EXHIBIT 10.4
$550,000,000
THREE-YEAR
CREDIT AGREEMENT
dated as of
August 20, 2001
among
Duke Capital Corporation,
The Banks Listed Herein,
Bank of America, N.A.,
as Syndication Agent
and
The Chase Manhattan Bank,
as Administrative Agent
--------------------------------------
▇.▇. ▇▇▇▇▇▇ Securities Inc. and
Banc of America Securities LLC
Joint Lead Arrangers and
Joint Bookrunners
First Union National Bank,
Bank One, NA and
Citibank, N.A.
Documentation Agents
TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions .................................................. 1
SECTION 1.02. Accounting Terms and Determinations .......................... 13
SECTION 1.03. Types of Borrowings .......................................... 13
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend .......................................... 13
SECTION 2.02. Notice of Committed Borrowings ............................... 15
SECTION 2.03. Bid Rate Borrowings .......................................... 16
SECTION 2.04. Notice to Banks; Funding of Loans ............................ 20
SECTION 2.05. Registry; Notes .............................................. 21
SECTION 2.06. Maturity of Loans; Effect of Cash Collateralization of
Letters of Credit .......................................... 21
SECTION 2.07. Interest Rates ............................................... 22
SECTION 2.08. Fees ......................................................... 24
SECTION 2.09. Optional Termination or Reduction of Commitments ............. 24
SECTION 2.10. Method of Electing Interest Rates ............................ 25
SECTION 2.11. Mandatory Termination of Commitments ......................... 26
SECTION 2.12. Optional Prepayments ......................................... 26
SECTION 2.13. General Provisions as to Payments ............................ 27
SECTION 2.14. Funding Losses ............................................... 28
SECTION 2.15. Computation of Interest and Fees ............................. 28
SECTION 2.16. Letters of Credit ............................................ 28
SECTION 2.17. Regulation D Compensation .................................... 31
SECTION 2.18. Takeout of Swingline Loans ................................... 32
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness ................................................ 33
SECTION 3.02. Borrowings and Issuance of Letters of Credits ................ 35
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Organization and Power ....................................... 36
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention .............................................. 36
SECTION 4.03. Binding Effect ............................................... 36
SECTION 4.04. Financial Information ........................................ 36
SECTION 4.05. Regulation U ................................................. 37
SECTION 4.06. Litigation ................................................... 37
SECTION 4.07. Compliance with Laws ......................................... 37
SECTION 4.08. Taxes ........................................................ 38
SECTION 4.09. Public Utility Holding Company Act ........................... 38
ARTICLE 5
COVENANTS
SECTION 5.01. Information .................................................. 38
SECTION 5.02. Payment of Taxes ............................................. 40
SECTION 5.03. Maintenance of Property; Insurance ........................... 40
SECTION 5.04. Maintenance of Existence ..................................... 41
SECTION 5.05. Compliance with Laws ......................................... 41
SECTION 5.06. Books and Records ............................................ 41
SECTION 5.07. Maintenance of Ownership of Principal Subsidiaries ........... 42
SECTION 5.08. Negative Pledge .............................................. 42
SECTION 5.09. Consolidations, Mergers and Sales of Assets .................. 43
SECTION 5.10. Use of Proceeds .............................................. 44
SECTION 5.11. Transactions with Affiliates ................................. 44
SECTION 5.12. Indebtedness/Capitalization Ratio ............................ 44
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default ............................................ 44
SECTION 6.02. Notice of Default ............................................ 47
SECTION 6.03. Cash Cover ................................................... 47
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization ................................ 47
SECTION 7.02. Administrative Agent and Affiliates .......................... 47
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SECTION 7.03. Action by Administrative Agent ............................... 47
SECTION 7.04. Consultation with Experts .................................... 48
SECTION 7.05. Liability of Administrative Agent ............................ 48
SECTION 7.06. Indemnification .............................................. 48
SECTION 7.07. Credit Decision .............................................. 48
SECTION 7.08. Successor Administrative Agent ............................... 49
SECTION 7.09. Administrative Agent's Fee ................................... 49
SECTION 7.10. Documentation Agents ......................................... 49
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair ..... 50
SECTION 8.02. Illegality ................................................... 50
SECTION 8.03. Increased Cost and Reduced Return ............................ 51
SECTION 8.04. Taxes ........................................................ 52
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans .... 55
SECTION 8.06. Substitution of Bank; Termination Option ..................... 55
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices ...................................................... 56
SECTION 9.02. No Waivers ................................................... 57
SECTION 9.03. Expenses; Indemnification .................................... 57
SECTION 9.04. Sharing of Set-offs .......................................... 57
SECTION 9.05. Amendments and Waivers ....................................... 58
SECTION 9.06. Successors and Assigns ....................................... 58
SECTION 9.07. Collateral ................................................... 60
SECTION 9.08. Confidentiality .............................................. 60
SECTION 9.09. Governing Law; Submission to Jurisdiction .................... 61
SECTION 9.10. Counterparts; Integration .................................... 61
SECTION 9.11. WAIVER OF JURY TRIAL ......................................... 61
PRICING SCHEDULE
SCHEDULE I - Duke Capital Corporation Credit Facilities (Being Replaced by
this Agreement and the Related Agreement)
EXHIBIT A - Note
EXHIBIT B - Form of Bid Rate Quote Request
EXHIBIT C - Form of Invitation for Bid Rate Quotes
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EXHIBIT D - Form of Bid Rate Quote
EXHIBIT E-1 - Opinion of General Counsel of the Borrower
EXHIBIT E-2 - Opinion of Special Counsel for the Borrower
EXHIBIT F - Opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Special Counsel for the
Administrative Agent
EXHIBIT G - Assignment and Assumption Agreement
EXHIBIT H - Extension Agreement
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THREE-YEAR
CREDIT AGREEMENT
THREE-YEAR CREDIT AGREEMENT dated as of August 20, 2001 among DUKE
CAPITAL CORPORATION, the BANKS listed on the signature pages hereof, BANK OF
AMERICA, N.A., as Syndication Agent, and THE CHASE MANHATTAN BANK, as
Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Additional Bank" means any financial institution that becomes a Bank
for purposes hereof in connection with the replacement of a Bank pursuant to
Section 8.06.
"Administrative Agent" means The Chase Manhattan Bank in its capacity
as administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Bank.
"Affiliate" means, as to any Person (the "specified Person") (i) any
Person that directly, or indirectly through one or more intermediaries, controls
the specified Person (a "Controlling Person") or (ii) any Person (other than the
specified Person or a Subsidiary of the specified Person) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. Unless otherwise
specified, "Affiliate" means an Affiliate of the Borrower.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of
its
Euro-Dollar Loans, its Euro-Dollar Lending Office, (iii) in the case of its Bid
Rate Loans, its Bid Rate Lending Office and (iv) in the case of its Swingline
Loans, its Swingline Lending Office.
"Approved Officer" means the president, a vice president, the
treasurer, an assistant treasurer or the controller of the Borrower or such
other representative of the Borrower as may be designated by any one of the
foregoing with the consent of the Administrative Agent.
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank or other financial institution listed on the
signature pages hereof, each Additional Bank, 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 (i) a Syndicated Loan which bears interest at
the Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice
of Interest Rate Election or the provisions of Article 8 or (ii) an overdue
amount which was a Base Rate Loan immediately before it became overdue.
"Bid Rate (General)" has the meaning set forth in Section 2.03(d).
"Bid Rate (General) Auction" means a solicitation of Bid Rate Quotes
setting forth Bid Rates (General) pursuant to Section 2.03.
"Bid Rate (General) Loan" means a loan made or to be made by a Bank
pursuant to a Bid Rate (General) Auction.
"Bid Rate (Indexed) Auction" means a solicitation of Bid Rate Quotes
setting forth Bid Rate (Indexed) Margins based on the London Interbank Offered
Rate pursuant to Section 2.03.
"Bid Rate (Indexed) Loan" means a loan made or to be made by a Bank
pursuant to a Bid Rate (Indexed) Auction (including such a loan bearing interest
at the Base Rate pursuant to Section 8.01).
"Bid Rate (Indexed) Margin" has the meaning set forth in Section
2.03(d).
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"Bid Rate 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 Bid Rate Lending Office by notice to the Borrower and
the Administrative Agent; provided that any Bank may from time to time by notice
to the Borrower and the Administrative Agent designate separate Bid Rate Lending
Offices for its Bid Rate (Indexed) Loans, on the one hand, and its Bid Rate
(General) Loans, on the other hand, in which case all references herein to the
Bid Rate Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"Bid Rate Loan" means a Bid Rate (Indexed) Loan or a Bid Rate (General)
Loan.
"Bid Rate Quote" means an offer by a Bank to make a Bid Rate Loan in
accordance with Section 2.03.
"Borrower" means Duke Capital Corporation, a Delaware corporation, and
its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Commitment" means (i) with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite the name of such Bank on
the signature pages hereof, and (ii) with respect to each Additional Bank or
Assignee which becomes a bank pursuant to Sections 8.06 and 9.06(c), the amount
of the Commitment thereby assumed by it, in each case as such amount may from
time to time be reduced pursuant to Section 2.09, 2.11, 8.06 or 9.06(c) or
increased pursuant to Section 8.06 or 9.06(c).
"Commitment Termination Date" means, for each Bank, August 20, 2004, as
such date may be extended from time to time with respect to such Bank pursuant
to Section 2.01 (d) or, if such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day.
"Committed Loan" means a Syndicated Loan or a Swingline Loan.
"Consolidated Capitalization" means the sum of (i) Consolidated
Indebtedness, (ii) consolidated common stockholders' equity as would appear on a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles, (iii) the
aggregate liquidation preference of preferred stocks (other than preferred
stocks subject to mandatory redemption or repurchase) of the Borrower and its
Consolidated Subsidiaries upon involuntary liquidation, (iv) the aggregate
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outstanding amount of all Equity Preferred Securities and (v) minority interests
as would appear on a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries prepared in accordance with generally accepted
accounting principles.
"Consolidated Indebtedness" means, at any date, all Indebtedness of
Borrower and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Consolidated Subsidiary" means, for any Person, at any date any
Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such statements
were prepared as of such date; unless otherwise specified "Consolidated
Subsidiary" means a Consolidated Subsidiary of the Borrower.
"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 would,
unless cured or waived, become an Event of Default.
"Documentation Agent" means each of First Union National Bank, Bank
One, NA and Citibank, N.A., in its capacity as a documentation agent in
connection with the credit facility provided under this Agreement.
"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 Administrative Agent.
"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, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing,
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distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equity Preferred Securities" means any securities, however
denominated, (i) issued by the Borrower or any Consolidated Subsidiary of the
Borrower, (ii) that are not subject to mandatory redemption or the underlying
securities, if any, of which are not subject to mandatory redemption, (iii) that
are perpetual or mature no less than 20 years from the date of issuance, (iv)
the indebtedness issued in connection with which, including any guaranty, is
subordinated in right of payment to the unsecured and unsubordinated
indebtedness of the issuer of such indebtedness or guaranty and (v) the terms of
which permit the deferral of interest or distributions thereon to date occurring
after the first anniversary of the later of (A) the Commitment Termination Date
and (B) the "Termination Date" under the Related Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, 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 Administrative Agent.
"Euro-Dollar Loan" means (i) a Syndicated Loan which bears interest at
a Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election or (ii) an overdue amount which was a
Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Margin" means the applicable rate per annum determined in
accordance with the Pricing Schedule.
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"Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.07(b) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal London offices of The
Chase Manhattan Bank and Bank of America, N.A.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.17.
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreements" means the credit facilities identified in
Schedule I hereto, as amended and in effect on the Effective Date.
"Facility Fee Rate" has the meaning set forth in the Pricing Schedule.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to The Chase Manhattan Bank (or its
successor as Administrative Agent) on such day on such transactions as
determined by the Administrative Agent.
"Final Maturity Date" means, for each Bank, the first anniversary of
its Commitment Termination Date or, if such day is not a Euro-Dollar Business
Day, the next preceding Euro-Dollar Business Day; provided that the Final
Maturity Date for all Banks shall be no later than August 20, 2007.
"Fixed Rate Loans" means Euro-Dollar Loans, Swingline Loans or Bid Rate
Loans (excluding Swingline Loans or Bid Rate (Indexed) Loans bearing interest at
the Base Rate) or any combination of the foregoing.
"Group of Loans" means at any time a group of Loans consisting of (i)
all Loans which are Base Rate Loans at such time or (ii) all Euro-Dollar Loans
having the same Interest Period at such time, provided that, if a Committed Loan
of any particular Bank is converted to or made as a Base Rate Loan pursuant to
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Article 8, such Loan shall be included in the same Group or Groups of Loans from
time to time as it would have been if it had not been so converted or made.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all indebtedness of
such Person for the deferred purchase price of property or services purchased,
(iii) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired, (iv) all
indebtedness under leases which shall have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases in respect
of which such Person is liable as lessee, (v) the face amount of all outstanding
letters of credit issued for the account of such Person (other than letters of
credit relating to indebtedness included in Indebtedness of such Person pursuant
to another clause of this definition) and, without duplication, the unreimbursed
amount of all drafts drawn thereunder, (vi) indebtedness secured by any Lien on
property or assets of such Person, whether or not assumed (but in any event not
exceeding the fair market value of the property or asset), (vii) all direct
guarantees of Indebtedness referred to above of another Person, (viii) all
amounts payable in connection with mandatory redemptions or repurchases of
preferred stock and (ix) any obligations of such Person (in the nature of
principal or interest) in respect of acceptances or similar obligations issued
or created for the account of such Person.
"Interest Period" means: (1) with respect to each Euro-Dollar Loan, the
period commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two, three or six, or, if deposits of a corresponding
maturity are generally available in the London interbank market, nine or twelve,
months thereafter, as the Borrower may elect in such notice; 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; and
(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 end on the last Euro-Dollar Business Day of a
calendar month;
(2) with respect to each Swingline Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing and ending
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such number of days thereafter (but not more than 10 Euro-Dollar Business Days)
as the Borrower may elect in such notice; provided that 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;
(3) with respect to each Bid Rate (Index) Loan, the period commencing
on the date of borrowing specified in the applicable Notice of Borrowing and
ending such 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; and
(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 end on the last Euro-Dollar Business Day of a
calendar month; and
(4) with respect to each Bid Rate (General) Loan, the period commencing
on the date of borrowing specified in the applicable Notice of Borrowing and
ending such number of days thereafter (but not less than 7 days) as the Borrower
may elect in accordance with Section 2.03; provided that 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
provided further that: (x) no Interest Period applicable to any Loan of any Bank
which begins before such Bank's Commitment Termination Date may end after such
Bank's Commitment Termination Date; and (y) no Interest Period applicable to any
Loan of any Bank may end after such Bank's Final Maturity Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment Grade Status" exists as to any Person at any date if all
senior long-term unsecured debt securities of such Person outstanding at such
date which had been rated by S&P or Moody's are rated BBB- or higher by S&P or
Baa3 or higher by Moody's, as the case may be.
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"Issuing Bank" means The Chase Manhattan Bank and any other Bank that
may agree to issue letters of credit hereunder, in each case as issuer of a
Letter of Credit hereunder.
"Letter of Credit" means a letter of credit to be issued or issued
hereunder by the Issuing Bank in accordance with Section 2.16.
"Letter of Credit Liabilities" means, for any Bank and at any time,
such Bank's ratable participation in the sum of (x) the amounts then owing by
the Borrower in respect of amounts drawn under Letters of Credit and (y) the
aggregate amount then available for drawing under all Letters of Credit.
"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 Committed Loan or a Bid Rate Loan and "Loans" means
Committed Loans or Bid Rate Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(b).
"Material Debt" means Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount exceeding $150,000,000.
"Material Plan" has the meaning set forth in Section 6.01(i).
"Material Subsidiary" means at any time any Subsidiary of the Borrower
having, together with its Subsidiaries, consolidated assets in excess of 10% of
the total assets of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Notes" means promissory notes of the Borrower, in the form required by
Section 2.05, evidencing the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued hereunder.
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"Notice of Borrowing" means a Notice of Committed Borrowing (as defined
in Section 2.02) or a Notice of Bid Rate Borrowing (as defined in Section
2.03(f)).
"Notice of Interest Rate Election" has the meaning set forth in Section
2.10(b).
"Notice of Issuance" has the meaning set forth in Section 2.16(b).
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"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 at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Internal Revenue Code and is either (i) maintained by a
member of the ERISA Group for employees of a member of the ERISA Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions.
"Pricing Schedule" means the Pricing Schedule attached hereto.
"Prime Rate" means the rate of interest publicly announced by The Chase
Manhattan Bank in New York City from time to time as its Prime Rate. Each change
in the Prime Rate shall be effective from and including the day such change is
publicly announced.
"Principal Subsidiary" means each of Texas Eastern Transmission Limited
Partnership, Algonquin Gas Transmission Company, PanEnergy Corp, and their
respective successors.
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"Quarterly Payment Date" means the first Domestic Business Day of each
January, April, July and October.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.16 to reimburse the
Issuing Banks for amounts paid by the Issuing Banks in respect of any one or
more drawings under Letters of Credit.
"Related Agreement" means the 364-Day Credit Agreement dated as of the
date hereof among the Borrower, the banks and other financial institutions and
Agents from time to time parties thereto, as amended and in effect from time to
time.
"Required Banks" means at any time Banks (i) having at least 51 % of
the sum of the aggregate amount of the Commitments or (ii) if all the
Commitments shall have been terminated, holding at least 51% of the sum of the
aggregate unpaid principal amount of the Loans and the aggregate Letter of
Credit Liabilities.
"Revolving Credit Loan" means a loan made or to be made by a Bank
pursuant to Section 2.01(a); provided that, if any such loan or loans (or
portions thereof) are combined or subdivided pursuant to a Notice of Interest
Rate Election, the term "Revolving Credit Loan" shall refer to the combined
principal amount resulting from such combination or to each of the separate
principal amounts resulting from such subdivision, as the case may be.
"Revolving Credit Period" means, with respect to any Bank, the period
from and including the Effective Date to but not including its Commitment
Termination Date.
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Subsidiary" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
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"Substantial Assets" means assets sold or otherwise disposed of in a
single transaction or a series of related transactions representing 25% or more
of the consolidated assets of the Borrower and its Consolidated Subsidiaries,
taken as a whole.
"Swingline Bank" means The Chase Manhattan Bank and its successors.
"Swingline Lending Office" means, as to the Swingline Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Swingline Lending Office)
or such other office as such Bank may hereafter designate as its Swingline
Lending Office by notice to the Borrower and the Administrative Agent.
"Swingline Loan" means a loan made by the Swingline Bank pursuant to
Section 2.01(c).
"Swingline Takeout Loan" means a Base Rate Loan made pursuant to
Section 2.18.
"Syndicated Loan" means a Loan made by a Bank pursuant to Section
2.01(a) or 2.01(b); provided that, if any loan or loans (or portions thereof)
are combined or subdivided pursuant to a Notice of Interest Rate Election, the
term "Syndicated Loan" shall refer to the combined principal amount resulting
from such combination or to each of the separate principal amounts resulting
from such subdivision, as the case may be.
"Term Loan" means a loan made or to be made by a Bank pursuant to
Section 2.01(b); provided that, if any such loan or loans (or portions thereof)
are combined or subdivided pursuant to a Notice of Interest Rate Election, the
term "Term Loan" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting from
such subdivision, as the case may be.
"United States" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all benefits under
such Plan exceeds (ii) the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of a member of the ERISA Group to the PBGC or the Plan under Title IV of ERISA.
12
"Unrefunded Swingline Loans" has the meaning set forth in Section
2.18(b).
"Utilization" has the meaning set forth in the Pricing Schedule.
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 consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 2 on a single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to the pricing of
Loans comprising such Borrowing (e.g., a "Fixed Rate Borrowing" is a Euro-Dollar
Borrowing, a Swingline Borrowing or a Bid Rate Borrowing (excluding any such
Borrowing consisting of Swingline Loans or Bid Rate (Indexed) Loans bearing
interest at the Base Rate), and a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro Dollar Loans) or by reference to the provisions of Article 2
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their Commitments, while a "Bid Rate Borrowing" is a Borrowing under Section
2.03 in which the Bank participants are determined on the basis of their bids in
accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) Revolving Credit Loans. During
its 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 subsection from time to time in amounts such that the aggregate
principal amount of Revolving Credit Loans by such Bank, together with its
Letter of Credit Liabilities and its participating interests in any Unrefunded
Swingline Loans, at any one time outstanding shall not exceed the amount of its
Commitment. Each Borrowing under this subsection (other than a Swingline Takeout
Borrowing) shall be in an aggregate principal amount of $10,000,000 or any
larger multiple of
13
$1,000,000 (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(b)) and shall be made from the several
Banks ratably in proportion to their respective Commitments in effect on the
date of Borrowing; provided that, if the Interest Period selected by the
Borrower for a Borrowing would otherwise end after the Commitment Termination
Dates of some but not all Banks, the Borrower may in its Notice of Committed
Borrowing elect not to borrow from those Banks whose Commitment Termination
Dates fall prior to the end of such Interest Period. Within the foregoing
limits, the Borrower may borrow under this subsection (a), or to the extent
permitted by Section 2.12, prepay Loans and reborrow at any time during the
Revolving Credit Periods under this subsection (a).
(b) Term Loans. Each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make a loan to the Borrower on its Commitment
Termination Date in an amount up to but not exceeding the amount of its
Commitment; provided that no Bank shall be obligated to make a loan pursuant to
this subsection if any Commitment is extended on such date pursuant to Section
2.01(d). Each Borrowing under this Section 2.01 (b) shall be made from the
several Banks having the same Commitment Termination Date ratably in proportion
to their respective Commitments.
(c) Swingline Loans. From time to time prior to its Commitment
Termination Date, the Swingline Bank agrees, on the terms and conditions set
forth in this Agreement, to make loans to the Borrower pursuant to this
subsection from time to time in amounts such that (i) the aggregate principal
amount of all Loans at such time outstanding together with the aggregate amount
of all Letter of Credit Liabilities at such time shall not exceed the aggregate
amount of all Commitments and (ii) the aggregate principal amount of Swingline
Loans at any time outstanding shall not exceed $100,000,000. Within the
foregoing limits, the Borrower may borrow under this subsection, repay or, to
the extent permitted by Section 2.12, prepay Loans and reborrow at any time;
provided that the proceeds of a Swingline Borrowing may not be used, in whole or
in part, to refund any prior Swingline Borrowing. Each Borrowing under this
subsection shall be in an aggregate principal amount of $10,000,000 or any
larger multiple of $1,000,000 (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.02).
(d) Extension of Commitments. On no more than two separate occasions,
the Borrower may, upon not less than 45 days but no earlier than 60 days notice
prior to the then current Commitment Termination Dates to the Administrative
Agent (which shall notify each Bank of receipt of such request), propose to
extend the Commitment Termination Dates for an additional one-year period
measured from the Commitment Termination Dates then in effect. Each
14
Bank shall endeavor to respond to such request, whether affirmatively or
negatively (such determination in the sole discretion of such Bank), by notice
to the Borrower and the Administrative Agent not more than 45 days nor less than
28 days prior to such Bank's Commitment Termination Date. Subject to the
execution by the Borrower, the Administrative Agent and such Banks of a duly
completed Extension Agreement in substantially the form of Exhibit H, the
Commitment Termination Date applicable to the Commitment of each Bank so
affirmatively notifying the Borrower and the Administrative Agent shall be
extended for the period specified above; provided that no Commitment Termination
Date of any Bank shall be extended unless Banks having Commitments in an
aggregate amount equal to at least the greater of (i) 66 2/3% in aggregate
amount of the Commitments in effect at the time any such extension is requested
and (ii) the sum of the aggregate principal amount of the Loans outstanding at
such time plus the aggregate amount of the Letter of Credit Liabilities at such
time, after giving effect to any repayment of Loans and/or termination of
Letters of Credit on such date, shall have elected so to extend their
Commitments. Any Bank which does not give such notice to the Borrower and the
Administrative Agent shall be deemed to have elected not to extend as requested,
and the Commitment of each non-extending Bank shall terminate on its Commitment
Termination Date determined without giving effect to such requested extension.
The Borrower may, in accordance with Section 8.06, designate another bank or
other financial institution (which may be, but need not be, an extending Bank)
to replace a non-extending Bank.
SECTION 2.02. Notice of Committed Borrowings. The Borrower shall give
the Administrative 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
or Swingline Borrowing and (y) 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 Swingline 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 Swingline
Loans or Syndicated Loans,
(d) in the case of a Syndicated Borrowing, whether the Loans comprising
such Borrowing are to bear interest initially at the Base Rate or a Euro-Dollar
Rate; and
15
(e) in the case of a Euro-Dollar Borrowing or a Swingline Borrowing,
the duration of the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
SECTION 2.03. Bid Rate Borrowings. (a) The Bid Rate Option. In addition
to Committed Borrowings pursuant to Section 2.01, the Borrower may, as set forth
in this Section, request the Banks at any time prior to their respective
Commitment Termination Dates to make offers to make Bid Rate 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) Bid Rate Quote Request. When the Borrower wishes to request offers
to make Bid Rate Loans under this Section, it shall transmit to the
Administrative Agent by telex or facsimile transmission a Bid Rate Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:00 A.M. (New York City time) on (x) the fourth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a Bid Rate (Indexed)
Auction or (y) the Domestic Business Day next preceding the date of Borrowing
proposed therein, in the case of a Bid Rate (General) Auction (or, in either
case, such other time or date as the Borrower and the Administrative Agent shall
have mutually agreed and shall have notified to the Banks not later than the
date of the Bid Rate Quote Request for the first Bid Rate (Indexed) Auction or
Bid Rate (General) Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day,
(ii) the aggregate amount of such Borrowing, which shall be
$10,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Bid Rate Quotes requested are to set forth a
Bid Rate (Indexed) or a Bid Rate (General) Rate or both such rates.
The Borrower may request offers to make Bid Rate Loans for more than one
Interest Period in a single Bid Rate Quote Request.
(c) Invitation for Bid Rate Quotes. Promptly upon receipt of a Bid Rate
Quote Request, the Administrative Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Bid Rate Quotes substantially in the
form
16
of Exhibit C hereto, which shall constitute an invitation by the Borrower to
each Bank to submit Bid Rate Quotes offering to make the Bid Rate Loans to which
such Bid Rate Quote Request relates in accordance with this Section.
(d) Submission and Contents of Bid Rate Quotes. (i) Each Bank may
submit a Bid Rate Quote containing an offer or offers to make Bid Rate Loans in
response to any Invitation for Bid Rate Quotes. Each Bid Rate Quote must comply
with the requirements of this subsection (d) and must be submitted to the
Administrative 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 Bid Rate (Indexed) Auction or (y) 9:30 A.M. (New York City
time) on the proposed date of Borrowing, in the case of a Bid Rate (General)
Auction (or, in either case, such other time or date as the Borrower and the
Administrative Agent shall have mutually agreed and shall have notified to the
Banks not later than the date of the Bid Rate Quote Request for the first Bid
Rate (Indexed) Auction or Bid Rate (General) Auction for which such change is to
be effective); provided that Bid Rate Quotes submitted by the Administrative
Agent (or any affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Administrative 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 Bid Rate (Indexed) Auction or (y) 9:15 A.M. (New York City time) on the
proposed date of Borrowing, in the case of a Bid Rate (General) Auction. Subject
to Articles 3 and 6, any Bid Rate Quote so made shall be irrevocable except with
the written consent of the Administrative Agent given on the instructions of the
Borrower.
