REVOLVING CREDIT AGREEMENT
dated as of
September 29, 1999
among
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,
THE BANKS LISTED HEREIN,
THE BANK OF NOVA SCOTIA
and
BANK ONE, N.A.
as CO-DOCUMENTATION AGENTS,
BANK OF AMERICA, N.A.
as SYNDICATION AGENT
and
THE CHASE MANHATTAN BANK
as ADMINISTRATIVE AGENT
Arranged by
CHASE SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions
Section 1.01. Definitions 1
Section 1.02. Accounting Terms and Determinations 15
Section 1.03. Types of Borrowings 15
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend 15
Section 2.02. Notice of Committed Borrowings 16
Section 2.03. Money Market Borrowings 17
Section 2.04. Notice to Banks; Funding of Loans 21
Section 2.05. Notes 22
Section 2.06. Maturity of Loans 23
Section 2.07. Interest Rates 23
Section 2.08. Method of Electing Interest Rates 27
Section 2.09. Fees 29
Section 2.10. Optional Termination or Reduction of Commitments 30
Section 2.11. Mandatory Termination of Commitments 30
Section 2.12. Optional Prepayments 30
Section 2.13. General Provisions as to Payments 31
Section 2.14. Funding Losses 32
Section 2.15. Computation of Interest and Fees 32
Section 2.16. Withholding Tax Exemption 32
Section 2.17. Increase of Commitments 33
ARTICLE 3
Conditions
Section 3.01. Effectiveness 34
Section 3.02. Borrowings 35
ARTICLE 4
Representations and Warranties
Section 4.01. Corporate Existence, Power and Authority 37
Section 4.02. Financial Statements 37
Page
Section 4.03. Litigations 38
Section 4.04. Governmental Authorizations 38
Section 4.05. Capital Term Certificates 39
Section 4.06. No Violation of Agreements 39
Section 4.07. No Event of Default under the Indentures 39
Section 4.08. Compliance with ERISA 40
Section 4.09. Compliance with Other Laws 40
Section 4.10. Tax Status 40
Section 4.11. Investment Company Act 40
Section 4.12. Public Utility Holding Company Act 40
Section 4.13. Disclosure 40
Section 4.14. Subsidiaries 41
Section 4.15. Environmental Matters 41
Section 4.16. Year 2000 41
ARTICLE 5
Covenants
Section 5.01. Corporate Existence 42
Section 5.02. Disposition of Assets; Merger,
Character of Business; etc 42
Section 5.03. Financial Information 43
Section 5.04. Default Certificates 44
Section 5.05. Notice of Litigation, Legislative Developments
and Defaults 45
Section 5.06. ERISA 45
Section 5.07. Payment of Charges 46
Section 5.08. Inspection of Books and Assets 46
Section 5.09. Indebtedness 46
Section 5.10. Liens 47
Section 5.11. Maintenance of Insurance 48
Section 5.12. Subsidiaries and Joint Ventures 48
Section 5.13. Minimum TIER 49
Section 5.14. Retirement of Patronage Capital 49
Section 5.15. Use of Proceeds 49
ARTICLE 6
Defaults
Section 6.01. Events of Defaults 49
Section 6.02. Notice of Default 52
Page
ARTICLE 7
The Agent
Section 7.01. Appointment and Authorization 52
Section 7.02. Agent and Affiliates 52
Section 7.03. Action by Agent 52
Section 7.04. Consultation with Experts 52
Section 7.05. Liability of Agent 52
Section 7.06. Indemnification 53
Section 7.07. Credit Decision 53
Section 7.08. Successor Agent 53
Section 7.09. Co-Documentation Agents and
Syndication Agent Not Liable 54
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate
Inadequate or Unfair 54
Section 8.02. Illegality 55
Section 8.03. Increased Cost and Reduced Return 55
Section 8.04. Base Rate Loans Substituted for
Affected Fixed Rate Loans 57
ARTICLE 9
Miscellaneous
Section 9.01. Notices 58
Section 9.02. No Waivers 58
Section 9.03. Expenses; Documentary Taxes; Indemnification 58
Section 9.04. Sharing of Set-offs 59
Section 9.05. Amendments and Waivers 60
Section 9.06. Successors and Assigns 60
Section 9.07. Collateral 61
Section 9.08. Managing Agents; Co-Agents 62
Section 9.09. Governing Law 62
Section 9.10. Counterparts; Integration 62
Section 9.11. Several Obligations 62
Section 9.12. Severability 62
Section 9.13. Waiver/Appointment Notice 62
Schedule I - Agent Schedule
Exhibit A - Note
Exhibit B - RUS Guarantee
Exhibit C - Money Market Quote Request
Exhibit D - Invitation for Money Market Quotes
Exhibit E - Money Market Quote
Exhibit F - Opinion of General Counsel for the Borrower
Annex A to Exhibit F - Subsidiaries and Joint Ventures
Exhibit G - Opinion of Special Counsel for the Borrower
Exhibit H - Opinion of Special Counsel for the Agent
Exhibit I - Extension Agreement
Exhibit J - Assignment and Assumption Agreement
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of September 29, 1999 among
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, a not-for-profit
cooperative association incorporated under the laws of the District of
Columbia, as Borrower, the BANKS listed on the signature pages hereof,
THE BANK OF NOVA SCOTIA and THE FIRST NATIONAL BANK ONE, N.A., as
Co-Documentation Agents, BANK OF AMERICA, N.A., as Syndication Agent, and
THE CHASE MANHATTAN BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the Agent
and submitted to the Agent (with a copy to the Borrower) duly completed
by such Bank.
"Agent" means The Chase Manhattan Bank in its capacity as administrative
agent for the Banks hereunder, and its successors in such capacity.
"Agreement" means this Revolving Credit Agreement, as the same may be
amended from time to time.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office, (ii) in the case
of its
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Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"Base Rate Loan" means a Committed Loan that bears interest at the Base Rate
pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or the last sentence of Section 2.08(a) or Article 8.
"Bonds" means any bonds issued pursuant to either Indenture or both, as the
context may require.
"Borrower" means the National Rural Utilities Cooperative Finance
Corporation, a not-for-profit cooperative association incorporated under
the laws of the District of Columbia, and its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Term Certificate" means a note of the Borrower substantially in
the form of the membership subscription certificates and the loan and
guarantee certificates outstanding on the date of the execution and
delivery of this Agreement and any other Indebtedness of the Borrower having
substantially similar provisions as to subordination as those contained in
said outstanding membership subscription certificates and loan and guarantee
certificates.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Committed Loan that bears interest at a CD Rate pursuant
to the applicable Notice of Committed Borrowing or Notice of Interest Rate
Election.
"CD Margin" means .290%.
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"CD Reference Banks" means The Chase Manhattan Bank and Bank of
America, N.A.
"Commitment" means (i) with respect to each Bank listed on the signature
pages hereof, the amount set forth opposite the name of such Bank on the
signature pages hereof and (ii) with respect to any Assignee that becomes a
Bank pursuant to Section 9.06(c), the amount of the transferor Bank's
Commitment assigned to it pursuant to Section 9.06(c), in each case as such
amount may be reduced from time to time pursuant to Sections 2.10 and 2.11;
provided that, if the context so requires, the term "Commitment" means the
obligation of a Bank to extend credit up to such amount to the Borrower
hereunder.
"Committed Loan" means a Revolving Loan or a Term Loan; provided that, if
any such loan or loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term "Committed Loan"
shall refer to the combined principal amount resulting from such combination
or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
"Commitment Termination Date" means September 27, 2000 or such later date to
which this Agreement shall have been extended pursuant to Section 2.01(c),
or, if either such day is not a Euro-Dollar Business Day, the next preceding
Euro-Dollar Business Day.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be combined or consolidated with those of the
Borrower in its combined or consolidated financial statements if such
statements were prepared as of such date.
"Co-Documentation Agents" means The Bank of Nova Scotia and Bank One, N.A.,
each in its capacity as co-documentation agent for the Banks hereunder, and
their successors in such capacity.
"Default" means any condition or event which constitutes an Event of Default
or which with the giving of notice or lapse of time or both (as specified
in Section 6.01) would, unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of such Person
in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
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transaction, currency option or any other similar transaction (including
any option with respect to any of the foregoing transactions) or any
combination of the foregoing transactions.
"Determination Date" shall have the meaning provided in Section 5.09.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Agent; provided that any Bank may
so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may
require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section 2.07(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and governmental restrictions
relating to the environment, the effect of the environment on human health
or to emissions, discharges or releases of pollutants, contaminants,
Hazardous Substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
Hazardous Substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
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"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan that bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing
or Notice of Interest Rate Election.
"Euro-Dollar Margin" means .165%.
"Euro-Dollar Reference Banks" means the principal London offices of The
Chase Manhattan Bank and Bank of America, N.A.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is
not a Domestic Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Domestic Business Day
as so published on the next succeeding Domestic Business Day, and (ii) if
no such rate is so published on such next succeeding Domestic Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to
The Chase Manhattan Bank on such day on such transactions as determined
by the Agent.
5
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money Market
Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group of Loans" means, at any time, a group of Loans consisting of (i)
all Committed Loans which are Base Rate Loans at such time, (ii) all
Euro-Dollar Loans having the same Interest Period at such time or (iii)
all CD Loans having the same Interest Period at such time; provided that,
if a Committed Loan of any particular Bank is converted to or made as a
Base Rate Loan pursuant to Article8, such Loan shall be included in the
same Group or Groups of Loans from time to time as it would have been in
if it had not been so converted or made.
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Indebtedness or
lease payments of any other Person or otherwise in any manner assuring the
holder of any Indebtedness of, or the obligee under any lease of, any other
Person through an agreement, contingent or otherwise, to purchase
Indebtedness or the property subject to such lease, or to purchase goods,
supplies or services primarily for the purpose of enabling the debtor or
obligor to make payment of the Indebtedness or under such lease or of
assuring such Person against loss, or to supply funds to or in any other
manner invest in the debtor or obligor, or otherwise; provided that the
term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" when used as a verb
has a correlative meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and
other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indebtedness" with respect to any Person means:
(1) all indebtedness which would appear as indebtedness on a balance
sheet of such Person prepared in accordance with generally accepted
accounting principles (i) for money borrowed, (ii) which is evidenced
by securities sold for money or (iii) which constitutes purchase money
indebtedness;
(2) all indebtedness of others Guaranteed by such Person;
(3) all indebtedness secured by any Lien upon property owned by such
Person, even though such Person has not assumed or become liable for the
payment of such indebtedness; and
6
(4) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement (including any lease
in the nature of a title retention agreement) with respect to property
acquired by such Person (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession of such property), but only if such property is included
as an asset on the balance sheet of such Person; provided that, in
computing the "Indebtedness" of such Person, there shall be excluded any
particular indebtedness if, upon or prior to the maturity thereof, there
shall have been deposited with the proper depositary in trust money
(or evidences of such indebtedness) in the amount necessary to pay,
redeem or satisfy such indebtedness, and thereafter such money and
evidences of indebtedness so deposited shall not be included in any
computation of the assets of such Person; and provided further that no
provision of this definition shall be construed to include as "Indebtedness"
of the Borrower any indebtedness by virtue of any agreement by the
Borrower to advance or supply funds to Members.
"Indenture" means either the 1972 Indenture or the 1994 Indenture, and
"Indentures" means both such Indentures.
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing,
the period commencing on the date of such Borrowing and ending one, two,
three or six months thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is not
a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business Day
of a calendar month;
(c) any Interest Period which begins before the Commitment Termination
Date and would otherwise end after the Commitment Termination Date shall
end on the Commitment Termination Date; and
7
(d) Interest Period which begins before the first anniversary of
the Commitment Termination Date and would otherwise end after the first
anniversary of the Commitment Termination Date shall end on the first
anniversary of the Commitment Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the date
of such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is not
a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day;
(b) any Interest Period which begins before the Commitment Termination
Date and would otherwise end after the Commitment Termination Date shall end
on the Commitment Termination Date; and
(c) any Interest Period which begins before the first anniversary of
the Commitment Termination Date and would otherwise end after the first
anniversary of the Commitment Termination Date shall end on the first
anniversary of the Commitment Termination Date;
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day;
(b) any Interest Period which begins before the Commitment Termination
Date and would otherwise end after the Commitment Termination Date shall
end on the Commitment Termination Date; and
(c) any Interest Period which begins before the first anniversary of
the Commitment Termination Date and would otherwise end after the first
anniversary of the Commitment Termination Date shall end on the first
anniversary of the Commitment Termination Date;
8
(4) with respect to each Money Market LIBOR Borrowing, the period commencing
on the date of such Borrowing and ending any whole number of months
thereafter (but not less than one month) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is not
a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (c) below, end on the last Euro-Dollar Business Day
of a calendar month;
(c) any Interest Period which begins before the Commitment Termination
Date and would otherwise end after the Commitment Termination Date shall
end on the Commitment Termination Date; and
(d) any Interest Period which begins before the first anniversary of the
Commitment Termination Date and would otherwise end after the first
anniversary of the Commitment Termination Date shall end on the first
anniversary of the Commitment Termination Date;
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 30 days) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day;
(b) any Interest Period which begins before the Commitment Termination
Date and would otherwise end after the Commitment Termination Date shall
end on the Commitment Termination Date; and
9
(c) any Interest Period which begins before the first anniversary of
the Commitment Termination Date and would otherwise end after the first
anniversary of the Commitment Termination Date shall end on the first
anniversary of the Commitment Termination Date;
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Joint Venture" means any corporation, partnership, association, joint
venture or other entity in which the Borrower, directly or indirectly
through Subsidiaries or Joint Ventures, has an equity interest at the
time of 10% or more but which is not a Subsidiary; provided that no Person
whose only assets are RUS Guaranteed Loans and investments incidental
thereto shall be deemed a Joint Venture.
"LIBOR Auction" means a solicitation of Money Market Quotes setting forth
Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall
be deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to
such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money Market Loan
and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market Loans
or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Member" means any Person which is a member or a patron of the Borrower.
"Money Market Absolute Rate" has the meaning set forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
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"Money Market Lending Office" means, as to each Bank, its Domestic Lending
Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Agent; provided that any Bank may from time to time by
notice to the Borrower and the Agent designate separate Money Market Lending
Offices for its Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case all references
herein to the Money Market Lending Office of such Bank shall be deemed to
refer to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant to a
LIBOR Auction (including such a loan bearing interest at the Prime Rate
pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money Market Loan
in accordance with Section 2.03.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"Net Margins" means operating and non-operating income of the Borrower and
its Subsidiaries determined on a combined or consolidated basis (excluding
income on Guaranteed Portions of RUS Guaranteed Loans) less, without
duplication, operating and non-operating costs and expenses of the Borrower
and its Subsidiaries determined on a combined or consolidated basis
(excluding costs and expenses relating to Guaranteed Portions of RUS
Guaranteed Loans).
"1994 Indenture" means the Indenture dated as of February 15, 1994 and as
amended as of September 16, 1999 between the Borrower and First Bank
National Association, as trustee, as amended and supplemented from time
to time, providing for the issuance in series of certain collateral trust
bonds of the Borrower.
"1972 Indenture" means the Seventeenth Supplemental Indenture dated as of
March 1, 1987, amending and restating in full the Indenture dated as of
December 1, 1972, by and between the Borrower and Chemical Bank (as
successor by merger to Manufacturers Hanover Trust Company), as trustee.
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"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as defined in
Section 2.02) or a Notice of Money Market Borrowing (as defined in Section
2.03(f)).
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"Patronage Capital Certificates" means those certificates that evidence the
allocation of Net Margins by the Borrower among its Members in proportion
to interest earned by the Borrower from such Members.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Plan" means any multiemployer plan or single employer plan, as defined in
Section 4001 and subject to Title IV of ERISA, which is maintained, or at
any time during the five calendar years preceding the date of this
Agreement was maintained, for employees of the Borrower or a Subsidiary of
the Borrower or any member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by The Chase
Manhattan Bank in New York City from time to time as its Prime Rate.
"Prior Credit Agreement" means the Revolving Credit Agreement dated as of
February 28, 1995, as amended and restated as of November 26, 1996, as
further amended and restated as of November 25, 1997, as further amended
and restated as of November 24, 1998, and as further amended to the date
hereof, among the Borrower, the banks listed on the signature pages thereof,
▇.▇. ▇▇▇▇▇▇ Securities Inc. and the Bank of Nova Scotia, as Co-Syndication
Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Administrative
Agent.
"Qualified Subordinated Indebtedness" means the Borrower's (i) 8% Quarterly
Income Capital Securities (Subordinated Deferrable Interest Debentures
Due 2045) and (ii) any
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other Indebtedness of the Borrower having substantially similar terms as
those contained in the instruments and documents relating to the foregoing
Indebtedness.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar Reference
Banks, as the context may require, and "Reference Bank" means any one of
such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Reportable Event" means an event described in Section 4043(c) of ERISA or
regulations promulgated by the Department of Labor thereunder (with respect
to which the 30 day notice requirement has not been waived by the PBGC).
"Required Banks" means at any time Banks having at least 51% of the sum of
the aggregate amount of the unused Commitments and the aggregate principal
outstanding amount of the Loans.
"Revolving Credit Period" means the period from and including the Effective
Date to but excluding the Commitment Termination Date.
"Revolving Loan" means a loan made by a Bank pursuant to Section2.01(a).
"RUS" means the Rural Utilities Service of the Department of Agriculture
of the United States of America (as successor to the Rural Electrification
Administration of the Department of Agriculture of the United States of
America) or any other regulatory body which succeeds to its functions.
"RUS Guaranteed Loan" means any loan made by any Person, which loan (x)
bears interest at least equal to such Person's cost of funds and (y) is
guaranteed, in whole or in part, as to principal and interest by the
United States of America through the RUS pursuant to a guarantee, which
guarantee contains provisions no less favorable to the holder thereof than
the provisions set forth in the form of Exhibit B-1 or Exhibit B-2 hereto;
and "Guaranteed Portion" of any RUS Guaranteed Loan means that portion of
principal of, and interest on, such RUS Guaranteed Loan which is guaranteed
by the United States of America through the RUS as provided in clause (y).
13
"S&P" means Standard and Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Subsidiary" of any Person means (i) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly
or indirectly through its Subsidiaries, and (ii) any other Person in which
such Person directly or indirectly through Subsidiaries has more than a 50%
voting and equity interest, provided that no Person whose only assets are
RUS Guaranteed Loans and investments incidental thereto shall be deemed a
Subsidiary. Neither the Rural Telephone Finance Cooperative nor the
Guaranty Funding Cooperative is on the date of this Agreement a
"Subsidiary", except that the Rural Telephone Finance Cooperative and,
but only so long as the Borrower maintains control of the Board of Directors
of the Guaranty Funding Cooperative (including, without limitation, the
ability to appoint a majority of such Board of Directors), the Guaranty
Funding Cooperative shall each be considered a "Subsidiary" for purposes
of the definitions of "Net Margins" and "TIER".
"Superior Indebtedness" means all Indebtedness of the Borrower (other
than Capital Term Certificates and Qualified Subordinated Indebtedness)
and its Subsidiaries determined on a combined or consolidated basis, but
excluding Indebtedness of the Borrower or any of its Subsidiaries to the
extent that the proceeds of such Indebtedness are used to fund Guaranteed
Portions of RUS Guaranteed Loans.
"Syndication Agent" means Bank of America, N.A. in its capacity as
Syndication Agent for the Banks hereunder, and its successors in such
capacity.
"Term Loan" means a loan made pursuant to Section 2.01(b).
"TIER" means, for any period, the ratio of (x)Net Margins plus interest on
Indebtedness of the Borrower or its Subsidiaries determined on a combined
or consolidated basis (but excluding Indebtedness of the Borrower or any
of its Subsidiaries to the extent that the proceeds of such Indebtedness
are used to fund Guaranteed Portions of RUS Guaranteed Loans) plus
amortization of bond discount and amortization of bond issuance costs of
the Borrower and its Subsidiaries determined on a combined or consolidated
basis for such period (but excluding such amortization of discount and
issuance costs with respect to Indebtedness referred to in the preceding
parenthetical phrase) to (y) interest on Indebtedness of the Borrower or
its Subsidiaries determined on a combined or
14
consolidated basis (but excluding Indebtedness of the Borrower or any of
its Subsidiaries to the extent that the proceeds of such Indebtedness are
used to fund Guaranteed Portions of RUS Guaranteed Loans) plus amortization
of bond discount and amortization of bond issuance costs of the Borrower
and its Subsidiaries determined on a combined or consolidated basis for
such period (but excluding such amortization of discount and issuance costs
with respect to Indebtedness referred to in the preceding parenthetical
phrase).
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made and all financial
statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in
by the Borrower's independent public accountants) with the most recent
audited combined financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks.
Section 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans)
or by reference to the provisions of Article 2 under which participation
therein is determined (i.e., a "Revolving Borrowing" is a Borrowing
under Section 2.01(a) in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing
under Section 2.03 in which the Bank participants are determined on
the basis of their bids in accordance therewith).
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. (a) Revolving Loans. During the
Revolving Credit Period each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time in amounts such that the
aggregate principal amount of Revolving Loans by such Bank at any one
time outstanding shall not exceed the amount of its Commitment. Each
Borrowing shall be in an aggregate principal amount of $10,000,000 or
any larger multiple of $1,000,000 (except that any such Borrowing may be
in the maximum
15
aggregate amount available in accordance with Section 3.02(c) or 3.02(d))
and shall be made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the Borrower may
borrow under this Section, repay or, to the extent permitted by Section
2.12, prepay Loans and reborrow at any time during the Revolving Credit
Period under this Section.
(b) Term Loans. Each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make a Term Loan to the Borrower on the
Commitment Termination Date in an amount up to but not exceeding the amount
of its Commitment, as then in effect.
(c) Extension of Commitments. The Commitment Termination Date
may be extended from time to time in the manner set forth in this
subsection (c), in each case for a period of up to 364 days from
the date on which Banks having 51% of the Commitments shall have
notified the Agent of their agreement so to extend. If the Borrower
wishes to request an extension of the Commitment Termination Date,
it shall give written notice to that effect (such notice to state
the date to which the Commitment Termination Date then in effect is
requested to be extended, subject to the provisions of the preceding
sentence) to the Agent not less than 60 nor more than 90 days prior
to the Commitment Termination Date then in effect, whereupon the
Agent shall promptly notify each of the Banks of such request and
send a copy of the Extension Agreement referred to below to each
Bank. Each Bank will use its best efforts to respond to such
request, whether affirmatively or negatively, as it may elect in
its discretion, within 30 days of such notice to the Agent. If
less than all Banks respond affirmatively to such request within
30 days, then the Borrower may request the Banks that do not elect
to extend the Commitment Termination Date to assign their
Commitments in their entirety, no later than 15 days prior to the
Commitment Termination Date then in effect, to one or more Assignees
pursuant to Section 9.06(c) which Assignees will agree to extend
the Commitment Termination Date. If Banks having at least 51% of
the Commitments (including such Assignees and excluding their
respective transferor Banks) respond affirmatively, then, subject
to receipt by the Agent of counterparts of an Extension Agreement
in substantially the form of Exhibit I hereto duly completed and
signed by all of the parties thereto, the Commitment Termination
Date shall be extended for the period specified above. The
Commitment of any Bank that elects not to extend the Commitment
Termination Date shall terminate on the Commitment Termination Date
in effect immediately prior to giving effect to any such extension.
Section 2.02. Notice of Committed Borrowings. The Borrower shall give the
Agent notice (a "Notice of Committed Borrowing") not later than 11:00 A.M.
(New York City time) on (x) the date of each Base Rate Borrowing, (y) the
16
second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate, a CD Rate or a Euro-Dollar Rate, and
(d) in the case of a Fixed Rate Borrowing, the duration of the Interest
Period applicable thereto, subject to the provisions of the definition of
Interest Period.
Notwithstanding the foregoing, no more than 15 Fixed Rate Borrowings shall
be outstanding at any one time, and any Borrowing which would exceed such
limitation shall be made as a Base Rate Borrowing.
Section 2.03. Money Market Borrowings. (a) In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in
this Section, request the Banks during the Revolving Credit Period to make
offers to make Money Market Loans to the Borrower. The Banks may, but
shall have no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth
in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit C hereto so as to be received no
later than 10:00 A.M. (New York City time) on (x) the fifth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in the
case of a LIBOR Auction or (y)the Domestic Business Day next preceding the
date of Borrowing proposed therein, in the case of an Absolute Rate Auction
(or, in either case, such other time or date as the Borrower and the Agent
shall have mutually agreed and shall have notified to the Banks not later
than the date of the Money Market Quote Request for the first LIBOR Auction
or Absolute Rate Auction for which such change is to be effective)
specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day
in the case of an Absolute Rate Auction,
17
(ii) the aggregate amount of such Borrowing, which shall be $10,000,000
or any larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a Money
Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market
Quote Request shall be given within five Euro-Dollar Business Days (or such
other number of days as the Borrower and the Agent may agree) of any other
Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially
in the form of Exhibit D hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the
Money Market Loans to which such Money Market Quote Request relates in
accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may
submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this subsection
(d) and must be submitted to the Agent by telex or facsimile transmission
at its offices specified in or pursuant to Section 9.01 not later than
(x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction
or (y) 9:00 A.M. (New York City time) on the proposed date of Borrowing,
in the case of an Absolute Rate Auction (or, in either case, such other
time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective); provided that Money Market Quotes submitted
by the Agent (or any affiliate of the Agent) in the capacity of a Bank may
be submitted, and may only be submitted, if the Agent or such affiliate
notifies the Borrower of the terms of the offer or offers contained therein
not later than (x) 1:00 P.M. (New York City time) on the fourth Euro-Dollar
Business Day prior to the proposed date of
18
Borrowing, in the case of a LIBOR Auction or (y) 8:45 A.M. (New York City
time) on the proposed date of Borrowing, in the case of an Absolute Rate
Auction. Subject to Articles 3 and 6, any Money Market Quote so made shall
be irrevocable except with the written consent of the Agent given on the
instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit E hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (w)may be greater than or less
than the Commitment of the quoting Bank, (x) must be $1,000,000 or any
larger multiple thereof, (y) may not exceed the principal amount of Money
Market Loans for which offers were requested and (z) may be subject to an
aggregate limitation as to principal amount of Money Market Loans for which
offers being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin") offered
for each such Money Market Loan, expressed as a percentage (rounded to the
nearest 1/10,000th of 1%) to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest
per annum (rounded to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit E hereto or does
not specify all of the information required by subsection (d)(ii),
(B) contains qualifying, conditional or similar language,
19
(C) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes, or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank
that is in accordance with subsection (d) and (y) of any Money Market Quote
that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be disregarded
by the Agent unless such subsequent Money Market Quote is submitted solely
to correct a manifest error in such former Money Market Quote. The Agent's
notice to the Borrower shall specify (A) the aggregate principal amount of
Money Market Loans for which offers have been received for each Interest
Period specified in the related Money Market Quote Request, (B) the
respective principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for
which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:00 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or,
in either case, such other time or date as the Borrower and the Agent shall
have mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the
Borrower shall notify the Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to subsection (e). In the case of
acceptance, such notice (a "Notice of Money Market Borrowing") shall specify
the aggregate principal amount of offers for each Interest Period that are
accepted. The Borrower may accept any Money Market Quote in whole or in
part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market Quote
Request,
(ii) the aggregate principal amount of each Money Market Borrowing must
be $10,000,000 or any larger multiple of $1,000,000,
20
(iii) acceptance of offers may only be made on the basis of ascending
Money Market Margins or Money Market Absolute Rates, as the case may be,
and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks with
the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect
of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Banks as nearly as
possible (in such multiples, not greater than $100,000, as the Agent may
deem appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Agent of the amounts of Money Market Loans
shall be conclusive in the absence of manifest error.
Section 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a
Notice of Borrowing, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 1:00 P.M. (New York City time) on the date of each
Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing,
in Federal or other funds immediately available in New York City, to the
Agent at its address specified in or pursuant to Section 9.01. Unless the
Agent determines that any applicable condition specified in Article 3 has
not been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank
to the Agent as provided in subsection (b), or remitted by the Borrower to
the Agent as provided in Section 2.13, as the case may be.
(d) Unless the Agent shall have been notified by any Bank prior to the
date of Borrowing (or prior to 1:00P.M. (New York City time) on the date of
Borrowing in the
21
case of a Base Rate Borrowing) that such Bank does not intend to make
available to the Agent such Bank's portion of the Borrowing to be made on
such date, the Agent may assume that such Bank has made such amount
available to the Agent on such date and the Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount,
subject to the provisions of subsection (c). If such corresponding amount
is not in fact made available to the Agent by such Bank, the Agent shall
be entitled to recover such corresponding amount on demand from such Bank.
If such Bank does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Borrower and
the Borrower shall promptly pay such corresponding amount to the Agent.
The Agent shall also be entitled to recover from such Bank or the Borrower
interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrower
to the date such corresponding amount is recovered by the Agent, at a rate
per annum equal to (x) in the case of a Bank, the Federal Funds Rate for
each such day and (y) in the case of the Borrower, the then applicable rate
for Base Rate Loans, CD Loans, Euro-Dollar Loans or Money Market Loans, as
appropriate. Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its Commitment hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by
such Bank hereunder. For purposes of this subsection (d), no amount paid
to the Agent hereunder shall be considered to have been recovered by the
Agent on the date of payment unless such amount shall have been received by
the Agent by 2:30 P.M. (New York City time) on such date.
Section 2.05. Notes. (a) The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request that
its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the
relevant type. Each reference in this Agreement to the "Note" of such
Bank shall be deemed to refer to and include any or all of such Notes, as
the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b), the
Agent shall forward such Note to such Bank. Each Bank shall record the
date, amount, type and maturity of each Loan made by it and the date and
amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note,
22
endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized
by the Borrower so to endorse its Note and to attach to and make a part of
its Note a continuation of any such schedule as and when required.
Section 2.06. Maturity of Loans. (a) The Revolving Loans shall mature,
and the principal amount thereof shall be due and payable, on the last day
of the Revolving Credit Period.
(b) Each Money Market Loan shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
(c) The Term Loans shall mature on the first anniversary of the
Commitment Termination Date.
Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate for such day. Such interest shall be payable for each Interest
Period on the last day thereof and, with respect to the principal amount
of any Base Rate Loan that is prepaid or converted to a CD Loan or
Euro-Dollar Loan, on the date of such prepayment or conversion. Any
overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to
the sum of 2% plus the rate otherwise applicable to Base Rate Loans for
such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the sum of the CD Margin plus the applicable Adjusted
CD Rate; provided that if any CD Loan shall, as a result of clause (2)(b)
of the definition of Interest Period, have an Interest Period of less
than 30 days, such Loan shall bear interest during such Interest Period
at the rate applicable to Base Rate Loans during such period. Such
interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 90 days, 90 days after the
first day thereof and, with respect to the principal amount of any CD
Loan that is prepaid or converted to a Base Rate Loan or Euro-Dollar Loan,
on the date of such prepayment or conversion. Any overdue principal of
or interest on any CD Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the
higher of (i) the sum of the CD Margin
23
plus the Adjusted CD Rate applicable to such Loan and (ii) the rate
applicable to Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to any Interest Period means a rate per
annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ----- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upwards, if necessary, to the next
higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of interest
determined by the Agent to be the average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of the prevailing rates per annum bid at 10:00
A.M. (New York City time) (or as soon thereafter as practicable) on the first
day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
unpaid principal amount of the CD Loan of such CD Reference Bank to which
such Interest Period applies and having a maturity comparable to such
Interest Period.
"Domestic Reserve Percentage" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having
a maturity comparable to the related Interest Period and in an amount of
$100,000 or more. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Domestic Reserve
Percentage.
24
"Assessment Rate" means for any day the annual assessment rate in effect on
such day which is payable by a member of the Bank Insurance Fund classified
as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of
12 C.F.R. Section 327.4(a) (or any successor provision) to the Federal
Deposit Insurance Corporation (or any successor) for such Corporation's (or
such successor's) insuring time deposits at offices of such institution in
the United States. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Euro-Dollar Margin plus the applicable
Adjusted London Interbank Offered Rate. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, three months after the first day thereof and, with
respect to the principal amount of any Euro-Dollar Loan that is prepaid or
converted to a Base Rate Loan or CD Loan, on the date of such prepayment or
conversion.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward,
if necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of
the respective rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank
to which such Interest Period is to apply and for a period of time comparable
to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate
on Euro-Dollar Loans is determined or any category of extensions of
25
credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate applicable
to such Loan and (ii) the Euro-Dollar Margin plus the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by dividing
(x) the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which one day (or, if such amount due
remains unpaid more than three Euro-Dollar Business Days, then for such other
period of time not longer than six months as the Agent may select) deposits
in dollars in an amount approximately equal to such overdue payment due to
each of the Euro-Dollar Reference Banks are offered to such Euro-Dollar
Reference Bank in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of
Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus the
rate applicable to Base Rate Loans for such day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance
with Section 2.07(c) as if each Euro-Dollar Reference Bank were to
participate in the related Money Market LIBOR Borrowing ratably in proportion
to its Commitment) plus (or minus) the Money Market Margin quoted by the Bank
making such Loan in accordance with Section 2.03. Each Money Market Absolute
Rate Loan shall bear interest on the outstanding principal amount thereof,
for the Interest Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such Loan in accordance
with Section 2.03. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the Prime Rate for such day.
(f) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
26
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference
Bank does not furnish a timely quotation, the Agent shall determine the
relevant interest rate on the basis of the quotation or quotations furnished
by the remaining Reference Bank or Banks or, if none of such quotations is
available on a timely basis, the provisions of Section 8.01 shall apply.
Section 2.08. Method of Electing Interest Rates. (a) The Loans included in
each Committed Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue
the type of interest rate borne by each Group of Loans (subject to Section
2.08(d) and the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to convert
such Loans to CD Loans as of any Domestic Business Day or to Euro-Dollar
Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to convert such
Loans to Base Rate Loans as of any Domestic Business Day, or convert such
Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day or continue
such Loans as CD Loans, as of the end of any Interest Period applicable
thereto, for an additional Interest Period, subject to Section 2.14 if any
such conversion is effective on any day other than the last day of an
Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans as of any Domestic Business Day, or
convert such Loans to CD Loans as of any Euro-Dollar Business Day or may
elect to continue such Loans as Euro-Dollar Loans, as of the end of any
Interest Period applicable thereto, for an additional Interest Period,
subject to Section 2.14 if any such conversion is effective on any day other
than the last day of an Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Administrative Agent not later than 10:30
A.M. (New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic Loans of one
type to Domestic Loans of the other type or are CD Loans to be continued as
CD Loans for an additional Interest Period, in which case such notice shall
27
be delivered to the Agent not later than 10:30 A.M. (New York City time) on
the second Domestic Business Day before such conversion or continuation is
to be effective). A Notice of Interest Rate Election may, if it so
specifies, apply to only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (i) such portion is allocated ratably
among the Loans comprising such Group and (ii) the portion to which such
Notice applies, and the remaining portion to which it does not apply, are
each at least $10,000,000 (unless such portion is comprised of Base Rate
Loans). If no such notice is timely received before the end of an Interest
Period for any Group of CD Loans or Euro-Dollar Loans, the Borrower shall be
deemed to have elected that such Group of Loans be converted to Base Rate
Loans at the end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
Section 2.08(a);
(iii) if the Loans comprising such Group are to be converted, the new Type
of Loans and, if the Loans resulting from such conversion are to be CD Loans
or Euro-Dollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar Loans
for an additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from the
Borrower pursuant to Section 2.08(a), the Agent shall notify each Bank of
the contents thereof and such notice shall not thereafter be revocable by
the Borrower.
(d) The Borrower shall not be entitled to elect to convert any Committed
Loans to, or continue any Committed Loans for an additional Interest Period
as, CD Loans or Euro-Dollar Loans if (i) the aggregate principal amount of
any Group of CD Loans or Euro-Dollar Loans created or continued as a result
of such
28
election would be less than $10,000,000 or (ii) a Default shall have occurred
and be continuing when the Borrower delivers notice of such election to the
Agent.
(e) If any Committed Loan is converted to a different type of Loan, the
Borrower shall pay, on the date of such conversion, the interest accrued to
such date on the principal amount being converted.
Section 2.09. Fees.
(a) Facility Fees. The Borrower shall pay to the Agent for the account
of each Bank facility fees on the daily average amount of such Bank's
Commitment (whether used or unused), for the period from the Effective Date
to but excluding the earlier of the date the Commitments are terminated or
the Commitment Termination Date, at a rate of 0.085% per annum; provided
that, if such Bank continues to have any Committed Loans outstanding after
its Commitment terminates, then such facility fee shall continue to accrue
on the daily outstanding principal amount of such Bank's Committed Loans
from and including the date on which its Commitment terminates to but
excluding the date on which such Bank ceases to have any Committed Loans
outstanding. Accrued facility fees shall be payable on each January 1,
April 1, July 1, and October 1 and on the date the Commitments are terminated
(and, if later, on the date the Loans shall be repaid in their entirety);
provided that any facility fees accruing after the first anniversary of the
Commitment Termination Date shall be payable on demand.
(b) Utilization Fees. (i) During any period when the aggregate
outstanding principal amount of the Loans exceeds 50% of the aggregate
amount of the Commitments or the Commitments have been terminated but Loans
are outstanding, the Borrower shall, unless Minimum Rating Status exists,
pay to the Agent for the account of each Bank utilization fees at a rate of
0.125% per annum. Such utilization fee shall accrue on the average daily
aggregate outstanding principal amount of such Bank's Loans and shall be
payable on each January 1, April 1, July 1, and October 1 and on the date
the Commitments are terminated (and, if later, on the date the Loans shall
be repaid in their entirety); provided that any utilization fees accruing
after the first anniversary of the Commitment Termination Date shall be
payable on demand.
(ii) For purposes of this Section, "Minimum Rating Status" exists at any
date if at such date the Borrower has outstanding senior unsecured long-term
debt and such debt, without third party enhancement, is rated (or, if on
such date the Borrower has no outstanding senior unsecured long-term debt,
evidence satisfactory to the Agent is provided to the effect that the rating
of senior unsecured long-term debt of the Borrower, assuming that it had
outstanding senior
29
unsecured long-term debt, would be rated) at least AA- (or any equivalent
rating which is used in lieu thereof) or higher by S&P or Aa3 (or any
equivalent rating which is used in lieu thereof) or higher by ▇▇▇▇▇'▇.
(c) Agents' Fees. The Borrower shall pay to the Agent and the
Co-Syndication Agents, each for its own account, one or more fees in such
amounts and at such times as has been previously agreed between the Borrower
and each of them.
Section 2.10. Optional Termination or Reduction of Commitments. During the
Revolving Credit Period, the Borrower may, upon at least three Domestic
Business Days' notice to the Agent (which notice the Agent will promptly
deliver to the Banks), (i)terminate the Commitments at any time, if no Loans
are outstanding at such time or (ii)ratably reduce from time to time by an
aggregate amount of $10,000,000 or any larger multiple of $1,000,000, the
aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans.
Section 2.11. Mandatory Termination of Commitments. The Commitments shall
terminate on the Commitment Termination Date and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such
date.
Section 2.12. Optional Prepayments. (a) Subject in the case of Fixed Rate
Loans to Section 2.14, the Borrower may (i) upon at least one Domestic
Business Day's notice to the Agent, prepay any Group of Domestic Loans (or
any Money Market Borrowing bearing interest at the Base Rate pursuant to
Section 8.01(a)) or (ii) upon at least three Euro-Dollar Business Days'
notice to the Agent, prepay any Group of Euro-Dollar Loans, in each case in
whole at any time, or from time to time in part in amounts aggregating
$10,000,000 or any larger multiple of $1,000,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Group of Loans (or
such Money Market Borrowing).
(b) Except as provided in Section 2.12(a), the Borrower may not prepay
all or any portion of the principal amount of any Money Market Loan prior to
the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
30
Section 2.13. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 1:00 P.M. (New York City time) on the date when
due, in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of fees shall be due on
a day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans shall be
due on a day which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-
Dollar Business Day. Whenever any payment of principal of, or interest on,
the Money Market Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If
and to the extent that the Borrower shall not have so made such payment,
each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from
the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Agent, at the Federal Funds Rate.
Section 2.14. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a different type of Loan (whether such payment or conversion is
pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last
day of the Interest Period applicable thereto, or the end of an applicable
period fixed pursuant to Section 2.07(d), or if the Borrower fails to borrow,
prepay, convert or continue any Fixed Rate Loans after notice has been given
to any Bank in accordance with Section 2.04(a), 2.08(c) or 2.12(c) the
Borrower shall reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an
31
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period
after any such payment or conversion or failure to borrow, prepay, convert
or continue; provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.
Section 2.15. Computation of Interest and Fees. Interest based on the
Prime Rate and fees hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
Section 2.16. Withholding Tax Exemption. At least five Domestic Business
Days prior to the first date on which interest or fees are payable hereunder
for the account of any Bank, each Bank that is not incorporated under the
laws of the United States of America or a state thereof agrees that it will
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Bank is entitled to receive payments under this
Agreement and its Note without deduction or withholding of any United States
federal income taxes. Each Bank which so delivers a Form 1001 or 4224
further undertakes to deliver to each of the Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date
that such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Agent, in each case certifying
that such Bank is entitled to receive payments under this Agreement and its
Note without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty,
law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or
which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
Section 2.17. Increase of Commitments. Upon at least 15 days' prior notice
to the Agent (which notice the Agent shall promptly transmit to each of the
Banks), the Borrower shall have the right, subject to the terms and
conditions set forth below and with the consent of the Banks as set forth
below, to increase the
32
aggregate amount of the Commitments in multiples of $5,000,000. Any such
increase shall apply, at the option of the Borrower, (x) to the Commitment
of one or more Banks, provided that (i) the Required Banks (including each
Bank whose Commitment is to be increased) shall consent to such increase,
(ii) the amount set forth on the signature pages hereof opposite the name of
each Bank the Commitment of which is being so increased shall be amended to
reflect the increased Commitment of such Bank and (iii) if any Committed
Loans are outstanding at the time of such an increase, the Borrower will,
notwithstanding anything to the contrary contained in this Agreement, on the
date of such increase incur and repay or prepay one or more Committed Loans
from the Banks in such amounts so that after giving effect thereto, the
Committed Loans shall be outstanding on a pro rata basis (based on the
Commitments of the Banks after giving effect to the changes made pursuant
hereto on such date) from all the Banks or (y) to the creation of a new
Commitment of an institution not then a Bank hereunder, provided that (i)
such institution becomes a party to this Agreement as a Bank by execution and
delivery to the Borrower and the Agent of counterparts of this Agreement,
(ii) the Required Banks shall consent to the creation of such Commitment of
such Bank, (iii) the signature pages hereof shall be amended to reflect the
Commitment of such new Bank, (iv) the Borrower shall issue a Note to such
new Bank in conformity with the provisions of Section 2.05, (v) if any
Committed Loans are outstanding at the time of the creation of such
Commitment of such Bank, the Borrower will, notwithstanding anything to the
contrary contained in this Agreement, on the date of the creation of such
Commitment incur and repay or prepay one or more Committed Loans from the
Banks in such amounts so that after giving effect thereto, the Committed
Loans shall be outstanding on a pro rata basis (based on the Commitments of
the Banks after giving effect to the changes made pursuant hereto on such
date) from all the Banks and (vi) if such institution is neither a banking
institution nor an affiliate of a Bank, such institution must be consented
to by the Agent; provided further that any such increase or creation may
apply, at the option of the Borrower, as set forth in clause (x) or (y)
above but without the consent of the Required Banks so long as (i) the amount
of such increase or the amount of such new Commitment so created, as the case
may be, when added to the aggregate amount of all such prior increases in the
Commitments and all such prior creations of new Commitments, in each case
created after the Effective Date, does not exceed $800,000,000 and (ii)
after giving effect to such increase or new Commitment, the amount of the
Commitment of any Bank shall not exceed 17.5% of the aggregate amount of the
Commitments (excluding, for purposes of this clause (ii), any increase
resulting solely from the merger or the acquisition of one Bank into or by
another Bank). It is understood that any increase in the amount of the
Commitments pursuant to this Section 2.17 shall not constitute an amendment
of this Agreement or the Notes.
33
ARTICLE 3
Conditions
Section 3.01. Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Agent shall have received the
following documents or other items, each dated the Effective Date unless
otherwise indicated:
(a) receipt by the Agent of counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly executed
Note dated on or before the Effective Date complying with the provisions of
Section 2.05;
(c) receipt by the Agent of an opinion of ▇▇▇▇ ▇▇▇ List, Esq., General
Counsel of the Borrower, substantially in the form of Exhibit F hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request, such opinion to be in
form and substance satisfactory to the Agent;
(d) receipt by the Agent of an opinion of Milbank, Tweed, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, special counsel for the Borrower, substantially in the form of
Exhibit G hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably
request, such opinion to be in form and substance satisfactory to the Agent;
(e) receipt by the Agent of an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special
counsel for the Agent, substantially in the form of Exhibit H hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request, such opinion to be in
form and substance satisfactory to the Agent;
(f) receipt by the Agent of a certificate signed by the Chief Financial
Officer or the Governor and an Assistant Secretary-Treasurer or the
Controller of the Borrower to the effect set forth in clauses (c) through
(g), inclusive, of Section 3.02 and, in the case of clauses (c), (e) and (g),
setting forth in reasonable detail the calculations required to establish
such compliance;
34
(g) receipt by the Agent, with a copy for each Bank, of a certificate of
an officer of the Borrower acceptable to the Agent stating that all consents,
authorizations, notices and filings required or advisable in connection with
this Agreement are in full force and effect, and the Agent shall have
received evidence thereof reasonably satisfactory to it;
(h) evidence satisfactory to the Required Banks that the Commitments, as
defined in the Prior Credit Agreement, have been terminated (except that
Sections 2.13, 7.05, 7.06, 8.03 and 9.03 (and Section 2.12 and Article 9
insofar as such Section or Article relates to such Sections 2.13, 7.05, 7.06,
8.03 and 9.03, as applicable)) of the Prior Credit Agreement shall survive
the termination of such Commitments and shall remain in full force and
effect) and all amounts owed under the Prior Credit Agreement have been paid
in full; and
(i) receipt by the Agent of all documents the Required Banks may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement and the Notes, and any
other matters relevant hereto, all in form and substance satisfactory to the
Agent.
The Agent shall promptly notify the Borrower and the Banks of the Effective
Date, and such notice shall be conclusive and binding on all parties hereto.
Section 3.02. Borrowings. The obligation of any Bank to make a Loan on the
occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) the fact that the Effective Date shall have occurred prior to October
15, 1999;
(b) receipt by the Agent of a Notice of Borrowing as required by Section
2.02 or 2.03, as the case may be;
(c) the fact that, immediately after such Borrowing, the Borrower is in
compliance with Section 7.12(a) of the 1972 Indenture and Section 7.11 of
the 1994 Indenture, as each Indenture is in effect as of the date hereof;
(d) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Commitments;
(e) the fact that, immediately after such Borrowing, no Default shall
have occurred and be continuing;
35
(f) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true on and as of the date of such
Borrowing (it being understood and agreed that the representation and
warranty set forth in Section 4.13 shall be true and correct as to all
information furnished prior to the making of the respective Loan); and
(g) the fact that, at the time of such Borrowing, (i) there shall be no
collateral securing Bonds issued pursuant to either Indenture of a type other
than the types of collateral permitted to secure Bonds issued pursuant to
such Indenture as of the date hereof and (ii) the Allowable Amount of
Eligible Collateral then pledged under either Indenture shall not exceed
150% of the aggregate principal amount of Bonds then Outstanding under such
Indenture and no collateral shall secure Bonds other than the Eligible
Collateral under such Indenture, the Allowable Amount of which is included
within the prior computation or collateral previously so pledged which ceases
to be such Eligible Collateral not as a result of any acts or omissions to
act of the Borrower (other than the declaration of an "event of default" as
defined in a Mortgage which results in the exercise of any right or remedy
described in such Mortgage); each defined term used in this clause (g) shall
have the meaning assigned thereto in the applicable Indenture.
Each Borrowing hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Borrowing as to the facts specified in
clauses (c), (d), (e), (f) and (g) of this Section.
ARTICLE 4
Representations and Warranties
The Borrower makes the following representations, warranties and agreements,
which shall survive the execution and delivery of this Agreement and the
Notes and the making of the Loans:
Section 4.01. Corporate Existence, Power and Authority. The Borrower is a
cooperative association duly incorporated, validly existing and in good
standing under the laws of the District of Columbia and has the corporate
power and authority and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and to
transact the business in which it is engaged. The Borrower is duly qualified
or licensed as a foreign corporation in good standing in every jurisdiction
in which the nature of the business in which it is engaged makes such
qualification or licensing necessary, except in those jurisdictions in which
the failure to be so qualified or licensed would not (after qualification,
assuming that the Borrower could so qualify
36
without the payment of any fee or penalty and retain the rights as they
existed prior to such qualification all to an extent so that any fees or
penalties required to be so paid or any rights not so retained would not,
individually or in the aggregate, have a material adverse effect on the
business or financial condition of the Borrower), individually or in the
aggregate, have a material adverse effect upon the business or financial
condition of the Borrower. The Borrower has the corporate power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement and the Notes. This Agreement has been, and the Notes when
executed and delivered will have been, duly and validly authorized, executed
and delivered by the Borrower, and this Agreement constitutes a legal, valid
and binding agreement of the Borrower, and the Notes, when executed and
delivered by the Borrower in accordance with this Agreement, will constitute
legal, valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
Section 4.02. Financial Statements. (a) The combined balance sheets of the
Borrower and its Consolidated Subsidiaries as at May 31, 1999 and the related
combined statements of income, expenses and net margins, changes in Members'
equity and cash flows for the fiscal year ended May 31, 1999, including the
related notes, accompanied by the opinion and report thereon of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co., certified public accountants, heretofore delivered to the
Banks, present fairly in accordance with generally accepted accounting
principles (i) the combined financial position of the Borrower and its
Consolidated Subsidiaries as at the date of said balance sheets and (ii) the
combined results of the operations of the Borrower and its Consolidated
Subsidiaries for said fiscal year. The Borrower has no material liabilities
(contingent or otherwise) which are not disclosed by or reserved against in
the most recent audited financial statements or in the notes thereto other
than (i) Indebtedness incurred and (ii) loan and guarantee commitments
issued in each case by the Borrower in the ordinary course of business since
the date of such financial statements. All such financial statements have
been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods, except as disclosed
therein. The same representations as are set forth in this Section 4.02
shall be deemed to have been made by the Borrower in respect of the most
recent annual and quarterly financial statements of the Borrower and its
Consolidated Subsidiaries (except that the opinion and report of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. may be replaced by an opinion and report of another nationally
recognized firm of independent certified public accountants) furnished or
required to be furnished to the Banks prior to or at the time of the making
of each Loan hereunder, at the time the same are furnished or required to be
furnished.
37
(b) The unaudited combined balance sheets of the Borrower and its
Consolidated Subsidiaries as of August 31, 1999 and the related unaudited
combined statements of income, expenses and net margins, changes in Members'
equity and cash flows for the three months then ended, heretofore delivered
to the Banks, present fairly in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements
referred to in subsection (a) of this Section 4.02, the combined financial
position of the Borrower and its Consolidated Subsidiaries as of such date
and their combined results of operations and changes in financial position
for such three-month period (subject to normal year-end adjustments). The
Borrower has no material liabilities (contingent or otherwise) which are not
disclosed by or reserved against in such financial statements for such three-
month period other than Indebtedness incurred and loan and guarantee
commitments issued by the Borrower in the ordinary course of business since
the date of such financial statements.
Section 4.03. Litigations. There are no actions, suits, proceedings or
investigations pending or, to the Borrower's knowledge, threatened by or
before any court or any governmental authority, body or agency or any
arbitration board which are reasonably likely to materially adversely affect
the business, property, assets, financial position or results of operations
of the Borrower or the authority or ability of the Borrower to perform its
obligations under this Agreement or the Notes.
Section 4.04. Governmental Authorizations. No authorization, consent,
approval or license of, or declaration, filing or registration with or
exemption by, any governmental authority, body or agency is required in
connection with the execution, delivery or performance by the Borrower of
this Agreement or the Notes.
Section 4.05. Capital Term Certificates. The holders of the Borrower's
Capital Term Certificates are not and will not be entitled to receive any
payments with respect to the principal thereof or interest thereon solely
because of withdrawing or being expelled from membership in the Borrower.
Section 4.06. No Violation of Agreements. Neither the Borrower nor any
Subsidiary is in default in any material respect under any material agreement
or other instrument to which it is a party or by which it is bound or its
property or assets may be affected. No event or condition exists which
constitutes, or with the giving of notice or lapse of time or both would
constitute, such a default under any such agreement or other instrument.
Neither the execution and delivery of this Agreement or the Notes, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms and provisions hereof or thereof, will contravene
any provision of law, statute, rule or regulation
38
to which the Borrower is subject or any judgment, decree, award, franchise,
order or permit applicable to the Borrower, or will conflict or be
inconsistent with, or will result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute (or with the giving of
notice or lapse of time, or both, would constitute) a default under (or
condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any
obligations prior to the scheduled maturity thereof), or result in the
creation or imposition of any Lien upon any of the property or assets of the
Borrower pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument to which it may be subject, or violate any
provision of the certificate of incorporation or by-laws of the Borrower.
Without limiting the generality of the foregoing, the Borrower is not a
party to, or otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of the Borrower, any agreement or indenture relating
thereto or any other contract or agreement (including its certificate of
incorporation and by-laws), which would be violated by the incurring of the
Indebtedness to be evidenced by the Notes.
Section 4.07. No Event of Default under the Indentures. The Borrower has
complied fully with all of the material provisions of each Indenture. No
Event of Default (within the meaning of such term as defined in each
Indenture) and no event, act or condition (except for possible non-compliance
by the Borrower with any immaterial provision of such Indenture which in
itself is not such an Event of Default under such Indenture) which with
notice or lapse of time, or both, would constitute such an Event of Default
has occurred and is continuing under such Indenture. The Borrowings by the
Borrower contemplated by this Agreement will not cause such an Event of
Default under, or the violation of any covenant contained in, either
Indenture.
Section 4.08. Compliance with ERISA. The Plans (other than Plans consisting
of mulitemployer plans (as defined in Section 4001 of ERISA)) are in
substantial compliance with ERISA, no such Plan is insolvent or in
reorganization, and no such Plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Internal Revenue Code.
No Plan consisting of a multiemployer plan (as defined in Section 4001 of
ERISA) is in reorganization. Neither the Borrower nor a Subsidiary of the
Borrower nor any member of the ERISA Group has incurred any material
liability (including any material contingent liability) to or on account of
a Plan pursuant to Section 4062, 4063, 4064, 4201 or 4204 of ERISA, no
proceedings have been instituted to terminate any Plan, and no condition
exists which presents a material risk to the Borrower or a Subsidiary of the
Borrower of incurring a material liability to or on account of a Plan
pursuant to any of the foregoing Sections of ERISA.
39
Section 4.09. Compliance with Other Laws. The Borrower and each Subsidiary
is in compliance, in all material respects, with all applicable requirements
of law and all applicable rules and regulations of each Federal, State,
municipal or other governmental department, agency or authority, domestic or
foreign.
Section 4.10. Tax Status. The Borrower is exempt from payment of Federal
income tax under Section 501(c)(4) of the Internal Revenue Code.
Section 4.11. Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
Section 4.12. Public Utility Holding Company Act. The Borrower is not a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended.
Section 4.13. Disclosure. To the best of the Borrower's knowledge,
information and belief, neither this Agreement nor any document, certificate
or financial statement furnished to any Bank by or on behalf of the Borrower
in connection herewith (all such documents, certificates and financial
statements, taken as a whole) contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact
(other than facts of a general economic or political nature) known to the
Borrower which in its judgment materially adversely affects or in the future
is likely to (so far as is now known to the Borrower) have a material adverse
effect upon the business, operations, prospects, property, assets or
financial condition of the Borrower which has not been set forth in this
Agreement or in other documents, certificates or financial statements
furnished to the Banks by or on behalf of the Borrower in connection with
the transactions contemplated hereby.
Section 4.14. Subsidiaries. Each of the Borrower's corporate Subsidiaries
is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
Section 4.15. Environmental Matters. In the ordinary course of its
business, the Borrower conducts reviews, to the extent appropriate given
the
40
nature of its business operations, of the effect of Environmental Laws on
the business, operations and properties of the Borrower and its Subsidiaries,
in the course of which it identifies and evaluates associated liabilities and
costs (including, without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or previously owned,
any capital or operating expenditures required to achieve or maintain
compliance with environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has reasonably
concluded that such associated liabilities and costs, including the cost of
compliance with Environmental Laws, are unlikely to have a material adverse
effect on the business, financial condition, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole.
Section 4.16. Year 2000. The cost to the Borrower and its Subsidiaries of
any reprogramming required to permit the proper functioning, in and following
the year 2000, of (i) the computer systems of the Borrower and its
Subsidiaries and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which the Borrower's
systems interface) and the testing of all such systems and equipment, as so
reprogrammed, and of the reasonably foreseeable consequences of year 2000 to
the Borrower and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) would
not reasonably be expected to result in a Default or Event of Default or
have a material adverse effect on the operations, business, properties or
condition (financial or otherwise) of the Borrower and its Subsidiaries,
taken as a whole. To the knowledge of the Borrower, except for such of the
reprogramming referred to in the preceding sentence as may be necessary,
which reprogramming the Borrower expects to complete in a timely fashion,
the computer and management information systems of the Borrower and its
Subsidiaries are and, with ordinary course upgrading and maintenance and
planned systems conversions and/or upgrades, will continue to be, sufficient
to permit the Borrower to conduct its businesses without a material adverse
effect on the operations, business, properties or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole.
41
ARTICLE 5
Covenants
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note or any fee payable pursuant to Section
2.09 or any other amount then due and payable hereunder remains unpaid:
Section 5.01. Corporate Existence. The Borrower, at its own cost and
expense, will, and will cause each Subsidiary to, do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, material rights and franchises; provided, however, that neither
the Borrower nor any Subsidiary shall be required to preserve any right or
franchise or, in the case of a Subsidiary, its corporate existence, if its
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower or such Subsidiary
(provided that the termination of the corporate existence of a Subsidiary
shall be permitted if the Board of Directors of the Borrower shall determine
that its existence is not desirable in the conduct of the business of the
Borrower) and that the loss thereof is not disadvantageous in any material
respect to the Banks.
Section 5.02. Disposition of Assets; Merger, Character of Business; etc.
The Borrower will not wind up or liquidate its business or sell, lease,
transfer or otherwise dispose of all or substantially all of its assets as
an entirety or in a series of related transactions and will not consolidate
with or merge with or into any other Person other than a merger with a
Subsidiary in which the Borrower is the surviving Person. The Borrower will
not engage in any business other than the business contemplated by its
certificate of incorporation and by-laws, each as in effect on the Effective
Date.
Section 5.03. Financial Information. The Borrower will, and will cause
each Subsidiary to, keep its books of account in accordance with generally
accepted accounting principles and the Borrower will furnish to the Banks
(i) as soon as available and in any event within 60 days after the close of
each of the first three quarters of each fiscal year of the Borrower, as at
the end of, and for the period commencing at the end of the previous fiscal
year and ending with, such quarter, unaudited combined balance sheets of the
Borrower and its Consolidated Subsidiaries and the related unaudited combined
statements of income, expenses and net margins, changes in Members' equity
and cash flow of the Borrower and its Consolidated Subsidiaries for such
quarter and for the portion of the Borrower's fiscal year ended at the end
of such quarter, setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all in reasonable detail and certified (subject to
normal year-end adjustments) as to fairness of
42
presentation in accordance with generally accepted accounting principles and
consistency (except for changes concurred in by the Borrower's independent
certified public accountants) by the Chief Financial Officer, the Governor,
an Assistant Secretary-Treasurer or the Controller of the Borrower; (ii) as
soon as practicable and in any event within 90 days after the close of each
fiscal year of the Borrower, as at the end of and for the fiscal year just
closed, combined balance sheets of the Borrower and its Consolidated
Subsidiaries and the related combined statements of income, expenses and net
margins, changes in Members' equity and cash flow for such fiscal year for
the Borrower and its Consolidated Subsidiaries, all in reasonable detail and
fully certified (without any qualification as to the scope of the audit) by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or other independent certified public accountants of
nationally recognized standing selected by the Borrower, who shall have
audited the books and accounts of the Borrower for such fiscal year; (iii)
together with the financial statements referred to in clauses (i) and (ii)
above, a certificate signed by the Governor, the Chief Financial Officer, an
Assistant Secretary-Treasurer or the Controller of the Borrower, in such
detail as shall be reasonably satisfactory to the Required Banks, (x)
identifying (A) all Indebtedness outstanding as at the end of the fiscal
period covered by such financial statements extended by the Borrower or by
any other Person and Guaranteed by the Borrower to any of the forty Members
with the largest amount of Indebtedness to (or Guaranteed by) the Borrower
outstanding as at the end of the fiscal period covered by such financial
statements (the "Largest Members") as to which, to the knowledge and
information of the Borrower, the Member is in default (whether in the
payment of the principal thereof or interest thereon or with respect to any
material covenant or agreement contained in any instrument, mortgage or
agreement evidencing or relating to such Indebtedness) and specifying whether
such default has been waived by the Borrower or such other Person and the
nature and status of each such default not so waived and (B) the aggregate
amount of all Indebtedness outstanding as of the end of the fiscal period
covered by such financial statements as to which, to the knowledge and
information of the Borrower, Members other than the Largest Members are in
default (whether in the payment of the principal thereof or interest thereon
or with respect to any material covenant or agreement contained in any
instrument, mortgage or agreement evidencing or relating to such
Indebtedness), (y) identifying the ten Members with the largest amount of
Indebtedness to (or Guaranteed by) the Borrower outstanding as of the end
of the fiscal period covered by such financial statements, together with the
principal amount of such Indebtedness outstanding with respect to each such
Member as of the end of such fiscal period and (z) identifying all loans
which are RUS Guaranteed Loans and are outstanding as of the end of the
fiscal period covered by such financial statements, together with (a) the
principal amount of each such RUS Guaranteed Loan as of the end of such
fiscal period, (b) the total amount of Indebtedness incurred by the Borrower
and Subsidiaries of the Borrower in order to fund such
43
RUS Guaranteed Loan, (c) the total interest expense incurred during such
fiscal period by the Borrower and Subsidiaries of the Borrower in connection
with the Indebtedness referred to in preceding clause (b) and (d) the amount
of the Guaranteed Portion of such RUS Guaranteed Loan; (iv) with reasonable
promptness, copies of all regular and periodical financial statements or
other financial reports and documents which the Borrower may make available
to its Members or bondholders or file with the Securities and Exchange
Commission; (v) promptly after obtaining knowledge or receiving notice of a
change (whether an increase or decrease) in any rating issued by S&P or
▇▇▇▇▇'▇ pertaining to any securities of, or guaranteed by, the Borrower or
any of its Subsidiaries or affiliates, a notice setting forth such change;
and (vi) with reasonable promptness, such other information respecting the
business, operations, prospects and financial condition of the Borrower or
any of its Subsidiaries or any Joint Venture as any Bank may, from time to
time, reasonably request, including, without limitation, with respect to the
performance and observance by the Borrower of the covenants and conditions
contained in this Agreement.
Section 5.04. Default Certificates. Concurrently with each financial
statement delivered to the Banks pursuant to clauses (i) and (ii) of Section
5.03, the Borrower will furnish to the Banks a certificate signed by the
Governor, the Chief Financial Officer, an Assistant Secretary-Treasurer or
the Controller of the Borrower to the effect that the review of the
activities of the Borrower during such year or the portion thereof covered
by such financial statement and of the performance of the Borrower under
this Agreement has been made under his supervision and that to the best of
his knowledge, based on such review, there exists no event which constitutes
a Default or an Event of Default under this Agreement or, if any such event
exists, specifying the nature thereof, the period of its existence and what
action the Borrower has taken and proposes to take with respect thereto,
which certificate shall set forth the calculations or other data required to
establish compliance with the provisions of Section 5.09 and Sections 5.12
through 5.14, inclusive, at the end of such fiscal quarter or fiscal year,
as the case may be. The Borrower further covenants that upon any such
officer of the Borrower obtaining knowledge of any Default or Event of
Default under this Agreement, it will forthwith, and in no event later than
the close of business on the Business Day immediately after the day such
knowledge is obtained, deliver to the Banks a statement of any officer
referred to above specifying the nature and the period of existence thereof
and what action the Borrower has taken and proposes to take with respect
thereto.
Section 5.05. Notice of Litigation, Legislative Developments and Defaults.
The Borrower will promptly give written notice to each of the Banks of (i)
any action, proceeding or claim of which the Borrower may have notice, which
may be commenced or asserted against the Borrower or any Subsidiary in which
44
the amount involved is $1,000,000 or more and is not covered in full by
insurance or as to which any insurer has disclaimed liability; (ii) any
dispute which may exist between the Borrower or any Subsidiary and any
governmental body, which is likely to materially and adversely affect the
normal business operation of the Borrower or the Borrower and its
Subsidiaries taken as a whole or any of the material properties and assets
of the Borrower or the Borrower and its Subsidiaries taken as a whole; (iii)
any legislation enacted by any governmental body and any rulings and
regulations promulgated by any governmental or regulatory bodies, known or
which should be known to the Borrower, affecting the Borrower or any
Subsidiary or generally affecting the Borrower's Members which is likely to
materially and adversely affect the present or future operations of the
Borrower, the Borrower and its Subsidiaries taken as a whole or the
Borrower's Members; and (iv) any default by the Borrower or any Subsidiary
or event or condition known or which should be known to the Borrower which
with the giving of notice or lapse of time, or both, would constitute a
default, with respect to any payment or payments in respect of Indebtedness
of the Borrower or such Subsidiary aggregating in excess of $15,000,000
(whether in payment of principal thereof or interest thereon or with respect
to any material covenant or agreement contained in any instrument, mortgage,
deed of trust or agreement evidencing or relating to such Indebtedness or
otherwise).
Section 5.06. ERISA. As soon as possible and, in any event, within 10 days
after the Borrower or a Subsidiary of the Borrower knows or has reason to
know that a Reportable Event has occurred, that an accumulated funding
deficiency has been incurred or an application may be or has been made to
the Secretary of the Treasury for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code with respect to a Plan, that
a Plan has been or may be terminated, that proceedings may be or have been
instituted to terminate a Plan, or that the Borrower, a Subsidiary of the
Borrower or any member of the ERISA Group will or may incur any liability to
or on account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of
ERISA, the Borrower will deliver to each of the Banks a certificate of the
Chief Financial Officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or such Subsidiary is
required or proposes to take, together with any notices required to be filed
with or by the Borrower, such Subsidiary, such member of the ERISA Group,
the PBGC or the plan administrator with respect thereto. Upon the request
of any Bank, the Borrower will furnish to such Bank a copy of the annual
report of each Plan (Form 5500) required to be filed with the Internal
Revenue Service. Copies of annual reports or any notices required to be
delivered to the Banks hereunder shall be delivered no later than 10 days
after the later of the date such report or notice has been filed with the
Internal Revenue Service or the PBGC or received by the Borrower or a
Subsidiary of the Borrower.
45
Section 5.07. Payment of Charges. The Borrower will, and will cause each
Subsidiary to, duly pay and discharge (i) all taxes, assessments and
governmental charges or levies imposed upon or against it or its property or
assets, prior to the date on which penalties attach thereto, unless and to
the extent only that such taxes, assessments and governmental charges or
levies are being contested in good faith by appropriate proceedings; and (ii)
all lawful claims, including, without limitation, claims for labor,
materials, supplies or services, which might or could, if unpaid, become a
Lien upon such property or assets, unless and to the extent only that the
validity of the amount thereof is being contested in good faith by
appropriate proceedings.
Section 5.08. Inspection of Books and Assets. The Borrower will, and will
cause each Subsidiary to, permit any representative of any Bank (or any agent
or nominee of such Bank) to visit and inspect any of the property of the
Borrower or such Subsidiary, to examine the books of record and account of
the Borrower or such Subsidiary and to discuss the affairs, finances and
accounts of the Borrower or such Subsidiary with the officers and independent
public accountants of the Borrower or such Subsidiary, all at such reasonable
times and as often as such Bank may reasonably request.
Section 5.09. Indebtedness. (a) The Borrower will not, and will not permit
any of its Subsidiaries to, incur, assume or Guarantee any Superior
Indebtedness, or make any optional prepayment on any Capital Term
Certificate, provided that (i) subject to the provisions of Section 5.12,
any Subsidiary may incur Superior Indebtedness owing to the Borrower or
assume or Guarantee Indebtedness of any Person (other than the Borrower or
any of its Subsidiaries) owing to the Borrower and (ii) the Borrower may
incur, assume or Guarantee Superior Indebtedness or make optional prepayments
on Capital Term Certificates if, after giving effect to any such action
specified above in this clause (ii), (x) on the date of such incurrence,
assumption or Guarantee or making of such optional prepayment (the
"Determination Date") the aggregate principal amount of Superior Indebtedness
then outstanding would not exceed ten times the sum of (a) the aggregate
principal amount of Capital Term Certificates outstanding on the
Determination Date, (b) the aggregate amount of Members' equity in the
Borrower, other than Capital Term Certificates, on the Determination Date
and (c) the aggregate principal amount of Qualified Subordinated Indebtedness
outstanding on the Determination Date and (y)on no given future date would
the aggregate principal amount of Superior Indebtedness outstanding on the
Determination Date which will remain outstanding on such given future date
exceed ten times the sum of (a) the aggregate principal amount of Capital
Term Certificates outstanding on the Determination Date which will remain
outstanding on such given future date, (b) the aggregate amount of Members'
equity in the Borrower, other than Capital Term Certificates, on the
Determination Date and (c)
46
the aggregate principal amount of Qualified Subordinated Indebtedness
outstanding on the Determination Date which will remain outstanding on such
given future date. The respective principal amounts of Superior
Indebtedness, Capital Term Certificates and Qualified Subordinated
Indebtedness to be outstanding on such given future date shall be determined
after giving effect to mandatory sinking fund payments, other mandatory
prepayments and serial and other maturity payments required to be made on or
prior to said given future date by the terms of such Superior Indebtedness,
Capital Term Certificates, Qualified Subordinated Indebtedness or any
indenture or other instrument pursuant to which they are respectively
issued.
(b) If any Loan is outstanding hereunder, the Borrower will not take any
action which would prevent it from then complying, or fail to take any action
which would enable it then to comply, with the provisions of Section 3.02(g),
assuming for this purpose only that the Borrower then intended to borrow from
one or more of the Banks hereunder.
Section 5.10. Liens. The Borrower will not create or permit to exist any
Lien on or with respect to any Indebtedness of any Member which is an asset
of the Borrower, now existing or hereafter created, or any collateral
securing any such Indebtedness, and the Borrower will not permit any
Subsidiary to create or permit to exist any Lien on or with respect to any
of such Subsidiary's assets, except Liens (i) granted by the Borrower to the
trustee pursuant to either Indenture, (ii) on any such Indebtedness granted
by the Borrower to secure any borrowing for the purpose of making loans to
Member power supply systems or loans to Members for bulk power supply
projects or loans to Members for the purpose of providing financing to
telephone and related systems eligible to borrow from the RUS, which
borrowing or borrowings are on terms (except as to terms of interest,
premium, if any, and amortization) not materially more disadvantageous to
the Borrower's unsecured creditors than the borrowings under either Indent
ure (it being understood that the Borrower can not pledge such assets to an
extent greater than 150% of the aggregate principal amount of such
Indebtedness) and which Liens secure amounts not exceeding $500,000,000 in
the aggregate at any one time outstanding, (iii) of current taxes not
delinquent or a security for taxes being contested in good faith, (iv) other
than in favor of the PBGC, created by or resulting from any legal proceedings
(including legal proceedings instituted by the Borrower or any Subsidiary)
which are being contested in good faith by appropriate proceedings, including
appeals of judgments as to which a stay of execution shall have been issued,
and adequate reserves shall have been established, (v) created by the
Borrower to secure Guarantees by the Borrower of Indebtedness, the interest
on which is excludable from the gross income of the recipient thereof for
Federal income tax purposes as provided in Section 103(a) of the Internal
Revenue Code or Section 103(a) of the Internal Revenue Code of
47
1954, as amended, (x) of a Member which is a state or political subdivision
thereof or (y) of a state or political subdivision thereof incurred to
benefit a Member for one of the purposes provided in Section 142(a)(2), (4),
(5), (6), (8), (9), (10) or (12) of the Internal Revenue Code or Section
103(b)(4)(D), (E), (F), (G), (H) or (J) of the Internal Revenue Code of
1954, as amended, and (vi) granted by any Subsidiary to the Borrower.
Section 5.11. Maintenance of Insurance. The Borrower will maintain, and
will cause each Subsidiary to maintain, insurance in such amounts, on such
forms and with such companies as is necessary or appropriate for its
business.
Section 5.12. Subsidiaries and Joint Ventures. The sum of the amount of
Indebtedness owing to the Borrower by all of its Subsidiaries and Joint
Ventures plus the amount paid by the Borrower in respect of the stock,
obligations or securities of or any other interest in such Subsidiaries and
Joint Ventures plus any capital contributions by the Borrower to such
Subsidiaries and Joint Ventures plus the amount of assets otherwise sold or
transferred by the Borrower to such Subsidiaries and Joint Ventures (other
than sales at fair market value) shall not exceed at any time 10% of the sum
of (i) all accounts which, in accordance with generally accepted accounting
principles, constitute Members' equity in the Borrower at such time, (ii)
all Indebtedness of the Borrower shown in its balance sheet dated as of May
31, 1999 as "Members' Subordinated Certificates" as such Indebtedness shall
be reduced from time to time and any other Indebtedness of the Borrower
incurred after May 31, 1999 having substantially similar provisions as to
subordination as those contained in said outstanding certificates as such
other Indebtedness shall be reduced from time to time, in each case at such
time and (iii) all Qualified Subordinated Indebtedness outstanding at such
time.
Section 5.13. Minimum TIER. The Borrower shall at no time permit the
average of the TIERs for the six (6) immediately preceding fiscal quarters
of the Borrower to be less than 1.025:1.00.
Section 5.14. Retirement of Patronage Capital. The Borrower shall not
make, or permit any Subsidiaries of the Borrower to make, any payments to
Members in respect of Patronage Capital Certificates unless (i) the TIER for
the immediately preceding fiscal year equals or exceeds 1.05:1.00 and (ii)
there exists (and would exist after giving effect to any such payment) no
Default or Event of Default under this Agreement.
Section 5.15. Use of Proceeds. The proceeds of the Loans made hereunder
may be used by the Borrower for general corporate purposes. None of such
proceeds will be used, directly or indirectly, for the purpose, whether
48
immediate, incidental or ultimate, of buying or carrying any "margin stock",
within the meaning of Regulation U. Neither the Borrower nor any agent
acting on its behalf has taken or will take any action which might cause
this Agreement or the Notes to violate Regulation U or Regulation X.
ARTICLE 6
Defaults
Section 6.01. Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) Principal and Interest. The Borrower shall (i)fail to pay when due
(whether upon stated maturity, by acceleration or otherwise) any principal of
the Notes or (ii)fail, and such failure shall continue uncured for one or
more Business Days, to pay when due (whether upon stated maturity, by
acceleration or otherwise) any interest on the Notes;
(b) Other Amounts. The Borrower shall fail to pay when due any fee or
other amount payable under this Agreement and such failure remains uncured
for five (5) days after the due date thereof;
(c) Covenants Without Notice. The Borrower shall fail to observe or
perform any covenant or agreement on its part to be observed or performed
which is set forth in Section 5.01, 5.02, 5.09, 5.10, 5.12, 5.13, 5.14 or
5.15;
(d) Covenants With 10 Days Grace. The Borrower shall fail to observe or
perform any covenant or agreement on its part to be observed or performed,
which is set forth in Section 5.05, 5.06, 5.07 or 5.08, and such
non-observance or non-performance shall continue unremedied for a period of
more than 10 days;
(e) Other Covenants. The Borrower shall fail to observe or perform any
covenant, condition or agreement on its part to be observed or performed,
other than as referred to in subsections (a), (b), (c) and (d) above, for a
period of 30 days after written notice specifying such failure and requesting
that it be remedied is given by any Bank to the Borrower and the other Banks;
provided that, if the failure be such that it cannot be corrected within the
applicable period, but can be corrected within a reasonable period of time
thereafter, it shall not constitute a default if corrective action is
instituted by the Borrower within the applicable period and diligently
pursued until the failure is corrected;
49
(f) Representations. Any representation, warranty, certification or
statement made or deemed to be made by the Borrower in this Agreement or in
any certificate, financial statement or other document delivered pursuant to
this Agreement shall prove to have been incorrect in any material respect
when made or deemed to be made;
(g) Non-Payments of Indebtedness and/or Derivatives Obligations. The
Borrower or any Subsidiary of the Borrower shall fail to make any payment or
payments aggregating for the Borrower and its Subsidiaries in excess of
$25,000,000 in respect of Indebtedness and/or Derivatives Obligations of the
Borrower or any Subsidiary (other than the Notes or any Indebtedness under
this Agreement) when due (whether upon stated maturity, by acceleration or
otherwise) or within any applicable grace period;
(h) Defaults Under Other Agreements. The Borrower or any Subsidiary
shall fail to observe or perform within any applicable grace period any
covenant or agreement contained in any agreement or instrument relating to
any Indebtedness of the Borrower or any Subsidiary, aggregating for the
Borrower and its Subsidiaries in excess of $25,000,000 if the effect of such
failure is to accelerate, or to permit the holder of such Indebtedness or
any other Person to accelerate, the maturity of such Indebtedness;
(i) Bankruptcy. The Borrower or any Subsidiary shall generally not pay
its debts as they become due, or shall admit in writing its inability to pay
its debts generally or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower
or any Subsidiary seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
conservation or proceeding in the nature thereof, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief or protection of debtors, or seeking the entry of
an order for relief or the appointment of a receiver (including state
regulatory authorities acting in a similar capacity), trustee, custodian or
other similar official for it or for any substantial part of its property,
and, in the case of any such proceeding instituted against it (but not
instituted by it) shall remain undismissed or unstayed for a period of 60
days; or the Borrower or any Subsidiary shall take any action to authorize
any of the actions set forth above in this subsection (i);
(j) ERISA. A Plan shall fail to maintain the minimum funding standard
required by Section 412 of the Internal Revenue Code for any plan year or a
waiver of such standard is sought or granted under Section 412(d), or a Plan
is, shall have been or is likely to be terminated or the subject of
termination proceedings under ERISA, or the Borrower or a Subsidiary of the
Borrower or any member
50
of the ERISA Group has incurred or is likely to incur a liability to or on
account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA, and
there shall result from any such event or events either a liability or a
material risk of incurring a liability to the PBGC or a Plan, which in the
opinion of the Required Banks, will have a material adverse effect upon the
business, operations or the financial condition of the Borrower or a
Subsidiary of the Borrower; or
(k) Money Judgment. A final judgment or order for the payment of money
in excess of $25,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue unsatisfied and in
effect for a period of 45 days during which execution shall not be
effectively stayed or deferred (whether by action of a court, by agreement
or otherwise); then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, the Agent, upon the request
of the Required Banks, shall by notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Agent, any
Bank or the holder of any Note to enforce its claims against the Borrower:
(a) declare the Commitments terminated, whereupon the Commitment of each
Bank shall forthwith terminate immediately and any fee payable pursuant to
Section 2.09 shall forthwith become due and payable without any other notice
of any kind; or (b) declare the principal of and accrued interest on the
Loans, and all other obligations owing hereunder, to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower;
provided that, if an Event of Default specified in subsection (i) shall
occur, the result which would occur upon the giving of written notice by the
Agent to the Borrower, as specified in clauses (a) and (b) above, shall occur
automatically without the giving of any such notice.
Section 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(b) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
The Agent
Section 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
51
Section 7.02. Agent and Affiliates. The Chase Manhattan Bank of New York
shall have the same rights and powers under this Agreement as any other Bank
and may exercise or refrain from exercising the same as though it were not
the Agent, and The Chase Manhattan 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 affiliate of the Borrower as if it
were not the Agent hereunder.
Section 7.03. Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of
the foregoing, the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in Article 6.
Section 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action taken
or omitted to be taken by it in good faith in accordance with the advice of
such counsel, accountants or experts.
Section 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents, or
employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness
of this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) reasonably believed by
it to be genuine or to be signed by the proper party or parties.
Section 7.06. Indemnification. Each Bank shall, ratably in accordance with
its Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by
the Borrower) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitee's gross negligence or willful misconduct) that
such indemnitees may
52
suffer or incur in connection with this Agreement or any action taken or
omitted by such indemnitees hereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
Section 7.08. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 15 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of its appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent.
Section 7.09. Co-Documentation Agents and Syndication Agent Not Liable.
Nothing in this Agreement shall impose upon any Co-Documentation Agent or
the Syndication Agent, each in such capacity, any duties or responsibilities
whatsoever.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing:
53
(a) the Agent is advised by the Reference Banks that deposits in dollars
(in the applicable amounts) are not being offered to the Reference Banks in
the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more of
the aggregate amount of the Commitments advise the Agent that the Adjusted
CD Rate or the Adjusted London Interbank Offered Rate, as the case may be,
as determined by the Agent will not adequately and fairly reflect the cost
to such Banks of funding their CD Loans or Euro-Dollar Loans, as the case
may be, for such Interest Period, the Agent shall forthwith give notice
thereof to the Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, (i) the obligations of the Banks to make CD Loans or Euro-Dollar
Loans, as the case may be, or to continue or convert outstanding Loans as or
into CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended
and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the case may be,
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any Fixed Rate
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, (i)if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but excluding the
last day of the Interest Period applicable thereto at the Base Rate for such
day.
Section 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Euro-Dollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank to make Euro-
Dollar Loans or to convert outstanding Loans into Euro-Dollar Loans or
continue outstanding Loans as Euro-Dollar Loans, shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Euro-Dollar Lending Office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
54
Bank, be otherwise disadvantageous to such Bank. If such Bank shall
determine that it may not lawfully continue to maintain and fund any of its
outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued
interest thereon. Concurrently with prepaying each such Euro-Dollar Loan,
the Borrower shall borrow a Base Rate Loan in an equal principal amount from
such Bank (on which interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and such Bank shall
make such a Base Rate Loan.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after (x) the
date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the
case of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any tax,
duty or other charge with respect to its Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate Loans, or shall change the basis of taxation
of payments to any Bank (or its Applicable Lending Office) of the principal
of or interest on its Fixed Rate Loans or any other amounts due under this
Agreement in respect of its Fixed Rate Loans or its obligation to make Fixed
Rate Loans (except for changes in the rate of tax on the overall net income
of such Bank or its Applicable Lending Office imposed by the jurisdiction in
which such Bank's principal executive office or Applicable Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding (A) with respect to any CD Loan,
any such requirement included in an applicable Domestic Reserve Percentage
and (B) with respect to any Euro-Dollar Loan any such requirement included
in an applicable Euro-Dollar Reserve Percentage), special deposit, insurance
assessment (excluding, with respect to any CD Loan, any such requirement
reflected in an applicable Assessment Rate) or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates
of deposit or
55
the London interbank market any other condition affecting its Fixed Rate
Loans, its Notes or its obligation to make Fixed Rate Loans; and the result
of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction (including any
amount or amounts equal to any taxes on the overall net income of such Bank
payable by such Bank with respect to the amount of payments required to be
made pursuant to this Section 8.03(a)).
(b) If any Bank determines that the adoption of any applicable law,
rule, regulation, guideline or request concerning capital adequacy, or any
change therein, or any change in interpretation or administration thereof by
any governmental authority, central bank or comparable agency (including,
without limitation, any such adoption or change the effect of which would be,
for purposes of capital adequacy requirements, to treat the Commitments
hereunder as not constituting commitments with an original maturity of one
year or less), occurring after the date hereof, will have the effect of
increasing the amount of capital required or expected to be maintained by
such Bank based on the existence of such Bank's Commitment hereunder or its
obligations hereunder, it will notify the Borrower. This determination will
be made on a Bank by Bank basis. The Borrower will pay to each Bank on
demand such additional amounts as are necessary to compensate for the
increased cost to such Bank as a result of the event described in the first
sentence of this Section 8.03(b). In determining such amount, such Bank will
act reasonably and in good faith and will use averaging and attribution
methods which are reasonable, and such Bank will pass such costs on to the
Borrower only if such costs are passed on in a similar manner by such Bank
to similarly situated borrowers (which are parties to credit or loan
documentation containing a provision similar to this Section 8.03(b)), as
determined by such Bank in its reasonable discretion. Each Bank's
determination of compensation shall be conclusive if made in accordance with
this provision. Each Bank, upon determining that any increased costs will
be payable pursuant to this Section 8.03(b), will give prompt written notice
thereof to the Borrower, which notice shall show the basis for calculation
of such increased costs, although the failure to give any such notice shall
not release or diminish any of the Borrower's obligations to pay increased
costs pursuant to this Section 8.03(b).
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle
56
such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A Bank claiming
compensation under this Section shall furnish a certificate to the Borrower
setting forth the additional amount or amounts to be paid to it hereunder,
which shall be conclusive in the absence of manifest error. In determining
such amount, such Bank may use any reasonable averaging and attribution
methods.
Section 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans.
If (i) the obligation of any Bank to make, or to continue or convert
outstanding Loans as or to, Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03(a)
and the Borrower shall, by at least five Euro-Dollar Business Days' prior
notice to such Bank through the Agent, have elected that the provisions of
this Section shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as CD Loans or
Euro-Dollar Loans, as the case may be, shall be made instead as Base Rate
Loans (on which interest and principal shall be payable contemporaneously
with the related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may be,
has been repaid, all payments of principal which would otherwise be applied
to repay such Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.
ARTICLE 9
Miscellaneous
Section 9.01. Notices. All notices, requests, directions, consents,
approvals and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (x) in the case of the Borrower
or the Agent, at its address or telex or telecopier number set forth on the
signature pages hereof, (y) in the case of any Bank, at its address or telex
or telecopier number set forth in its Administrative Questionnaire or (z) in
the case of any other party, such other address or telex or telecopier number
as such party may hereafter specify for the purpose by notice to the Agent
and the Borrower. Each such notice, request, direction, consent, approval
or other communication shall be effective (i) if given by
57
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received or (ii) if given by any
other means, when delivered or received at the address specified in this
Section; provided that notices to the Agent under Article 2 or Article 8
shall not be effective until received.
Section 9.02. No Waivers. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Documentary Taxes; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses of the Agent,
including reasonable fees and disbursements of special counsel for the Agent,
in connection with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent or any Bank, including reasonable fees and
disbursements incurred by counsel or in-house counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom. The Borrower shall indemnify
each Bank against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution and
delivery of this Agreement or the Notes and any and all liabilities with
respect to or resulting from any delay or omission (unless solely
attributable to such Bank) to pay such taxes.
(b) The Borrower agrees to indemnify each Bank, their respective
affiliates and the respective directors, officers, agents and employees of
the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from
and against any and all liabilities, losses, damages, costs and expenses of
any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by any Indemnitee (or by the
Agent in connection with its actions as Agent hereunder) in connection with
any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) relating to or arising
out of this Agreement or any actual or proposed use of proceeds of Loans
hereunder; provided that no Indemnitee shall have the right to be indemnified
hereunder for its own gross negligence, willful misconduct or unlawful
conduct as determined by a court of competent jurisdiction.
Section 9.04. Sharing of Set-offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment
of a
58
proportion of the aggregate amount of principal and interest then due with
respect to any Note held by it which is greater than the proportion received
by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or counterclaim
it may have and to apply the amount subject to such exercise to the payment
of indebtedness of the Borrower other than its indebtedness under the Notes.
The Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note,whether or not
acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
Section 9.05. Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Borrower and the Required Banks (and, if
the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on
any Loan or any fees hereunder, (iii) postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder or for any
reduction or termination of any Commitment or (iv) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Notes, or
the number of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any
other provision of this Agreement.
Section 9.06. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without
the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the
59
Agent, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.05 without the consent of
the Participant. Subject to the provisions of subsection (e), the Borrower
agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits, and be bound by the
obligations, of Article8 with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance with this subsection
(b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (but not in
any case in an amount less than $10,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit J hereto executed by such
Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent, such consents not to be unreasonably
withheld; provided that if an Assignee is another Bank or an affiliate of
such transferor Bank, no such consent shall be required; and provided further
that such assignment may, but need not, include the rights of the transferor
Bank in respect of outstanding Money Market Loans. Upon execution and
delivery of such an instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with
a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Agent an administrative fee for processing such assignment in the
amount of $3,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall, prior to the first
date on which interest or fees are payable
60
hereunder for its account, deliver to the Borrower and the Agent
certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 2.16.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02 or 8.03 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
Section 9.07. Collateral. Each of the Banks represents to the Agent and
each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
Section 9.08. Managing Agents; Co-Agents. Each Bank listed on Schedule I
hereto under the heading "Managing Agent" shall be a Managing Agent
hereunder. Each Bank listed on Schedule I hereto under the heading
"Co-Agent" shall be a Co-Agent hereunder. Nothing in this Agreement shall
impose upon any Managing Agent or Co-Agent, each in such capacity, any duties
or responsibilities whatsoever.
Section 9.09. Governing Law. This Agreement and each Note shall be governed
by and construed in accordance with the laws of the State of New York.
Section 9.10. Counterparts; Integration. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
Section 9.11. Several Obligations. The obligations of the Banks hereunder
are several. Neither the failure of any Bank to carry out its obligations
hereunder nor of this Agreement to be duly authorized, executed and delivery
by any Bank shall relieve any other Bank of its obligations hereunder (or
affect the
61
rights hereunder of such other Bank). No Bank shall be responsible for the
obligations of, or any action taken or omitted by, any other Bank hereunder.
Section 9.12. Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 9.13. Waiver/Appointment Notice. (a) Each Bank party to the Five-
Year Credit Agreement dated as of February 28, 1995 (as amended and restated
as of November 26, 1996 and as further amended to the date hereof the "Five-
Year Credit Agreement") hereby waives the Borrower's obligation to notify
the Agent at least 45 days prior to the creation of any new commitment
pursuant to Section 2.16 of the Five-Year Credit Agreement solely to the
extent necessary to permit any Bank party hereto to provide a commitment
under the Five-Year Credit Agreement effective on the Effective Date.
(b) Each Bank hereby waives the Borrower's obligation to notify the Agent
at least 15 days prior to the creation of a new Commitment pursuant to
Section 2.17 solely to the extent necessary to permit one or more
institutions to provide a new Commitment hereunder effective within thirty
days of the Effective Date.
(c) ▇▇▇▇▇▇ Guaranty Trust Company of New York hereby notifies the
Borrower and each Bank party to the Five-Year Credit Agreement of its
resignation as Administrative Agent under the Five-Year Credit Agreement.
Each Bank party to the Five-Year Credit Agreement hereby appoints, pursuant
to Section 7.08 of the Five-Year Credit Agreement, The Chase Manhattan Bank
as successor Administrative Agent under the Five-Year Credit Agreement. The
Chase Manhattan Bank hereby accepts such appointment.
(d) The Borrower hereby notifies each Bank party to the Prior Credit
Agreement of the Borrower's termination of the Commitments (as defined in
the Prior Credit Agreement), such termination to be effective on the
Effective Date. Each Bank party to the Prior Credit Agreement hereby waives
the Borrower's obligation to notify the Administrative Agent under the Prior
Credit Agreement of such termination at least three Domestic Business Days
prior to such termination.
62
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.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By:____________________________________
Title:
Address: Woodland Park
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
63
Commitments
$345,000,000 THE CHASE MANHATTAN BANK
By:______________________________
Title:
$230,000,000 BANK OF AMERICA, N.A.
By:______________________________
Title:
$230,000,000 THE BANK OF NOVA SCOTIA
By:______________________________
Title:
$240,000,000 BANK ONE, N.A. (MAIN OFFICE-CHICAGO)
By:______________________________
Title:
$150,000,000 ABN AMRO BANK N.V.
By:______________________________
Title:
By:______________________________
Title:
64
$150,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By:_____________________________
Title:
$100,000,000 FIRST UNION NATIONAL BANK
By:_____________________________
Title:
$90,000,000 TORONTO DOMINION (NEW YORK), INC.
By:_____________________________
Title:
$85,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By:_________________________________
Title:
By:_________________________________
Title:
$77,500,000 BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By:_________________________________
Title:
65
$75,000,000 US BANK NATIONAL ASSOCIATION
By:_______________________________
Title:
$75,000,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By:_______________________________
Title:
$65,000,000 PNC BANK, NATIONAL ASSOCIATION
By:_______________________________
Title:
$50,000,000 BARCLAYS BANK PLC
By:_______________________________
Title:
$50,000,000 COMERICA BANK
By:_______________________________
Title:
$50,000,000 FLEET NATIONAL BANK
By:_______________________________
Title:
66
$50,000,000 STATE STREET BANK AND TRUST CO.
By:________________________________
Title:
$45,000,000 NORDDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK
BRANCH AND/OR CAYMAN ISLAND
BRANCH
By:________________________________
Title:
By:________________________________
Title:
$42,500,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By:_________________________________
Title:
$40,000,000 BANQUE NATIONALE DE PARIS
By:________________________________
Title:
By:________________________________
Title:
67
40,000,000 BANCA MONTE DEI PASCHI DI SIENA,
S.P.A.
By:_________________________________
Title:
By:_________________________________
Title:
$30,000,000 CREDIT AGRICOLE INDOSUEZ
By:_________________________________
Title:
By:_________________________________
Title:
$30,000,000 KBC BANK N.V.
By:_________________________________
Title:
By:_________________________________
Title
68
$25,000,000 BAYERISCHE LANDESBANK
GIROZENTRALE
By:_________________________________
Title:
By:_________________________________
Title:
$25,000,000 CRESTAR BANK
By:_________________________________
Title:
$25,000,000 ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By:_________________________________
Title:
$25,000,000 MELLON BANK, N. A.
By:_________________________________
Title:
$25,000,000 ▇▇▇▇▇ FARGO BANK N. A.
By:_________________________________
Title:
69
$12,500,000 BANCA DI ROMA
By:__________________________________
Title:
By:__________________________________
Title:
$12,500,000 BANK OF MONTREAL
By:__________________________________
Title:
$50,000,000 BANCO DI NAPOLI, S.p.A.-NEW YORK
BRANCH
By:__________________________________
Title:
By:__________________________________
Title:
Total Commitments
$2,540,000,000
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Co-Documentation Agent
By:__________________________________
Title:
BANK ONE, N.A. (MAIN OFFICE-CHICAGO),
as Co-Documentation Agent
By:__________________________________
Title:
BANK OF AMERICA, N.A.
as Syndication Agent
By:__________________________________
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:__________________________________
Title:
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy number:
71
SCHEDULE I
Institution Title
The Chase Manhattan Bank Administrative Agent
Bank of America, N.A. Syndication Agent
The Bank of Nova Scotia Documentation Agent
Bank One, N.A. (Main Office-Chicago) Documentation Agent
ABN AMRO Bank N.V. Managing Agent
Credit Lyonnais New York Branch Managing Agent
First Union National Bank Co-Agent
Toronto Dominion (New York), Inc. Co-Agent
Cooperatieve Centrale Raiffeisen-BoereleenBank
B.A., "Rabobank Nederland", New York Branch Co-Agent
Bank of Tokyo-Mitsubishi Trust Company Co-Agent
US Bank National Association Co-Agent
▇▇▇▇▇▇ Guaranty Trust Company of New York Co-Agent
EXHIBIT A
NOTE
New York, New York
, 19
For value received, National Rural Utilities Cooperative Finance Corporation,
a not-for-profit cooperative association incorporated under the laws of the
District of Columbia (the "Borrower"), promises to pay to the order of (the
"Bank"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to
the Revolving Credit Agreement referred to below on the last day of the
Interest Period relating to such Loan. The Borrower promises to pay interest
on the unpaid principal amount of each such Loan on the dates and at the rate
or rates provided for in the Revolving Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States
in Federal or other immediately available funds at the office of The Chase
Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
All Loans made by the Bank, the respective types and maturities thereof and
all repayments of the principal thereof shall be recorded by the Bank and,
prior to any transfer hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding may be
endorsed by the Bank on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof; provided that the
failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Revolving
Credit Agreement.
This note is one of the Notes referred to in the 364-Day Revolving Credit
Agreement dated as of September 29, 1999 among the Borrower, the banks listed
on the signature pages thereof, The Bank of Nova Scotia and Bank One, N.A.,
as Co-Documentation Agents, Bank of America, N.A., as Syndication Agent, and
The Chase Manhattan Bank, as Administrative Agent (as the same may be amended
from time to time, the "Revolving Credit Agreement"). Terms defined in the
Revolving Credit Agreement are used herein with the same meanings. Reference
is made to the Revolving Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount Type Amount of Maturity Notation
of of Principal Date Made
Loan Loan Repaid By
EXHIBIT B-1
Form of RUS Guarantee
The United States of America acting through the Administrator of the
Rural Utilities Service ("RUS") hereby unconditionally guarantees to [name of
Payee] the making of [__%] of the payments of principal and interest when and
as due on this Note of _________ (the "Cooperative") in accordance with the
terms hereof and of the Loan Agreement referred to in this Note, until such
principal and interest shall be indefeasibly paid in full (which includes
interest accruing on such principal between the date of default under this
Note and the payment in full of this Guarantee), irrespective of receipt by
RUS of any sums or property from its enforcement of its remedies for the
Cooperative default. This Guarantee shall be incontestable except for fraud
or misrepresentation of which the holder had actual knowledge at the time it
became a holder. RUS hereby waives diligence, presentment, demand, protest
and notice of any kind, as well as any requirement that [name of Payee]
exhaust any right or take any action against the Cooperative.
This Guarantee is issued pursuant to Title III of the Rural
Electrification Act of 1936, as amended (7 U.S.C. {{901, et seq.), and the
Loan Guarantee and Servicing Agreement among RUS, the Cooperative, Bank One,
N.A. and National Rural Utilities Cooperative Finance Corporation dated
___________, 19__.
UNITED STATES OF AMERICA
Date___________, 19__ By_______________________
Administrator of Rural Electrification
Administration
EXHIBIT B-2
Form of RUS Guarantee
The United States of America acting through the Administrator of the Rural
Utilities Service ("RUS") hereby unconditionally guarantees to the Payee the
making of the payments of principal and Guaranteed Interest when and as due
on the Note of _______________ (the "Cooperative") dated _____ in the
original principal amount of $ _____ (the "Note"), in accordance with the
terms thereof and of the Loan Agreement and the Master Loan Guarantee and
Servicing Agreement referred to in the Note, until such principal and
Guaranteed Interest shall be indefeasibly paid in full (which includes
interest accruing at the Guaranteed Interest Rate between the date of default
under the Note and the payment in full of this Guarantee), irrespective of
receipt by RUS of any sums or property from its enforcement of its remedies
for the Cooperative's default. This Guarantee shall be incontestable except
for fraud or misrepresentation of which the holder had actual knowledge at
the time it became a holder. RUS hereby waives diligence, presentment,
demand, protest and notice of any kind (except the "Default Notice" required
pursuant to Section 5.3(a) of the Master Loan Guarantee and Servicing
Agreement), and acknowledges that the Payee does not have any right or
obligation to exercise any right or take any action against the Cooperative.
This Guarantee is issued pursuant to the Rural Electrification Act of 1936,
as amended (7 U.S.C. 901, et seq.) (the "Act"), and the Master Loan
Guarantee and Servicing Agreement between RUS and National Rural Utilities
Cooperative Finance Corporation dated as of February 16, 1999.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE UNITED STATES OF AMERICA, TO THE EXTENT APPLICABLE, AND
OTHERWISE THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
THE UNDERSIGNED, AS [ADMINISTRATOR] OF RUS, DOES HEREBY CERTIFY THAT I AM
AUTHORIZED UNDER THE ACT AND 7 CFR PART 1700 TO DELIVER THIS GUARANTEE.
UNITED STATES OF AMERICA,
by
[Administrator]
of the
Rural Utilities Service
Dated: RUS Loan No.
EXHIBIT C
Form of Money Market Quote Request
[Date]
To: The Chase Manhattan Bank
(the "Agent")
From: National Rural Utilities
Cooperative Finance Corporation (the "Borrower")
Re: 364-Day Revolving Credit Agreement (the "Revolving Credit Agreement")
dated as of September 29, 1999 among the Borrower, the banks listed
on the signature pages thereof, The Bank of Nova Scotia and Bank One,
N.A., as Co-Documentation Agents, Bank of America, N.A., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent.
We hereby give notice pursuant to Section 2.03 of the Revolving
Credit Agreement that we request Money Market Quotes for the
following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount(1) Interest Period(2)
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate].
[The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Revolving Credit
Agreement.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By________________________
Title:
___________________________
(1) Amount must be $10,000,000 or a larger multiple of $1,000,000.
(2) Any number of whole months (but not less than one month) (LIBOR
Auction) or not less than 30 days (Absolute Rate Auction),
subject to the provisions of the definition of Interest Period.
EXHIBIT D
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to the National Rural Utilities Cooperative
Finance Corporation (the "Borrower")
Pursuant to Section 2.03 of the 364-Day Revolving Credit Agreement
dated as of September 29, 1999 among the Borrower, the banks listed
on the signature pages thereof, The Bank of Nova Scotia and Bank One,
N.A., as Co-Documentation Agents, Bank of America, N.A., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent:
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:00 A.M.]
(New York City time) on [date].
THE CHASE MANHATTAN BANK
By______________________
Authorized Officer
EXHIBIT E
FORM OF MONEY MARKET QUOTE
THE CHASE MANHATTAN BANK,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: Money Market Quote to
National Rural Utilities Cooperative
Finance Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank: _____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made
for $1,000,000 or a larger multiple thereof.
(notes continued on following page)
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the 364-Day Revolving
Credit Agreement dated as of September 29, 1999 among the Borrower, the
banks listed on the signature pages thereof, The Bank of Nova Scotia and
Bank One, N.A., as Co-Documentation Agents, Bank of America, N.A., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent.
Very truly yours,
[NAME OF BANK]
Dated: _______________
By: __________________________
Authorized Officer
*** Any number of whole months (but not less than one month) or not less
than 30 days, as specified in the related Invitation. No more than five
bids are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (rounded to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (rounded to the nearest 1/10,000th
of 1%).
EXHIBIT F
OPINION OF ▇▇▇▇ ▇▇▇ LIST, ESQ.,
GENERAL COUNSEL OF THE BORROWER
September __, 1999
I am General Counsel of the National Rural Utilities Cooperative Finance
Corporation (the "Borrower") and am delivering this opinion pursuant to the
364-Day Revolving Credit Agreement (the "Agreement") dated as of September
29, 1999 among the Borrower, the banks listed on the signature pages thereof,
The Bank of Nova Scotia and Bank One, N.A., as Co-Documentation Agents, Bank
of America, N.A., as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent. Terms defined in the Agreement are used herein as
therein defined. This opinion is being rendered to you at the request of my
client, the Borrower, pursuant to Section 3.01(c) of the Agreement.
I have examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations
of fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a cooperative association duly incorporated, validly
existing and in good standing under the laws of the District of Columbia and
has the corporate power and authority and all material governmental licenses,
authorizations, consents and approvals required to own its property and
assets and to transact the business in which it is engaged. The Borrower is
duly qualified or licensed as a foreign corporation in good standing in
every jurisdiction in which the nature of the business in which it is engaged
makes such qualification or licensing necessary, except in those
jurisdictions in which the failure to be so qualified or licensed would not
(after qualification, assuming that the Borrower could so qualify without
the payment of any fee or penalty and retain its rights as they existed prior
to such qualification all to an extent so that any fees or penalties required
to be so paid or any rights not so retained would not, individually or in the
aggregate, have a material adverse effect on the business or financial
condition of the Borrower), individually or in the aggregate, have a material
adverse effect upon the business or financial condition of the Borrower.
The Borrower has the corporate power and authority to execute, deliver and
carry out the terms and provisions of the Agreement and the Notes. The
Agreement and the Notes have been duly and validly authorized, executed and
delivered by the Borrower, and the Agreement constitutes a legal, valid and
binding agreement of the Borrower, and the Notes constitute
legal, valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
2. There are no actions, suits, proceedings or investigations pending or,
to my knowledge, threatened against or affecting the Borrower by or before
any court or any governmental authority, body or agency or any arbitration
board which are reasonably likely to materially adversely affect the
business, property, assets, financial position or results of operations of
the Borrower or the authority or ability of the Borrower to perform its
obligations under the Agreement or the Notes.
3. No authorization, consent, approval or license of, or declaration, filing
or registration with or exemption by, any governmental authority, body or
agency is required in connection with the execution, delivery or performance
by the Borrower of the Agreement or the Notes.
4. The holders of the Borrower's Capital Term Certificates are not and will
not be entitled to receive any payments with respect to the principal thereof
or interest thereon solely because of withdrawing or being expelled from
membership in the Borrower.
5. Neither the Borrower nor any Subsidiary is in default in any material
respect under any material agreement or other instrument to which it is a
party or by which it is bound or its property or assets may be affected. No
event or condition exists which constitutes, or with the giving of notice or
lapse of time or both would constitute, such a default under any such
agreement or other instrument. Neither the execution and delivery of the
Agreement or the Notes, nor the consummation of any of the transactions
therein contemplated, nor compliance with the terms and provisions thereof,
will contravene any provision of law, statute, rule or regulation to which
the Borrower is subject or any judgment, decree, award, franchise, order or
permit applicable to the Borrower, or will conflict or be inconsistent with,
or will result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute (or with the giving of notice or lapse of time,
or both, would constitute) a default under (or condition or event entitling
any Person to require, whether by purchase, redemption, acceleration or
otherwise, the Borrower to perform any obligations prior to the scheduled
maturity thereof), or result in the creation or imposition of any Lien upon
any of the property or assets of the Borrower pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other instrument to which
it may be subject, or violate any provision of the certificate of
incorporation or by-laws of the Borrower. Without limiting the generality
of the foregoing, the Borrower is not a party to, or otherwise subject to
any provision contained in, any instrument evidencing Indebtedness of the
Borrower, any agreement or indenture relating thereto or any other contract
or agreement (including its certificate of incorporation and by-laws), which
would be violated by the incurring of the Indebtedness to be evidenced by the
Notes.
6. The Borrower has complied fully with all of the material provisions of
each Indenture. No Event of Default (within the meaning of such term as
defined in either Indenture) and no event, act or condition (except for
possible non-compliance by the Borrower with any immaterial provision of
such Indenture which in itself is not such an Event of Default under such
Indenture) which with notice or lapse of time, or both, would constitute
such an Event of Default has occurred and is continuing under such
Indenture. The borrowings by the Borrower contemplated by the Agreement will
not cause such an Event of Default under, or the violation of any covenant
contained in, either Indenture.
7. Set forth on Annex A attached hereto is a true, correct and complete list
of all of the Borrower's Subsidiaries and Joint Ventures, the jurisdiction of
incorporation or organization of each such Subsidiary and Joint Venture and
the nature and percentage of the Borrower's ownership of each such Subsidiary
and Joint Venture.
8. The Borrower has received a ruling from the Internal Revenue Service to
the effect that it is exempt from payment of Federal income tax under Section
501(c)(4) of the Internal Revenue Code of 1986, and nothing has come to our
attention that leads us to believe that the Borrower is not so exempt.
EXHIBIT G
OPINION OF MILBANK, TWEED, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
SPECIAL COUNSEL FOR THE BORROWER
September __, 1999
We have acted as special counsel to National Rural Utilities Cooperative
Finance Corporation (the "Borrower") in connection with the 364-Day Revolving
Credit Agreement dated as of September 29, 1999 (the "Agreement") among the
Borrower, the banks listed on the signature pages thereof, The Bank of Nova
Scotia and Bank One, N.A., as Co-Documentation Agents, Bank of America, N.A.,
as Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent
(the "Agent"). All capitalized terms used but not defined herein have the
respective meanings given to such terms in the Agreement.
In rendering the opinions expressed below, we have examined:
(i) the Agreement;
(ii) the Notes; and
(iii) such corporate records of the Borrower and such other documents as
we have deemed necessary as a basis for the opinions expressed below.
In our examination, we have assumed the genuineness of all signatures (other
than the Borrower's), the authenticity of all documents submitted to us as
originals and the conformity with authentic original documents of all
documents submitted to us as copies. When relevant facts were not
independently established, we have relied upon statements of governmental
officials and upon representations made in or pursuant to the Agreement and
certificates of appropriate representatives of the Borrower.
In rendering the opinions expressed below, we have assumed, with respect to
all of the documents referred to in this opinion letter (except as provided
below), that:
(i) such documents have been duly authorized by, have been duly executed
and delivered by, and constitute legal, valid, binding and enforceable
obligations of, all of the parties (except the Borrower) to such documents;
(ii) all signatures (except signatures of officers of the Borrower) to
such documents have been duly authorized; and
(iii) all of the parties to such documents (except the Borrower) are duly
organized and validly existing and have the power and authority (corporate
and other) to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the comments and
qualifications set forth below, and having considered such questions of law
as we have deemed necessary as a basis for the opinions expressed below, we
are of the opinion that:
1. The Borrower is a cooperative association duly incorporated, validly
existing and in good standing under the laws of the District of Columbia.
The Borrower has the corporate power and authority to execute, deliver and
carry out the terms and provisions of the Agreement and the Notes. The
Agreement and the Notes have been duly and validly authorized, executed and
delivered by the Borrower, and the Agreement constitutes a legal, valid and
binding agreement of the Borrower, and the Notes constitute legal, valid and
binding obligations of the Borrower, in each case enforceable against the
Borrower in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally and
except as the enforceability of the Agreement and the Notes is subject to the
application of general principles of equity (regardless of whether considered
in a proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality, reasonableness, good
faith and fair dealing.
2. To our best knowledge, there are no actions, suits, proceedings or
investigations pending or threatened against the Borrower by or before any
court or any governmental authority, body or agency or any arbitration board
which in our view are reasonably likely to materially adversely affect the
business, property, assets, financial position or results of operations of
the Borrower or the authority or ability of the Borrower to perform its
obligations under the Agreement or the Notes.
3. No authorization, consent, approval or license of, or declaration, filing
or registration with or exemption by, any governmental authority, body or
agency is required in connection with the execution, delivery or performance
by the Borrower of the Agreement or the Notes.
4. The holders of the Borrower's Capital Term Certificates are not and will
not be entitled to receive any payments with respect to the principal thereof
or interest thereon solely because of withdrawing or being expelled from
membership in the Borrower.
5. Neither the execution and delivery of the Agreement or the Notes, nor the
consummation of any of the transactions therein contemplated, nor compliance
with the terms and provisions thereof, will contravene any provision of law,
statute, rule or
regulation to which the Borrower is subject or any judgment, decree, award,
franchise, order or permit known to us applicable to the Borrower, or will
conflict or be inconsistent with, or will result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute (or with the
giving of notice or lapse of time, or both, would constitute) a default under
(or condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any
obligations prior to the scheduled maturity thereof), or result in the
creation or imposition of any Lien upon any of the property or assets of the
Borrower pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument known to us to which it may be subject, or
violate any provision of the certificate of incorporation or by-laws of the
Borrower. Without limiting the generality of the foregoing, to our best
knowledge the Borrower is not a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the
Borrower, any agreement or indenture relating thereto or any other contract
or agreement (including its certificate of incorporation and by-laws), which
would be violated by the incurring of the Indebtedness to be evidenced by the
Notes.
6. The Borrower is not an "investment company" or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
7. The Borrower is not a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended.
The foregoing opinions are subject to the following qualifications:
We express no opinion as to the effect of the laws of any jurisdiction in
which any Bank is located (other than New York) that limit the interest, fees
or other charges such Bank may impose.
We express no opinion concerning any law other than the law of New York, the
District of Columbia and the federal law of the United States. Insofar as
this opinion pertains to matters of District of Columbia law, we have relied
on the opinion of ▇▇▇▇ ▇▇▇ List, Esq. being delivered to you
contemporaneously herewith.
This opinion letter is, pursuant to Section 3.01(d) of the Agreement,
provided to you by us in our capacity as special counsel to the Borrower and
at its request and may not be relied upon by any Person or for any purpose
other than in connection with the transactions contemplated by the Agreement
without, in each instance, our prior written consent.
Very truly yours,
EXHIBIT H
OPINION OF
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL
FOR THE AGENT
September __, 1999
To the Banks and the Agent
Referred to Below
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have participated in the preparation of the 364-Day Revolving Credit
Agreement dated as of September 29, 1999 (the "Credit Agreement") among the
National Rural Utilities Cooperative Finance Corporation, a not-for-profit
cooperative association incorporated under the laws of the District of
Columbia (the "Borrower"), the banks listed on the signature pages thereof,
The Bank of Nova Scotia and Bank One, N.A., as Co-Documentation Agents, Bank
of America, N.A., as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent (the "Agent"), and have acted as special counsel for
the Agent for the purpose of rendering this opinion pursuant to Section
3.01(e) of the Credit Agreement. Terms defined in the Credit Agreement are
used herein as therein defined.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and the
Notes issued today constitute valid and binding obligations of the Borrower,
in each case enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and by general principles of equity.
In rendering the foregoing opinion, we have assumed that (i) the Borrower is
duly incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation and (ii) the execution, delivery and
performance by the Borrower of the Credit Agreement and the Notes issued by
the Borrower are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene or constitute a default under, any provision of applicable law
or regulation or of the Borrower's certificate of incorporation or by-laws or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or result in the creation or imposition of any lien
on the assets of the Borrower or any Subsidiary of the Borrower.
We are members of the Bar of the State of New York and the foregoing opinion
is limited to the laws of the State of New York and the federal laws of the
United States of America. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any jurisdiction (except the
State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not re relied upon by you for any other purpose or relied
upon by any other Person without our prior written consent.
Very truly yours,
EXHIBIT I
EXTENSION AGREEMENT
[Date]
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The Chase Manhattan Bank,
as Administrative Agent
under the Credit Agreement
referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
Effective as of [effective date], the undersigned hereby agree to extend the
Commitment Termination Date as now in effect under the 364-Day Credit
Agreement dated as of September 29, 1999 as amended and supplemented from
time to time (the "Credit Agreement"), among National Rural Utilities
Cooperative Finance Corporation, the Banks listed therein, The Bank of Nova
Scotia and Bank One, N.A., as Co-Documentation Agents, Bank of America, N.A.,
as Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent,
to [Date]. Terms defined in the Credit Agreement are used herein as therein
defined.
This Extension Agreement shall be construed in accordance with and governed
by the law of the State of New York.
[NAME OF BANK]
By____________________________
Title:
[NAME OF BANK]
By____________________________
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By____________________________
Title:
Agreed and accepted:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
EXHIBIT J
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ___________, 19__ among [ASSIGNOR] (the "Assignor"),
[ASSIGNEE] (the "Assignee"), NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION (the "Borrower") and THE CHASE MANHATTAN BANK, as Administrative
Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates
to the 364-Day Credit Agreement dated as of September 29, 1999 (the "Credit
Agreement") among the Borrower, the Assignor and the other Banks party
thereto, as Banks, The Bank of Nova Scotia and Bank One, N.A., as
Co-Documentation Agents, Bank of America, N.A., as Syndication Agent, and
The Chase Manhattan Bank, as Administrative Agent (the "Agent");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at
any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and
assumes all of the obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase from the Assignor
of the corresponding portion of the principal amount of the Committed Loans
made by the Assignor outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Borrower and the Agent
and the payment of the amounts specified in Section 3 required to be paid on
the date hereof (i) the Assignee shall, as of the date hereof, succeed to
the rights and be obligated to perform the obligations of a Bank under the
Credit Agreement with a Commitment in an amount equal to the Assigned Amount,
and (ii) the Commitment of the Assignor shall, as of the date hereof, be
reduced by a like amount and the Assignor released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee. The assignment provided for herein shall be without recourse to
the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or facility fees accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agent pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by
the Borrower and the Agent is evidence of this consent. Pursuant to Section
9.06(c) of the Credit Agreement the Borrower agrees to execute and deliver a
Note payable to the order of the Assignee to evidence the assignment and
assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance on
the Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE
CORPORATION
By__________________________
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By__________________________
Title: