revenue Bonds held under such pledge agreement equal to
the amount of such repayment; PROVIDED that, prior to the release of such
Revenue Bonds, the Borrower shall have paid to the Administrative Agent the
amount of any LC Disbursement made in connection with the purchase of such
Revenue Bonds to pay the interest portion of the purchase price thereof. The
provisions of paragraph (i) above shall apply with respect to any portion of
such an LC Disbursement on the Tranche A Maturity Date or Tranche B Maturity
Date, as applicable, as if it were an LC Disbursement in respect of which the
Borrower received notice prior to 11:00 a.m., New York City time, on the
Tranche A Maturity Date or Tranche B Maturity Date, as applicable. Whenever
an Issuing Bank is holding Revenue Bonds pursuant to a pledge agreement in
respect of a Letter of Credit and accordingly receives a payment of interest
on such pledged Revenue Bonds, such Issuing Bank shall promptly deliver such
interest so received to the Administrative Agent for application to the
payment of accrued and unpaid interest on all outstanding Purchase Price
Disbursements of such Issuing Bank in respect of such Letter of Credit. If
the amount of interest so received exceeds the amount of accrued and unpaid
interest on such Purchase Price Disbursements on the date of receipt, such
Issuing Bank shall hold the unused balance of such interest received and
apply it on a daily basis to interest accrued on such Purchase Price
Disbursements.
(iii) If any Tranche B LC Disbursement that shall have been
funded from the Tranche B Credit-Linked Deposits shall be reimbursed pursuant
to paragraph (i) or (ii) above other than on the last day of an Interest
Period applicable to the Tranche B Credit-Linked Deposits, the Administrative
Agent shall invest the amount so reimbursed in overnight or short-term cash
equivalent investments until the end of the Interest Period at the time in
effect and the Borrower shall pay to the Administrative Agent, upon the
Administrative Agent's request therefor, the amount, if any, by which the
interest accrued on a like amount of the Tranche B Credit-Linked Deposits at
the LIBO Rate for the Interest Period in effect therefor shall exceed the
interest earned through the investment of the amount so reimbursed for the
period from the date of such reimbursement through the end of the applicable
Interest Period, as determined by the Administrative Agent (such
determination to be conclusive absent manifest error) and set forth in the
request for payment delivered to the Borrower. In the event the Borrower
shall fail to pay any amount due under this paragraph, the interest payable
by the Administrative Agent to the Tranche B Lenders on their Tranche B
Credit-Linked Deposits under Section 2.06(b) shall be correspondingly reduced
and the Tranche B Lenders shall without further act succeed, ratably in
accordance with their Applicable Percentages, to the rights of the
Administrative Agent with respect to such amount.
(iv) If the Borrower fails to make any payment due under
paragraph (i) above with respect to a Tranche A LC Disbursement, or if any
Purchase Price Disbursement shall be made under a Tranche A Letter of Credit,
the Administrative Agent shall notify each Tranche A Lender of the applicable
Tranche A LC Disbursement and such Tranche A Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Tranche A Lender
shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in
Section 2.07 with respect to Loans made by Revolving Lenders (and
Section 2.07 shall apply, MUTATIS MUTANDIS, to the payment obligations of the
Tranche A Lenders), and the Administrative Agent shall promptly pay to the
applicable Issuing Bank the amounts so received by it from the Tranche A
Lenders. If the Borrower fails to make any payment due under paragraph (i)
above with respect to a Tranche B LC Disbursement, or if any Purchase Price
Disbursement shall be made under a Tranche B Letter of Credit, the
Administrative Agent shall notify each Tranche B Lender of the applicable
Tranche B LC Disbursement and such Tranche B Lender's Applicable Percentage
thereof, and the Administrative Agent shall promptly pay to the applicable
Issuing Bank each Tranche B Lender's Applicable Percentage of such Tranche B
LC Disbursement from such Tranche B Lender's Tranche B Credit-Linked Deposit
(or from funds of the Administrative Agent as contemplated by the last
sentence of paragraph (d)(ii) above). Promptly following receipt by the
Administrative Agent of any payment pursuant to paragraph (i) or (ii) above
in respect of any LC Disbursement, the Administrative Agent shall distribute
such payment to the applicable Issuing Bank or, (A) to the extent that
Tranche A Lenders have made payments pursuant to this paragraph to reimburse
such Issuing Bank in connection with an unreimbursed Tranche A LC
Disbursement, then to such Tranche A Lenders as their interests may appear
and (B) to the extent payments have been made from the Tranche B Credit-
Linked Deposits or from funds of the Administrative Agent to reimburse such
Issuing Bank in connection with an unreimbursed Tranche B LC Disbursement, to
the Tranche B Credit-Linked Deposit Account to be added to the Tranche B
Credit-Linked Deposits of the Tranche B Lenders in accordance with their
respective Applicable Percentages or to reimburse the Administrative Agent,
as the case may be. The Borrower acknowledges that each payment made pursuant
to paragraph (i) or (ii) above in respect of any LC Disbursement is required to
be made for the benefit of the distributees indicated in the immediately
preceding sentence. Any payment made by a Tranche A Lender or from the
Tranche B Credit-Linked Deposit Account, or from funds of the Administrative
Agent, pursuant to this paragraph to reimburse an Issuing Bank for any
Tranche A LC Disbursement or Tranche B LC Disbursement shall not constitute a
Loan and shall not relieve the Borrower of its obligation to reimburse such
LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever
and irrespective of (i) any lack of validity or enforceability of any Letter
of Credit or this Agreement, or any term or provision therein, (ii) any draft
or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or
equitable discharge of, or provide a right of setoff against, the Borrower's
obligations hereunder. None of the Administrative Agent, the Tranche A
Lenders, the Tranche B Lenders, the Issuing Banks or any of their Related
Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice
or other communication under or relating to any Letter of Credit (including
any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes
beyond the control of the applicable Issuing Bank; PROVIDED that the fore
going shall not be construed to excuse such Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused
by such Issuing Bank's failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of
gross negligence or wilful misconduct on the part of an Issuing Bank (as
finally determined by a court of competent jurisdiction), such Issuing Bank
shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit,
the applicable Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
(g) DISBURSEMENT PROCEDURES. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent
a demand for payment under a Letter of Credit. Such Issuing Bank shall
promptly notify the Administrative Agent and the Borrower by telephone (con
firmed by telecopy) of such demand for payment and whether such Issuing Bank
has made or will make an LC Disbursement thereunder; PROVIDED that any
failure to give or delay in giving such notice shall not relieve the Borrower
of its obligation to reimburse such Issuing Bank and the Tranche A Lenders or
Tranche B Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If an Issuing Bank shall make any
LC Disbursement, then, unless the Borrower shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at (i) in the case of a Tranche A LC
Disbursement, the rate per annum then applicable to ABR Revolving Loans, and
(ii) in the case of a Tranche B LC Disbursement, at the LIBO Rate for the
Interest Period at the time in effect for the Credit-Linked Deposits PLUS
5.50% per annum; PROVIDED that, if the Borrower fails to reimburse such
LC Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph
shall be for the account of the applicable Issuing Bank, except that interest
accrued on and after the date of payment by any Tranche A Lender or from the
Tranche B Credit-Linked Deposit of any Tranche B Lender (or with funds of the
Administrative Agent pending the application of such Tranche B Credit-Linked
Deposit) to reimburse an Issuing Bank shall be for the account of such
Tranche A Lender or Tranche B Lender, as applicable, to the extent of such
payment.
(i) REPLACEMENT OF AN ISSUING BANK. Any Issuing Bank may be
replaced at any time by written agreement among the Borrower and the
Administrative Agent; PROVIDED, HOWEVER, that the Administrative Agent shall
review any such proposed agreement for form only and not with respect to the
identity of any successor Issuing Bank or the identity of the Issuing Bank to
be replaced (subject in the case of any replacement of any Affiliate of the
Administrative Agent to the provisions of the first paragraph of
Article VIII). The Administrative Agent shall notify the Tranche A Lenders
and Tranche B Lenders of any such replacement of an Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b) and shall return to such Issuing Bank each Letter of Credit
issued by such Issuing Bank. From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued by it on such effective date or thereafter and
(ii) references herein to the term "Issuing Bank" shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by
it prior to such replacement, but shall not be required to issue additional
Letters of Credit.
(j) ACCELERATION OF REVENUE BONDS. If any Event of Default shall
occur and be continuing, the Administrative Agent may, and at the request of
the Required Lenders shall, direct the applicable Issuing Bank to take such
steps as are required and available to it under any Revenue Bond Indenture to
cause the Revenue Bond Trustee thereunder to declare the principal amount of
all Revenue Bonds then outstanding thereunder to be immediately due and
payable and, to the extent necessary to make all payments then due and
payable on the Revenue Bonds, require all necessary drawings under the
applicable Letter of Credit to be made in respect thereof, whereupon such
Issuing Bank shall pay from its general funds (or, in the case of a Tranche B
Letter of Credit, from the Tranche B Credit-Linked Deposits) the amounts so
drawn and such amounts, all interest thereon and all other amounts payable by
the Borrower hereunder in respect thereof shall automatically be forthwith
due and payable.
SECTION 2.06. CREDIT-LINKED DEPOSIT ACCOUNT. (a) The Tranche B
Credit-Linked Deposits shall be held by the Administrative Agent in the
Tranche B Credit-Linked Deposit Account, and no party other than the
Administrative Agent shall have a right of withdrawal from the Tranche B
Credit-Linked Deposit Account or any other right or power with respect to the
Tranche B Credit-Linked Deposits. Notwithstanding anything herein to the
contrary, the funding obligation of each Tranche B Lender in respect of its
participation in Tranche B Letters of Credit shall be satisfied in full upon
the funding of its Tranche B Credit-Linked Deposit.
(b) Each of the Administrative Agent, each Issuing Bank issuing
any Tranche B Letter of Credit and each Tranche B Lender hereby acknowledges
and agrees that each Tranche B Lender is funding its Tranche B Credit-Linked
Deposit to the Administrative Agent for application in the manner
contemplated by Section 2.05(d) and that the Administrative Agent has agreed
to invest the Tranche B Credit-Linked Deposits so as to earn a return (except
during periods when such Tranche B Credit-Linked Deposits, or funds advanced
by the Administrative Agent against such Tranche B Credit-Linked Deposits,
are used to cover unreimbursed Tranche B LC Disbursements, and subject to
Section 2.14) for the Tranche B Lenders equal at any time to the LIBO Rate
for the Interest Period in effect for the Tranche B Credit-Linked Deposits at
such time. Such interest will be paid to the Tranche B Lenders by the
Administrative Agent at the applicable LIBO Rate (or at an amount determined
in accordance with clause (iii) of Section 2.14, if applicable) in arrears on
the last day of each Interest Period applicable to the Tranche B Credit-
Linked Deposits.
(c) The Borrower shall have no right, title or interest in or to
the Tranche B Credit-Linked Deposits and no obligations with respect thereto
(except to refund portions thereof used to fund LC Disbursements as provided
in Section 2.05(e)), it being acknowledged and agreed by the parties hereto
that the making of the Tranche B Credit-Linked Deposits by the Tranche B
Lenders, the provisions of this Section 2.06 and the application of the
Tranche B Credit-Linked Deposits in the manner contemplated by Section
2.05(d) constitute agreements among the Administrative Agent, each Issuing
Bank issuing any Tranche B Letter of Credit and each Tranche B Lender with
respect to the funding obligations of each Tranche B Lender in respect of its
participation in Tranche B Letters of Credit and do not constitute any loan
or extension of credit to the Borrower.
SECTION 2.07. FUNDING OF BORROWINGS. (a) Each Revolving Lender
shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 1:00 p.m., New York City
time, to the account of the Administrative Agent most recently designated by
it for such purpose by notice to the Lenders. The Administrative Agent will
make such Loans available to the Borrower by promptly crediting the amounts
so received, in like funds, to an account of the Borrower maintained with The
Toronto-Dominion Bank, New York Branch, in New York and designated by the
Borrower in the applicable Borrowing Request; PROVIDED that ABR Revolving
Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.05(e) shall be remitted by the Administrative Agent to the
applicable Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Revolving Lender prior to the proposed date of any Borrowing that such
Revolving Lender will not make available to the Administrative Agent such
Revolving Lender's share of such Borrowing, the Administrative Agent may
assume that such Revolving Lender has made such share available on such date
in accordance with paragraph (a) of this Section and may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. In
such event, if a Revolving Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the
applicable Revolving Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is
made available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Revolving Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans. If such Revolving Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Revolving
Lender's Loan included in such Borrowing.
SECTION 2.08. INTEREST ELECTIONS. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in
the case of a Eurodollar Revolving Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among
the Revolving Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative
Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or
a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Revolving Lender of the details
thereof and of such Revolving Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of
the Interest Period applicable thereto, then, unless such Borrowing is repaid
as provided herein, at the end of such Interest Period such Borrowing shall
be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Revolving Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS; RETURN OF
TRANCHE B CREDIT-LINKED DEPOSITS. (a) Unless previously terminated, the
Revolving Commitments shall terminate on the Revolving Maturity Date. If any
Tranche A Letter of Credit remains outstanding on the Tranche A Maturity
Date, or if any Tranche B Letter of Credit remains outstanding on the Tranche
B Maturity Date, the Borrower will deposit with the Administrative Agent an
amount in cash equal to 105% of the aggregate undrawn amount of such Letter
of Credit to secure the Borrower's reimbursement obligations with respect to
any drawings that may occur thereunder. Subject only to the Borrower's
compliance with its obligations under the preceding sentence, the Tranche A
Commitments will terminate on the Tranche A Maturity Date and any amount of
the Tranche B Credit-Linked Deposits held in the Tranche B Credit-Linked
Deposit Account will be returned to the Tranche B Lenders on the Tranche B
Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Commitments or the Tranche A LC Commitments; PROVIDED
that (i) each reduction of the Revolving Commitments or the Tranche A LC
Commitments shall be in an amount that is an integral multiple of $1,000,000
and not less than $5,000,000 and (ii) the Borrower shall not terminate or
reduce any Revolving Commitments or Tranche A LC Commitments if, after giving
effect to such reduction and any concurrent prepayment of the Loans in
accordance with Section 2.11, the aggregate Revolving Credit Exposures would
exceed the aggregate Revolving Commitments or the Tranche A LC Exposure would
exceed the aggregate Tranche A LC Commitments. The Borrower may at any time
or from time to time direct the Administrative Agent to reduce the Total
Tranche B Credit-Linked Deposits; PROVIDED that (i) each reduction of the
Tranche B Credit-Linked Deposits shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower
shall not direct the Administrative Agent to reduce the Tranche B Credit-
Linked Deposits if, after giving effect to such reduction, the aggregate
Tranche B LC Exposure would exceed the aggregate Tranche B LC Commitments.
In the event the Tranche B Credit-Linked Deposits shall be reduced as
provided in the preceding sentence, the Administrative Agent will return all
amounts in the Tranche B Credit-Linked Deposit Account in excess of the
reduced Tranche B Credit-Linked Deposits to the Tranche B Lenders, ratably in
accordance with their Applicable Percentages of the Total Tranche B Credit-
Linked Deposit.
(c) In the event that any Revenue Bonds shall be redeemed, repaid
or otherwise retired, the Borrower shall, to the extent permitted under the
documentation for such Revenue Bonds, and after reimbursement of any LC
Disbursement made in connection with such redemption, repayment or
retirement, permanently reduce the stated amount of the applicable Letter of
Credit and the Tranche A LC Commitments or the Total Tranche B Credit-Linked
Deposit, as applicable, hereunder shall be automatically and permanently
reduced by an amount equal to the amount of such reduction as of the date
such reduction becomes effective. In the event the Tranche B Credit-Linked
Deposits shall be reduced as provided in the preceding sentence, the
Administrative Agent will return all amounts in the Tranche B Credit-Linked
Deposit Account in excess of the reduced Tranche B Credit-Linked Deposits to
the Tranche B Lenders, ratably in accordance with their Applicable
Percentages of the Total Tranche B Credit-Linked Deposit.
(d) The Borrower shall notify the Administrative Agent of any
election or requirement to terminate or reduce the Commitments or the Total
Tranche B Credit-Linked Deposit under paragraph (b) or (c) of this Section at
least three Business Days prior to the effective date of such termination or
reduction (or as soon as practicable but in any event no later than such
effective date, in the case of a reduction under paragraph (c)), specifying
such election and the effective date thereof. Promptly following receipt of
any notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; PROVIDED that a notice of termination of the Commit
ments or the Total Tranche B Credit-Linked Deposit delivered by the Borrower
may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Any termination or reduction of
the Commitments or the Total Tranche B Credit-Linked Deposit shall be
permanent. Each reduction of the Revolving Commitments, the Tranche A
Commitments or the Total Tranche B Credit-Linked Deposit shall be made
ratably among the Revolving Lenders, Tranche A Lenders or Tranche B Lenders,
as the case may be, ratably in accordance with their Applicable Percentages.
(e) Each permanent reduction of the Total Tranche B Credit-Linked
Deposit made on or prior to the date that is six months after the Effective
Date shall be accompanied by a premium payment by the Borrower in cash of 1%
of the aggregate principal amount of such reduction, which shall be paid to
the Tranche B Lenders ratably based on the amounts of their respective
Tranche B Credit-Linked Deposits.
SECTION 2.10. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Revolving Lender the then unpaid principal amount of
each Revolving Loan on the Revolving Maturity Date.
(b) Each Revolving Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the
Borrower to such Revolving Lender resulting from each Loan made by such
Revolving Lender, including the amounts of principal and interest payable and
paid to such Revolving Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Revolving Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Revolving Lenders
and each Revolving Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Revolving Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.
(e) Any Revolving Lender may request that Loans made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Revolving Lender a promissory note payable to the
order of such Revolving Lender (or, if requested by such Revolving Lender, to
such Revolving Lender and its registered assigns) and in a form approved by
the Administrative Agent. Thereafter, the Loans evidenced by such promissory
note 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 (or, if such
promissory note is a registered note, to such payee and its registered
assigns).
SECTION 2.11. PREPAYMENT OF LOANS. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole
or in part, subject to prior notice in accordance with paragraph (b) of this
Section.
(b) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Revolving Borrowing, not later than 12:00 noon,
New York City time, three Business Days before the date of prepayment or
(ii) in the case of prepayment of an ABR Revolving Borrowing, not later than
12:00 noon, New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof
to be prepaid; PROVIDED that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.09, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.09. Promptly following receipt of any such notice, the
Administrative Agent shall advise the Revolving Lenders of the contents
thereof. Each partial prepayment of any Revolving Borrowing shall be in an
amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type as provided in Section 2.02. Each prepayment of a
Revolving Borrowing shall be applied ratably to the Loans included in the pre
paid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.
SECTION 2.12. FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment
fee, which shall accrue at the Applicable Rate on the daily unused amount of
the Revolving Commitment of such Revolving Lender during the period from and
including the date this Agreement becomes effective under Section 9.06 to but
excluding the date on which such Revolving Commitment terminates. Accrued
commitment fees shall be payable in arrears on the last business day of March,
June, September and December of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the
date hereof. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Tranche A Lender a participation fee with respect to its
participations in Tranche A Letters of Credit, which participation fee shall
accrue at the Applicable Rate used to compute interest on Eurodollar
Revolving Loans, on the average daily amount of such Tranche A Lender's
Tranche A LC Exposure (excluding any portion thereof attributable to
unreimbursed Tranche A LC Disbursements) during the period from and including
the Effective Date to but excluding the later of the date on which such
Tranche A Lender's Tranche A LC Commitment terminates and the date on which
such Tranche A Lender ceases to have any Tranche A LC Exposure, and (ii) to
each Issuing Bank a fronting fee, which shall accrue at the rate of 0.250%
per annum on the average daily aggregate face amount of the outstanding
Tranche A Letters of Credit of such Issuing Bank during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Tranche A LC Commitments and the date on which there
ceases to be any Tranche A LC Exposure, as well as such Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension
of any Tranche A Letter of Credit or processing of drawings thereunder.
Accrued participation fees and fronting fees in respect of Tranche A Letters
of Credit shall be due and payable on the last day of March, June, September
and December of each year, commencing on the first such date to occur after
the Effective Date; PROVIDED that all such fees shall be payable on the date
on which the Tranche A LC Commitments terminate and any such fees accruing
after the date on which the Tranche A LC Commitments terminate shall be
payable on demand. Any other fees payable to any Issuing Bank pursuant to
this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Tranche B Lender a participation fee with respect to its
participations in Tranche B Letters of Credit, which such participation fee
shall accrue at the rate of 5.50% per annum, on the average daily amount of
such Tranche B Lender's Tranche B LC Exposure (excluding any portion thereof
attributable to unreimbursed Tranche B LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date
on which such Lender's Tranche B Credit-Linked Deposit is returned to it and
the date on which such Tranche B Lender ceases to have any Tranche B LC
Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at
the rate of 0.250% per annum on the average daily aggregate face amount of
the outstanding Tranche B Letters of Credit of such Issuing Bank during the
period from and including the Effective Date to but excluding the later of
the date on which the Tranche B Credit-Linked Deposits are returned to the
Tranche B Lenders and the date on which there ceases to be any Tranche B
LC Exposure, as well as such Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Tranche B Letter of Credit
or processing of drawings thereunder. Accrued participation fees and
fronting fees in respect of Tranche B Letters of Credit shall be due and
payable on the last day of March, June, September and December of each year,
commencing on the first such date to occur after the Effective Date; PROVIDED
that all such fees shall be payable on the date on which the Tranche B Credit-
Linked Deposits are returned to the Tranche B Lenders and any such fees
accruing after the date on which the Tranche B Credit-Linked Deposits are
returned to the Tranche B Lenders shall be payable on demand. Any other fees
payable to any Issuing Bank pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
(d) The Borrower agrees to pay to the Administrative Agent, the
Documentation Agent and the Co-Syndication Agents, each for its own account,
fees payable in the amounts and at the times separately agreed upon by the
Borrower and such Persons.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the
applicable Issuing Bank, in the case of fees payable to any Issuing Bank) for
distribution, in the case of commitment fees and participation fees, to the
Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. INTEREST. (a) The Loans comprising each
ABR Borrowing shall bear interest at the Alternate Base Rate plus the
Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or LC Disbursement or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan or any LC Disbursement, 2% per annum plus the
rate otherwise applicable to such Loan or LC Disbursement as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount,
2% per annum plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the
Revolving Commitments; PROVIDED that (i) interest accrued pursuant to para
graph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar
Revolving Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing or the Tranche
B Credit-Linked Deposit:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the Adjusted LIBO Rate or LIBO Rate, as
applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate or LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such Borrowing
or the Tranche B Credit-Linked Deposit, as applicable, for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and
the Revolving Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the
Revolving Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Revolving Borrowing to, or continuation of any Revolving Borrowing as, a
Eurodollar Borrowing shall be ineffective, (ii) if any Borrowing Request
requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as an
ABR Borrowing and (iii) the Tranche B Credit-Linked Deposit shall be invested
so as to earn a return equal to the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.
SECTION 2.15. INCREASED COSTS. (a) If any Change in Law shall:
(i) 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, any Lender or the Administrative
Agent (except any such reserve requirement reflected in the Adjusted
LIBO Rate, where applicable) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the Administrative
Agent or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender or any Letter of
Credit or participation therein or the Tranche B Credit-Linked Deposit;
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 of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
such Issuing Bank or the Administrative Agent of participating in, issuing or
maintaining any Letter of Credit or the Tranche B Credit-Linked Deposit or to
reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender or such Issuing Bank or the
Administrative Agent, as the case may be, such additional amount or amounts
as will compensate such Lender or such Issuing Bank or the Administrative
Agent, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or such Issuing Bank's capital
or on the capital of such Lender's or such Issuing Bank's holding company, if
any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such Issuing Bank, to a level below that which such Lender
or such Issuing Bank or such Lender's or such Issuing Bank's holding company
could have achieved but for such Change in Law (taking into consideration
such Lender's or such Issuing Bank's policies and the policies of such
Lender's or such Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or
such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank or such Lender's or such
Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or such Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or such Issuing
Bank, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver
of such Lender's or such Issuing Bank's right to demand such compensation;
PROVIDED that the Borrower shall not be required to compensate a Lender or an
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or such
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender's or
such Issuing Bank's intention to claim compensation therefor; PROVIDED
FURTHER that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan or LC Disbursement or the
reduction of any Tranche B Credit-Linked Deposit other than in connection
with the funding of an LC Disbursement, in each case other than on the last
day of an Interest Period applicable thereto (including as a result of an
Event of Default), (b) the conversion of any Eurodollar Loan or LC
Disbursement other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan or LC Disbursement on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under
Section 2.11(b) and is revoked in accordance therewith), (d) the assignment
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each
applicable Lender for the loss, cost and expense attributable to such event.
In the case of a Eurodollar Loan, an LC Disbursemnt bearing interest by
reference to the LIBO Rate or a Tranche B Credit-Linked Deposit, such loss,
cost or expense to any applicable Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan, LC
Disbursement or Tranche B Credit-Linked Deposit had such event not occurred,
at the Adjusted LIBO Rate that would have been applicable to such Loan, LC
Disbursement or Tranche B Credit-Linked Deposit, for the period from the date
of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan or LC Disbursement),
over (ii) the amount of interest which would accrue on such principal amount
for such period at the interest rate which such Lender would bid were it to
bid, at the commencement of such period, for dollar deposits of a comparable
amount and period from other banks in the Eurodollar market. A certificate
of any Lender setting forth any amount or amounts that such Lender is
entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall
pay such Lender the amount shown as due on any such certificate within
10 days after receipt thereof.
SECTION 2.17. TAXES. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; PROVIDED that if the Borrower shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Bank (as the case
may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) Any and all payments by or on account of any obligation of the
Administrative Agent pursuant to Section 2.06(b) hereunder shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes;
PROVIDED that if the Administrative Agent shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the
Administrative Agent shall so notify the Borrower and advise it of the
additional amount required to be paid by the Borrower so that the sum payable
pursuant to Section 2.06(b) shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Tranche B Lenders receive an amount
equal to the sum they would have received had no deductions been made, (ii)
the Borrower shall pay such additional amount to the Administrative Agent,
(iii) the Administrative Agent shall make such deductions, (iv) the
Administrative Agent shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law and (v) the Borrower
shall indemnify, within 10 days after written demand therefor, the
Administrative Agent for the full amount of any deductions paid by the
Administrative Agent with respect to any payments made on account of any
obligation of the Administrative Agent pursuant to Section 2.06(b).
(c) The Borrower shall indemnify the Administrative Agent, each
Lender and each Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or
an Issuing Bank, or by the Administrative Agent on its own behalf or on
behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of
a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.
(f) In addition, the Borrower or the Administrative Agent shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) The Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable
under Section 2.15, 2.16 or 2.17, or otherwise) prior to 1:00 p.m., New York
City time, on the date when due, in immediately available funds, without set-
off, counterclaim, recoupment or deduction of any kind. Any amounts received
after such time on any date may, in the discretion of the Administrative
Agent, be deemed to have been received on the next succeeding Business Day
for purposes of calculating interest thereon. All such payments shall be
made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇, except payments to be made directly to an Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto
and payments pursuant to other Loan Documents shall be made to the Persons
specified therein. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment
hereunder or under any other Loan Document shall be due on a day that is not
a Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements then due here
under, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in
LC Disbursements and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans and
participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders
ratably in accordance with the aggregate amount of principal of and accrued
interest on their respective Revolving Loans and participations in
LC Disbursements; PROVIDED that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest, and (ii) the provisions of this
paragraph shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or any
payment obtained by a Lender as consideration for the assignment of or sale
of a participation in any of its Loans or participations in LC Disbursements
to any assignee or participant, other than to the Borrower or any Subsidiary
or Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrower consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or any Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or such Issuing Bank, as the case may be, the amount due. In
such event, if the Borrower has not in fact made such payment, then each of
the Lenders or such Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or such Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.05(d) or (e), 2.07(b) or 2.18(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are
fully paid.
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation
or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not other
wise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Revolving Lender defaults in its obligation to fund
Loans hereunder, or if any Lender does not agree to any request for an
extension of the Revolving Maturity Date under Section 2.04(a), then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); PROVIDED that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent and the Issuing Banks, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to
the outstanding principal of its Loans and participations in
LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such out
standing principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments
required to be made pursuant to Section 2.17, such assignment will result in
a reduction in such compensation or payments. A Lender shall not be required
to make any such assignment and delegation if, prior thereto, as a result of
a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.20. CERTAIN REGULATORY EVENTS. Upon the occurrence of a
Regulatory Event, the Borrower will promptly notify the Administrative Agent
and the Lenders and will, within 60 days, deliver to the Administrative Agent
and the Lenders an analysis satisfactory to the Administrative Agent
including (a) a summary in reasonable detail of the actions anticipated to be
taken by the Borrower in response to such Regulatory Event and the
anticipated timing thereof and (b) quarterly financial projections for the
period prior to the maturity of the Facilities taking into account the impact
of such Regulatory Event and of such actions. Following the receipt of such
analysis, if the Administrative Agent and the Required Lenders shall
determine that such Regulatory Event, after taking into account the actions
anticipated to be taken by the Borrower in response thereto, is likely to
result in a Material Adverse Effect, the Lenders may propose modifications
(the "Proposed Modifications") to the structure of the credit facilities
established by this Agreement and the pricing and other terms set forth
herein and in the other Loan Documents that in their judgment are appropriate
to reduce credit risks related to such Regulatory Event and/or to provide
appropriate compensation for such risks. The Borrower and the Lenders will,
following the occurrence of a Regulatory Event and the determination by the
Administrative Agent and the Required Lenders referred to in the preceding
sentence, negotiate in good faith to agree upon the Proposed Modifications or
alternative modifications. If the Loan Documents shall not have been amended
in a manner satisfactory to the Borrower and the Required Lenders by the
120th day after the delivery of the Proposed Modifications to the Borrower
(the "Amortization Date"), then, notwithstanding any other provision of this
Agreement, on the last Business Day of each calendar quarter ending after the
Amortization Date (i) the Revolving Commitments will be automatically reduced
by an amount equal to 1/8 of the aggregate amount of such Commitments on the
Amortization Date and the Borrower shall prepay Revolving Loans, together
with the interest accrued thereon to the date of prepayment, to the extent
necessary in order that the aggregate Revolving Credit Exposures shall at no
time exceed the aggregate Revolving Commitments, (ii) the Borrower will cause
the Tranche A LC Exposure to be reduced by an amount equal to 1/8 of the amount
of such Tranche A LC Exposure on the Amortization Date by causing the undrawn
amounts of Tranche A Letters of Credit to be reduced or by depositing cash
with the Administrative Agent on terms and under documentation approved by
the Administrative Agent as security for the Borrower's reimbursement
obligations in respect of Tranche A Letters of Credit and (iii) the Borrower
will cause the Tranche B LC Exposure to be reduced by an amount equal to 1/8 of
the amount of such Tranche B LC Exposure on the Amortization Date by causing
the undrawn amounts of Tranche B Letters of Credit to be reduced or by
depositing cash with the Administrative Agent on terms and under
documentation approved by the Administrative Agent as security for the
Borrower's reimbursement obligations in respect of Tranche B Letters of
Credit. It is expressly understood that nothing in this Section shall
postpone the Revolving Maturity Date, the Tranche A Maturity Date or the
Tranche B Maturity Date or any other date for the payment of any amount due
under this Agreement.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. The Borrower and each of its
Consolidated Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite corporate, partnership, limited liability company or other
applicable organizational power and authority to carry on its business as now
conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business, in and is in good standing, in every
jurisdiction where such qualification is required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes, the Second
Indenture constitutes, and each other Loan Document to which the Borrower is
to be a party, when executed and delivered by the Borrower (and, in the case
of the Collateral Mortgage Bonds, authenticated by the trustee therefor),
will constitute, a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except for
the approval of the ACC, which has been obtained and is in full force and
effect, and except filings necessary to perfect Liens created under the Loan
Documents (other than the Lien of the Second Indenture, in respect of which
all requisite filings have been made), (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents
of the Borrower or any of its Consolidated Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of
its Consolidated Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by the Borrower or any of its
Consolidated Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its
Consolidated Subsidiaries, except Liens created under the Loan Documents or
under the Second Indenture.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) The Borrower has heretofore furnished to the Lenders the consolidated
balance sheet and statements of income, stockholders' equity and cash flows
for the Borrower and its Consolidated Subsidiaries (i) as of and for the
fiscal year ended December 31, 2001, which are reported on by
PricewaterhouseCoopers LLP, independent public accountants, and (ii) as of
and for the fiscal quarter and the portion of the fiscal year ended
September 30, 2002, certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the financial position
and results of operations and cash flows of the Borrower and its Consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the
case of the statements referred to in clause (ii) above. Neither the
Borrower nor any of its Consolidated Subsidiaries had, at the date of the
most recent balance sheet referred to above, any Guarantee, contingent
liability or liability for taxes, or any long-term lease or unusual forward
or long-term commitment, including any interest rate or foreign currency swap
or exchange transaction, which, in any case, is material to the Borrower and
its Consolidated Subsidiaries, taken as a whole, and which is not reflected
in the foregoing statements or in the notes thereto. During the period from
December 31, 2001, to and including the Effective Date there has been no
sale, transfer or other disposition by the Borrower or any of its
Consolidated Subsidiaries of any part of its business or property, and no
purchase or other acquisition of any business or property (including any
capital stock of any other Person), which, in either case, is material in
relation to the consolidated financial condition of the Borrower and its
Consolidated Subsidiaries taken as a whole at December 31, 2001.
(b) Except to the extent that any specific change explicitly
disclosed in the Disclosure Documents may be so considered, since
December 31, 2001, there has been no material adverse change in the financial
condition, results of operations, business or prospects of the Borrower and
its Consolidated Subsidiaries, taken as a whole.
SECTION 3.05. PROPERTIES. (a) Other than as explicitly disclosed
in the Disclosure Documents, each of the Borrower and its Consolidated
Subsidiaries has good title to, or valid leasehold interests in, and enjoys
peaceful and undisturbed possession of, all its real and personal property
material to its business, 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 for their intended purposes.
(b) Each of the Borrower and its Consolidated Subsidiaries owns,
or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use thereof by
the Borrower and its Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) Except
as explicitly disclosed in the Disclosure Documents, there are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of its Consolidated Subsidiaries (i) as to
which there is a reasonable possibility of an adverse determination and that,
if adversely determined, would, individually or in the aggregate, result in a
Material Adverse Effect or (ii) that involve any of the Loan Documents, the
Second Indenture or the Transactions.
(b) Except as explicitly disclosed in the Disclosure Documents,
and except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Consolidated Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental
Law, (ii) has become subject to any Environmental Liability, (iii) has
received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in
the status of any matter disclosed in the Disclosure Documents that,
individually or in the aggregate, has resulted in, or materially increased
the likelihood of, a Material Adverse Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Except as
explicitly disclosed in the Disclosure Documents, each of the Borrower and
its Consolidated Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to be in compliance, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. (a) Neither
the Borrower nor any of its Consolidated Subsidiaries is an "investment
company" or a company "controlled" by an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940.
(b) The Borrower and its Consolidated Subsidiaries are exempt from
all provisions of the Public Utility Holding Company Act of 1935, as amended,
except Section 9(a)(2) thereof; and no order, consent, approval or
authorization is required under such Act in connection with the making of the
Loans hereunder or the consummation of any of the other Transactions.
SECTION 3.09. TAXES. Each of the Borrower and its Consolidated
Subsidiaries has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower
or such Subsidiary, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not reasonably
be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability is reasonably expected to occur, would result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by
more than $25,000,000 the fair market value of the assets of such Plan, and
the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $25,000,000
the fair market value of the assets of all such underfunded Plans.
SECTION 3.11. SECURITY DOCUMENTS. (a) The Collateral Mortgage
Bonds are entitled to the benefits of the Second Indenture and secured by the
Lien of the Second Indenture. Upon delivery of the Collateral Mortgage Bonds
to the Administrative Agent under the Bond Delivery Agreement and at all
times thereafter, the Collateral Mortgage Bonds will be "Outstanding" and the
Administrative Agent will be the "Holder" of the Collateral Mortgage Bonds
for all purposes of the Second Indenture. The Second Indenture constitutes a
valid mortgage lien on and a valid and perfected security interest in the
properties or franchises described therein as being subject to the Lien of
the Second Indenture. As of the Effective Date no material properties or
franchises subject to the Lien of the Second Indenture have been released
from such Lien, and, as of any subsequent date, no such properties or
franchises shall have been released from the Lien of the Second Indenture
except in accordance with the terms thereof and hereof.
(b) The provisions of the Security Documents not covered by
paragraph (a) above are effective to create, in favor of the Administrative
Agent for the benefit of the secured parties thereunder, legal, valid and
enforceable Liens on or in all of the Collateral subject thereto, and all
necessary deliveries of property to the Administrative Agent and all
necessary and appropriate recordings and filings have been made in all
necessary and appropriate public offices so that the Liens created by such
Security Documents constitute perfected Liens on or in all rights, titles,
estates and interests of the Borrower and any applicable Subsidiaries in the
Collateral covered thereby, prior and superior to all other Liens and all
necessary and appropriate consents to the creation and perfection of such
Liens have been obtained. No mortgage or financing statement or other
instrument or recordation covering all or any part of the Collateral is on
file in any recording office which has not been terminated or released,
except as may have been filed in favor of the Administrative Agent.
SECTION 3.12. DISCLOSURE. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, would result in a Material
Adverse Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by
or on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document
or delivered hereunder (as modified or supplemented by, and taken together
with other information so furnished) contains any misstatement of a material
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED that, with respect to forward looking statements, the
Borrower represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time and notes that
there can be no assurance that such expectations, beliefs or projections will
be achieved or accomplished and that such projections are subject to an
increasing degree of uncertainty as they relate to later periods of time.
ARTICLE IV
Conditions
----------
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to
make Loans and acquire participations in Letters of Credit, the obligations
of the Tranche B Lenders to fund their Tranche B Credit-Linked Deposits and
the obligations of the Issuing Banks to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a
signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of each of (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, General
Counsel for the Borrower, substantially in the form of Exhibit E-1,
(ii) ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, New York, counsel for the Borrower,
substantially in the form of Exhibit E-2, and (iii) ▇▇▇▇▇, Dickason,
Sloan, Akin & ▇▇▇▇, PA, special New Mexico counsel for the Borrower,
substantially in the form of Exhibit E-3, and covering such other
matters relating to the Borrower, the Loan Documents, the Second
Indenture, the Lien of the Second Indenture or the Transactions as the
Required Lenders shall reasonably request. The Borrower hereby requests
such counsel to deliver such opinion.
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of the Borrower, the authorization of the Transactions and any
other legal matters relating to the Borrower, the Loan Documents, the
Second Indenture, the Lien of the Second Indenture or the Transactions,
all in form and substance satisfactory to the Administrative Agent and
its counsel.
(d) The conditions set forth in paragraphs (a) and (b) of
Section 4.02 shall be satisfied, and the Administrative Agent shall have
received a certificate, dated the Effective Date and signed by the
President, a Vice President or a Financial Officer of the Borrower,
confirming compliance with such conditions as of the Effective Date.
(e) The Administrative Agent, the Documentation Agent and the Co-
Syndication Agents shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including all up-front
fees and, to the extent invoiced, reimbursement or payment of all out-of-
pocket expenses required to be reimbursed or paid by the Borrower here
under or under any other Loan Document.
(f) The Administrative Agent shall have received a counterpart of
the Bond Delivery Agreement signed on behalf of the Borrower, together
with (i) Collateral Mortgage Bonds in an aggregate principal amount not
less than $400,587,047, duly issued and authenticated under the Second
Indenture; (ii) a duly executed copy of the Fourth Supplemental
Indenture and all other documents, instruments and filings relating to
the issuance and authentication of the Collateral Mortgage Bonds under
the Second Indenture; (iii) all documents instruments and filings
creating or perfecting the Lien of the Second Indenture; and (iv) all
other documents and instruments required by law or reasonably requested
by the Administrative Agent to be filed, registered or recorded to
create or perfect the Liens intended to be created under the Security
Documents.
(g) The Administrative Agent shall have received copies of the ACC
order authorizing the Transactions certified by an officer of the
Borrower as being a true and complete copy thereof and as being in full
force and effect.
(h) On the Effective Date, (i) the Borrower shall have repaid in
full the principal of all loans outstanding, interest thereon and other
amounts due under the Existing Agreement; (ii) all commitments of the
lenders and issuing banks under the Existing Agreement shall have been
terminated; (iii) all letters of credit outstanding under the Existing
Agreement shall have been returned and canceled (or the Administrative
Agent shall be satisfied with the arrangements made for such
cancelation); (iv) the Second Mortgage Bonds, Collateral Series B,
securing the obligations under the Existing Agreement shall have been
canceled (or the Administrative Agent shall be satisfied with the
arrangements made for such cancelation); and (v) the Administrative
Agent shall have received a certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in
clauses (i) through (iv) of this paragraph.
(i) The credit facilities established by this Agreement shall have
received Reference Ratings of at least Ba3 from ▇▇▇▇▇'▇ and at least BB-
from S&P, and the Borrower shall have delivered or caused to be
delivered to the Administrative Agent evidence satisfactory to the
Administrative Agent of such Reference Ratings.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 9.02) at or prior to 3:00 p.m., New York City
time, on December 30, 2002, (and in the event such conditions are not so
satisfied or waived, the Commitments and the obligations of the Lenders and
Issuing Banks hereunder shall terminate at such time).
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Revolving
Lender to make a Loan on the occasion of any Borrowing that increases the
amount of the Loans of any Revolving Lender outstanding is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of the Borrower set forth
in the Loan Documents shall be true and correct on and as of the date of
such Borrowing.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in para
graphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder have
been paid in full and all Letters of Credit have expired or terminated and
all LC Disbursements have been reimbursed, the Borrower covenants and agrees
with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Borrower will furnish to the Administrative Agent and each Lender (or in any
instance in which the Borrower shall so request, the Borrower will furnish
copies to the Administrative Agent and the Administrative Agent will forward
such copies to the Lenders):
(a) as soon as available and in any event within 60 days after the
end of each of the first three fiscal quarterly periods of each fiscal
year of the Borrower, or 15 days after the date on which its quarterly
report for such fiscal quarterly period is required to be filed with the
Securities and Exchange Commission, whichever is later, consolidated
statements of income of the Borrower and its Consolidated Subsidiaries
for such period and for the period from the beginning of the respective
fiscal year to the end of such period, consolidated statements of cash
flows of the Borrower and its Consolidated Subsidiaries from the
beginning of the applicable fiscal year to the end of such period and
the related consolidated balance sheets as of the end of such period,
setting forth in each case in comparative form the corresponding
consolidated figures for the corresponding period in the preceding
fiscal year, accompanied by a certificate of a Financial Officer of the
Borrower, which certificate shall state that the financial statements
fairly present in all material respects the consolidated financial
condition and results of operations, as the case may be, of the Borrower
and its Consolidated Subsidiaries in accordance with GAAP, consistently
applied (except where noted), as of the end of, and for, such period
(subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 105 days after
the end of each fiscal year of the Borrower, or 15 days after the date
on which its annual report for such fiscal year is required to be filed
with the Securities and Exchange Commission, whichever is later,
consolidated statements of income and cash flows of the Borrower and its
Consolidated Subsidiaries for such year and the related consolidated
balance sheets as of the end of such year, setting forth in each case in
comparative form the corresponding consolidated figures for the pre
ceding fiscal year, and accompanied by an opinion of independent public
accountants of recognized national standing selected by the Borrower,
which opinion shall not contain any qualification or exception as to the
scope of such audit and shall state that the consolidated financial
statements fairly present in all material respects the consolidated
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries as of the end of, and for, such fiscal year
and have been prepared with GAAP, consistently applied (except where
noted);
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with
Sections 6.06, 6.07 and 6.08 and (iii) stating whether any change in
GAAP or in the application thereof not disclosed in any prior such
certificate has occurred since the date of the audited financial
statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (b) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(e) promptly upon their becoming available, copies of all
registration statements (other than on Form S-8 or any successor form)
and regular periodic reports, if any, that the Borrower shall have filed
pursuant to Section 13(a) or 15 of the Securities Exchange Act of 1934,
as amended, with the Securities and Exchange Commission (or any
governmental agency substituted therefor) or filed with any national
securities exchange;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly upon their becoming available, copies of all current
reports on Form 8-K filed by the Borrower with the Securities and
Exchange Commission, and all similar reports filed with any national
securities exchange;
(h) promptly upon their becoming available, copies of (i) any
certified resolutions of the Board of Directors of the Borrower and net
earnings certificates delivered under the Second Indenture in connection
with the issuance of Bonds upon the basis of net property additions or
deposits of cash; any certificates of a Financial Officer under either
Indenture with respect to amounts charged to replacement reserve,
detailing insurance on the Borrower's property or showing compliance by
the Borrower with the covenants contained in such Indenture; any
supplemental indentures to either Indenture; any redemption notices
under either Indenture; and any notices of defaults under either
Indenture or accelerations of Bonds; (ii) any notices of default under
the documentation for any Sale Leaseback of the Borrower or any
Consolidated Subsidiary, any notices of non-payment of rent or any other
material amounts owing under any such Sale Leaseback documentation and
any notices of acceleration of any amounts due under any such Sale
Leaseback documentation; and (iii) any written notices from the ACC of
non-compliance by the Borrower or its Consolidated Subsidiaries with any
material ACC decision or with any other rules, regulations or orders of
the ACC, and any written notices of any extraordinary audit or investiga
tion by the ACC into the business, affairs or operations of the Borrower
or its Consolidated Subsidiaries;
(i) as soon as practicable and in any event within five Business
Days after the Borrower receives written notice of an upgrading or a
downgrading of the First Mortgage Bonds or the Second Mortgage Bonds by
any Rating Agency, a notice of such upgrading or downgrading;
(j) if requested by the Administrative Agent, concurrently with
any delivery of financial statements under clause (a) or (b) above,
consolidating statements of income and cash flows for the applicable
periods and the consolidating balance sheets as of the end of such
periods, accompanied (i) in the case of a delivery of financial
statements under clause (a) above, by a certificate of a Financial
Officer of the Borrower, which certificate shall state that such
financial statements fairly present in all material respects the
consolidating financial condition and results of operations, as the case
may be, of the Borrower and its Consolidated Subsidiaries in accordance
with GAAP, consistently applied (except where noted), as of the end of,
and for, the applicable period (subject to normal year-end audit
adjustments), and (ii) in the case of a delivery of financial statements
under clause (b) above, by (A) a certificate of a Financial Officer of
the Borrower, which certificate shall state that such consolidating
financial statements fairly present in all material respects the
financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries as of the end of, and for, the applicable
fiscal year and have been prepared in accordance with GAAP, consistently
applied (except where noted), and (B) a certificate of the independent
public accountants referred to in clause (i) of paragraph (b) above,
which certificate should state that such consolidating financial
statements are the consolidating financial statements that served as the
basis for the audited consolidated financial statements in respect of
which such accountants delivered the opinion referred to in such
clause (i); and
(k) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any Subsidiary, or compliance with the terms of any Loan
Document or the Second Indenture, as the Administrative Agent or any
Lender may reasonably request.
So long as the Borrower is subject to the financial reporting
requirements of the Securities Exchange Act of 1934, as amended, and the
financial statements contained in any quarterly or annual reports filed with
the Securities and Exchange Commission in accordance with such Act and the
rules and regulations promulgated thereunder, such financial statements may
be delivered by the Borrower in satisfaction of its obligations to deliver
consolidated financial statements pursuant to clauses (a) or (b), as the case
may be, of this Section 5.01.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of
the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Borrower or any Affiliate thereof as to which there is a reasonable
possibility of an adverse determination and that, if adversely
determined, would reasonably be expected to result in a Material Adverse
Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, would result in liability of
the Borrower and its Subsidiaries in an aggregate amount exceeding
$25,000,000; and
(d) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement
of a Financial Officer or other executive officer of the Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
SECTION 5.03. EXISTENCE; CONDUCT OF BUSINESS. The Borrower will,
and will cause each of its Consolidated Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business, except to the extent the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect; PROVIDED that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. PAYMENT OF OBLIGATIONS. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, pay its obligations,
including Tax liabilities and assessments (including water assessments by the
Arizona State Land Department), that, if not paid, could result in a Material
Adverse Effect before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto to the extent required by
and otherwise in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower
will, and will cause each of its Consolidated Subsidiaries to, (a) keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, PROVIDED that the
Borrower or any of its Consolidated Subsidiaries may discontinue the
operation of any of its properties to the extent, in the judgment of the
Borrower, it is no longer advisable to operate such property, or to the
extent the Borrower or such Subsidiary intends to sell or otherwise dispose
of such property, which disposition is not prohibited by Section 6.04. and
(b) maintain, with financially sound and reputable insurance companies, or
through its own program of self-insurance, insurance in such amounts and
against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.
SECTION 5.06. BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower
will, and will cause each of its Consolidated Subsidiaries to, keep proper
books of record and account in which entries are made of all dealings and
transactions in relation to its business and activities, all in accordance
with customary and prudent business practices. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior
notice, to visit and inspect its properties, and, subject to contractual or
statutory limitations regarding confidential or proprietary information, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers, all at such reasonable
times and as often as reasonably requested.
SECTION 5.07. COMPLIANCE WITH LAWS. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, except where the failure to do so, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.08. USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds
of the Loans will be used only for general corporate purposes. No part of
the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X. Letters of Credit will be issued only to
support the Revenue Bonds set forth on Schedule 2.05 for such Letters of
Credit.
SECTION 5.09. ENVIRONMENTAL LAWS. (a) The Borrower and the
Consolidated Subsidiaries will comply with, and use commercially reasonable
efforts to insure compliance by all tenants and subtenants, if any, with, all
Environmental Laws and obtain and comply with and maintain, and use
commercially reasonable efforts to insure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
registrations or permits required by Environmental Laws, except to the extent
that failure to do so would not reasonably be expected to have a Material
Adverse Effect;
(b) The Borrower and the Consolidated Subsidiaries will conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, except
to the extent that the failure to take such actions would not reasonably be
expected to have a Material Adverse Effect and promptly comply with all
lawful orders and directives of all Governmental Authorities respecting
Environmental Laws, except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of such proceedings
would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.10. FURTHER ASSURANCES. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, execute any and all further
documents, financing statements, agreements and instruments, and take all
such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Administrative
Agent or the Required Lenders may reasonably request, to effectuate the trans
actions contemplated by the Loan Documents or under the Second Indenture or
to grant, preserve, protect or perfect the Liens created or intended to be
created by the Second Indenture or the Security Documents or the validity or
priority of any such Lien, all at the expense of the Borrower. The Borrower
also agrees to provide to the Administrative Agent, from time to time upon
request, evidence reasonably satisfactory to the Administrative Agent as to
the perfection and priority of the Liens created or intended to be created by
the Security Documents or by or under the Second Indenture.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all
LC Disbursements have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01. INDEBTEDNESS. The Borrower will not permit:
(a) the aggregate principal amount of (i) First Mortgage Bonds
outstanding at any time to exceed $222,265,000 and (ii) First Mortgage
Bonds and Second Mortgage Bonds outstanding at any time taken together
to exceed $622,852,047; PROVIDED that there shall be disregarded for
purposes of any determination under this paragraph the principal amount
of any outstanding First Mortgage Bonds or Second Mortgage Bonds
(collectively, "Mortgage Bonds") which (A) are to be redeemed or paid at
maturity within 90 days after the date of such determination or (ii)
evidence or secure the Borrower's obligations in respect of industrial
development revenue bonds of the same principal amount (or related
reimbursement obligations) which are to be redeemed or paid at maturity
within 90 days after the date of such determination; PROVIDED, HOWEVER,
that (1) in the case of any such redemption, either irrevocable and
unconditional notice of redemption shall have been given or irrevocable
and unconditional instructions shall have been given to the related
trustee to give such notice of redemption and (2) in the case of any
such redemption or payment, cash in an amount sufficient to redeem or
repay the Mortgage Bonds to be disregarded (or the obligations evidenced
or secured thereby) shall have been deposited with the applicable
trustee for the redemption or payment thereof; or
(b) the aggregate amount of Guarantees by the Borrower and the
Consolidated Subsidiaries (other than Guarantees of the Obligations and
other than Guarantees by the Borrower or any Consolidated Subsidiary of
Indebtedness or obligations of the Borrower or a Consolidated
Subsidiary) outstanding at any time to exceed $30,000,000.
SECTION 6.02. LIENS. The Borrower will not, and will not permit
any Consolidated Subsidiary to, create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues or rights in respect of any thereof,
except:
(a) Liens created or existing on the date hereof; PROVIDED that no
such Lien is spread to cover any additional property and the amount of
the Indebtedness secured thereby is not increased;
(b) Liens created pursuant to the Loan Documents;
(c) Liens created pursuant to the Indentures;
(d) any "permitted encumbrances", "prepaid liens" or permitted
"prior liens" (as such terms are defined in the Indentures);
(e) Liens on property not subject to the Lien of the Second
Indenture;
(f) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other similar Liens arising by operation of law in the
ordinary course of business that are not overdue for a period of more
than 90 days;
(g) Liens on property of San ▇▇▇▇▇▇, PROVIDED that in the event any
Lien is placed on property of San ▇▇▇▇▇▇, the Indebtedness secured by
such Lien shall be deemed to be Indebtedness of the Borrower for
purposes of all calculations under Sections 6.06, 6.07 and 6.08;
(h) any Lien on any property or asset which Lien existed prior to
the acquisition thereof by the Borrower or any Consolidated Subsidiary;
PROVIDED that such Lien is not created in contemplation of or in
connection with such acquisition, such Lien is not spread to cover any
other property of the Borrower and its Consolidated Subsidiaries, and
the amount of Indebtedness secured thereby is not increased; and
(i) any Liens created to secure Indebtedness (i) which refinances
Indebtedness outstanding on the date of this Agreement, so long as such
Liens apply to no more property, have no greater priority and secure
Indebtedness in a principal amount no greater than the Liens in effect
on the date hereof securing the Indebtedness being refinanced; (ii) in
the form of industrial development revenue bonds, the Borrower's
Indebtedness to the issuer thereon and any Indebtedness incurred to
provide security or credit support therefor; or (iii) created pursuant
to a Sale Leaseback in effect on the date hereof or pursuant to a Sale
Leaseback entered into under Section 6.10.
SECTION 6.03. FUNDAMENTAL CHANGES. (a) The Borrower will not,
and will not permit any of its Consolidated Subsidiaries to, merge into or
consolidate with any other Person, or permit any other Person to merge into
or consolidate with it, or sell, transfer, lease or otherwise dispose of (in
one transaction or in a series of transactions) its assets as an entirety or
substantially as an entirety, or all or substantially all of the stock of any
of its Consolidated Subsidiaries (in each case, whether now owned or here
after acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default or Event of
Default shall have occurred and be continuing (i) any Person may merge into
the Borrower in a transaction in which the Borrower is the surviving corpora
tion (ii) any Consolidated Subsidiary may merge with any other Consolidated
Subsidiary, and (iii) the Borrower may merge with or into or consolidate with
or transfer its assets as an entirety or substantially as an entirety to any
Person, so long as (A) immediately prior to and immediately after giving
effect to such merger, consolidation or transfer, the Person with or into
which the Borrower shall ultimately merge or consolidate or to whom the
Borrower shall ultimately transfer its assets as an entirety or substantially
as an entirety is in the Utility Business, (B) the Required Lenders shall
have determined (so long as such determination is exercised in good faith and
after consultation with the Borrower) that the rating of the first mortgage
bonds (or bonds otherwise denominated that benefit from a first Lien on such
Person's utility assets, or, if such Person has no first mortgage bonds, the
rating of the senior unsecured long-term Indebtedness of such Person that is
not guaranteed and does not benefit from any other credit enhancement) of the
surviving Person of any such merger, consolidation, acquisition or transfer
of assets shall be at least BBB- or higher by S&P and Baa3 or higher by
▇▇▇▇▇'▇ (unless the requirements of this clause (B) shall have been waived by
the Required Lenders); PROVIDED that the requirement of this clause (B) shall
be deemed to have been satisfied if, prior to the consummation of any such
merger, consolidation or transfer, the Borrower shall have delivered written
evidence from each such rating agency to the effect that, upon such merger,
consolidation or transfer, the applicable rating of such surviving Person
would be equal to or higher than the ratings specified in this clause (B),
(C) in the case of any merger or consolidation or transfer of assets in which
the Borrower is not the surviving corporation, the Person formed by any such
consolidation or transfer of assets or into which the Borrower shall be
merged or consolidated or to which such assets are transferred shall have
executed an agreement in form reasonably satisfactory to the Administrative
Agent containing an assumption by the surviving Person of the due and
punctual performance of each obligation, agreement, covenant and condition of
each of the Loan Documents and the Second Indenture to be performed or
complied with by the Borrower, and (D) the Administrative Agent shall have
received an opinion of counsel, in form and substance reasonably satisfactory
to the Administrative Agent and its counsel, with respect to the due
authorization, execution, delivery, validity and enforceability of the
assumption agreement referred to in clause (C) of this Section 6.03, of the
enforceability and continuation of the Liens created pursuant to the Security
Documents and such other matters as the Required Lenders may reasonably
require.
(b) The Borrower will not, and will not permit any of its
Consolidated Subsidiaries to, engage to any material extent in any business
other than the Utility Business.
SECTION 6.04. SALE OF ASSETS. (a) The Borrower will not, and will
not permit any of its Consolidated Subsidiaries to, convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including leasehold interests), whether now owned or hereafter
acquired, except:
(i) inventory and other property in the ordinary course of
business;
(ii) sales of accounts receivable;
(iii) property, businesses or assets (including receivables and
leasehold interests) with an aggregate Fair Value not in excess of
$250,000,000; PROVIDED that the aggregate Fair Value of such property,
businesses or assets permitted to be disposed of pursuant to this
clause (iii) shall be increased on a dollar for dollar basis by the
aggregate amount of each reduction of the Commitments in respect of
which the Borrower shall have given the Administrative Agent, for the
benefit of the Lenders, written evidence of the Borrower's agreement not
to issue Indebtedness under the Second Indenture based upon the Second
Mortgage Bonds retired in connection with such reduction;
(iv) property in connection with any securitization (e.g., stranded
costs) or sale of assets required by law; PROVIDED that not less than
80% of the proceeds of such securitization or sale are applied to reduce
outstanding Indebtedness of the Borrower; and
(v) any sale of the Borrower's assets as an entirety or
substantially as an entirety in accordance with Section 6.03, PROVIDED
that any assets of the Borrower not included in such sale shall be
deemed to have been disposed of in a transaction subject to the
limitations of this Section 6.04, including the dollar limit set forth
in clause (iii) above.
PROVIDED, that any Consolidated Subsidiary may convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets to
the Borrower or any other Consolidated Subsidiary. Investments by the
Borrower and the Consolidated Subsidiaries in, and contributions by the
Borrower and the Consolidated Subsidiaries to, Consolidated Subsidiaries
shall be deemed not to constitute transfers of assets subject to the
limitations of this Section 6.04 to the extent such investments or
contributions are made in cash.
(b) The Borrower will not, and will not permit any Consolidated
Subsidiary to, convey, sell, lease, assign, transfer or otherwise dispose of
all or any substantial part of its generating assets (including leasehold
interests), whether now owned or hereafter acquired, except as required by
applicable law.
SECTION 6.05. RESTRICTED PAYMENTS. (a) The Borrower will not
declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment at any time that any Default or Event of Default has
occurred and is continuing or would occur as a result of such action, except
that (i) the Borrower may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its common stock and
(ii) the Borrower may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of
the Borrower and its Subsidiaries.
(b) The Borrower will not, and will not permit any Consolidated
Subsidiary to, purchase or acquire any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other
right to acquire any of the foregoing) of, make any loans or advances to,
Guarantee any obligations of, or make any investment or any other interest
in, any Affiliate of the Borrower that is not a Consolidated Subsidiary (each
of the foregoing, an "Affiliate Investment"), at any time that any Default or
Event of Default has occurred and is continuing or as a result of the making
of such Affiliate Investment would occur or would be deemed to occur pursuant
to the next sentence. For purposes of determining whether a Default or Event
of Default would be deemed to occur under Section 6.06, 6.07 or 6.08 as a
result of an Affiliate Investment, the applicable computations shall be made
as if the Affiliate Investment were a dividend and did not result in the
creation of any asset.
(c) The Borrower will not declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, and the Borrower will
not, and will not permit any Consolidated Subsidiary to, purchase, acquire or
make any Affiliate Investment, if any Tranche B Credit-Linked Deposit or any
unreimbursed Tranche B LC Disbursement is outstanding on the date thereof and
after giving effect thereto the aggregate amount of Restricted Payments paid
(other than those paid in shares of the Borrower's common stock) and
Affiliate Investments made in any fiscal year would exceed 65% of
Consolidated Net Income for the immediately preceding fiscal year.
SECTION 6.06. CONSOLIDATED TANGIBLE NET WORTH. The Borrower will
not permit Consolidated Tangible Net Worth (excluding up to $30,000,000 of
gains and up to $30,000,000 of charges resulting from the adoption by the
Borrower of FAS 143 on January 1, 2003) to be less at the end of any fiscal
quarter than (a) the sum of (i) $270,612,000, (ii) on September 30, 2002, 40%
of Consolidated Net Income for the quarter ended September 30, 2002, if
positive, and on December 31, 2002, 40% of Consolidated Net Income for the
six months ended December 31, 2002, if positive, (iii) 40% of Consolidated
Net Income for each completed fiscal year after the fiscal year ending
December 31, 2002, for which Consolidated Net Income is positive and (iv) 40%
of Consolidated Net Income for any completed fiscal quarter or quarters since
the most recent fiscal year end, taken on a fiscal year-to-date basis, if
positive (amounts determined in accordance with clauses (i), (ii) and (iii)
to be determined without duplication), plus (b) 75% of the net proceeds of
any issuance by the Borrower or any of its Subsidiaries of common stock to
third parties.
SECTION 6.07. CASH COVERAGE RATIO. (a) The Borrower will not
permit the ratio of (i) Consolidated EBITDA plus interest income MINUS
Adjusted Consolidated Capital Expenditures to (ii) Consolidated Interest
Expense, in each case for the twelve-month period ended on the last day of
any fiscal quarter commencing with the fiscal quarter ended December 31,
2002, to be less than the amount specified in the chart below for the
calendar year in which such fiscal quarter ends:
Year Minimum Ratio
---- -------------
2002 and 2003 1.70
2004 1.75
2005 1.90
2006 2.00
(b) The Borrower will not permit the ratio of (i) Consolidated
EBITDA plus interest income MINUS Consolidated Capital Expenditures to
(ii) Consolidated Interest Expense, in each case for the twelve-month period
ended on the last day of any fiscal quarter commencing with the fiscal
quarter ended December 31, 2002, to be less than 1.40.
SECTION 6.08. LEVERAGE TEST. The Borrower will not permit the
ratio of (a) Consolidated Total Indebtedness at the end of any fiscal quarter
to (b) Consolidated EBITDA for the twelve-month period ended on such date to
be greater than the amount specified in the chart below for the fiscal year
in which such date shall occur:
Year Maximum Ratio
---- -------------
2002 5.75
2003 5.50
2004 5.25
2005 4.75
2006 4.50
SECTION 6.09. AMENDMENTS TO DOCUMENTS. The Borrower will not, and
will not permit any Consolidated Subsidiary to, amend, modify or change, or
consent or agree to any amendment, modification or change to, the Second
Indenture, the Fourth Supplemental Indenture, any Revenue Bond Indenture, any
Revenue Bond Loan Agreement or any Revenue Bonds without the prior written
consent of the Required Lenders and any Issuing Bank affected thereby,
PROVIDED that (a) such consent shall not be required in connection with any
amendment of the Second Indenture for which the Second Indenture does not
require the consent of any bondholder, (b) such consent shall not be
unreasonably withheld with respect to any amendment of the Second Indenture
that has been approved by bondholders entitled to vote under the Second
Indenture who hold bonds in an aggregate principal amount greater than the
principal amount of the Collateral Mortgage Bonds and (c) such consent shall
not be required in connection with any amendment of any Revenue Bond
Indenture, any Revenue Bond Loan Agreement or any Revenue Bonds to provide
for a mandatory tender of Revenue Bonds at any time when such Revenue Bonds
are currently subject to mandatory redemption at a purchase price which does
not exceed the applicable redemption price.
SECTION 6.10. SALE LEASEBACK TRANSACTIONS. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any Sale Leaseback
if the aggregate annual basic rent payments under all Sale Leasebacks entered
into by the Borrower and its Subsidiaries after the date hereof would exceed
$20,000,000 in any fiscal year after giving effect to such Sale Leaseback.
SECTION 6.11. RELEASE OF COLLATERAL UNDER THE SECOND INDENTURE.
(a) Subject to paragraph (b) below, the Borrower will not, and will not
permit any of its Subsidiaries to, permit any asset (including any cash) to
be released from the Lien of the Second Indenture if after giving effect to
such release the aggregate fair market value of all the assets released
therefrom on or after the date hereof (determined with respect to each asset
as of the date of its release) would exceed $25,000,000.
(b) There shall be disregarded for purposes of determinations
under paragraph (a) above, any asset or the applicable portion thereof
released from the Lien of the Second Indenture to the extent that cash in an
amount equal to the fair value of such asset or applicable portion
(determined as of the date of its release), or the proceeds of the award upon
any exercise of the power of eminent domain, shall have been deposited, and
shall remain on deposit, with the trustee under the Second Indenture.
SECTION 6.12. TRANSACTIONS WITH AFFILIATES. The Borrower will
not, and will not permit any of the Consolidated Subsidiaries to, sell, lease
or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates which are not Consolidated
Subsidiaries, except (a) 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,
(b) transactions between or among the Borrower and the Consolidated
Subsidiaries not involving any other Affiliate and (c) any Restricted Payment
permitted by Section 6.05(a).
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise, subject in the
case of any such reimbursement obligation to a grace period of two days,
or the Borrower shall fail to make any required deposit of cash
collateral under Section 2.20;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Consolidated Subsidiary in or in
connection with any Loan Document or any amendment or modification
hereof or waiver hereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
any Loan Document or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 2.20, 5.02, 5.03 (with
respect to the Borrower's existence) or 5.08 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender);
(f) the Borrower or any Significant Subsidiary shall fail to make
any payment of principal (regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption (other than pursuant to provisions permitting the tendering
of such Indebtedness from time to time for repurchase or redemption
without regard to the occurrence or non-occurrence of any event or
condition) or defeasance thereof, prior to its scheduled maturity;
PROVIDED that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Consolidated Subsidiary or its
debts, or of a substantial part of its assets, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any Consolidated Subsidiary or for a substantial part of its
assets, and, in any such case, 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;
(i) the Borrower or any Consolidated Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or here
after in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Consolidated Subsidiary or
for a substantial part of its assets, (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
or (vi) take any action for the purpose of effecting any of the fore
going;
(j) the Borrower or any Consolidated Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $15,000,000 shall be rendered against the Borrower,
any Consolidated Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets
of the Borrower or any Consolidated Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, when taken together
with all other ERISA Events that have occurred, would result in a
Material Adverse Effect; or
(m) (i) any Lien purported to be created under any Security
Document or the Second Indenture shall cease to be, or shall be asserted
by the Borrower or any Consolidated Subsidiary not to be, a valid and
perfected Lien on any collateral subject thereto, with the priority
required by the applicable Security Document or the Second Indenture, as
applicable, except (A) as a result of the sale or other disposition of
the applicable Collateral in a transaction permitted under the Loan
Documents or (B) as a result of the Administrative Agent's failure to
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under any Security Document or (ii) any
Collateral Mortgage Bond shall for any reason (x) cease to be entitled
to the benefits of the Second Indenture or to be secured by the Lien of
the Second Indenture equally and ratably with all other bonds, if any,
outstanding under the Second Indenture or (y) cease to be a legal, valid
and binding obligation of the Borrower;
then, and in every such event (other than an event with respect to the
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrower, take any or all of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, (ii) declare the Loans and LC Disbursements then out
standing to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to
be due and payable), and thereupon the principal of the Loans and LC
Disbursements so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower, (iii) take any action under Section 2.05(j) and (iv) deliver
a notice of redemption under the Fourth Supplemental Indenture stating that
such notice is being delivered pursuant to this Article VII; and in case of
any event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of
the Loans and LC Disbursements then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The Borrower (a) may at any time, with the consent of the Required
Lenders, replace the Administrative Agent and (b) simultaneously with the
replacement of any Affiliate of the Administrative Agent as Issuing Bank
under Section 2.05(i), shall replace the Administrative Agent (it being
understood that any such replacement Administrative Agent shall be a Person
that serves as administrative agent for other credit facilities of a
comparable size), PROVIDED that the Borrower may not replace such
Administrative Agent or Issuing Bank unless, after giving effect to such
replacement and each contemporaneous assignment the Borrower shall have
arranged in connection with such replacement (i) neither the Administrative
Agent nor any of its Affiliates shall have outstanding any Letter of Credit,
Loan, LC Disbursement, Commitment or other obligation of any kind under this
Agreement or any other Loan Document and (ii) each of the Administrative
Agent and its Affiliates shall have received payment in full of all amounts
owing to it under or in respect of this Agreement and each other Loan
Document.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank 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
hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contem
plated by the Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Subsidiaries that is communicated to or obtained
by the bank serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02) or in the absence of its
own gross negligence or wilful misconduct. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agree
ments or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document
or any other agreement, instrument or document, or (v) the satisfaction of
any condition set forth in Article IV or elsewhere in any Loan Document,
other than to confirm receipt of items expressly required to be delivered to
the Administrative Agent. Notwithstanding anything herein to the contrary,
no Lender identified as Co-Syndication Agent or Documentation Agent shall
have any separate duties, responsibilities, obligations or authority as Co-
Syndication Agent or Documentation Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to
be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Banks and the
Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders and the Issuing Banks, appoint a successor
Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, 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. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor. After the Administrative
Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it
was acting as Administrative Agent.
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 other Loan Document or related agreement or any document
furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Chief Financial Officer (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to Toronto Dominion (Texas),
Inc., ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of Manager,
Agency (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to any other Agent, any Issuing Bank, or any Lender, to it
at its address (or telecopy number) set forth in its Administrative
Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties 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.
SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by
the Administrative Agent, any Issuing Bank or any Lender in exercising any
right or power hereunder or under any other Loan Document or the Second
Indenture 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, the Issuing Banks and the Lenders here
under and under the other Loan Documents and the Second Indenture are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent
to any departure by the Borrower therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the Admini
strative Agent, any Lender or any Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and
the Administrative Agent with the consent of the Required Lenders or, in the
case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the Administrative Agent and the Borrower, in each
case with the consent of the Required Lenders or, in the case of the Fourth
Supplemental Indenture or the Collateral Mortgage Bonds, in each case with
the consent of the Required Lenders and as provided by the Second Indenture
with the Administrative Agent exercising the rights of the holder of the
Collateral Mortgage Bonds and acting at the direction of the Required
Lenders; provided that no such agreement shall (i) increase any Commitment of
any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any
interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or
the definition of "Required Lenders" or any other provision of any Loan
Document specifying the number or percentage of Lenders required to waive,
amend or modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender, (vi) change
any provisions of any Loan Document in a manner that by its terms adversely
affects the rights in respect of payments or Collateral of the Revolving
Lenders, the Tranche A Lenders or the Tranche B Lenders differently from the
rights of Lenders of any other class without the written consent of Lenders
holding a majority in interest of the Commitments of such adversely affected
class, (vii) provide for the release of any Tranche B Credit-Linked Deposit
(other than as provided in this Agreement) without the consent of each
Tranche B Lender affected thereby, (viii) release all or substantially all
the Collateral Mortgage Bonds or release all or substantially all of any
other Collateral from the Liens of the Security Documents without the consent
of each Lender or (ix) amend, modify or waive any condition precedent set
forth in Section 4.02 with respect to the making of Revolving Loans, without
the prior written consent of Revolving Lenders holding a majority in interest
of the Revolving Commitments; provided further that (A) no such agreement
shall amend, modify or otherwise affect the rights or duties of any Agent or
any Issuing Bank hereunder without the prior written consent of such Agent or
Issuing Bank, as the case may be and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Tranche A Lenders
and Tranche B Lenders), the Tranche A Lenders (but not the Revolving Lenders
and Tranche B Lenders) or the Tranche B Lenders (but not the Revolving
Lenders and Tranche A Lenders) may be effected by an agreement or agreements
in writing entered into by the Borrower and the requisite percentage in
interest of the affected class of Lenders, as the case may be. In
furtherance of clause (ix) of this Section 9.02(b), (x) any amendment or
modification to or waiver of Section 6.06, 6.07 or 6.08 of this Agreement and
(y) any amendment or modification to or waiver of any provision of this
Agreement or any other Loan Document at a time when any Default or Event of
Default has occurred and is continuing that would have the effect of
eliminating any such Default or Event of Default shall not be deemed to be
effective for purposes of determining whether the conditions precedent set
forth in Section 4.02 to the making of any Revolving Loan have been satisfied
unless the Revolving Lenders holding a majority in interest of the Revolving
Commitments shall have consented to such amendment, modification or waiver,
provided that the foregoing shall not be construed to affect any amendment or
modification to any provision of this Agreement or any other Loan Document
(other than any amendment or modification to Section 6.06, 6.07 or 6.08 of
this Agreement) if no Default or Event of Default has occurred and is
continuing at the time of such amendment or modification.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Arrangers and their Affiliates (including due
diligence expenses and the reasonable fees, charges and disbursements of
counsel for the Administrative Agent) in connection with the arrangement and
syndication of the credit facilities provided for herein, the preparation,
execution, delivery and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated),
(ii) all out-of-pocket expenses and charges of the Administrative Agent in
connection with any evaluations of Collateral conducted by it, (iii) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection
with the issuance, amendment or extension of any Letter of Credit or any
demand for payment thereunder and (iv) all out-of-pocket expenses incurred by
the Administrative Agent, any Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights in connection with the Loan Documents, including its rights
under this Section, or in connection with the Loans made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) The Borrower shall indemnify each Agent and Arranger, each
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold
each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any agreement or
instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of
the Transactions or any other transactions contemplated thereby, (ii) any
Loan or Letter of Credit or the use of the proceeds therefrom (including any
refusal by any Issuing Bank to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based
on contract, tort or any other theory and regardless of whether 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 primarily
from the gross negligence, wilful misconduct or bad faith of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to any Agent, Arranger or Issuing Bank under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to
such Agent, Arranger or Issuing Bank, as the case may be, such Lender's
Applicable Percentages (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
PROVIDED that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against such Agent, Arranger or Issuing Bank in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with,
or as a result of, this Agreement, any other Loan Document or any agreement
or instrument contemplated hereby or thereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby
(including any Affiliate of any Issuing Bank that issues any Letter of
Credit), except that the Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including
any Affiliate of any Issuing Bank that issues any Letter of Credit) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Agents, the Arrangers, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or
a portion of its Revolving Commitment and the Loans at the time owing to it,
its Tranche A Commitment or its Tranche B Credit-Linked Deposit); PROVIDED
that (i) except in the case of an assignment to a Lender, an Affiliate of a
Lender or Approved Fund of any Lender, each of the Borrower and the
Administrative Agent (and, in the case of an assignment of all or a portion
of a Tranche A Lender's Tranche A Commitment, the Issuing Banks that have
issued Tranche A Letters of Credit) must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender, an Affiliate of a
Lender or Approved Fund of any Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitments, the aggregate amount
of the Commitments of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall be in an aggregate
amount of not less than $5,000,000 (or $1,000,000 in the case of an
assignment of a Tranche B Lender's Tranche B Credit-Linked Deposit) unless
each of the Borrower and the Administrative Agent otherwise consent,
(iii) each partial assignment by a Lender of its Revolving Commitment and
Revolving Credit Exposure, its Tranche A Commitment and Tranche A LC Exposure
or its Tranche B Credit-Linked Deposit and Tranche B LC Exposure shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement in respect of its Revolving
Commitment and Revolving Credit Exposure, its Tranche A Commitment and
Tranche A LC Exposure or its Tranche B Credit-Linked Deposit and Tranche B LC
Exposure, as the case may be, (iv) the parties to each 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; and PROVIDED FURTHER that any consent
of the Borrower otherwise required under this paragraph shall not be required
if an Event of Default shall have occurred and is continuing. Subject to
acceptance and recording thereof pursuant to paragraph (d) of this Section,
from and after the effective date specified in each Assignment and Acceptance
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 the assigning Lender there
under 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 of the 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 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section. Without the consent of the Administrative
Agent, the Tranche B Credit-Linked Deposit of any Tranche B Lender shall not
be released in connection with any assignment by such Tranche B Lender, but
shall instead be purchased by the relevant assignee and continue to be held
for application (to the extent not already applied) in accordance with
Section 2.05 to satisfy such assignee's obligations in respect of Tranche B
LC Disbursements.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in Houston, Texas 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 Commitments
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Banks 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, notwithstanding notice
to the contrary. The Register shall be available for inspection by the
Borrower, any Issuing Bank and any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b)
of this Section and any written consent to such assignment required by para
graph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or any Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a
portion of its Revolving Commitments and the Loans owing to it, its Tranche A
Commitments or its Tranche B Credit-Linked Deposit); PROVIDED 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 and (iii) the Borrower, the Administrative
Agent, the Issuing Banks 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. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
PROVIDED that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto. In the case of any Lender that is a fund that
invests in bank loans, such Lender may, without the consent of the Borrower
or Administrative Agent, assign or pledge all or any portion of its rights
under this Agreement, including the Loans and notes or any other instrument
evidencing its rights as a Lender under this Agreement, to any holder of,
trustee for, or any other representative of holders of, obligations owed or
securities issued, by such fund, as security for such obligations or
securities; provided that any foreclosure or similar action by such trustee
or representative shall be subject to the provisions of this Section 9.04(b)
concerning assignments.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement or
the option to pay to the Administrative Agent for the account of the
applicable Issuing Bank all or any part of such Granting Lender's Applicable
Percentage of any LC Disbursement made by such Issuing Bank and not
reimbursed by the Borrower that such Granting Lender would otherwise be
obligated to pay to the Administrative Agent for the account of the
applicable Issuing Bank pursuant to this Agreement, as the case may be;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan or to pay such Granting Lender's Applicable Percentage of any
LC Disbursement reimbursement obligation and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such
Loan or to pay all or any part of such Granting Lender's Applicable
Percentage of any LC Disbursement reimbursement obligation, the Granting
Lender shall be obligated to make such Loan or to pay its Applicable
Percentage of any LC Disbursement reimbursement obligation, as the case may
be, pursuant to the terms hereof. The making of a Loan by an SPC or the
payment by such SPC of such Granting Lender's Applicable Percentage of any LC
Disbursement reimbursement obligation hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by
such Granting Lender or such LC Disbursement reimbursement obligation were
paid by such Granting Lender. Each party hereto hereby agrees that no SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender).
In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement ) that, prior to
the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such
SPC in connection with its activities as an SPC hereunder any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary in this Section 9.04, any SPC may (i) with notice
to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign
all or a portion of its interests in any Loans or LC Disbursement
reimbursement obligations to the Granting Lender or to any financial
institutions (consented to by the Borrower and the Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC
to support the funding or maintenance of Loans or payment of LC Disbursement
reimbursement obligations and (ii) disclose on a confidential basis
consistent with the provisions of Section 9.12 any non-public information
relating to its Loans or LC Disbursement reimbursement obligations to any
rating agency, commercial paper dealer or provider of any surety, guarantee
or credit or liquidity enhancement to such SPC. The provisions of this
Section relating any SPC may not be amended without the written consent of
such SPC.
SECTION 9.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Borrower in the Loan Documents and
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that any Agent, any
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, 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 any Letter
of Credit is outstanding and so long as any Commitment has not expired or ter
minated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of
the Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Agents and Arrangers constitute the entire
contract among the parties relating to the subject matter hereof and super
sede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each
of the other parties hereto, and thereafter shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 9.08. RIGHT OF SET-OFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates 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 obligations at
any time owing by such Lender or Affiliate 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 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of
or relating to any Loan Document, 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 con
clusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that the Administrative Agent, any
Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.
(c) 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 or any other Loan
Document in any court referred to in paragraph (b) of this Section. 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.
(d) 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 or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. 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 ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. 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 shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. CONFIDENTIALITY. Each of the Administrative Agent,
the Issuing Banks and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, auditors, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed
of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For the
purposes of this Section, "Information" means all information received from
the Borrower relating to the Borrower or its business, other than any such
information that is available to any Agent, any Issuing Bank or any Lender on
a nonconfidential basis prior to disclosure by the Borrower; PROVIDED that,
in the case of information received from the Borrower after the date hereof,
such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Informa
tion as provided in this Section shall be considered to have complied with
its obligation to do so if such Person has exercised the same degree of care
to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 9.13. INTEREST RATE LIMITATION. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"),
shall exceed the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by the Revolving Lender
holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable
in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of
such Loan but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable to such Revolving
Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repay
ment, shall have been received by such Revolving Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
TUCSON ELECTRIC POWER COMPANY,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Treasurer
TORONTO DOMINION (TEXAS), INC., as
Administrative Agent,
by /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
SCHEDULE 2.01
COMMITMENTS
NAME REVOLVER TRANCHE A LC TRANCHE B TOTAL
COMMITMENT COMMITMENT CREDIT LINKED COMMITMENT
DEPOSIT
-------------------------------------------------------------------------------------------------
TORONTO-DOMINION $12,618,062.63 $28,326,382.37 $178,702,602.00 $219,647,047.00
BANK
CREDIT SUISSE $11,171,351.09 $25,078,648.91 $13,190,000.00 $49,440,000.00
FIRST BOSTON
THE BANK OF NEW $11,171,351.09 $25,078,648.91 $4,000,000.00 $40,250,000.00
YORK
UNION BANK OF $11,171,351.09 $25,078,648.91 $3,000,000.00 $39,250,000.00
CALIFORNIA
FLEET BANK $7,704,380.06 $17,295,619.94 $2,000,000.00 $27,000,000.00
▇▇▇▇▇ FARGO $6,163,504.05 $13,836,495.95 N/A $20,000,000.00
BANK
BANC ONE N/A N/A $5,000,000.00 $5,000,000.00
-------------------------------------------------------------------------------------------------
TOTAL $60,000,000.00 $134,694,445.00 $205,892,602.00 $400,587,047.00
Schedule 2.05
Revenue Bonds
Supported by Amount of
Issuing Bank Letter of Credit Letter of Credit
----------------------------------------------------------------------------
The Toronto- The Industrial Development $ 41,321,095.89
Dominion Bank Authority of the County of Pima
Industrial Development Revenue
Bonds (Tucson Electric Power
Company Projects) 1982 Series A
The Toronto- The Industrial Development $ 40,078,356.16
Dominion Bank Authority of the County of Pima
Industrial Development Revenue
Bonds (Tucson Electric Power
Company Irvington Project) 1982
Series A
The Toronto- The Industrial Development $103,835,616.44
Dominion Bank Authority of the County of Apache
Industrial Development Revenue
Bonds (Tucson Electric Power
Company Springerville Project) 1983
Series A
The Bank of New The Industrial Development $ 82,888,888.89
York Authority of the County of Apache
Industrial Development Revenue
Bonds (Tucson Electric Power
Company Springerville Project) 1983
Series B
The Bank of New The Industrial Development $ 51,805,555.56
York Authority of the County of Apache
Industrial Development Revenue
Bonds (Tucson Electric Power
Company Springerville Project) 1983
Series C
The Toronto- The Industrial Development $ 20,657,534.25
Dominion Bank Authority of the County of Apache
Industrial Development Revenue
Bonds (Tucson Electric Power
Company Springerville Project) 1985
Series A