Exhibit 10.2
FIVE-YEAR
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of
February 28, 1995
and
amended and restated as of
November 26, 1996
among
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,
THE BANKS LISTED HEREIN,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
and
THE BANK OF NOVA SCOTIA,
as CO-SYNDICATION AGENTS
and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as ADMINISTRATIVE AGENT
Arranged by
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
2
TABLE OF CONTENTS1
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations 15
SECTION 1.03. Types of Borrowings 15
ARTICLE II
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. Fees 27
SECTION 2.09. Optional Termination or Reduction of Commitments 27
SECTION 2.10. Mandatory Termination of Commitments 28
SECTION 2.11. Optional Prepayments 28
SECTION 2.12. General Provisions as to Payments 28
SECTION 2.13. Funding Losses. 29
SECTION 2.14. Computation of Interest and Fees 29
SECTION 2.15. Withholding Tax Exemption. 29
SECTION 2.16. Increase of Commitments. 30
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness 31
SECTION 3.02. Borrowings 33
---------------------------
1The Table of Contents is not a part of this Agreement.
2
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence, Power and Authority 35
SECTION 4.02. Financial Statements 35
SECTION 4.03. Litigation 36
SECTION 4.04. Governmental Authorizations 37
SECTION 4.05. Capital Term Certificates 37
SECTION 4.06. No Violation of Agreements 37
SECTION 4.07. No Event of Default under the Indentures 38
SECTION 4.08. Compliance with ERISA 38
SECTION 4.09. Compliance with Other Laws 38
SECTION 4.10. Tax Status 38
SECTION 4.11. Investment Company Act 38
SECTION 4.12. Public Utility Holding Company Act 39
SECTION 4.13. Disclosure 39
SECTION 4.14. Subsidiaries 39
SECTION 4.15. Environmental Matters 39
ARTICLE V
COVENANTS
SECTION 5.01. Corporate Existence 40
SECTION 5.02. Disposition of Assets; Merger; Character of Business; etc. 40
SECTION 5.03. Financial Information 41
SECTION 5.04. Default Certificates 43
SECTION 5.05. Notice of Litigation, Legislative Developments and Defaults 43
SECTION 5.06. ERISA 44
SECTION 5.07. Payment of Charges 44
SECTION 5.08. Inspection of Books and Assets 45
SECTION 5.09. Indebtedness 45
SECTION 5.10. Liens 46
SECTION 5.11. Maintenance of Insurance 47
SECTION 5.12. Subsidiaries and Joint Ventures 47
SECTION 5.13. Minimum Net Worth 47
SECTION 5.14. Minimum TIER 47
SECTION 5.15. Retirement of Patronage Capital 48
SECTION 5.16. Use of Proceeds 48
4
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default 48
SECTION 6.02. Notice of Default 51
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization 51
SECTION 7.02. Agent and Affiliates 51
SECTION 7.03. Action by Agent 51
SECTION 7.04. Consultation with Experts 51
SECTION 7.05. Liability of Agent 52
SECTION 7.06. Indemnification 52
SECTION 7.07. Credit Decision 52
SECTION 7.08. Successor Agent 52
SECTION 7.09. Co-Syndication Agents Not Liable 53
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair 53
SECTION 8.02. Illegality 54
SECTION 8.03. Increased Cost and Reduced Return 54
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans 57
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices 57
SECTION 9.02. No Waivers 58
SECTION 9.03. Expenses; Documentary Taxes; Indemnification 58
SECTION 9.04. Sharing of Set-Offs 59
5
SECTION 9.05. Amendments and Waivers 59
SECTION 9.06. Successors and Assigns 60
SECTION 9.07. Collateral 61
SECTION 9.08. Managing Agents; Co-Agents 61
SECTION 9.09. Governing Law 61
SECTION 9.10. Counterparts; Integration 62
SECTION 9.11. Several Obligations 62
SECTION 9.12. Severability 62
Pricing Schedule
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
6
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of February 28, 1995 and
amended and restated as of November 26, 1996 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, ▇.▇. ▇▇▇▇▇▇ SECURITIES INC. and
THE BANK OF NOVA SCOTIA, as Co-Syndication Agents, and ▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
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 ▇▇▇▇▇▇ Guaranty Trust Company of New York in its
capacity as administrative agent for the Banks hereunder, and its successors
in such capacity.