(ii) Each Bid Rate Quote shall be in substantially the form of Exhibit
D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Bid Rate 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
$5,000,000 or a larger multiple of $1,000,000 and (y) may not exceed
the principal amount of Bid Rate Loans for each Interest Period for
which offers were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Bid Rate Loans for which
offers being made by such quoting Bank may be accepted,
17
(C) in the case of a Bid Rate (Indexed) Auction, the margin
above or below the applicable London Interbank Offered Rate (the "Bid
Rate (Indexed) Margin") offered for each such Bid Rate Loan, expressed
as a percentage (specified to the nearest 1/10,000th of 1%) to be added
to or subtracted from such base rate,
(D) in the case of a Bid Rate (General) Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Bid Rate (General)") offered for each such Bid Rate Loan, and
(E) the identity of the quoting Bank.
A Bid Rate 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 Bid
Rate Quotes.
(iii) Any Bid Rate Quote shall be disregarded if:
(A) it is not substantially in conformity with Exhibit D
hereto or does not specify all of the information required by
subsection 2.03(d)(ii);
(B) it contains qualifying, conditional or similar language
beyond that contemplated by Exhibit D;
(C) it proposes terms other than or in addition to those set
forth in the applicable Invitation for Bid Rate Quotes;
(D) it arrives after the time set forth in subsection
2.03(d)(i); or
(E) the Commitment Termination Date of the Bank submitting
such Bid Rate Quote falls prior to the last day of the requested
Interest Period for which such Bank offers to make a Bid Rate Loan.
(e) Notice to Borrower. The Administrative Agent shall promptly but in
no event later than 11:00 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 Bid Rate
(Indexed) Auction or (y) the proposed date of Borrowing, in the case of a Bid
Rate (General) Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall have
notified to the
18
Banks not later than the date of the Bid Rate Quote Request for the first Bid
Rate (Indexed) Auction or Bid Rate (General) Auction for which such change is to
be effective), notify the Borrower of the terms (x) of any Bid Rate Quote
submitted by a Bank that is in accordance with subsection (d) and (y) of any Bid
Rate Quote that amends, modifies or is otherwise inconsistent with a previous
Bid Rate Quote submitted by such Bank with respect to the same Bid Rate Quote
Request. Any such subsequent Quote shall be disregarded by the Administrative
Agent unless such subsequent Quote is submitted solely to correct a manifest
error in such former Quote. The Administrative Agent's notice to the Borrower
shall specify (A) the aggregate principal amount of Loans for which offers have
been received for each Interest Period specified in the related Bid Rate Quote
Request, (B) the respective principal amounts and Bid Rate (Indexed) Margins or
Bid Rate (General) Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Bid Rate Loans for which offers
in any single Bid Rate Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 11:00 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 Bid Rate (Indexed) Auction or (y) the
proposed date of Borrowing, in the case of a Bid Rate (General) Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not later
than the date of the Bid Rate Quote Request for the first Bid Rate (Indexed)
Auction or Bid Rate (General) Auction for which such change is to be effective),
the Borrower shall notify the Administrative 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 Bid Rate Borrowing") shall
specify the aggregate principal amount of offers for each Interest Period that
are accepted. The Borrower may accept any Bid Rate Quote in whole or in part;
provided that:
(i) the aggregate principal amount of each Bid Rate Borrowing
may not exceed the applicable amount set forth in the related Bid Rate
Quote Request,
(ii) the principal amount of each Bid Rate Borrowing must be
$10,000,000 or a larger multiple of $1,000,000, and
(iii) acceptance of offers may only be made on the basis of
ascending Bid Rate (Indexed) Margins or Bid Rate (General) Rates, as
the case may be.
(g) Allocation by Administrative Agent. If offers are made by two more
Banks with the same Bid Rate (Indexed) Margins or Bid Rate (General), as the
19
case may be, for a greater aggregate principal amount than the amount in respect
of which such offers are accepted for the related Interest Period, the principal
amount of Bid Rate Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Banks as nearly as possible (in
multiples of $1,000,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers. Determinations by
the Administrative Agent of the amounts of Bid Rate 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 Administrative 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
Administrative Agent at its address specified in or pursuant to Section 9.01.
Unless the Administrative Agent determines that any applicable condition
specified in Article 3 has not been satisfied, the Administrative Agent will
make the funds so received from the Banks available to the Borrower at the
Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsections (b) of this Section 2.04 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and, if such Bank
shall not have made such payment within two Domestic Business Days of demand
therefor, the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, a rate per annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section 2.07 and (ii) in
the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
20
(d) The failure of any Bank to make the Loan to be made by it as part
of any Borrowing shall not relieve any other Bank of its obligation, if any,
hereunder to make a Loan on the date of such Borrowing, but no Bank shall be
responsible for the failure of any other Bank to make a Loan to be made by such
other Bank.
SECTION 2.05. Registry; Notes. (a) The Administrative Agent shall
maintain a register (the "Register") on which it will record the Commitment of
each Bank, each Loan made by such Bank and each repayment of any Loan made by
such Bank. Any such recordation by the Administrative Agent on the Register
shall be conclusive, absent manifest error. Failure to make any such
recordation, or any error in such recordation, shall not affect the Borrower's
obligations hereunder.
(b) The Borrower hereby agrees that, promptly upon the request of any
Bank at any time, the Borrower shall deliver to such Bank a duly executed Note,
in substantially the form of Exhibit A hereto, payable to the order of such Bank
and representing the obligation of the Borrower to pay the unpaid principal
amount of the Loans made to the Borrower by such Bank, with interest as provided
herein on the unpaid principal amount from time to time outstanding.
(c) Each Bank shall record the date, amount 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 each Bank receiving a Note pursuant to this
Section, if such Bank so elects in connection with any transfer or enforcement
of its Note, may 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 such Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Such 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; Effect of Cash Collateralization of
Letters of Credit. (a) Each Revolving Credit Loan made by any Bank shall mature,
and the principal amount thereof shall be due and payable together with accrued
interest thereon, on the Commitment Termination Date of such Bank.
(b) The Term Loans of each Bank shall mature, and the principal amount
thereof shall be due and payable, together with accrued interest thereon, on the
Final Maturity Date of such Bank.
(c) Each Swingline Loan included in any Swingline Borrowing and each
Bid Rate Loan included in any Bid Rate Borrowing shall mature, and the principal
21
amount thereof shall be due and payable (together with interest accrued
thereon), on the last day of the Interest Period applicable to such Borrowing.
(d) If any provision of any debt instrument or other agreement or
instrument binding upon the Borrower, including without limitation this
Agreement, would be contravened by any deposit required to cash collateralize
any letter of credit obligations under any other debt instrument or other
agreement or instrument, the Borrower shall either (x) obtain a waiver of such
provision, (y) prepay the debt incurred under such debt instrument and terminate
such debt instrument or (z) make other arrangements satisfactory to the Required
Banks; it being understood and agreed that the risk of any such contravention
shall be borne solely by the Borrower and not by the Banks and shall in no event
constitute a defense available to the Borrower for nonperformance of its
obligations hereunder.
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 quarterly in arrears on each
Quarterly Payment Date, at maturity and on the date of termination of the
Commitments in their entirety. Any overdue principal of or overdue 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 1 % plus the Base Rate for such
day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
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.
The "London Interbank Offered Rate" applicable to any Interest Period
means the rate appearing on Page 3750 of the Telerate Service Company (or on any
successor or substitute page of such service, or any successor to or substitute
for such service, providing rate quotations comparable to those currently
provided on such page of the Telerate Service, as may be nominated by the
British Bankers' Association for purposes of providing quotations of interest
rates applicable to dollar deposits in the London interbank market) as of 11:00
A.M. (London time) two Euro-Dollar Business Days prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity comparable
to such Interest Period. In the event that such rate is not so available at such
time for any reason, then the "London Interbank Offered Rate" for such Interest
Period shall be the
22
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 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. If any
Euro-Dollar Reference Bank does not furnish a timely quotation, the
Administrative Agent shall determine the relevant interest rate on the basis of
the quotation furnished by the remaining Euro-Dollar Reference Bank or, if none
of such quotations is available on a timely basis, the provisions of Section
8.01 shall apply.
(c) Any overdue principal of or overdue 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 1% plus the higher of (i) the sum of the
Euro-Dollar Margin for such day plus the London Interbank Offered Rate
applicable to such Loan at the date such payment was due and (ii) the Base Rate
for such day.
(d) Each Swingline Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the Base Rate for such day or such other
rate as may be from time to time determined by mutual agreement between the
Swingline Bank and the Borrower. Interest on each Swingline Loan shall be
payable at the maturity of such Loan. Any overdue principal of or interest on
any Swingline Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 1% plus the Base Rate for such day.
(e) Subject to Section 8.01(a), each Bid Rate (Indexed) 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(b) as if each Euro-Dollar Reference Bank were to participate in the related
Bid Rate (Indexed) Borrowing ratably in proportion to its Commitment) plus (or
minus) the Bid Rate (Indexed) Margin quoted by the Bank making such Loan in
accordance with Section 2.03. Each Bid Rate (General) Loan shall bear interest
on the outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Bid Rate (General) 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.
23
Any overdue principal of or overdue interest on any Bid Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 1 % plus the Base Rate for such day.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the participating Banks by telecopy, telex or cable
of each rate of interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error unless the Borrower raises an
objection thereto within five Domestic Business Days after receipt of such
notice.
SECTION 2.08. Fees. (a) Facility Fee. The Borrower shall pay to the
Administrative Agent for the account of each Bank a facility fee at the Facility
Fee Rate (determined daily in accordance with the Pricing Schedule). Such
facility fee shall accrue (i) from and including the Effective Date to but
excluding such Bank's Commitment Termination Date, on the daily average
aggregate amount of such Bank's Commitment (whether used or unused) and (ii)
from and including such Bank's Commitment Termination Date to but excluding the
date such Bank's Loans and Letter of Credit Liabilities shall be repaid in their
entirety, on the daily average aggregate outstanding principal amount of such
Bank's Committed Loans and Letter of Credit Liabilities.
(b) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent (i) for the account of the Banks ratably a letter of credit fee accruing
daily on the aggregate amount then available for drawing under all outstanding
Letters of Credit at a rate per annum equal to the then applicable Euro-Dollar
Margin (assuming for this purpose Utilization exceeding 66 2/3%) and (ii) for
the account of each Issuing Bank a letter of credit fronting fee accruing daily
on the aggregate amount then available for drawing under all Letters of Credit
issued by such Issuing Bank at a rate per annum of 0.10% (or such other rate as
may be mutually agreed from time to time by the Borrower and such Issuing Bank).
(c) Payments. Accrued fees under this Section for the account of any
Bank shall be payable quarterly in arrears on each Quarterly Payment Date and
upon such Bank's Commitment Termination Date and Final Maturity Date (and, if
later, the date the Loans and Letter of Credit Liabilities of such Bank shall be
repaid in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no Loans or
Letter of Credit Liabilities are outstanding at such time, or (ii) ratably
reduce from time to time by an aggregate amount of $10,000,000 or any larger
multiple of
24
$1,000,000 the aggregate amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans and Letter of Credit Liabilities.
SECTION 2.10. Method of Electing Interest Rates. (a) The Loans included
in each Syndicated Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the
provisions of Article 8 and the last sentence of this subsection (a)), as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period,
subject to Section 2.14 in the case of any such conversion or
continuation effective on any day other than the last day of the then
current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans, provided that (i) such portion
is allocated ratably among the Loans comprising such Group and (ii) the portion
to which such notice applies, and the remaining portion to which it does not
apply, are each $10,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of subsection 2.10(a) above;
(iii) if the Loans comprising such Group are to be converted,
the new type of Loans and, if the Loans being converted are to be Fixed
Rate
25
Loans, the duration of the next succeeding Interest Period applicable
thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of the term "Interest Period".
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to subsection 2.10(a) above, the Administrative Agent
shall notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by the Borrower. If no Notice of Interest Rate Election
is timely received prior to the end of an Interest Period for any Group of
Loans, the Borrower shall be deemed to have elected that such Group of Loans be
converted to Base Rate Loans as of the last day of such Interest Period.
(d) An election by the Borrower to change or continue the rate of
interest applicable to any Group of Loans pursuant to this Section shall not
constitute a "Borrowing" subject to the provisions of Section 3.02.
SECTION 2.11. Mandatory Termination of Commitments. The Commitment of
each Bank shall terminate on such Bank's Commitment Termination Date, and any
Revolving Credit Loans of such Bank then outstanding (together with accrued
interest thereon) shall be due and payable on such date.
SECTION 2.12. Optional Prepayments. (a) The Borrower may (1) upon
notice to the Administrative Agent not later than 11:00 A.M. (New York City
time) on any Domestic Business Day prepay on such Domestic Business Day any
Group of Base Rate Loans, any Swingline Borrowing or any Bid Rate Borrowing
bearing interest at the Base Rate pursuant to Section 8.01 (a) and (ii) upon at
least three Euro-Dollar Business Days' notice to the Administrative Agent not
later than 11:00 A.M. (New York City time) prepay any Group of Euro-Dollar
Loans, in each case in whole at any time, or from time to time in part in
amounts aggregating $5,000,000 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 and together with any additional amounts payable pursuant to
Section 2.14. Each such optional prepayment shall be applied to prepay ratably
the Loans of the several Banks included in such Group or Borrowing.
(b) Except as provided in subsection 2.12(a), the Borrower may not
prepay all or any portion of the principal amount of any Bid Rate Loan prior to
the
26
maturity thereof except with the express written consent of the Bank holding
such Bid Rate Loan.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents thereof
and of such Bank's share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.13. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 1:00 P.M. (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.01. The
Administrative Agent will promptly distribute to each Bank in like funds its
ratable share of each such payment received by the Administrative Agent for the
account of the Banks. Whenever any payment of principal of, or interest on, the
Base Rate Loans, Swingline Loans or Letter of Credit Liabilities 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 Bid Rate Loans shall
be due on a day which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar Business Day. If
the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative 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 Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each 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 Administrative
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 Administrative Agent, at
the Federal Funds Rate.
27
SECTION 2.14. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Euro-Dollar Loan is
converted to a Base Rate Loan or continued as a Euro-Dollar Loan for a new
Interest Period (pursuant to Article 2, 6 or 8 or otherwise) on any day other
than the last day of an Interest Period applicable thereto, or if the Borrower
fails to borrow, prepay, convert or continue any Fixed Rate Loans after notice
has been given to any Bank in accordance with Section 2.04(a), 2.10(c) or
2.12(c), the Borrower shall reimburse each Bank within 15 days after demand for
any resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or conversion or
failure to borrow, prepay, convert or continue, provided that such Bank shall
have delivered to the Borrower a certificate setting forth in reasonable detail
the calculation of the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.
SECTION 2.15. Computation of Interest and Fees. Interest based on the
Prime Rate and facility 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
and Letter of Credit fees shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed (including the first day but
excluding the last day).
SECTION 2.16. Letters of Credit. (a) Subject to the terms and
conditions hereof, each Issuing Bank agrees to issue Letters of Credit hereunder
from time to time before its Commitment Termination Date upon the request of the
Borrower; provided that, immediately after each Letter of Credit is issued (i)
the aggregate amount of the Letter of Credit Liabilities plus the aggregate
outstanding amount of all Loans shall not exceed the aggregate amount of the
Commitments and (ii) the aggregate Letter of Credit Liabilities shall not exceed
$300,000,000. Upon the date of issuance by the Issuing Bank of a Letter of
Credit, the Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each Bank, and each Bank shall be deemed, without
further action by any party hereto, to have purchased from the Issuing Bank, a
participation in such Letter of Credit and the related Letter of Credit
Liabilities in the proportion its Commitment bears to the aggregate Commitments;
provided that if the scheduled Commitment Termination Date of a Bank falls prior
to the expiry date of a Letter of Credit then outstanding and the Commitments of
the other Banks are extended on such date in accordance with Section 2.01(d),
such Bank's participation in such Letter of Credit shall terminate on its
Commitment Termination Date, and the participations of the other Banks therein
shall be redetermined pro rata in
28
proportion to their Commitments after giving effect to the termination of the
Commitment of such former Bank.
(b) The Borrower shall give the Issuing Bank notice at least three
Domestic Business Days prior to the requested issuance of a Letter of Credit
specifying the date such Letter of Credit is to be issued, and describing the
terms of such Letter of Credit and the nature of the transactions to be
supported thereby (such notice, including any such notice given in connection
with the extension of a Letter of Credit, a "Notice of Issuance"). Upon receipt
of a Notice of Issuance, the Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Bank of the contents thereof and of the amount of such Bank's participation in
such Letter of Credit. The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article 3, be
subject to the conditions precedent that such Letter of Credit shall be in such
form and contain such terms as shall be reasonably satisfactory to the Issuing
Bank and that the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as the Issuing Bank
shall have reasonably requested. The Borrower shall also pay to the Issuing Bank
for its own account issuance, drawing, amendment and extension charges in the
amounts and at the times as agreed between the Borrower and the Issuing Bank.
The extension or renewal of any Letter of Credit shall be deemed to be an
issuance of such Letter of Credit, and if any Letter of Credit contains a
provision pursuant to which it is deemed to be extended unless notice of
termination is given by the Issuing Bank, the Issuing Bank shall timely give
such notice of termination unless it has theretofore timely received a Notice of
Issuance and the other conditions to issuance of a Letter of Credit have also
theretofore been met with respect to such extension.
(c) No Letter of Credit shall have a term extending or extendible
beyond the first anniversary of the Commitment Termination Date of the
applicable Issuing Bank.
(d) Upon receipt from the beneficiary of any applicable Letter of
Credit of any notice of a drawing under such Letter of Credit, the Issuing Bank
shall notify the Administrative Agent and the Administrative Agent shall
promptly notify the Borrower and each other Bank as to the amount to be paid as
a result of such demand or drawing and the payment date. The Borrower shall be
irrevocably and unconditionally obligated forthwith to reimburse the Issuing
Bank for any amounts paid by the Issuing Bank upon any drawing under any Letter
of Credit, without presentment, demand, protest or other formalities of any
kind. All such amounts paid by the Issuing Bank and remaining unpaid by the
Borrower shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the Base Rate for such day plus, if such amount remains
unpaid for more than
29
two Domestic Business Days, 1%. In addition, each Bank will pay to the
Administrative Agent, for the account of the applicable Issuing Bank,
immediately upon such Issuing Bank's demand at any time during the period
commencing after such drawing until reimbursement therefor in full by the
Borrower, an amount equal to such Bank's ratable share of such drawing (in
proportion to its participation therein), together with interest on such amount
for each day from the date of the Issuing Bank's demand for such payment (or, if
such demand is made after 12:00 Noon (New York City time) on such date, from the
next succeeding Domestic Business Day) to the date of payment by such Bank of
such amount at a rate of interest per annum equal to the Federal Funds Rate. The
Issuing Bank will pay to each Bank ratably all amounts received from the
Borrower for application in payment of its reimbursement obligations in respect
of any Letter of Credit, but only to the extent such Bank has made payment to
the Issuing Bank in respect of such Letter of Credit pursuant hereto.
(e) The obligations of the Borrower and each Bank under subsection
2.16(d) above shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the following
circumstances:
(i) the use which may be made of the Letter of Credit by, or
any acts or omission of, a beneficiary of a Letter of Credit (or any
Person for whom the beneficiary may be acting);
(ii) the existence of any claim, set-off, defense or other
rights that the Borrower may have at any time against a beneficiary of
a Letter of Credit (or any Person for whom the beneficiary may be
acting), the Banks (including the Issuing Bank) or any other Person,
whether in connection with this Agreement or the Letter of Credit or
any document related hereto or thereto or any unrelated transaction;
(iii) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect whatsoever;
(iv) payment under a Letter of Credit to the beneficiary of
such Letter of Credit against presentation to the Issuing Bank of a
draft or certificate that does not comply with the terms of the Letter
of Credit; provided that the determination by the Issuing Bank to make
such payment shall not have been the result of its willful misconduct
or gross negligence; or
30
(v) any other act or omission to act or delay of any kind by
any Bank (including the Issuing Bank), the Administrative Agent or any
other Person or any other event or circumstance whatsoever that might,
but for the provisions of this subsection (v), constitute a legal or
equitable discharge of the Borrower's or the Bank's obligations
hereunder.
(f) The Borrower hereby indemnifies and holds harmless each Bank
(including the Issuing Bank) and the Administrative Agent from and against any
and all claims, damages, losses, liabilities, costs or expenses which such Bank
or the Administrative Agent may incur (including, without limitation, any
claims, damages, losses, liabilities, costs or expenses which the Issuing Bank
may incur by reason of or in connection with the failure of any other Bank to
fulfill or comply with its obligations to such Issuing Bank hereunder (but
nothing herein contained shall affect any rights the Borrower may have against
such defaulting Bank)), and none of the Banks (including the Issuing Bank) nor
the Administrative Agent nor any of their officers or directors or employees or
agents shall be liable or responsible, by reason of or in connection with the
execution and delivery or transfer of or payment or failure to pay under any
Letter of Credit, including without limitation any of the circumstances
enumerated in subsection 2.16(e) above, as well as (i) any error, omission,
interruption or delay in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, (ii) any loss or delay in the transmission
of any document required in order to make a drawing under a Letter of Credit,
and (iii) any consequences arising from causes beyond the control of the Issuing
Bank, including without limitation any government acts, or any other
circumstances whatsoever in making or failing to make payment under such Letter
of Credit; provided that the Borrower shall not be required to indemnify the
Issuing Bank for any claims, damages, losses, liabilities, costs or expenses,
and the Borrower shall have a claim for direct (but not consequential) damage
suffered by it, to the extent found by a court of competent jurisdiction to have
been caused by (x) the willful misconduct or gross negligence of the Issuing
Bank in determining whether a request presented under any Letter of Credit
complied with the terms of such Letter of Credit or (y) the Issuing Bank's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of the Letter of
Credit. Nothing in this subsection 2.16(f) is intended to limit the obligations
of the Borrower under any other provision of this Agreement. To the extent the
Borrower does not indemnify the Issuing Bank as required by this subsection, the
Banks agree to do so ratably in accordance with their Commitments.
SECTION 2.17. Regulation D Compensation. In the event that a Bank is
required to maintain reserves of the type contemplated by the definition of
"Euro-Dollar Reserve Percentage", such Bank may require the Borrower to pay,
31
contemporaneously with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Bank at a rate per
annum determined by such Bank up to but not exceeding the excess of (i) (A) the
applicable London Interbank Offered Rate divided by (B) one minus the
Euro-Dollar Reserve Percentage over (ii) the applicable London Interbank Offered
Rate. Any Bank wishing to require payment of such additional interest (x) shall
so notify the Borrower and the Administrative Agent, in which case such
additional interest on the Euro-Dollar Loans of such Bank shall be payable to
such Bank at the place indicated in such notice with respect to each Interest
Period commencing at least three Euro-Dollar Business Days after the giving of
such notice and (y) shall notify the Borrower at least three Euro-Dollar
Business Days prior to each date on which interest is payable on the Euro-Dollar
Loans of the amount then due it under this Section. Each such notification shall
be accompanied by such information as the Borrower may reasonably request.
"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).
SECTION 2.18. Takeout of Swingline Loans. (a) In the event that any
Swingline Borrowing shall not be repaid in full at or prior to the maturity
thereof the Administrative Agent shall, on behalf of the Borrower (the Borrower
hereby irrevocably directing and authorizing the Administrative Agent so to act
on its behalf), give a Notice of Borrowing requesting the Banks, including the
Swingline Bank, to make Base Rate Loans on the maturity date of such Swingline
Borrowing in an aggregate amount equal to the unpaid principal amount of such
Swingline Borrowing. Each Bank will make the proceeds of such Base Rate Loans
available to the Administrative Agent for the account of the Swingline Bank on
such date in accordance with Section 2.04. The proceeds of such Base Rate
Borrowing shall be immediately applied to repay such Swingline Borrowing.
(b) If, for any reason, a Base Rate Borrowing may not be (as determined
by the Administrative Agent in its sole discretion), or is not, made pursuant to
subsection (a) above to refund Swingline Loans as required by said clause, then,
effective on the date such Borrowing would otherwise have been made, each Bank
severally, unconditionally and irrevocably agrees that it shall purchase an
32
undivided participating interest in such Swingline Loans ("Unrefunded Swingline
Loans") in an amount equal to the amount of the Loan which otherwise would have
been made by such Bank pursuant to subsection (a), which purchase shall be
funded by the time such Loan would have been required to be funded pursuant to
Section 2.04 by transfer to the Administrative Agent, for the account of the
Swingline Bank, in immediately available funds, of the amount of its
participation.
(c) Whenever, at any time after the Swingline Bank has received from
any Bank payment in full for such Bank's participating interest in a Swingline
Loan, the Swingline Bank (or the Administrative Agent on its behalf) receives
any payment on account thereof, the Swingline Bank (or the Administrative Agent,
as the case may be) will promptly distribute to such Bank its participating
interest in such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank's participating
interest was outstanding and funded); provided, however, that in the event that
such payment is subsequently required to be returned, such Bank will return to
the Swingline Bank (or the Administrative Agent, as the case may be) any portion
thereof previously distributed by the Swingline Bank (or the Administrative
Agent, as the case may be) to it.
(d) Each Bank's obligation to purchase and fund participating interests
pursuant to this Section shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation: (i) any setoff,
counterclaim, recoupment, defense or other right which such Bank or the Borrower
may have against the Swingline Bank, or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or the failure to
satisfy any of the conditions specified in Article 3; (iii) any adverse change
in the condition (financial or otherwise) of the Borrower; (iv) any breach of
this Agreement by the Borrower or any Bank; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective on
the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 9.05):
(a) receipt by the Administrative Agent of counterparts hereof signed
by each of the parties hereto (or, in the case of any party as to which an
executed
33
counterpart shall not have been received, receipt by the Administrative Agent in
form satisfactory to it of telegraphic, telecopy, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party);
(b) receipt by the Administrative Agent of (i) an opinion of the
general counsel of the Borrower, substantially in the form of Exhibit E-1 hereto
and (ii) an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., special counsel for
the Borrower, substantially in the form of Exhibit E-2 hereto, and, in each
case, covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(c) receipt by the Administrative Agent of an opinion of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel for the Administrative Agent, 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;
(d) receipt by the Administrative Agent of a certificate signed by a
Vice President, the Treasurer, an Assistant Treasurer or the Controller of the
Borrower, dated the Effective Date, to the effect set forth in clauses (c) and
(d) of Section 3.02;
(e) receipt by the Administrative Agent of all documents it may have
reasonably requested prior to the date hereof relating to the existence of the
Borrower, the corporate authority for and the validity of this Agreement and the
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent; and
(f) receipt by the Administrative Agent of evidence satisfactory to it
of the payment of all principal of and interest on any loans outstanding under,
and all accrued commitment fees under, the Existing Credit Agreements and the
cancellation or the expiration of any letter of credit issued thereunder;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
August 20, 2001. The Administrative 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. The Borrower and the Banks party to the Existing Credit
Agreements, comprising the "Required Banks" as defined therein, hereby agree
that (i) the commitments of the lenders under the Existing Credit Agreements
shall terminate in their entirety immediately and automatically upon the
effectiveness of this Agreement, without further action by any party to the
Existing Credit Agreements, (ii) all accrued fees under the Existing Credit
Agreements shall be due and payable at such time and (iii) subject to the
funding
34
loss indemnities in the Existing Credit Agreements, the Borrower may prepay any
and all loans outstanding thereunder on the date of effectiveness of this
Agreement.
SECTION 3.02. Borrowings and Issuance of Letters of Credits. The
obligation of any Bank to make a Loan on the occasion of any Borrowing and the
obligation of the Issuing Bank to issue (or renew or extend the term of) any
Letter of Credit is subject to the satisfaction of the following conditions;
provided that if such Borrowing is a Swingline Takeout Borrowing, only the
conditions set forth in clauses 3.02(a) and 3.02(b) must be satisfied:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03 or receipt by the Issuing Bank of a Notice of
Issuance as required by Section 2.16(b), as the case may be;
(b) the fact that, immediately after such Borrowing or issuance of such
Letter of Credit (and, in the case of any Swingline Borrowing, at any time prior
to the tenth day following the maturity thereof), (i) the sum of the aggregate
outstanding principal amount of the Loans and the aggregate amount of Letter of
Credit Liabilities will not exceed the aggregate amount of the Commitments, (ii)
the aggregate outstanding principal amount of Swingline Loans will not exceed
$100,000,000 and (iii) the aggregate amount of Letter of Credit Liabilities will
not exceed $300,000,000;
(c) the fact that, immediately after such Borrowing or issuance of such
Letter of Credit, no Default shall have occurred and be continuing;
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except the representations and warranties set forth
in Sections 4.04(c) and 4.06) shall be true on and as of the date of such
Borrowing or issuance of such Letter of Credit;
(e) the fact that the Borrower's senior unsecured long-term debt
securities are rated at least BBB, Baa2 or the equivalent by at least two of
S&P, ▇▇▇▇▇'▇ and Fitch, Inc.; and
(f) in the case of a Term Loan Borrowing, receipt by the Administrative
Agent for the account of each Bank making a Term Loan pursuant to Section 2.01
(b) hereof of a term loan fee equal to 0.10% of the principal amount of such
Bank's Term Loan.
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed to
be a representation and warranty by the Borrower on the date of such Borrowing
35
as to the facts specified in clauses (b), (c), (d) and (e) of this Section
(unless such Borrowing is a Swingline Takeout Borrowing, in which case the
Borrower shall be deemed to represent and warrant as to the facts specified in
clause (b) of this Section).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Organization and Power. The Borrower is duly organized,
validly existing and in good standing under the laws of Delaware and has all
requisite powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and is
duly qualified to do business in each jurisdiction where such qualification is
required, except where the failure so to qualify would not have a material
adverse effect on the business, financial position or results of operations of
the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or by-laws of the Borrower or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Borrower or result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Material Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and each Note, if and when executed and
delivered in accordance with this Agreement, will constitute a valid and binding
obligation 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 4.04. Financial Information. (a) The consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of December 31, 2000 and
the related consolidated statements of income, cash flows, capitalization and
retained earnings for the fiscal year then ended, reported on by Deloitte &
Touche,
36
copies of which have been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such fiscal
year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of June 30, 2001 and the related unaudited
consolidated statements of income and cash flows for the six months then ended,
copies of which have been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and changes in financial position for such six-month period (subject
to normal year-end adjustments and the absence of footnotes).
(c) Since December 31, 2000, there has been no material adverse change
in the business, financial position or results of operations of the Borrower and
its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Regulation U. The Borrower and its Material Subsidiaries
are not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the Board of Governors of the Federal Reserve System) and no proceeds of any
Borrowing or issuance of Letters of Credit by the Borrower will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock. Not more than 25% of the value of
the assets of the Borrower and its Material Subsidiaries is represented by
margin stock.
SECTION 4.06. Litigation. Except as disclosed in the reports referred
to in Section 4.04, there is no action, suit or proceeding pending against, or
to the knowledge of the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official which would be likely to be decided adversely to
Borrower or such Subsidiary and, as a result, have a material adverse effect
upon the business, consolidated financial position or results of operations of
the Borrower and its Consolidated Subsidiaries, considered as a whole, or which
in any manner draws into question the validity of this Agreement or any Note.
SECTION 4.07. Compliance with Laws. The Borrower and each Material
Subsidiary is in compliance in all material respects with all applicable laws,
ordinances, rules, regulations and requirements of governmental authorities
37
(including, without limitation, ERISA and Environmental Laws) except where (i)
non-compliance would not have a material adverse effect on the business,
financial position or results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole, or (ii) the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
SECTION 4.08. Taxes. The Borrower and its Material Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Material Subsidiary except (i) where nonpayment would not have a material
adverse effect on the business, financial position or results of operations of
the Borrower and its Consolidated Subsidiaries, considered as a whole or (ii)
where the same are contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of the Borrower and its Material
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.
SECTION 4.09. Public Utility Holding Company Act. The Borrower is not a
holding company under the Public Utility Holding Company Act of 1935, as
amended.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable hereunder remains unpaid or any Letter of Credit
Liabilities remain outstanding:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income, cash flows, capitalization and
retained earnings for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on in a
manner consistent with the requirements of the Securities and Exchange
Commission by Deloitte & Touche or other independent public accountants of
nationally recognized standing;
38
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income and
cash flows 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 certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by an Approved Officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of an
Approved Officer of the Borrower stating whether any Default exists on the date
of such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto;
(d) within five days after any officer of the Borrower with
responsibility relating thereto obtains knowledge of any Default, if such
Default is then continuing, a certificate of an Approved Officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(e) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(f) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Material Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Material Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Material Plan is
in reorganization, is insolvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose material liability (other than for premiums under Section 4007
of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Material Plan under Section 4041 (c) of ERISA,
a copy of such
39
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Material Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any Material
Plan or makes any amendment to any Material Plan which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is required or
proposes to take; and
(g) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
Information required to be delivered pursuant to these Sections
5.01(a), 5.01 (b) and 5.01 (e) shall be deemed to have been delivered on the
date on which the Borrower provides notice to the Banks that such information
has been posted on the Securities and Exchange Commission website on the
Internet at ▇▇▇.▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇ or at another website identified in such
notice and accessible by the Banks without charge; provided that (i) such notice
may be included in a certificate delivered pursuant to Section 5.01 (c) and (ii)
the Borrower shall deliver paper copies of the information referred to in
Sections 5.01(a), 5.01 (b) and 5.01 (e) to any Bank which requests such
delivery.
SECTION 5.02. Payment of Taxes. The Borrower will pay and discharge,
and will cause each Material Subsidiary to pay and discharge, at or before
maturity, all their tax liabilities, except where (i) nonpayment would not have
a material adverse effect on the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries, considered as a
whole, or (ii) the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each Material Subsidiary to
maintain, in accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Material Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each of its Material Subsidiaries
to, maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance on
all their respective properties in at least such amounts and against at least
such risks (and with such risk retention) as are usually insured against in the
same
40
general area by companies of established repute engaged in the same or a similar
business; provided that self-insurance by the Borrower or any such Material
Subsidiary shall not be deemed a violation of this covenant to the extent that
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Material Subsidiary operates
self-insure; and will furnish to the Banks, upon request from the Administrative
Agent, information presented in reasonable detail as to the insurance so
carried.
SECTION 5.04. Maintenance of Existence. The Borrower will preserve,
renew and keep in full force and effect, and will cause each Material Subsidiary
to preserve, renew and keep in full force and effect their respective corporate
or other legal existence and their respective rights, privileges and franchises
material to the normal conduct of their respective businesses; provided that
nothing in this Section 5.04 shall prohibit the termination of any right,
privilege or franchise of the Borrower or any Material Subsidiary or of the
corporate or other legal existence of any Material Subsidiary or the change in
form of organization of the Borrower or any Material Subsidiary if the Borrower
in good faith determines that such termination or change is in the best interest
of the Borrower, is not materially disadvantageous to the Banks and, in the case
of a change in the form of organization of the Borrower, the Administrative
Agent has consented thereto.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and cause
each Material Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, ERISA and Environmental Laws) except
where (i) noncompliance would not have a material adverse effect on the
business, financial position or results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or (ii) the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Books and Records. The Borrower will keep, and will cause
each Material Subsidiary to keep, proper books of record and account in which
full, true and correct entries shall be made of all financial transactions in
relation to its business and activities in accordance with its customary
practices; and will permit, and will cause each Material Subsidiary to permit,
representatives of any Bank at such Bank's expense (accompanied by a
representative of the Borrower, if the Borrower so desires) to visit any of
their respective properties, to examine any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants, all
upon such reasonable notice, at such reasonable times and as often as may
reasonably be desired.
41
SECTION 5.07. Maintenance of Ownership of Principal Subsidiaries. The
Borrower will maintain ownership of all common equity interests of each
Principal Subsidiary, directly or indirectly through Subsidiaries, free and
clear of all Liens, provided that any Principal Subsidiary may merge or
consolidate with or into the Borrower or another wholly-owned Subsidiary.
SECTION 5.08. Negative Pledge. The Borrower will not create, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired by it,
except:
(a) Liens granted by the Borrower existing on the date of this
Agreement securing Indebtedness outstanding on the date of this Agreement in an
aggregate principal amount not exceeding $100,000,000;
(b) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower and not created in
contemplation of such event;
(c) any Lien existing on any asset prior to the acquisition thereof by
the Borrower and not created in contemplation of such acquisition;
(d) any Lien on any asset securing Indebtedness incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with or within 180
days after the acquisition thereof,
(e) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Indebtedness is not
increased and is not secured by any additional assets,
(f) Liens for taxes, assessments or other governmental charges or
levies not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with generally accepted accounting
principles;
(g) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law, created in the ordinary
course of business and for amounts not past due for more than 60 days or which
are being contested in good faith by appropriate proceedings which are
sufficient to prevent imminent foreclosure of such Liens, are promptly
instituted and diligently conducted and with respect to which adequate reserves
or other
42
appropriate provisions are being maintained in accordance with generally
accepted accounting principles;
(h) Liens incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations or arising as a result of progress payments under
government contracts;
(i) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and other restrictions, charges or
encumbrances (whether or not recorded) affecting the use of real property;
(j) Liens with respect to judgments and attachments which do not result
in an Event of Default;
(k) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other obligations arising in the
ordinary course of business;
(1) other Liens including Liens imposed by Environmental Laws arising
in the ordinary course of its business which (i) do not secure Indebtedness,
(ii) do not secure any obligation in an amount exceeding $100,000,000 at any
time at which Investment Grade Status does not exist as to the Borrower and
(iii) do not in the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business; and
(m) Liens not otherwise permitted by the foregoing clauses of this
Section securing obligations in an aggregate principal or face amount at any
date not to exceed $500,000,000.
SECTION 5.09. Consolidations, Mergers and Sales of Assets. The Borrower
will not (i) consolidate or merge with or into any other Person or (ii) sell,
lease or otherwise transfer, directly or indirectly, Substantial Assets to any
Person (other than a Subsidiary); provided that the Borrower may merge with
another Person if the Borrower is the corporation surviving such merger and,
after giving effect thereto, no Default shall have occurred and be continuing.
43
SECTION 5.10. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Borrower for its general corporate purposes,
including liquidity support for outstanding commercial paper and acquisitions.
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.
SECTION 5.11. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, or participate in, or effect,
any transaction with, any Affiliate unless all such transactions between the
Borrower and its Subsidiaries on the one hand and any Affiliate on the other,
taken in the aggregate and not individually, shall be on an arms-length basis on
terms no less favorable to the Borrower or such Subsidiary than could have been
obtained from a third party who was not an Affiliate; provided that the
foregoing provisions of this Section shall not prohibit the Borrower and each
Subsidiary from (i) declaring or paying any lawful dividend so long as, after
giving effect thereto, no Default shall have occurred and be continuing, (ii)
issuing and maintaining letters of credit, guaranties and sureties as contingent
obligations on behalf of Affiliates, or (iii) the payment of funds and making of
capital contributions, loans and other transfers of money to Affiliates or to
other Persons, including payments made under letters of credit, guarantees and
sureties issued and maintained on behalf of Affiliates, provided that the
aggregate amount for all such payments and transfers does not exceed
$200,000,000 at any time outstanding.
SECTION 5.12. Indebtedness/Capitalization Ratio. The ratio of
Consolidated Indebtedness to Consolidated Capitalization will at no time exceed
65%.
ARTICLE 6
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) the Borrower shall fail to pay when due any principal of any Loan
or Reimbursement Obligation or shall fail to pay, within five days of the due
date thereof, any interest, fees or any other amount payable hereunder;
44
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.04, 5.08, 5.09, 5.12 or the second sentence of 5.10,
inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after notice thereof has been given to the Borrower by
the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement 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 made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of Material Debt (other than the Loans) when due or within any
applicable grace period;
(f) any event or condition shall occur and shall continue beyond the
applicable grace or cure period, if any, provided with respect thereto so as to
result in the acceleration of the maturity of Material Debt;
(g) the Borrower or any Material Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall admit in writing its inability to, or shall
fail generally to, pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or any Material Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an order for
relief shall be entered against the Borrower or any Material Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
45
(i) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $25,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title 1V of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Vested Liabilities
in excess of $50,000,000 (collectively, a "Material Plan") shall be filed under
Title IV of ERISA by any member of the ERISA Group, any plan administrator or
any combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a fiduciary
of any Material Plan against any member of the ERISA Group to enforce Section
515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within 90 days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any Material Plan
must be terminated;
(j) a judgment or other court order for the payment of money in excess
of $50,000,000 shall be rendered against the Borrower or any Material Subsidiary
and such judgment or order shall continue without being vacated, discharged,
satisfied or stayed or bonded pending appeal for a period of 45 days;
(k) the Borrower shall cease to be a Subsidiary or Affiliate of Duke
Energy Corporation; or
(1) an "Event of Default" as defined in the Related Agreement shall
have occurred and be continuing;
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 66-2/3% in aggregate amount of the Commitments, by
notice to the Borrower terminate the Commitments and they shall thereupon
terminate and (ii) if requested by Banks holding more than 66-2/3% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Loans and
all Reimbursement Obligations (together with accrued interest thereon) to be,
and the Loans and all Reimbursement Obligations shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; provided that in
the case of any of the Events of Default specified in clause (g) or (h) above
with respect to the Borrower, without any notice to the Borrower or any other
act by the Administrative Agent or the Banks, the Commitments shall thereupon
terminate and the Loans and all Reimbursement Obligations (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
46
SECTION 6.02. Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 6.01 (c) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
SECTION 6.03. Cash Cover. The Borrower agrees, in addition to the
provisions of Section 6.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Administrative Agent upon the instruction of the Banks having at least 66 2/3%
in the aggregate amount of the Commitments (or, if the Commitments shall have
been terminated, holding at least 66 2/3% of the Letter of Credit Liabilities),
deposit with the Administrative Agent an amount in immediately available funds
(which funds shall be held as collateral pursuant to arrangements mutually
satisfactory to the Administrative Agent and the Borrower) equal to the
aggregate amount available for drawing under all Letters of Credit then
outstanding at such time, provided that, upon the occurrence of any Event of
Default specified in Section 6.01 (g) or 6.01 (h) with respect to the Borrower,
the Borrower shall pay such amount forthwith without any notice or demand or any
other act by the Administrative Agent or the Banks.
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative 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 Administrative Agent by the terms hereof or thereof, together
with all such powers as are reasonably incidental thereto.
SECTION 7.02. Administrative Agent and Affiliates. The Chase Manhattan
Bank 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 Administrative Agent, and The Chase Manhattan Bank and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower as if
it were not the Administrative Agent hereunder.
SECTION 7.03. Action by Administrative Agent. The obligations of the
Administrative Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Administrative Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in Article 6.
47
SECTION 7.04. Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Administrative Agent. Neither the
Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable to any Bank 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 Administrative Agent nor any of
its affiliates nor any of their respective directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
this Agreement or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Borrower; (iii) the satisfaction of
any condition specified in Article 3, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Administrative 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)
believed by it in good faith to be genuine or to be signed by the proper party
or parties. Without limiting the generality of the foregoing, the use of the
term "agent" in this Agreement with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Administrative 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 indemnitees' 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 thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
48
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
Administrative 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 Administrative Agent. The Administrative Agent
may resign at any time by giving notice thereof to the Banks and the Borrower.
Upon any such resignation, the Borrower, with the consent of the Required Banks
(such consent not to be unreasonably withheld or delayed), shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative 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
$250,000,000. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder; provided
that if such successor Administrative Agent is appointed without the consent of
the Borrower, such successor Administrative Agent may be replaced by the
Borrower with the consent of the Required Banks. After any retiring
Administrative Agent's resignation hereunder as Administrative 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 Administrative Agent.
SECTION 7.09. Administrative Agent's Fee. The Borrower shall pay to the
Administrative Agent for its own account fees in the amounts and at the times
previously agreed upon between the Borrower and the Administrative Agent.
SECTION 7.10. Documentation Agents. None of the Documentation Agents,
in their capacity as such, shall have any duties or obligations of any kind
under this Agreement.
49
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Euro-Dollar
Borrowing or Bid Rate (Indexed) Borrowing:
(a) the Administrative Agent is advised by the Euro-Dollar Reference
Banks that deposits in dollars (in the applicable amounts) are not being offered
to the Euro-Dollar Reference Banks in the relevant market for such Interest
Period, or
(b) in the case of a Euro-Dollar Borrowing, Banks having 66-2/3% or
more of the aggregate amount of the affected Loans advise the Administrative
Agent that the London Interbank Offered Rate as determined by the Administrative
Agent will not adequately and fairly reflect the cost to such Banks of funding
their Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Euro-Dollar Loans or to continue or convert
outstanding Loans as or into Euro-Dollar Loans shall be suspended and (ii) each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Administrative Agent at least one Domestic Business Day
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 Syndicated Borrowing, such Borrowing shall instead be
made as a Base Rate Borrowing and (ii) if such Borrowing is a Bid Rate (Indexed)
Borrowing, the 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 in any
applicable law, rule or regulation, 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 any of its Euro-Dollar
Loans and such
50
Bank shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Administrative Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans, or to continue or convert outstanding Loans
as or into Euro-Dollar Loans, shall be suspended. Before giving any notice to
the Administrative 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 be otherwise disadvantageous to such Bank in the
good faith exercise of its discretion. If such notice is given, each Euro-Dollar
Loan of such Bank then outstanding shall be converted to a Base Rate Loan either
(a) on the last day of the then current Interest Period applicable to such
Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund such
Loan to such day or (b) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
the date of this Agreement, in the case of any Committed Loan or Letter of
Credit or any obligation to make Committed Loans or issue or participate in any
Letter of Credit or (y) the date of any related Bid Rate Quote, in the case of
any Bid Rate Loan, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, 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) issued on or after
such date of any such authority, central bank or comparable agency shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar
Reserve Percentage) 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 London interbank market
any other condition (other than in respect of Taxes or Other Taxes) affecting
its Fixed Rate Loans, its Note or its obligation to make Fixed Rate Loans or its
obligations hereunder in respect of Letters of Credit 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 of issuing or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Bank (or its Applicable Lending Office) under
this Agreement or under its Note with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Administrative Agent), the
51
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction; provided that no such
amount shall be payable with respect to any period commencing more than 90 days
prior to the date such Bank first notifies the Borrower of its intention to
demand compensation therefor under this Section 8.03(a).
(b) If any Bank shall have determined that, on or after the date of
this Agreement, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, 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 any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency given or made after the date of this Agreement, has or would
have the effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, within 15 days after demand by such Bank (with a copy to
the Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction; provided that no such amount shall be payable with respect to any
period commencing less than 30 days after the date such Bank first notifies the
Borrower of its intention to demand compensation under this Section 8.03(b).
(c) Each Bank will promptly notify the Borrower and the Administrative
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 disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder 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. Taxes. (a) For purposes of this Section 8.04, the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by the
Borrower pursuant to this Agreement or any Note, and all liabilities with
respect thereto,
52
excluding (i) in the case of each Bank and the Administrative Agent, taxes
imposed on its income, net worth or gross receipts and franchise or similar
taxes imposed on it by a jurisdiction under the laws of which such Bank or the
Administrative Agent (as the case may be) is organized or in which its principal
executive office is located or, in the case of each Bank, in which its
Applicable Lending Office is located and (ii) in the case of each Bank, any
United States withholding tax imposed on such payments except to the extent that
such Bank is subject to United States withholding tax by reason of a U.S. Tax
Law Change.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or from
the execution or delivery of, or otherwise with respect to, this Agreement or
any Note.
"U.S. Tax Law Change" means with respect to any Bank or Participant the
occurrence (x) in the case of each Bank listed on the signature pages hereof,
after the date of its execution and delivery of this Agreement and (y) in the
case of any other Bank, after the date such Bank shall have become a Bank
hereunder, and (z) in the case of each Participant, after the date such
Participant became a Participant hereunder, of the adoption of any applicable
U.S. federal law, U.S. federal rule or U.S. federal regulation relating to
taxation, or any change therein, or the entry into force, modification or
revocation of any income tax convention or treaty to which the United States is
a party.
(b) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 8.04) such Bank or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 8.04) paid by such Bank or the Administrative
Agent (as the case may be) and any liability (including penalties, interest and
expenses)
53
arising therefrom or with respect thereto. This indemnification shall be paid
within 15 days after such Bank or the Administrative Agent (as the case may be)
makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter as required by law (but only so long as such
Bank remains lawfully able to do so), shall provide the Borrower two completed
and duly executed copies of Internal Revenue Service form W-8BEN or W-8ECI, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
or other documentation reasonably requested by the Borrower, certifying that
such Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account of
such Bank or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.04(d) (unless such
failure is due to a U.S. Tax Law Change), such Bank shall not be entitled to
indemnification under Section 8.04(b) or 8.04(c) with respect to any Taxes or
Other Taxes which would not have been payable had such form been so provided,
provided that if a Bank, which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form) required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes (it
being understood, however, that the Borrower shall have no liability to such
Bank in respect of such Taxes).
(f) If the Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section 8.04, then such Bank will take such
action (including changing the jurisdiction of its Applicable Lending Office) as
in the good faith judgment of such Bank (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
(g) If any Bank or the Administrative Agent receives a refund
(including a refund in the form of a credit against taxes that are otherwise
payable by the Bank or the Administrative Agent) of any Taxes or Other Taxes for
which the Borrower has made a payment under Section 8.04(b) or (c) and such
refund was received from the taxing authority which originally imposed such
Taxes or Other
54
Taxes, such Bank or the Administrative Agent agrees to reimburse the Borrower to
the extent of such refund, provided that nothing contained in this paragraph (g)
shall require any Bank or the Administrative Agent to seek any such refund or
make available its tax returns (or any other information relating to its taxes
which it deems to be confidential).
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make or to continue or convert
outstanding Loans as or into Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03(a) or
8.04 with respect to its Euro-Dollar Loans and the Borrower shall, by at least
five Euro-Dollar Business Days' prior notice to such Bank through the
Administrative 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 (or
continued as or converted to) Euro-Dollar Loans, as the case may be, shall
instead be Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Loans shall be
applied to repay its Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist, the principal amount of
each such Base Rate Loan shall be converted into a Euro-Dollar Loan on the first
day of the next succeeding Interest Period applicable to the related Euro-Dollar
Loans of the other Banks.
SECTION 8.06. Substitution of Bank; Termination Option. If (i) the
obligation of any Bank to make or to convert or continue outstanding Loans as or
into Euro-Dollar Loans has been suspended pursuant to Section 8.02, (ii) any
Bank has demanded compensation under Section 8.03 or 8.04, (iii) any Bank
exercises its right not to extend its Commitment Termination Date pursuant to
Section 2.01 (d) or (iv) Investment Grade Status ceases to exist as to any Bank,
then:
(a) the Borrower shall have the right, with the assistance of the
Administrative Agent, to designate a substitute bank or banks (which may be one
or more of the Banks) mutually satisfactory to the Borrower, the Administrative
55
Agent, the Issuing Banks and the Swingline Bank (whose consent shall not be
unreasonably withheld or delayed) to purchase for cash, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit G
hereto, the outstanding Loans of such Bank and assume the Commitment and Letter
of Credit Liabilities of such Bank, without recourse to or warranty by, or
expense to, such Bank, for a purchase price equal to the principal amount of all
of such Bank's outstanding Loans and funded Letter of Credit Liabilities plus
any accrued but unpaid interest thereon and the accrued but unpaid fees in
respect of such Bank's Commitment hereunder and all other amounts payable by the
Borrower to such Bank hereunder plus such amount, if any, as would be payable
pursuant to Section 2.14 if the outstanding Loans of such Bank were prepaid in
their entirety on the date of consummation of such assignment; and
(b) if at the time Investment Grade Status exists as to the Borrower,
the Borrower may elect to terminate this Agreement as to such Bank, provided
that (i) the Borrower notifies such Bank through the Administrative Agent of
such election at least three Euro-Dollar Business Days before the effective date
of such termination, (ii) the Borrower repays or prepays the principal amount of
all outstanding Loans made by such Bank plus any accrued but unpaid interest
thereon and the accrued but unpaid fees in respect of such Bank's Commitment
hereunder plus all other amounts payable by the Borrower to such Bank hereunder,
not later than the effective date of such termination and (iii) if at the
effective date of such termination, any Letter of Credit Liabilities or
Swingline Loans are outstanding, the conditions specified in Section 3.02 would
be satisfied (after giving effect to such termination) were the related Letters
of Credit and Swingline Loans made on such date. Upon satisfaction of the
foregoing conditions, the Commitment of such Bank shall terminate on the
effective date specified in such notice.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests 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 Administrative Agent, at its address or
telecopy or telex number set forth on the signature pages hereof, (y) in the
case of any Bank, at its address or telecopy or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other address
or telecopy or telex number as such party may hereafter specify for the purpose
by notice to the Administrative Agent and the Borrower. Each such notice,
request or other communication shall
56
be effective (i) if given by telecopy or telex, when such telecopy or telex is
transmitted to the telecopy or telex number specified in this Section and the
appropriate answerback or confirmation slip, as the case may be, is received or
(ii) if given by any other means, when delivered at the address specified in
this Section; provided that notices to the Administrative Agent or any Issuing
Bank under Article 2 or Article 3 shall not be effective until delivered.
SECTION 9.02. No Waivers. No failure or delay by the Administrative
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; Indemnification. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses of the Administrative Agent, including
reasonable fees and disbursements of special counsel for the Administrative
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 Administrative Agent or any Bank, including reasonable
fees and disbursements of counsel, in connection with such Event of Default and
collection and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent and 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 such Indemnitee 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
such Indemnitee's own gross negligence or willful misconduct 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 then due with respect to the Loans and
Letter of Credit Liabilities held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount then due with
respect to the Loans and Letter of Credit Liabilities held by such other Bank,
the Bank receiving such
57
proportionately greater payment shall purchase such participations in the Loans
and Letter of Credit Liabilities held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments with
respect to the Loans and Letter of Credit Liabilities 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 this Agreement.
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 Administrative Agent, the Swingline Bank or any Issuing
Bank are affected thereby, by such Person); 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 the amount to be reimbursed in
respect of any Letter of Credit or any interest thereon or any fees hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on any
Loan or for reimbursement in respect of any Letter of Credit or interest thereon
or any fees hereunder or for termination of any Commitment, (iv) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans and Letter of Credit Liabilities, 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 or (v) change the provisions of Section
9.04.
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, with the consent (unless an Event of Default then
exists) of the Borrower (such consent not to be unreasonably withheld or
delayed), 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 and Letter of Credit Liabilities. In the event of any such grant by a Bank
of a participating interest to a Participant, whether or not upon notice to the
Administrative Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Borrower, the Issuing Banks, the Swingline
Bank and the Administrative Agent shall continue to deal solely and directly
with such Bank in
58
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. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest, subject to the performance by such
Participant of the obligations of a Bank thereunder. 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
financial institutions (each an "Assignee") all, or a proportionate part
(equivalent to an initial Commitment of not less than $10,000,000 (unless the
Borrower and the Administrative Agent shall otherwise agree)) of all, of its
rights and obligations under this Agreement and its Note (if any), and such
Assignee shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit G hereto executed by
such Assignee and such transferor Bank, with (and only with and subject to) the
prior written consent of the Issuing Banks, the Swingline Bank, the
Administrative Agent (which shall not be unreasonably withheld or delayed) and,
so long as no Event of Default has occurred and is continuing, the Borrower
(given in its sole discretion), provided that unless such assignment is of the
entire right, title and interest of the transferor Bank hereunder, after making
any such assignment such transferor Bank shall have a Commitment of at least
$10,000,000 (unless the Borrower and the Administrative Agent shall otherwise
agree). Upon execution and delivery of such instrument of assumption 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 Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required by the Assignee, a Note is issued
to the Assignee. 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
59
payable hereunder for its account, deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with Section 8.04. All
assignments shall be subject to a transaction fee established by, and payable by
the transferor Bank to, the Administrative Agent for its own account (which
shall not exceed $5,000).
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note (if any) to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder or
modify any such obligations.
(e) No Assignee, Participant or other transferee of any Bank's rights
(including any Applicable Lending Office other than such Bank's initial
Applicable Lending Office) shall be entitled to receive any greater payment
under Section 8.03 or 8.04 than such Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made by reason
of the provisions of Section 8.02, 8.03 or 8.04 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
Administrative 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. Confidentiality. The Administrative Agent and each Bank
agrees to keep any information delivered or made available by the Borrower
pursuant to this Agreement confidential from anyone other than persons employed
or retained by such Bank and its affiliates who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated hereby;
provided that nothing herein shall prevent any Bank from disclosing such
information (a) to any other Bank or to the Administrative Agent, (b) to any
other Person if reasonably incidental to the administration of the credit
facility contemplated hereby, (c) upon the order of any court or administrative
agency, (d) upon the request or demand of any regulatory agency or authority,
(e) which had been publicly disclosed other than as a result of a disclosure by
the Administrative Agent or any Bank prohibited by this Agreement, (f) in
connection with any litigation to which the Administrative Agent, any Bank or
its subsidiaries or Parent may be a party, (g) to the extent necessary in
connection with the exercise of any remedy hereunder, (h) to such Bank's or
Administrative Agent's legal counsel and independent auditors and (i) subject to
provisions substantially
60
similar to those contained in this Section 9.08, to any actual or proposed
Participant or Assignee.
SECTION 9.09. Governing Law; Submission to Jurisdiction. This Agreement
and each Note (if any) shall be construed in accordance with and governed by the
law of the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
SECTION 9.10. Counterparts; Integration. This Agreement maybe 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. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE SWINGLINE BANK AND THE BANKS, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
61
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.
DUKE CAPITAL CORPORATION
By /s/ S. L. Love
------------------------------------
Title: Assistant Treasure
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: S. L. Love
Telecopy number:
Commitments
-----------
$28,170,731.71 THE CHASE MANHATTAN BANK
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
$28,170,731.71 BANK OF AMERICA, N.A.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Managing Director
$24,146,341.46 THE BANK OF TOKYO-
MITSUBISHI, LTD., NEW YORK
BRANCH
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Attorney-in-Fact
$24,146,341.46 BANK ONE, NA
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Director
$24,146,341.46 BARCLAYS BANK PLC
By /s/ Sydney ▇. ▇▇▇▇▇▇
------------------------------------
Title: Director
$24,146,341.46 CITIBANK, N.A.
By /s/ J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Managing Director
$24,146,341.46 DEUTSCHE BANK AG NEW YORK
BRANCH
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
$24,146,341.46 FIRST UNION NATIONAL BANK
By /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Vice President
$17,439,024.39 ABN AMRO BANK N.V.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Title: Group Vice President
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: Assistant Vice President
$17,439,024.39 BAYERISCHE LANDESBANK
GIROZENTRALE, CAYMAN
ISLANDS BRANCH
By /s/ ▇▇▇▇ ▇'▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Title: Senior Vice President
$17,439,024.39 COMMERZBANK AG, NEW YORK
AND GRAND CAYMAN
BRANCHES
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Sen. Vice President & Manager
By /s/ ▇▇▇ ▇▇▇▇
------------------------------------
Title: Assistant Vice President
$17,439,024.39 CREDIT SUISSE FIRST BOSTON
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Assistant Vice President
$17,439,024.39 DRESDNER BANK AG, NEW
YORK AND GRAND CAYMAN
BRANCHES
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Assistant Vice President
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Vice President
$17,439,024.39 FLEET NATIONAL BANK
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Managing Director
$17,439,024.39 THE INDUSTRIAL BANK OF
JAPAN, LIMITED
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Senior Vice President
$17,439,024.39 THE NORTHERN TRUST
COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
$17,439,024.39 SOCIETE GENERALE
By /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------
Title: Vice President
$17,439,024.39 TD SECURITIES (USA) INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Vice President
$17,439,024.39 UBS AG, STAMFORD
BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇. Saint
------------------------------------
Title: Associate Director
By /s/ ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------
Title: Director
$17,439,024.39 WACHOVIA BANK, N.A.
By /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Vice President
$10,731,707.32 THE BANK OF NEW YORK
By /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: Vice President
$10,731,707.32 THE BANK OF NOVA SCOTIA
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Managing Director
$10,731,707.32 BNP PARIBAS
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Managing Director
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Vice President
$10,731,707.32 CIBC, INC.
By /s/ M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Executive Director
$10,731,707.32 CREDIT LYONNAIS NEW YORK
BRANCH
By /s/ Philippe Soustra
------------------------------------
Title: Executive Vice President
$10,731,707.32 KBC BANK
By /s/ ▇▇▇▇-▇▇▇▇▇▇ Diels
------------------------------------
Title: First Vice President
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Assistant Vice President
$10,731,707.32 MELLON BANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
$10,731,707.32 NATIONAL AUSTRALIA BANK LTD.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
$10,731,707.32 ROYAL BANK OF CANADA
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Senior Manager
$10,731,707.32 THE SANWA BANK LIMITED
By /s/ ▇. ▇▇▇▇▇▇▇▇ Wu
------------------------------------
Title: Vice President
$10,731,707.32 SUMITOMO MITSUI BANKING
CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: Senior Vice President
$10,731,707.32 SUNTRUST BANK, ATLANTA
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Vice President
$10,731,707.32 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK
BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Vice President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Manager
------------------
Total Commitments
$550,000,000
==================
BANK OF AMERICA, N.A.,
as Syndication Agent
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Managing Director
THE CHASE MANHATTAN BANK,
as Administrative Agent
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Pricing Schedule
----------------
The "Euro-Dollar Margin" and the "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 I | LEVEL | LEVEL | LEVEL | LEVEL | LEVEL |
| | | II | III | IV | V | VI |
|----------------------------------------------|------------|------------|------------|------------|------------|------------|
| Facility Fee | .105% | .120% | .135% | .155% | .200% | .250% |
| ------------ | | | | | | |
|----------------------------------------------|------------|------------|------------|------------|------------|------------|
| Euro-Dollar Margin | | | | | | |
| ------------------ | | | | | | |
| | | | | | | |
| Syndicated Loans (other | | | | | | |
| than Term Loans): | | | | | | |
| | | | | | | |
| Utilization
| (less than) 33 1/3% | .145% | .180% | .215% | .245% | .350% | .550% |
| | | | | | | |
| Utilization
| (less than) 33 1/3%, (greater than) 66 2/3%| .395% | .430% | .465% | .495% | .600% | .800% |
| | | | | | | |
| Utilization
| (greater than) 66 2/3 | .520% | .555% | .590% | .620% | .725% | .925% |
| | | | | | | |
| | | | | | | |
| Term Loans | .895% | .930% | .965% | .995% | 1.100% | 1.300% |
------------------------------------------------------------------------------------------------------------------------------
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 is
rated "A+" or higher by S&P or "A1" or higher by ▇▇▇▇▇'▇.
"Level II Status" exists at any date if, at such date, (i) the Borrower
is rated "A" by S&P or "A2" by ▇▇▇▇▇'▇ and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the
Borrower is rated "A-" by S&P or "A3" by ▇▇▇▇▇'▇ and (ii) neither Level I Status
nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the Borrower
is rated "BBB+" by S&P or "Baa1" by ▇▇▇▇▇'▇ and (ii) neither Level I Status,
Level II Status nor Level III Status exists.
"Level V Status" exists at any date if, at such date, (i) the Borrower
is rated "BBB" by S&P or "Baa2" by ▇▇▇▇▇'▇ and (ii) neither Level I Status,
Level II Status, Level III Status nor Level IV Status exists.
"Level VI Status" exists at any date if, at such date, no other Status
exists.
"Status" refers to the determination of which of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status or Level VI Status
exists at any date.
The "Utilization" applicable to any date is the percentage equivalent
of a fraction the numerator of which is the sum of (i) the aggregate outstanding
principal amount of the Loans determined at such time after giving effect, if
one or more Loans are being made at such time, to any substantially concurrent
application of the proceeds thereof to repay one or more other Loans plus (ii)
the aggregate amount of the Letter of Credit Liabilities of all Banks at such
time and the denominator of which is the aggregate amount of the Commitments at
such date. If for any reason any Loans or Letter of Credit Liabilities remain
outstanding following the termination of the Commitments, Utilization will be
deemed to be more than 66 2/3%.
The credit ratings to be utilized for purposes of this Schedule are
those indicated for or assigned to the senior unsecured long-term debt
securities of the Borrower without third-party credit enhancement, and any
rating indicated for or assigned to any other debt security of the Borrower
shall be disregarded. The ratings in effect for any day are those in effect at
the close of business on such day. A change in credit rating will result in an
immediate change in the applicable Status. In the case of split ratings from S&P
and ▇▇▇▇▇'▇, the rating to be used to determine the applicable Status is the
higher of the two.
2
SCHEDULE I
DUKE CAPITAL CORPORATION
CREDIT FACILITIES
(Being Replaced by this Agreement and the Related Agreement)
1. Credit Agreement (364-Day Facility) dated as of August 21, 2000
among Duke Capital Corporation, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent.
2. Credit Agreement (5-Year Facility) dated as of August 25, 1997 among
Duke Capital Corporation, the lenders party thereto and The Chase Manhattan
Bank, as administrative agent.
EXHIBIT A
NOTE
New York, New York
August 20, 2001
For value received, Duke Capital Corporation, a Delaware corporation
(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 Credit Agreement
referred to below on the date specified in the Credit Agreement. 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 Credit Agreement. All such
payments of principal and interest shall be made in lawful money of the United
States in Federal or other immediately available funds at the office of The
Chase Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
the Bank, if the Bank so elects in connection with any transfer or enforcement
of its Note, may endorse on the schedule attached hereto appropriate notations
to evidence the foregoing information with respect to the Loans then
outstanding; 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 Credit Agreement.
This note is one of the Notes referred to in the Three-Year Credit
Agreement dated as of August 20, 2001 among the Borrower, the banks listed on
the signature pages thereof, Bank of America, N.A., as Syndication Agent, and
The Chase Manhattan Bank, as Administrative Agent (as the same may be amended
from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
DUKE CAPITAL CORPORATION
By
------------------------------------
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
-------------------------------------------------------------------------------
Amount of
Amount Type Principal Maturity Notation
Date of Loan of Loan Repaid Date Made By
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2
EXHIBIT B
FORM OF BID RATE QUOTE REQUEST
------------------------------
[Date]
To: The Chase Manhattan Bank
(the "Administrative Agent")
From: Duke Capital Corporation (the "Borrower")
Re: Three-Year Credit Agreement (the "Credit Agreement") dated as
of August 20, 2001 among the Borrower, the Banks listed on the
signature pages thereof, Bank of America, N.A., as Syndication
Agent and the Administrative Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Bid Rate Quotes for the following proposed Bid Rate
Borrowing(s):
Date of Borrowing: _______________________
Principal Amount* Interest Period**
----------------- ----------------
$
Such Bid Rate Quotes should offer a Bid Rate [(General), (Indexed) or
both]. [The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
DUKE CAPITAL CORPORATION
By
------------------------------------
Title:
------------------------
* "Amount must be $10,000,000 or a larger multiple of $1,000,000.
** "Not less than one month (Bid Rate (Indexed) Auction) or not less
than 7 days (Bid Rate (General) Auction), subject to the provisions of the
definition of Interest Period.
EXHIBIT C
FORM OF INVITATION FOR BID RATE QUOTES
--------------------------------------
To: [Name of Bank]
Re: Invitation for Bid Rate Quotes to Duke Capital Corporation (the
"Borrower")
Pursuant to Section 2.03 of the Three-Year Credit Agreement dated as of
August 20, 2001 among the Borrower, the Banks parties thereto, Bank of America,
N.A., as Syndication Agent, and the undersigned, as Administrative Agent, we are
pleased on behalf of the Borrower to invite you to submit Bid Rate Quotes to the
Borrower for the following proposed Bid Rate Borrowing(s):
Date of Borrowing: ___________________
Principal Amount Interest Period
---------------- ---------------
$
Such Bid Rate Quotes should offer a Bid Rate [(Indexed), (General) or
both]. [The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
THE CHASE MANHATTAN BANK
By
------------------------------------
Authorized Officer
EXHIBIT D
FORM OF BID RATE QUOTE
----------------------
To: The Chase Manhattan Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: Bid Rate Quote to Duke Capital Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
________________, 20__, we hereby make the following Bid Rate 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 Bid Rate Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Bid Rate
Amount** Period*** [(Indexed)****] [(General)*****]
-------- --------- --------------- ----------------
$
$
provided, that the aggregate principal amount of Bid Rate 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 $5,000,000 or a larger of multiple of $1,000,000.
*** Not less than one month or less than 30 days, as specified in the
related Invitation, but no bid may be submitted for an Interest Period extending
beyond bidder's Commitment Termination Date. 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 l%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (rounded to the nearest
1/10,000th of 1%).
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Three-Year Credit
Agreement dated as of August 20, 2001 among the Borrower, the Banks listed on
the signature pages thereof, Bank of America, N.A., as Syndication Agent, and
yourselves, as Administrative Agent, irrevocably obligates us to make the Bid
Rate Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated: By:
-------------------- ------------------------------------
Authorized Officer
2
EXHIBIT E-1
OPINION OF GENERAL COUNSEL OF THE BORROWER
August 20, 2001
To the Banks and the Administrative Agent
Referred to Below
c/o The Chase Manhattan Bank
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am the Deputy General Counsel of Duke Capital Corporation (the
"Borrower") and have acted as its counsel in connection with the Three-Year
Credit Agreement (the "Credit Agreement"), dated as of August 20, 2001, among
the Borrower, the banks listed on the signature pages thereof, The Chase
Manhattan Bank, as Administrative Agent, and Bank of America, N.A., as
Syndication Agent. Capitalized terms defined in the Credit Agreement are used
herein as therein defined. This opinion letter is being delivered pursuant to
Section 3.01 (b) of the Credit Agreement.
In such capacity, I or attorneys under my direct supervision 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 corporation duly incorporated, validly existing
and in good standing under the laws of Delaware.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and any Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or, to my knowledge, of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower or, to my knowledge, result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Material Subsidiaries.
3. Except as disclosed in the reports referred to in Section 4.04 of
the Credit Agreement, to my knowledge (but without independent investigation),
there is no action, suit or proceeding pending or threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, which would be likely
to be decided adversely to the Borrower or such Subsidiary and, as a result, to
have a material adverse effect upon the business, consolidated financial
position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole or which in any manner draws
into question the validity of the Credit Agreement or any Notes.
4. The Borrower is not a holding company under the Public Utility
Holding Company Act of 1935, as amended.
The phrase "to my knowledge", as used in the foregoing opinion, refers
to my actual knowledge without any independent investigation as to any such
matters.
I am a member of the Bar of the State of North Carolina and do not
express any opinion herein concerning any law other than the law of the State of
North Carolina, the General Corporation Law of the State of Delaware and the
federal law of the United States of America.
This opinion is rendered to you in connection with the above-referenced
matter and may not be relied upon by you for any other purpose, or relied upon
by, or furnished to, any other Person, firm or corporation without my prior
written consent, except for Additional Banks and Assignees. My opinions
expressed herein are as of the date hereof, and I undertake no obligation to
advise you of any changes of applicable law or any other matters that may come
to my attention after the date hereof that may affect my opinions expressed
herein.
Very truly yours,
2
EXHIBIT E-2
OPINION OF
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.,
SPECIAL COUNSEL FOR THE BORROWER
August 20, 2001
To the Banks and the Administrative Agent
Referred to Below
c/o The Chase Manhattan Bank
as Administrative Agent
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Ladies and Gentlemen:
We have acted as counsel to Duke Capital Corporation, a Delaware
corporation, in connection with the Three-Year Credit Agreement (the "Credit
Agreement"), dated as of August 20, 2001, between the Duke Capital Corporation,
the banks listed on the signature pages thereof, The Chase Manhattan Bank, as
Administrative Agent, and Bank of America, N.A., as Syndication Agent.
Capitalized terms used herein and not defined shall have the meanings given to
them in the Credit Agreement. This opinion letter is being delivered pursuant to
Section 3.01(b) of the Credit Agreement.
In connection with this opinion, we also examined originals, or copies
identified to our satisfaction, of such other documents and considered such
matters of law and fact as we, in our professional judgment, have deemed
appropriate to render the opinions contained herein. Where we have considered it
appropriate, as to certain facts we have relied, without investigation or
analysis of any underlying data contained therein, upon certificates or other
comparable documents of public officials and officers or other appropriate
representatives of the Borrower.
In rendering the opinions contained herein, we have assumed, among
other things, that the Credit Agreement and any Notes to be executed (i) are
within the Borrower's corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of, or
filing with, any governmental body, agency of official, and (iv) do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the Borrower's certificate of incorporation or by-laws or any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower or result in the creation or imposition of any Lien on any asset of
the Borrower. In addition, we have assumed that the Credit Agreement fully
states the agreement between the
Borrower and the Banks with respect to the matters addressed therein, and that
the Credit Agreement constitutes a legal, valid and binding obligation of each
Bank, enforceable in accordance with its respective terms.
The opinions set forth herein are limited to matters governed by the
laws of the State of North Carolina and the federal laws of the United States,
and no opinion is expressed herein as to the laws of any other jurisdiction. For
purposes of our opinions, we have disregarded the choice of law provisions in
the Credit Agreement and, instead, have assumed with your permission that the
Credit Agreement and the Notes are governed exclusively by the internal,
substantive laws and judicial interpretations of the State of North Carolina. We
express no opinion concerning any matter respecting or affected by any laws
other than laws that a lawyer in North Carolina exercising customary
professional diligence would reasonably recognize as being directly applicable
to the Borrower, the Loans, the Letters of Credit, or any of them.
Based upon and subject to the foregoing and the further limitations and
qualifications hereinafter expressed, it is our opinion that the Credit
Agreement constitutes the legal, valid and binding obligation of the Borrower
and the Notes, if and when issued, will constitute legal, valid and binding
obligations of the Borrower, in each case, enforceable against the Borrower in
accordance with its terms.
The opinions expressed above are subject to the following
qualifications and limitations:
1. Enforcement of the Credit Agreement and the Notes is subject to the
effect of applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws affecting the enforcement of creditors'
rights generally.
2. Enforcement of the Credit Agreement and the Notes is subject to the
effect of general principles of equity (regardless of whether considered in a
proceeding in equity or at law) by which a court with proper jurisdiction may
deny rights of specific performance, injunction, self-help, possessory remedies
or other remedies.
3. We do not express any opinion as to the enforceability of any
provisions contained in the Credit Agreement or any Note that (i) purport to
excuse a party for liability for its own acts, (ii) purport to make void any act
done in contravention thereof, (iii) purport to authorize a party to act in its
sole discretion, (iv) require waivers or amendments to be made only in writing,
(v) purport to effect waivers of constitutional, statutory or equitable rights
or the effect of applicable laws, (vi) impose liquidated damages, penalties or
forfeiture, or (vii) purport to indemnify a party for its own negligence or
willful misconduct. Indemnification provisions in the Credit Agreement are
subject to and may be rendered unenforceable by applicable law or public policy,
including applicable securities law.
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4. We do not express any opinion as to the enforceability of any
provisions contained in the Credit Agreement or the Notes purporting to require
a party thereto to pay or reimburse attorneys' fees incurred by another party,
or to indemnify another party therefor, which may be limited by applicable
statutes and decisions relating to the collection and award of attorneys' fees,
including but not limited to North Carolina General Statutes ss. 6-21.2.
5. We do not express any opinion as to the enforceability of any
provisions contained in the Credit Agreement purporting to waive the right of
jury trial. Under North Carolina General Statutes ss. 22B-10, a provision for
the waiver of the right to a jury trial is unconscionable and unenforceable.
6. We do not express any opinion as to the enforceability of any
provisions contained in the Credit Agreement concerning choice of forum or
consent to the jurisdiction of courts, venue of actions or means of service of
process.
7. It is likely that North Carolina courts will enforce the provisions
of the Credit Agreement providing for interest at a higher rate resulting from a
Default or Event of Default (a "Default Rate") which rate is higher than the
rate otherwise stipulated in the Credit Agreement. The law, however, disfavors
penalties, and it is possible that interest at the Default Rate may be held to
be an unenforceable penalty, to the extent such rate exceeds the rate applicable
prior to a default under the Credit Agreement. Also, since North Carolina
General Statutes ss. 24-10.1 expressly provides for late charges, it is possible
that North Carolina courts, when faced specifically with the issue, might rule
that this statutory late charge preempts any other charge (such as default
interest) by a bank for delinquent payments. The only North Carolina case which
we have found that addresses this issue is a 1978 Court of Appeals decision,
which in our opinion is of limited precedential value, North Carolina National
Bank ▇. ▇▇▇▇▇▇▇▇, 38 N.C. App. 120, 247 S.E.2d 648 (1978), rev'd on other
grounds, 297 N.C. 524, 256 S.E.2d 388 (1979). While the court in that case did
allow interest after default (commencing with the date requested in the
complaint) at a rate six percent in excess of pre-default interest, we are
unable to determine from the opinion that any question was raised as to this
being penal in nature, nor does the court address the possible question of the
statutory late charge preempting a default interest surcharge. Therefore, since
the North Carolina Supreme Court has not ruled in a properly presented case
raising issues of its possible penal nature and those of North Carolina General
Statutes ss. 24-10.1, we are unwilling to express an unqualified opinion that
the Default Rate of interest prescribed in the Credit Agreement is enforceable.
8. We do not express any opinion as to the enforceability of any
provisions contained in the Credit Agreement relating to evidentiary standards
or other standards by which the Credit Agreement are to be construed.
This opinion letter is delivered solely for your benefit in connection
with the Credit Agreement and, except for any Additional Bank or any Assignee
which becomes a Bank pursuant to Section 9.06(c) of the Credit Agreement, may
not be
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used or relied upon by any other Person or for any other purpose without our
prior written consent in each instance. Our opinions expressed herein are as of
the date hereof, and we undertake no obligation to advise you of any changes of
applicable law or any other matters that may come to our attention after the
date hereof that may affect our opinions expressed herein.
Very truly yours,
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EXHIBIT F
OPINION OF
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL
FOR THE ADMINISTRATIVE AGENT
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August 20, 2001
To the Banks and the Administrative Agent
Referred to Below
c/o The Chase Manhattan Bank,
as Administrative Agent
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Dear Sirs:
We have participated in the preparation of the Three-Year Credit
Agreement (the "Credit Agreement") dated as of August 20, 2001 among Duke
Capital Corporation, a Delaware corporation (the "Borrower"), the banks listed
on the signature pages thereof (the "Banks"), Bank of America, N.A., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent"), and have acted as special counsel for the
Administrative Agent for the purpose of rendering this opinion pursuant to
Section 3.01 (c) of the Credit Agreement. Terms defined in the Credit Agreement
are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
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.
2. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Notes, if and when issued, constitute valid and binding
obligations of the Borrower enforceable in accordance with their respective
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, we express no opinion as to the effect
(if any) of any law of any jurisdiction (except the State of New York) in which
any Bank is located which limits the rate of interest that such Bank may charge
or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person, firm or corporation without our
prior written consent, except for Additional Banks and all Participants.
Very truly yours,
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EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ______________, 20__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), [DUKE CAPITAL CORPORATION,] THE CHASE
MANHATTAN BANK [AND OTHER ISSUING BANK(S)], as Issuing Bank(s), THE CHASE
MANHATTAN BANK, as Swingline Bank, and THE CHASE MANHATTAN BANK, as
Administrative Agent (the "Administrative Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Three-Year Credit Agreement dated as of August 20, 2001 among
Duke Capital Corporation (the "Borrower"), the Assignor and the other Banks
party thereto, as Banks, Bank of America, N.A., as Syndication Agent, and the
Administrative Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower and participate in Letters of Credit in
an aggregate principal amount at any time outstanding not to exceed $_________;*
WHEREAS, Syndicated 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, Letters of Credit with a total amount available for drawing
thereunder 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
Letter of Credit Liabilities, and the Assignee proposes to accept assignment of
such rights and assume the corresponding obligations from the Assignor on such
terms;*
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* The asterisked provisions shall be appropriately revised in the event
of an assignment after the Commitment Termination Date.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Syndicated Loans made by, and Letter of Credit Liabilities of, the Assignor
outstanding at the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee, [the Borrower,] the Issuing Banks, the Swingline Bank
and the Administrative Agent, 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 facility and Letter of Credit fees accrued to the date hereof in
respect of the Assigned Amount 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 to Assignment. This Agreement is conditioned upon
the consent of [the Borrower,] the Issuing Banks, the Swingline Bank and the
Administrative Agent pursuant to Section 9.06(c) of the Credit Agreement. The
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* Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
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execution of this Agreement by [the Borrower,] the Issuing Banks, the Swingline
Bank and the Administrative Agent is evidence of this consent. Pursuant to
Section 9.06(c) the Borrower agrees to execute and deliver a Note, if required
by the Assignee, 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 any
Borrower, or the validity and enforceability of the obligations of any Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 8. Administrative Questionnaire. Attached is an Administrative
Questionnaire duly completed by the Assignee.
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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
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Title:
[ASSIGNEE]
By
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Title:
[DUKE CAPITAL CORPORATION
By
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Title:]
THE CHASE MANHATTAN BANK, as Issuing
Bank, Swingline Bank and Administrative
Agent
By
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Title:
[ISSUING BANK]
By
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Title:
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EXHIBIT H
EXTENSION AGREEMENT
The Chase Manhattan Bank, as Administrative
Agent under the Credit Agreement
referred to below
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Ladies and Gentlemen:
Effective as of [date], the undersigned hereby agrees to extend its
Commitment and Commitment Termination Date under the Three-Year Credit Agreement
dated as of August 20, 2001 among Duke Capital Corporation, (the "Borrower"),
the banks parties thereto, Bank of America, N.A., as Syndication Agent, and The
Chase Manhattan Bank, as Administrative Agent (the "Credit Agreement") for one
year to [date to which its Commitment Termination Date is to be extended]
pursuant to Section 2.01 (d) of the Credit Agreement. 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. This Extension 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.
[NAME OF BANK]
By
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Title:
Agreed and Accepted:
DUKE CAPITAL CORPORATION,
as Borrower
By
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Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
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Title:
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