"Agreement" means the Original Agreement, as amended by the
Amended Agreement and as the same may be further amended from time to time.
6
"Amended Agreement" means this Amended and Restated Revolving
Credit Agreement dated as of February 28, 1995 and amended and restated as of
November 26, 1996.
"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 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 to be made by a Bank
as a Base Rate Loan in accordance with the applicable Notice of Committed
Borrowing or pursuant to Article VIII.
"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.
7
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Committed Loan to be made by a Bank as a
CD Loan in accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in the Pricing Schedule.
"CD Reference Banks" means The Bank of Nova Scotia, SunBank,
National Association and ▇▇▇▇▇▇ Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Sections 2.09 and 2.10.
"Committed Loan" means a loan made by a Bank pursuant to
Section 2.01.
"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-Syndication Agents" means ▇.▇. ▇▇▇▇▇▇ Securities Inc. and
The Bank of Nova Scotia, each in its capacity as co-syndication 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 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.
8
"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.
"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
9
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 to be made by a Bank
as a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in the Pricing
Schedule.
"Euro-Dollar Reference Banks" means the principal London
offices of The Bank of Nova Scotia, SunBank, National Association and ▇▇▇▇▇▇
Guaranty Trust Company of New York.
"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 ▇▇▇▇▇▇
Guaranty Trust Company of New York on such day on such transactions as
determined by the Agent.
10
"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.
"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
(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
11
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; and
(c) any Interest Period which begins before the Termination
Date and would otherwise end after the Termination Date shall end on the
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:
12
(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; and
(b) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date shall
end on the 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; and
(b) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date shall
end on the Termination Date;
(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; and
(c) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date shall end
on the Termination Date; and
(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
13
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; and
(b) any Interest Period which begins before the
Termination Date and would otherwise end after the Termination Date shall
end on the 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.
"Minimum Required Net Worth" shall initially be
$1,346,291,939; provided that on each date after the Effective Date upon
14
which annual financial statements are required to be delivered pursuant to
Section 5.03(ii), the Minimum Required Net Worth shall be permanently
increased by an amount, if positive, equal to ninety percent (90%) of (i) the
aggregate amount of Net Margins for the prior fiscal year minus (ii) the
aggregate amount of retirements of Patronage Capital Certificates made by the
Borrower to Members in the prior fiscal year. In the event that in any year
the amount specified in clause (ii) above is equal to or greater than the
amount specified in clause (i) above, the Minimum Required Net Worth shall
remain the same for that year.
"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.
"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
15
(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).
"Net Worth" means the sum of (i) all accounts which
constitute Members' equity in the Borrower, (ii) all Indebtedness of the
Borrower shown in its balance sheet dated as of May 31, 1996 as "Members'
Subordinated Certificates" and any other Indebtedness of the Borrower
incurred after May 31, 1996 having substantially similar provisions as to
subordination as those contained in said outstanding certificates and (iii)
any amounts reflected in the financial statements of the Borrower as a
reserve for loan losses.
"1994 Indenture" means the Indenture dated as of February 15,
1994 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.
"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)).
"Original Agreement" means the $2,430,000,000 Revolving
Credit Agreement dated as of February 28, 1995 among the Borrower, the Banks
listed therein, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and The Bank of Nova Scotia, as
Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as
Administrative Agent.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
16
"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.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly announced
by ▇▇▇▇▇▇ Guaranty Trust Company of New York in New York City from time to
time as its Prime Rate.
"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.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"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.
17
"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 60%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 60% of the aggregate
unpaid principal amount of the Loans.
"Revolving Credit Period" means the period from and including
the Effective Date to but excluding the Termination Date.
"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 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).
"S&P" means Standard and Poor's Ratings 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
18
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 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.
"Termination Date" means November 26, 2001 or such later date
to which this Agreement shall have been extended pursuant to Section 2.01(b),
or, if either such day is not a Euro-Dollar Business Day, the next preceding
Euro-Dollar Business Day.
"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 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).
19
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 II 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 II under which participation therein
is determined (i.e., a "Committed Borrowing" is a Borrowing under Section
2.01 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 II
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) 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 Committed 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 $25,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the maximum aggregate
amount available in accordance with Section 3.02(c) or (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 2.11, prepay Loans and reborrow
at any time during the Revolving Credit Period under this Section.
20
(b) Extension of Commitments. The Termination Date may be
extended one time in the manner set forth in this subsection (b), for a
period of up to one year from the date on which Banks having 100% of the
Commitments shall have notified the Agent of their agreement so to extend.
If the Borrower wishes to request an extension of the Termination Date, it
shall give written notice to that effect (such notice to state the date to
which the 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 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 Termination Date to assign their
Commitments in their entirety, no later than 15 days prior to the Termination
Date then in effect, to one or more Assignees pursuant to Section 9.06(c)
which Assignees will agree to extend the Termination Date. If all Banks
(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 Termination Date
shall be extended for the period specified above.
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 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 be
CD Loans, Base Rate Loans or Euro-Dollar Loans, and
21
(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 10 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) The Money Market Option. 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,
(ii) the aggregate amount of such Borrowing, which shall be
$25,000,000 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
22
(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 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
III and VI, any Money Market Quote so made shall be irrevocable except with
the written consent of the Agent given on the instructions of the Borrower.
23
(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,
(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).
24
(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 Marke
t 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 $25,000,000 or any larger multiple of $1,000,000,
(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
25
(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 amoun
t 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 III 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 2.12, 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 1:00 P.M. (New York City
26
time) on the date of Borrowing in the 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.
27
(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, 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. Each Loan included in
any Borrowing shall mature, and the principal amount thereof shall be due
and payable, on the last day of the Interest Period applicable to such
Borrowing.
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. 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.
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 plus the Adjusted
CD Rate applicable to such Loan and (ii) the rate applicable to Base Rate
Loans for such day.
28
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.
"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
29
meaning of 12 C.F.R. Section 327.3(e) (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.
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 credit or other assets which includes loans by a non-United
States office of any Bank to United States residents). The Adjusted London
30
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.
31
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt notice to the
Borrower and the participating Banks by telex or cable 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. Fees.
(a) Facility Fee. The Borrower shall pay to the Agent
for the account of the Banks ratably in proportion to their Commitments a
facility fee at the Facility Fee Rate (determined daily in accordance with
the Pricing Schedule). Such facility fee shall accrue from and including the
Effective Date to but excluding the Termination Date (or such earlier date
as the Commitments shall be terminated) on the aggregate amount of the
Commitments in existence on each such day (whether used or unused).
(b) 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.
(c) Payments. Accrued fees under subsection (a) of this
Section 2.08 shall be payable quarterly in arrears on each January 1,
April 1, July 1 and October 1, commencing on the first such date after the
Effective Date, and upon the date of termination of the Commitments in their
entirety.
SECTION 2.09. 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 $25,000,000 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.
32
SECTION 2.10. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.11. Optional Prepayments. (a) The Borrower may,
upon at least one Domestic Business Day's notice to the Agent, prepay any
Base Rate Borrowing (or any Money Market Borrowing bearing interest at the
Base Rate pursuant to Section 8.01(a)) in whole at any time, or from time to
time in part in amounts aggregating $25,000,000 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 Borrowing.
(b) Except as provided in Section 8.02, the Borrower may
not prepay all or any portion of the principal amount of any Fixed Rate 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.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 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
33
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 2.13. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan (pursuant to
Article VI or VIII 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 any Fixed
Rate Loans after notice has been given to any Bank in accordance with Section
2.04(a), the Borrower shall reimburse each Bank within 15 days after demand
for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment
or failure to borrow, 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 2.14. 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 2.15. 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
34
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 2.16. Increase of Commitments. Upon at least 45
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 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
35
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 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 $300,000,000. It is
understood that any increase in the amount of the Commitments pursuant to
this Section 2.16 shall not constitute an amendment of this Agreement or the
Notes.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Amended 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
36
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;
37
(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;
(g) receipt by the Agent, for the account of the Banks,
of all commitment fees and facility fees accrued to but excluding the
Effective Date pursuant to Sections 2.08(a) and (b) of the Original
Agreement; and
(h) 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,
38
and any other matters relevant hereto, all in form and substance satisfactory
to the Agent.
On the Effective Date the Original Agreement will be automatically amended
and restated in its entirety to read as set forth herein. On and after the
Effective Date the rights and obligations of the parties hereto shall be
governed by this Amended Agreement; provided that rights and obligations of
the parties hereto with respect to the period prior to the Effective Date
shall continue to be governed by the provisions of the Original Agreement.
With effect from and including the Effective Date, each Person listed on the
signatures pages hereof which is not a party to the Original Agreement shall
become a Bank party to this Agreement and the Commitment of each Bank shall
be the amount set forth opposite the name of such Bank on the signature pages
hereof, as such amount may be reduced from time to time pursuant to Section
2.09 or 2.10 hereof. All references to "the date hereof" or "the date of
this Agreement" contained in this Agreement shall mean references to November
26, 1996. Any Bank whose Commitment is changed to zero shall upon the
Effective Date cease to be a Bank party to this Agreement; provided that the
provisions of Sections 8.03 and 9.03 thereof shall continue to inure to the
benefit of each Bank. 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 December 15, 1996.
(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;
39
(e) the fact that, immediately after such Borrowing, if
such Borrowing is not a Refunding Borrowing, no Default shall have occurred
and be continuing or, if such Borrowing is a Refunding Borrowing, no Event
of Default shall have occurred and be continuing;
(f) the fact that the representations and warranties of
the Borrower contained in this Agreement (except, in the case of a Refunding
Borrowing, the representations and warranties set forth in Section 4.03, the
second sentence of Section 4.06, and the first sentence of Section 4.07
) 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.
40
ARTICLE IV
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 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, 1996 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, 1996, including the related notes, accompanied by the opinion and
41
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 frim 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 herunder,
at the time the same are furnished or required to be furnished.
(b) The unaudited combined balance sheets of the Borrower
and its Consolidated Subsidiaries as of August 31, 1996 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
ty 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. Litigation. There are no actions, suits,
proceedings or investigations pending or, to the Borrower's knowledge,
42
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 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
43
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 are in
substantial compliance with ERISA, no Plan is insolvent or in reorganization,
no Plan has an accumulated or waived funding deficiency within the meaning of
Section 412 of the Internal Revenue Code, 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 liability to or on account of a Plan pursuant to any
of the foregoing Sections of ERISA.
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",
44
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 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
45
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.
ARTICLE V
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 2.08 or any other amount then due and payable hereunde
r 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
46
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 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)
47
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 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,
48
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 5.15, 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 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
49
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.
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,
50
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 and (b) the aggregate amount of Members' equity in the
Borrower, other than Capital Term Certificates, 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
and (b) the aggregate amount of Members' equity in the Borrower, other than
Capital Term Certificates, on the Determination Date. The respective
51
principal amounts of Superior Indebtedness and Capital Term Certificates 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 sai
d given future date by the terms of such Superior Indebtedness and Capital
Term Certificates 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 Indenture
(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
52
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 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 and (ii)
all Indebtedness of the Borrower shown in its balance sheet dated as of May
31, 1996 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, 1996 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.
SECTION 5.13. Minimum Net Worth. The Borrower will not at
any time permit its Net Worth to be less than the Minimum Required Net Worth
as in effect from time to time.
SECTION 5.14. 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 5.15. 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
53
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 5.16. 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 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 VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) 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, 5.15 or 5.16;
(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,
54
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;
(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 $15,000,000 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 $15,000,000 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
55
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 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 $15,000,000 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 2.08(a) shall forthwith become due and payable
without any other notice of any kind; or (b) declare the principal of and
56
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(e) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
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.
SECTION 7.02. Agent and Affiliates. ▇▇▇▇▇▇ Guaranty Trust
Company 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 ▇▇▇▇▇▇ Guaranty Trust Company of
New York 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
VI.
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.
57
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 III, 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 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
58
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-Syndication Agents Not Liable. Nothing in
this Agreement shall impose upon any Co-Syndication Agent, in such capacity,
any duties or responsibilities whatsoever.
ARTICLE VIII
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:
(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, the obligations of the Banks to
59
make CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended.
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 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 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
60
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 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
61
(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 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 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
62
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 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 IX
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 telex, when such telex
63
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 II or Article VIII 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
64
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 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.
65
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 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 Article VIII 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
66
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
$2,500. 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 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 2.15.
(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
67
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 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.
68
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 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
Address: Woodland Park
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sr. Vice President &
Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
69
Commitments
$125,000,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Sanjeanette ▇▇▇▇▇▇
Title: Vice President
$120,000,000 THE BANK OF NOVA SCOTIA
By /s/ J. R. Trimble
Title: Senior Relationship
Manager
$110,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
$110,000,000 THE CHASE MANHATTAN BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$110,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Agent
$110,000,000 NATIONSBANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
70
$ 90,000,000 ABN-AMRO BANK N.V.
By /s/ ▇▇▇▇▇▇▇ OR ▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
$ 90,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
$ 90,000,000 THE TORONTO-DOMINION BANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager Credit
Administration
$ 90,000,000 UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
$ 85,000,000 RABOBANK NEDERLAND
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇ ▇▇▇▇▇
Title: Vice President & Manager
71
$ 70,000,000 BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By /s/ J. ▇▇▇▇▇▇ ▇▇▇
Title: Vice President & Manager
$ 55,000,000 CIBC INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
$ 50,000,000 THE YASUDA TRUST & BANKING
COMPANY LTD.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
$ 47,500,000 COMERICA BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Account Officer
$ 42,500,000 THE INDUSTRIAL BANK OF JAPAN
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
$ 42,500,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
$ 37,500,000 DRESDNER BANK AG
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
72
$ 30,000,000 FIRST BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Commercial Banking Officer
$ 30,000,000 THE FUJI BANK, LIMITED
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President &
Manager
$ 30,000,000 KREDIETBANK N.V.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$ 30,000,000 BANCA MONTE DEI PASCHI DI
SIENA, S.p.A.
By /s/ ▇. ▇. ▇▇▇▇▇▇
Title: First Vice President &
Deputy General Manager
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$ 30,000,000 NORDDEUTSCHE LANDESBANK GIROZENTRALE
New York Branch and/or Cayman
Island Branch
By /s/ ▇. ▇. ▇▇▇▇▇▇
Title: Senior Vice President
By /s/ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
73
$ 25,000,000 BANCO BILBAO VIZCAYA, S.A.
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
$ 25,000,000 BANKERS TRUST COMPANY
By /s/ ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
$ 25,000,000 BAYERISCHE LANDESBANK GIROZENTRALE
By /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President &
Manager Lending Division
$ 25,000,000 BANQUE NATIONALE DE PARIS
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
$ 25,000,000 CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
$ 25,000,000 CRESTAR BANK
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
74
$ 25,000,000 FLEET NATIONAL BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
$ 25,000,000 ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
$ 25,000,000 MELLON BANK N.A.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
$ 25,000,000 THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., NEW YORK BRANCH
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Deputy General Manager
$ 25,000,000 THE SAKURA BANK, LTD
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
$ 25,000,000 THE TOKAI BANK, LTD
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Deputy General Manager
75
$ 22,500,000 COMMERZBANK AG, NEW YORK BRANCH
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Cashier
$ 22,500,000 NATIONAL WESTMINSTER BANK PLC
New York Branch
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NATIONAL WESTMINSTER BANK PLC
Nassau Branch
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$ 22,500,000 ROYAL BANK OF CANADA
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
$ 20,000,000 BANCA CASSA DI RISPARMIO DI
TORINO S.p.A.
By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Title: Vice President
$ 20,000,000 THE DAI-ICHI KANGYO BANK, LTD.
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
$ 20,000,000 UNITED STATES NATIONAL BANK OF OREGON
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
76
$ 17,500,000 BANK AUSTRIA AG
By /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
By /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
$ 17,500,000 SUNTRUST BANK, CENTRAL FLORIDA, NA
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
$ 15,000,000 THE TOYO TRUST AND BANKING COMPANY,
LIMITED, NEW YORK BRANCH
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
$ 15,000,000 BANCO DI NAPOLI, S.p.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: First Vice President
$ 12,500,000 BANK OF MONTREAL
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
$ 12,500,000 THE SANWA BANK, LIMITED
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
77
$ 12,500,000 SIGNET BANK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
$ 12,500,000 UNION BANK OF CALIFORNIA, N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$ -0- BANK ONE, ARIZONA, NA
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
$ -0- BARCLAYS BANK PLC
By /s/ Sydney ▇. ▇▇▇▇▇▇
Title: Director
$ -0- CREDIT SUISSE
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member of Senior
Management
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Associate
$ -0- DEUTSCHE BANK AG
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Associate
78
$ -0- DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
$ -0- LLOYDS BANK PLC
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
$ -0- NATIONAL CITY BANK
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President &
Regional Director
$ -0- THE NORTHERN TRUST COMPANY
By /s/ ▇▇▇▇▇ ▇. Love
Title: Commercial Banking Officer
$ -0- SOCIETE GENERALE
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
$ -0- THE SUMITOMO BANK, LTD
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Joint General Manager
79
$ -0- ▇▇▇▇▇ FARGO, N.A.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
$ -0- WESTDEUTSCHE LANDESBANK GIROZENTRALE
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇ ▇▇▇
Title: Associate
____________________
Total Commitments
$ 2,167,500,000
====================
80
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Arranger and Co-Syndication Agent
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA,
as Co-Syndication Agent
By /s/ J.R. Trimble
Title: Senior Relationship
Manager
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative
Agent
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan Department
Telex number: 420230
81
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin" and "Facility Fee Rate"
for any day are the respective percentages set forth below in the applicable
row under the column corresponding to the Status that exists on such day:
Level Level Level
Status I II III
Euro-Dollar 0.16 0.2% 0.225%
Margin
If Utiliza-
tion is equal to or
less than
50%
If Utiliza- 0.16 0.325% 0.35%
tion exceeds
50%
CD Margin 0.285% 0.325% 0.35%
If Utiliza-
tion is
equal to or
less than
50%
If Utiliza- 0.285 0.45% 0.475%
tion exceeds
50%
Facility Fee 0.09% 0.1% 0.125%
Rate
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Status" exists at any date if, at such date, the Borrower 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
82
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
unsecured long-term debt, would be rated) at least AA- (or any equivalent
rating which is used in lieu thereof) by S&P or Aa3 (or any equivalent
rating which is used in lieu thereof) by ▇▇▇▇▇'▇.
"Level II 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
unsecured long-term debt, would be rated) at least A+ (or any equivalent
rating which is used in lieu thereof) or higher by S&P or A1 (or any
equivalent rating which is used in lieu thereof) or higher by ▇▇▇▇▇'▇ and
Level I Status does not exist at such date.
"Level III Status" exists at any date if, at such date,
neither Level I Status nor Level II Status exists.
"Status" refers to the determination of which of Level I
Status, Level II Status or Level III Status exists at any date.
"Utilization" means at any date the percentage equivalent
of a fraction (i) the numerator of which is the aggregate outstanding
principal amount of the Loans at such date, after giving effect to any
borrowing or payment on such date, and (ii) the denominator of which is the
aggregate amount of the Commitments at such date, after giving effect to any
reduction of the Commitments on such date. For purposes of this Schedule,
if for any reason any Loans remain outstanding after termination of the
Commitments, the Utilization for each date on or after the date of such
termination shall be deemed to be greater than 50%.
The credit ratings to be utilized for purposes of this
Pricing Schedule shall be, so long as the Borrower's unsecured Medium Term
Notes are rated by either S&P or ▇▇▇▇▇'▇, those assigned to the Borrower's
unsecured Medium Term Notes. The rating in effect at any date is that in
effect at the close of business on such date.
83
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 ▇▇▇▇▇▇ Guaranty Trust Company of New York, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇.
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 Five-Year
Revolving Credit Agreement dated as of February 28, 1995 and amended and
restated as of November 26, 1996 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 (as the same may be amended from time to
time, the "Revolving Credit Agreement").
84
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:
85
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Type of Principal Maturity Notation Made
Date Loan Loan Repaid Date By
86
EXHIBIT B
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, The First
National Bank of Chicago and National Rural Utilities Cooperative Finance
Corporation dated ___________, 19__.
UNITED STATES OF AMERICA
Date___________, 19__ By_______________________
Administrator of Rural
Electrification
Administration
87
EXHIBIT C
Form of Money Market Quote Request
[Date]
To: ▇▇▇▇▇▇ Guaranty Trust Company of New York
(the "Agent")
From: National Rural Utilities
Cooperative Finance Corporation (the "Borrower")
Re: Five-Year Revolving Credit Agreement (the "Revolving Credit
Agreement") dated as of February 28, 1995 and amended and restated
as of November 26, 1996 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
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 Amount2 Interest Period3
$
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:
2 Amount must be $25,000,000 or a larger multiple of $1,000,000.
3 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.
88
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 Five-Year Revolving Credit
Agreement dated as of February 28, 1995 and amended and
restated as of November 26, 1996 among the Borrower, the
Banks party thereto, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and The
Bank of Nova Scotia, as Co-Syndication Agents, and the
undersigned, as Administrative Agent, we are pleased on
behalf of the Borrower to invite you to submit Money Market
Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
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].
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
89
EXHIBIT E
Form of Money Market Quote
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, 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)
90
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions set forth in
the Five-Year Revolving Credit Agreement dated as of February 28, 1995 and
amended and restated as of November 26, 1996 among the Borrower, the Banks
listed on the signature pages thereof, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and The
Bank of Nova Scotia, as Co-Syndication Agents, and yourselves, as
Administrative Agent, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in part.
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%).
91
EXHIBIT F
OPINION OF ▇▇▇▇ ▇▇▇ LIST, ESQ.,
GENERAL COUNSEL OF THE BORROWER
November __, 1996
I am General Counsel of the National Rural Utilities
Cooperative Finance Corporation (the "Borrower") and am delivering this
opinion pursuant to the Five-Year Revolving Credit Agreement (the
"Agreement") dated as of February 28, 1995 and amended and restated as of
November 26, 1996 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. 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),
92
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,
93
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.
94
EXHIBIT G
OPINION OF MILBANK, TWEED, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
SPECIAL COUNSEL FOR THE BORROWER
November 26, 1996
We have acted as special counsel to National Rural Utilities
Cooperative Finance Corporation (the "Borrower") in connection with the
Five-Year Revolving Credit Agreement dated as of February 28, 1995 and
amended and restated as of November 26, 1996 (the "Agreement") among the
Borrower, the Banks party thereto, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and The Bank
of Nova Scotia, as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company
of New York, in its capacity 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:
95
(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 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 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.
96
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.
97
6. 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.
7. 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.
8. 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,
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL
FOR THE AGENT
November 26, 1996
To the Banks and the Agent
Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have participated in the preparation of the Five- Year
Revolving Credit Agreement dated as of February 28, 1995 and amended and
restated (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 "Banks"), ▇.▇. ▇▇▇▇▇▇
Securities Inc. and The Bank of Nova Scotia, as Co-Syndication Agents, and
▇▇▇▇▇▇ Guaranty Trust Company of New York, 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 conducte
d 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:
1. The execution, delivery and performance by the Borrower
of the Credit Agreement and the Notes are within the Borrower's corporate
powers and have been duly authorized by all necessary corporate action.
99
2. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and the Notes 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 giving the foregoing opinion, (i) 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 and (ii) we have relied,
without independent investigation, as to all matters governed by the laws
of the District of Columbia, upon the opinion of ▇▇▇▇ ▇▇▇ List, Esq.,
General Counsel of the Borrower, dated the date hereof, a copy of which
has been delivered to you.
Very truly yours,
100
EXHIBIT I
EXTENSION AGREEMENT
[Date]
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative Agent
under the Credit Agreement
referred to below
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
Effective as of [effective date], the undersigned hereby agree to
extend the Termination Date as now in effect under the Five-Year Credit
Agreement dated as of February 28, 1995 and amended and restated as of
November 26, 1996, as further amended and supplemented from time to time
(the "Credit Agreement"), among National Rural Utilities Cooperative
Finance Corporation, the Banks listed therein, ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and The Bank of Nova Scotia, as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, 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:
101
[NAME OF BANK]
By____________________________
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By____________________________
Title:
Agreed and accepted:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
102
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 ▇▇▇▇▇▇ GUARANTY
TRUST COMPANY OF NEW YORK, 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 Five-Year Credit Agreement dated as of
February 28, 1995 and amended and restated as of November 26, 1996
(the "Credit Agreement") among the Borrower, the Assignor and the other
Banks party thereto, as Banks, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and The Bank
of Nova Scotia, as Co-Syndication Agents, and ▇▇▇▇▇▇ Guaranty Trust Company
of New York, 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.
103
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
104
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:
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇, as Administrative Agent
By__________________________
Title: