Exhibit 10(e)
[EXECUTION COPY]
$600,000,000
364-DAY CREDIT AGREEMENT
dated as of
June 27, 2000,
among
AMERICAN WATER CAPITAL CORP.,
as Borrower
AMERICAN WATER WORKS COMPANY, INC.,
as Parent
THE LENDERS IDENTIFIED HEREIN,
as Lenders
FIRST UNION NATIONAL BANK,
as Administrative Agent
PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agent
and
MELLON BANK, N.A.,
as Documentation Agent
FIRST UNION SECURITIES, INC.,
as Sole Lead Arranger and Book Manager
TABLE OF CONTENTS
364-DAY
CREDIT AGREEMENT
SECTION PAGE
ARTICLE I
DEFINITIONS 1
SECTION 1.1 Certain Defined Terms............................................................... 1
SECTION 1.2 Accounting Terms and Determinations................................................. 14
SECTION 1.3 Use of Defined Terms................................................................ 14
SECTION 1.4 Terminology......................................................................... 14
SECTION 1.5 References.......................................................................... 15
ARTICLE II
THE CREDITS
SECTION 2.01 Commitment to Lend.................................................................. 15
SECTION 2.02 Method of Borrowing................................................................. 15
SECTION 2.03 Method of Swing Line Borrowing...................................................... 16
SECTION 2.04 Evidence of Loans................................................................... 18
SECTION 2.05 Maturity of Loans; Termination of Commitment........................................ 19
SECTION 2.06 Interest Rates...................................................................... 20
SECTION 2.07 Fees................................................................................ 21
SECTION 2.08 Optional Termination or Reduction of Commitment..................................... 22
SECTION 2.09 Mandatory Prepayments............................................................... 22
SECTION 2.10 Optional Prepayments................................................................ 22
SECTION 2.11 Compensation after Prepayment or Conversion......................................... 22
SECTION 2.12 General Provisions as to Payments................................................... 23
SECTION 2.13 Computation of Interest and Fees.................................................... 23
SECTION 2.14 Compensation, Additional Interest................................................... 23
SECTION 2.15 Taxes............................................................................... 24
SECTION 2.16 Interest Rate Determination......................................................... 26
SECTION 2.17 Conversion of Loans................................................................. 27
SECTION 2.18 Security; Set-off................................................................... 28
SECTION 2.19 Pro Rata Treatment.................................................................. 28
SECTION 2.20 Sharing of Payments................................................................. 29
SECTION 2.21 Substitution of Lenders............................................................. 30
ARTICLE III
CONDITIONS TO BORROWINGS
AND SWING LINE BORROWINGS
SECTION 3.01 Conditions to Closing............................................................... 30
SECTION 3.02 Conditions to All Borrowings and Swing Line Borrowings.............................. 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Status...................................................... 33
SECTION 4.02 Corporate Power and Authority; Enforceability....................................... 33
SECTION 4.03 Non-Contravention................................................................... 33
SECTION 4.04 Litigation.......................................................................... 33
SECTION 4.05 Financial Information............................................................... 34
SECTION 4.06 Approvals........................................................................... 34
SECTION 4.07 Use of Proceeds..................................................................... 34
SECTION 4.08 Investment Company Act; Public Utility Holding Company Act; Margin Stock............ 34
SECTION 4.09 Compliance with Laws................................................................ 35
SECTION 4.10 Compliance with ERISA............................................................... 35
SECTION 4.11 Environmental Matters............................................................... 35
SECTION 4.12 Taxes............................................................................... 36
SECTION 4.13 No Defaults......................................................................... 36
SECTION 4.14 Solvency............................................................................ 37
SECTION 4.15 Ownership of Borrower and Operating Utilities....................................... 37
SECTION 4.16 Ownership of Properties and Assets.................................................. 37
SECTION 4.17 Enforceability of Xxxxx Notes....................................................... 37
SECTION 4.18 Full Disclosure..................................................................... 37
ARTICLE V
COVENANTS
SECTION 5.01 Affirmative Covenants............................................................... 38
SECTION 5.02 Negative Covenants.................................................................. 42
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default..................................................................... 45
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Notices............................................................................... 48
SECTION 7.02 No Waivers............................................................................ 48
SECTION 7.03 Expenses: Documentary Taxes; Indemnification.......................................... 48
SECTION 7.04 Amendments, Waivers and Consents...................................................... 49
SECTION 7.05 Benefit of Agreement.................................................................. 50
SECTION 7.06 Confidentiality....................................................................... 52
SECTION 7.07 Representation by Lender.............................................................. 53
SECTION 7.08 North Carolina Law.................................................................... 53
SECTION 7.09 Consent to Jurisdiction; Waiver of Jury Trial......................................... 53
SECTION 7.10 Interpretation........................................................................ 53
SECTION 7.11 Counterparts.......................................................................... 53
SECTION 7.12 Entire Agreement...................................................................... 54
ARTICLE VIII
AGENCY PROVISIONS
SECTION 8.01 Appointment........................................................................... 54
SECTION 8.02 Delegation of Duties.................................................................. 54
SECTION 8.03 Exculpatory Provisions................................................................ 54
SECTION 8.04 Reliance on Communications............................................................ 55
SECTION 8.05 Notice of Default..................................................................... 56
SECTION 8.06 Non-Reliance on Administrative Agent and Other Lenders................................ 56
SECTION 8.07 Indemnification....................................................................... 56
SECTION 8.08 Administrative Agent in its Individual Capacity....................................... 57
SECTION 8.09 Successor Agent....................................................................... 57
SECTION 8.10 Other Agents.......................................................................... 58
SCHEDULES
Schedule 1.01A Commitments of Lenders
Schedule 1.01B Notice and Lending Offices of Lenders
Schedule 3.02 Terminated Senior Credit Lines
EXHIBITS
Exhibit A-1.......Form of Note
Exhibit A-2.......Form of Swing Line Note
Exhibit B-1.......Form of Opinion of Counsel to Borrower and Parent
Exhibit B-2.......Form of Opinion of General Counsel to Borrower and Parent
Exhibit C.........Form of Assignment and Acceptance
Exhibit D-1.......Form of Notice of Borrowing
Exhibit D-2.......Form of Notice of Swing Line Borrowing
Exhibit E-1.......Form of Xxxxx Note (Short-Term)
Exhibit E-2.......Form of Xxxxx Note (Long-Term)
Exhibit F.........Form of Support Agreement
Exhibit G.........Form of Financial Services Agreement
364-DAY CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 27, 2000 (the "Agreement"), among
AMERICAN WATER CAPITAL CORP., a Delaware corporation (the "Borrower"); AMERICAN
WATER WORKS COMPANY, INC., a Delaware corporation (the "Parent"); the Lenders
identified herein and such other Lenders as may hereafter become a party
(collectively, the "Lenders"); and FIRST UNION NATIONAL BANK, as Administrative
Agent (in such capacity and its successors and assigns, the "Administrative
Agent").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. The terms defined in this Section
1.01 shall, for all purposes of this Agreement and any amendment hereto have the
meanings set forth herein:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control another entity if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such entity, whether through the ownership of
voting securities, by contract, or otherwise.
"Agreement" has the meaning set forth in the preamble.
"Administrative Agent" has the meaning set forth in the preamble.
"Applicable Percentage" shall be based on the Borrower's Senior Unsecured
Debt Rating, and as of any date of determination, shall be the per annum
percentage set forth opposite the applicable ratings below (it being understood
that the Applicable Percentage for LIBOR Rate Loans shall be the percentage set
out under the column "Applicable LIBOR Rate Margin"; the Applicable Percentage
for the Swing Line Loans shall be the percentage set out under the column
"Applicable Swing Line Margin"; the Applicable Percentage for the Facility Fee
shall be the percentage set out under the column "Applicable Facility Fee"; the
Applicable Percentage for the Utilization Fee shall be the percentage set out
under the column "Applicable Utilization Fee"; and the Borrower's Senior
Unsecured Debt Rating shown in the table below reflects the ratings for S&P
first, then Xxxxx'x):
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Senior Unsecured Applicable Applicable Applicable Applicable
Debt LIBOR Rate Swing Line Facility Utilization
Rating (S&P/ Margin Margin Fee Fee
------ ------ ------ --- ---
Xxxxx'x)
-----------------------------------------------------------------------------------------------------
Level I At least A+/A1 0.225% 0.475% 0.075% 0.050%
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Level II Less than A+/A1; 0.265% 0.515% 0.085% 0.075%
at least A/A2
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Level III Less than A/A2; 0.325% 0.575% 0.100% 0.100%
At least A-/A3
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Level IV Less than 0.400% 0.650% 0.125% 0.100%
A-/A3; at least
BBB+/Baa1
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Level V Less than 0.475% 0.725% 0.150% 0.125%
BBB+/Baa1; at
least BBB/ Baa2
-----------------------------------------------------------------------------------------------------
Level VI Less than 0.625% 0.875% 0.175% 0.200%
BBB/Baa2
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For purposes of the foregoing, (i) if either Xxxxx'x or S&P shall not have in
effect a Senior Unsecured Debt Rating (other than by reason of the circumstances
referred to in the last sentence of this definition), then such rating agency
shall be deemed to have established a rating less than BBB, in the case of S&P,
and less than Baa2, in the case of Xxxxx'x; (ii) if the Senior Unsecured Debt
Ratings established or deemed to have been established by Xxxxx'x and S&P shall
fall within different "Levels" and the ratings differential is one level, the
higher rating will apply; (iii) if the Senior Unsecured Debt Ratings established
or deemed to have been established by Xxxxx'x and S&P shall fall within
different "Levels" and the ratings differential is two levels or more, the level
one below the higher of the two ratings will apply and (iv) if the rating system
of Xxxxx'x or S&P shall change, or if Xxxxx'x or S&P shall cease to be in the
business of rating corporate debt obligations, the Borrower and the
Administrative Agent and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the unavailability of
ratings from Xxxxx'x or S&P, and, pending the effectiveness of any such
amendment, the Senior Unsecured Debt Rating shall be determined by reference to
the Senior Unsecured Debt Rating most recently in effect prior to such change or
cessation. As of the date hereof, the Borrower's Senior Unsecured Debt Rating
is at Level III.
The Applicable Percentages shall be adjusted effective on the next Business Day
following any change by Xxxxx'x and S&P to the Borrower's Senior Unsecured Debt
Rating. The Borrower
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shall notify the Administrative Agent in writing promptly after becoming aware
of any change in such Senior Unsecured Debt Rating.
"Arranger" means First Union Securities, Inc.
"Assignee" means the assignee of all or a portion of a Lender's rights and
obligations under this Agreement pursuant to the terms of Section 7.05(b).
"Assignment and Acceptance" means an Assignment and Acceptance executed in
accordance with Section 7.05(b) in the form attached hereto as Exhibit C.
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"Authority" means any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Base Rate" means, for any period, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate per annum shall at all times be
equal to the higher of (i) the rate of interest announced publicly by the
Administrative Agent in Charlotte, North Carolina, from time to time, as the
Administrative Agent's Prime Rate; and (ii) 1/2 of one percent per annum above
the Federal Funds Rate in effect from time to time.
"Base Rate Loan" means a loan which bears interest at the Base Rate.
"Borrower" has the meaning set forth in the preamble.
"Borrowing" means a borrowing hereunder consisting of Base Rate Loans and
LIBOR Rate Loans made to the Borrower.
"Business Day" means a day of the year on which (i) banks are not required
or authorized to close in Charlotte, North Carolina, and (ii) with respect to
any borrowing, payment or rate selection of LIBOR Rate Loans, a day on which
banks are not required or authorized to close in Charlotte, North Carolina and,
on which dealings in Dollar deposits are carried on in the London interbank
market and on which commercial banks are open for domestic and international
business (including dealings in Dollar deposits) in London, England.
"Capitalized Lease" means any lease which is required to be capitalized on
a balance sheet of the lessee in accordance with GAAP, consistently applied.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C., (S) 9601, a et seq., as amended from time to time, and
-- ---
any regulations promulgated thereunder.
"CERCLIS" means the Comprehensive Environmental Response Compensation and
Liability Inventory System established pursuant to CERCLA.
3
"Change of Control" means, with respect to the Parent, the occurrence of
either of the following: (i) any entity, person (within the meaning of Section
14(d) of the Exchange Act) or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) which theretofore was beneficial owner (as defined
in Rule 13d-3 under the Exchange Act) of less than 25% of the Parent's then
outstanding Common Stock other than the Xxxx Shareholder, either (a) acquires
shares of Common Stock of the Parent, in a transaction or series of transactions
that results in such entity, person or group directly or indirectly owning
beneficially 25% or more of the outstanding Common Stock of the Parent, or (b)
acquires, by proxy or otherwise the right to vote for the election of directors,
for any merger, combination or consolidation of the Parent, or any of the
Parent's direct or indirect Subsidiaries, or for any other matter or question,
more than 25% of the then outstanding voting securities of the Parent; or (ii)
the election or appointment of persons to the board of directors of the Parent,
who were not directors on the date hereof, and whose election or appointment was
not approved by a majority of those persons who were directors at the beginning
of such period, where such newly elected or appointed directors constitute 25%
or more of the directors of the board of directors of such Person.
"Closing Date" means June 27, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Commitment" means (i) with respect to each Lender, the commitment of such
Lender to make its Pro Rata Percentage of Loans in an aggregate amount up to the
amount set forth opposite the name of each Lender on Schedule 1.01A hereto,
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subject to adjustment on account of assignment pursuant to Section 7.05(b) or
reduction in the aggregate Commitment pursuant to Section 2.08, and (ii) with
respect to the Lenders collectively, the aggregate amount of all such
Commitments.
"Commitment Letter" means that commitment letter dated May 16, 2000, from
the Administrative Agent and the Arranger to the Borrower and the Parent, agreed
to and accepted by the Borrower and the Parent.
"Common Stock" means, with respect to any Person, the voting securities of
such Person having general voting rights, including, without limitation, the
right to vote in the election of members of the board of directors of such
Person.
"Controlled Group" means, with respect to any Person, all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with such Person, are treated
as a single employer under Section 414 of the Code.
4
"Consolidated Total Capitalization" means at any date of determination with
respect to the Parent and its Subsidiaries, on a consolidated basis in
accordance with GAAP, the sum of (without duplication) (i) Consolidated Total
Debt of the Parent and its Subsidiaries, plus (ii) the sum of the capital stock
(excluding treasury stock and capital stock subscribed for and unissued) and
surplus (including earned surplus, capital surplus, translation adjustment, the
balance of the current profit and loss account not transferred to surplus and
accumulated other comprehensive income) accounts of the Parent and its
Subsidiaries appearing on a consolidated balance sheet of the Parent and its
Subsidiaries, in each case prepared as of the date of determination in
accordance with GAAP consistent with those applied in the preparation of the
financial statements referred to in Section 4.05(a), after eliminating all
intercompany transactions and all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries.
"Consolidated Total Debt" means at any date of determination with respect
to the Parent and its Subsidiaries, on a consolidated basis in accordance with
GAAP, the sum of (without duplication) all then outstanding Debt of the Parent
and its Subsidiaries.
"Convert," "Conversion" and "Converted" each refers to a conversion of
Loans of one Type into Loans of another Type or the selection of a new, or the
renewal of the same, Interest Period for LIBOR Rate Loans, as the case may be,
pursuant to Sections 2.16 or 2.17.
"Current Termination Date" has the meaning set forth in Section 2.05(b).
"Debt" means, for any Person, (without duplication), all (i) indebtedness
for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or
other similar instruments, (iii) obligations to pay the deferred purchase price
of property or services (other than trade payables not overdue by more than 60
days incurred in the ordinary course of business), (iv) obligations under
Capitalized Leases, (v) reimbursement obligations (contingent or otherwise) in
respect of outstanding letters of credit, (vi) indebtedness of the type referred
to in clauses (i) through (v) above secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien or encumbrance on, or security interest in, property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness, and (vii) all obligations of such Person for indebtedness or
obligations of others of the kinds referred to in clauses (i) through (v) above
under direct or indirect Guarantees, excluding, in all cases, advances for
construction as set forth on the consolidated balance sheet of the Parent and
its Subsidiaries.
"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 in writing, become an Event of Default.
5
"Default Rate" means, with respect to any Loan on any day, a per annum rate
2% greater than the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the Base
Rate plus 2%).
"Dollars" or "$" means dollars in lawful currency of the United States of
America.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any bank or financial institution approved by the Administrative Agent
and, unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 7.05, the Borrower (such
approval by the Administrative Agent or the Borrower not to be unreasonably
withheld or delayed and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Administrative Agent from
the Borrower within five (5) Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower); provided,
--------
however that neither the Borrower nor an Affiliate of the Borrower shall qualify
-------
as an Eligible Assignee.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or orders
arising from or in any way associated with any Environmental Requirements,
whether or not entered upon consent or written agreements with an Environmental
Authority or other entity arising from or in any way associated with any
Environmental Requirement, whether or not incorporated in a judgment, decree or
order.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority or by
any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under any
applicable state or local environmental law or regulation.
"Environmental Requirement" means, with respect to any Person, any legal
requirement relating to health, safety or the environment and applicable to such
Person, or the Properties of
6
such Person, including but not limited to any such requirement under CERCLA or
similar state legislation and all federal, state and local laws, ordinances,
regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Facility Fee" has the meaning set forth in Section 2.07(a).
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 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 Business Day next
succeeding such day; provided that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
of quotations for such day on such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by the
Administrative Agent.
"Fee Letter" means that certain fee letter dated May 16, 2000, from the
Administrative Agent and the Arranger to the Borrower, agreed to and accepted by
the Borrower.
"Financial Services Agreement" means that certain Financial Services
Agreement by and among the Borrower, the Parent and certain Operating
Utilities, in substantially the form of Exhibit G attached hereto (as amended,
---------
modified, or supplemented from time to time in accordance with its terms).
"Xxxxx Loans" means the intercompany loans made by the Borrower to (i) the
Parent, (ii) the Operating Utilities, or (iii) any other Subsidiary of the
Parent, in accordance with the terms of the Financial Services Agreement.
"Xxxxx Notes" means, collectively, (i) each of the promissory notes
evidencing Xxxxx Loans that are due and payable on demand, in substantially the
form of Exhibit E-1, and (ii) each
-----------
7
of the promissory notes evidencing Xxxxx Loans that are due and payable more
than one year after the date of issuance thereof, in substantially the form of
Exhibit E-2.
-----------
"Fiscal Quarter" means any fiscal quarter of the Borrower or the Parent, as
applicable.
"Fiscal Year" means any fiscal year of the Borrower or the Parent, as
applicable.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time.
"Guarantee" means, with respect to any Person, any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds) for the
purchase or payment of such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of this payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term Guarantee shall
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not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Materials" means (a) solid or hazardous waste, as defined in the
Resource Conservation and Recovery Act of 1980, 42 U.S.C. (S) 6901, et seq. and
-- ---
its implementing regulations and amendments, or in any applicable state or local
law or regulation, (b) "hazardous substance," "pollutant" or "contaminant" as
defined in CERCLA, or in any applicable state or local law or regulation, (c)
gasoline, or any other petroleum product or by-product, including crude oil or
any fraction thereof, (d) "toxic substances", as defined in the Toxic Substances
Control Act of 1976, or in any applicable state or local law or regulation and
(e) "insecticides", "fungicides" or "rodenticides" as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975 or in any applicable state
or local law or regulation, as each such Act, statute or regulation may be
amended from time to time.
"Interest Period" means, for each LIBOR Rate Loan, the period commencing on
the date of such Loan or the date of the Conversion of any Loan into such a Loan
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below and, thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the last day
of the period selected by the Borrower pursuant to the provisions below. In the
case of a LIBOR Rate Loan, the duration of each such Interest Period shall be
one, two, three or six months, in each case as the Borrower may select by notice
to the Administrative Agent pursuant to Section 2.02(a) or Section 2.17;
provided, however, that:
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8
(1) the Borrower may not select any Interest Period that ends after
the Termination Date;
(2) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided, in the case of any Interest Period for a LIBOR Rate Loan, that if
such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(3) any Interest Period for a LIBOR Rate Loan which begins on the
last business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Lenders" means each of the Lenders identified on the signature pages
hereto, and their successors and permitted assigns.
"Lending Office" means, as to each Lender, its office located at its
address set forth on Schedule 1.01B (or identified on Schedule 1.01B as its
-------------- --------------
"Domestic Lending Office") or such other office as such Lender may hereafter
designate as its Lending Office by notice to the Borrower, and as to any
Assignee, the office of the Assignee designated as such in its Assignment and
Acceptance or such other office as the Assignee may designate as its Lending
Office.
"Lending Party" has the meaning set forth in Section 7.06.
"LIBOR Lending Office" means, as to each Lender, the office of the Lender
designated as its "LIBOR Lending Office" opposite its name on Schedule 1.01B, or
--------------
such other office as the Lender may from time to time specify to the Borrower as
its LIBOR Lending Office, and as to any Assignee, the office of the Assignee
designated as such in its Assignment and Acceptance or such other office as the
Assignee may designate as its LIBOR Lending Office.
"LIBOR Market Index Rate" means, at any time, a floating rate per annum of
interest equal to the LIBOR Rate which at such time would be quoted to apply to
a LIBOR Rate Loan having a maturity of one month if such LIBOR Rate Loan were
made two Business Days following such time. Any change in the LIBOR Market
Index Rate resulting from a change in such LIBOR Rate shall become effective as
of 12:01 A.M. on the Business Day on which such change occurs.
9
"LIBOR Rate" means, with respect to each day during each Interest Period
pertaining to a LIBOR Rate Loan, the rate appearing on Page 3750 of the Dow
Xxxxx Markets Service (or on any successor or substitute page of such Service,
or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) at approximately 11:00 A.M. (London time), two Business
Days prior to the commencement of such Interest Period, as the rate for Dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBOR Rate"
with respect to such LIBOR Rate Loan for such Interest Period shall be the rate
per annum equal to the rate at which the principal London office of the
Administrative Agent offers to place Dollar deposits at or about 11:00 A.M.
(London time), two Business Days prior to the beginning of such Interest Period
with first-class banks in the London interbank market for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its LIBOR Rate Loan to be outstanding during
such Interest Period.
"LIBOR Rate Loan" means a Loan which bears interest at a rate based upon
the LIBOR Rate.
"LIBOR Rate Reserve Percentage" for the Interest Period of any LIBOR Rate
Loan means the reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities.
"Lien" means, with respect to any asset, any mortgage, deed to secure debt,
deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest, servitude or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, a Person 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, Capitalized
Lease or other title retention agreement relating to such asset.
"Loan" means a Base Rate Loan, a LIBOR Rate Loan or a Swing Line Loan, and
"Loans" means Base Rate Loans, LIBOR Rate Loans or Swing Line Loans, or any or
all of them, as the context shall require.
"Loan Documents" means this Agreement, the Notes and any other document
evidencing, relating to or securing the Loans, and any other document or
instrument delivered
10
from time to time in connection with this Agreement, the Notes or the Loans, as
such documents and instruments may be amended or supplemented from time to time.
"Material Adverse Effect" means a material adverse effect (i) on the
business, condition (financial or otherwise), results of operations or prospects
of the Borrower, or the Parent and its Subsidiaries, taken as a whole, or (ii)
on the Parent's or the Borrower's ability to perform its obligations under this
Agreement or any other Loan Document to which it is a party.
"Margin Stock" means "margin stock" as defined in Regulation T, U or X of
the Board of Governors of the Federal Reserve System, as in effect from time to
time, together with all official rulings and interpretations issued thereunder.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Multi-employer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Non-Extending Lender" shall have the meaning set forth in Section 2.05(b).
"Note" or "Notes" means each of the promissory notes of the Borrower,
evidencing the obligation of the Borrower to repay the Loans to the Lenders, (i)
the form of Note for a Base Rate Loan or a LIBOR Rate Loan to be substantially
in the form of Exhibit A-1 hereto, and (ii) the form of Note for a Swing Line
-----------
Loan to be substantially in the form of Exhibit A-2 hereto.
-----------
"Notice of Borrowing" has the meaning set forth in Section 2.02(a).
"Notice of Swing Line Borrowing" has the meaning set forth in Section
2.03(a).
"Operating Utilities" means those Subsidiaries of the Parent which are
operating water utilities and have entered into a Financial Services Agreement
with the Borrower and the Parent.
"Other Taxes" has the meaning set forth in Section 2.15(b).
"Parent" has the meaning set forth in the preamble.
"Participant" has the meaning set forth in Section 7.05(e).
"Participation Interest" means a purchase by a Lender of a participation in
Loans as provided in Section 2.20.
"Payment Date" means each March 31, June 30, September 30 and December 31.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
11
"Person" means an individual, a corporation, a partnership (including,
without limitation, a joint venture), an unincorporated association, a limited
liability company, a trust or any other entity or organization, including, but
not limited to, 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 Code and is maintained by a member of the Controlled Group for
employees of a member of the Controlled Group.
"Prime Rate" means a rate per annum equal to the Administrative Agent's
index or base rate of interest announced from time to time by the Administrative
Agent (which is not necessarily the lowest rate charged to any customer),
changing when and as such base rate changes.
"Pro Rata Share" or "Pro Rata Percentage" means for each Lender, a fraction
(expressed as a decimal) the numerator of which is the Commitment of such Lender
at such time and the denominator of which is the aggregate Commitment of the
Lenders at such time. The initial Pro Rata Percentages are set out on Schedule
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1.01A hereto.
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"Properties" means, with respect to any Person, all real property owned,
leased or otherwise used or occupied by such Person, wherever located.
"Register" has the meaning set forth in Section 7.05(c).
"Required Lenders" means, at any time, Lenders which are then in compliance
with their obligations hereunder (as determined by the Administrative Agent in
its reasonable judgment) and holding, in the aggregate, more than 50% of the
aggregate principal amount of the Loans (exclusive of Swing Line Loans)
outstanding under all Commitments, or, if no amount of the Loans is outstanding,
more than 50% of the aggregate principal amount of all Commitments (exclusive of
the Swing Line Commitment).
"S&P" means Standard & Poor's Ratings Services, a division of The XxXxxx-
Xxxx Companies, Inc., and its successors.
"Senior Unsecured Debt Rating" means the lower of (i) the rating assigned
by Moody's and S&P to the Borrower's senior unsecured, non-credit-enhanced,
long-term debt, or (ii) such other corporate credit rating or issuer rating
assigned to the Borrower by Moody's and S&P.
"Short-Term Loans" means each of the Xxxxx Loans due and payable upon
demand (or less than one-year from issuance thereof) made by the Borrower to the
Parent, any of the Operating Utilities or any other Subsidiaries of the Parent,
for acquisitions and other general corporate purposes, including, without
limitation, commercial paper backup, with the proceeds of the Loans.
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"Significant Subsidiary" means, with respect to any Person, a Subsidiary
which meets any of the following conditions:
(i) such Person's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10% of the total assets of such Person
and its Subsidiaries consolidated as of the end of the most recently
completed Fiscal Quarter; or
(ii) such Person's and its other Subsidiaries' proportionate share of
the total assets (after intercompany eliminations) of the Subsidiary
exceeds 10% of the total assets of such Person and its Subsidiaries
consolidated as of the end of the most recently completed Fiscal Quarter;
or
(iii) such Person's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of changes in accounting principles of the Subsidiary
exceeds 10% of such income of such Person and its Subsidiaries consolidated
for the most recently completed Fiscal Quarter; or
(iv) with respect to the Parent, such Subsidiary is an Operating
Utility.
"Solvent" means, as to a Person on a particular date, that such person (i)
has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage and is able to pay its
debts as they mature, (ii) owns property having a value, both at fair valuation
and at present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies), and (iii) does not believe that
it will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature.
"Subsidiary" means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
at the time capital stock (or comparable interest) of any other class or classes
of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
said Person (whether directly or through one of more other Subsidiaries). In
the case of an unincorporated entity, a Person shall be deemed to have more than
50% of interests having ordinary voting power only if such Person's vote in
respect of such interests comprises more than 50% of the total voting power of
all such interests in the unincorporated entity.
"Support Agreement" means that certain Support Agreement dated June 22,
2000, hereof, given by the Parent to the Borrower, in substantially the form of
Exhibit F attached hereto.
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"Swing Line Bank" means the Administrative Agent, in its capacity as Swing
Line Bank hereunder, or any successor thereto as provided in Section 2.03(e).
13
"Swing Line Borrowing"means a borrowing hereunder consisting of Swing Line
Loans made to the Borrower.
"Swing Line Commitment" means, with respect to the Swing Line Bank, the
Commitment of the Swing Line Bank to make Swing Line Loans in the aggregate
amount up to the amount set forth on Schedule 1.01A hereto, subject to
--------------
adjustment on account of a reduction in the Swing Line Commitment pursuant to
Section 2.08.
"Swing Line Loan" means a Loan which bears interest at a rate based upon
the LIBOR Market Index Rate.
"Taxes" has the meaning set forth in Section 2.15.
"Termination Date" means June 26, 2001, unless such date is otherwise
extended pursuant to Section 2.05.
"Type," with respect to a Loan (other than a Swing Line Loan) means any of
the following, each of which shall be deemed to be a different "Type" of Loan: a
Base Rate Loan, a LIBOR Rate Loan having a one-month Interest Period, a LIBOR
Rate Loan having a two-month Interest Period, a LIBOR Rate Loan having a three-
month Interest Period and a LIBOR Rate Loan having a six-month Interest Period.
"Utilization Fee" has the meaning set forth in Section 2.07(b).
"Xxxx Shareholder" means any lineal descendant of Xxxx X. Xxxx, Xx. who is
a shareholder of the Parent; any spouse of such descendant; any executor,
administrator, estate, attorney-in-fact, proxy, guardian or representative of
such descendant or spouse; and any trust, general partnership, limited
partnership, organization or other Person controlled by any of the foregoing.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise specified
herein, all terms of an accounting character 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 GAAP, applied on a basis consistent with the most recent audited financial
statements delivered to the Administrative Agent and the Lenders pursuant to
Section 4.05(a).
SECTION 1.3 Use of Defined Terms. All terms defined in this Agreement shall
have the same meanings when used in any of the other Loan Documents, unless
otherwise defined therein or unless the context shall otherwise require.
SECTION 1.4 Terminology. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural and the plural shall include the
singular. Titles of Articles and Sections in this
14
Agreement are for convenience only, and neither limit nor amplify the provisions
of this Agreement.
SECTION 1.5 References. Unless otherwise indicated, references in this
Agreement to "Articles," "Exhibits," "Schedules" and "Sections" are references
to articles, exhibits, schedules and sections hereof.
ARTICLE II
THE CREDITS
SECTION 2.01 Commitment to Lend.
(a) Each Lender severally agrees, on the terms and conditions set
forth herein, to make its Pro Rata Share of Loans (other than Swing Line Loans)
to the Borrower from time to time before the Termination Date, provided that,
immediately after each such Loan is made, (i) with respect to each Lender
individually, the aggregate outstanding principal amount of such Loans made or
attributable to such Lender shall not exceed such Lender's Commitment, and (ii)
with respect to the Lenders collectively, the aggregate outstanding principal
amount of all such Loans shall not exceed the Lenders' aggregate Commitment.
(b) The Swing Line Bank agrees, on the terms and conditions set forth
herein, to make Swing Line Loans to the Borrower from time to time before the
Termination Date, provided that, immediately after each such Swing Line Loan is
made, (i) the outstanding aggregate principal amount of the Swing Line Loans
shall not exceed the Swing Line Commitment, (ii) with respect to each Lender
individually, the aggregate outstanding principal amount of all Loans
attributable to such Lender shall not exceed such Lender's Commitment, and (iii)
with respect to the Lenders collectively, the aggregate outstanding principal
amount of all Loans shall not exceed the Lenders' aggregate Commitment.
(c) Within the foregoing limits, the Borrower may borrow under this
Section, repay or, to the extent permitted by Section 2.10, prepay Loans and
reborrow under this Section at any time before the Termination Date.
SECTION 2.02 Method of Borrowing.
(a) Each Borrowing shall be made on a Business Day, upon notice from
the Borrower to the Administrative Agent, given (i) in the case of a Borrowing
which is a Base Rate Loan, not later than 1:00 PM (Charlotte, North Carolina
time) on the date of the proposed Borrowing and (ii) in the case of a Borrowing
which is a LIBOR Rate Loan, not later than 1:00 PM (Charlotte, North Carolina
time) on the third Business Day prior to the date of the proposed Borrowing.
Each such notice of a Borrowing (a "Notice of Borrowing") by the Borrower shall
be in substantially the form of Exhibit D-1 hereto, specifying therein the
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requested (A) date of such Borrowing, (B) Type of Loan to be made in connection
with such Borrowing, (C) aggregate amount of such Borrowing and (D) in the case
of a Borrowing comprising a LIBOR Rate Loan,
15
initial Interest Period for each such Loan. The Administrative Agent shall give
notice to each Lender promptly upon receipt of each Notice of Borrowing pursuant
to this Section 2.02(a), the contents thereof and each such Lender's share of
any Borrowing to be made pursuant thereto. Each Lender shall, before 1:00 P.M.
(Charlotte, North Carolina time) on the date of such Borrowing in the case of
LIBOR Rate Loans, and 3:00 PM (Charlotte, North Carolina time) on the date of
such Borrowing in the case of Base Rate Loans, make available to the
Administrative Agent for the account of the Borrower in same day funds, the
proceeds of such Borrowing. Such Borrowing will then be made available to the
Borrower by the Administrative Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent (or at such other location as may be agreed by the Borrower
and the Administrative Agent).
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to comprise LIBOR Rate Loans, the Borrower shall indemnify the
applicable Lender against any loss, cost or expense incurred by such Lender as a
result of any failure of the Borrower to fulfill on or before the date specified
in such Notice of Borrowing for such Loans, the applicable conditions set forth
in Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by such Lender as part of such
Borrowing when such Loan is not made on such date.
(c) Each Borrowing (whether for a Base Rate Loan or a LIBOR Rate
Loan) shall be in an aggregate principal amount of $5,000,000 or any multiple of
$1,000,000 in excess thereof (except that any such Borrowing may be in the
aggregate amount of the unborrowed Commitment on such date).
SECTION 2.03 Method of Swing Line Borrowing.
(a) Each Swing Line Borrowing shall be made on a Business Day, upon
notice from the Borrower to the Swing Line Bank, given not later than 2:00 PM
(Charlotte, North Carolina time) on the date of the proposed Swing Line
Borrowing. Each such notice of a Swing Line Borrowing (a "Notice of Swing Line
Borrowing") by the Borrower shall be in substantially the form of Exhibit D-2
-----------
hereto, specifying therein the requested (i) date of such Swing Line Borrowing
and (ii) aggregate amount of such Swing Line Borrowing. The Swing Line Bank
shall, before 4:00 P.M. (Charlotte, North Carolina time) on the date of such
Swing Line Borrowing, make available to the Administrative Agent for the account
of the Borrower in same day funds, the proceeds of such Swing Line Borrowing.
Such Swing Line Borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower on the books of
such office with the aggregate of the amounts made available to the
Administrative Agent by the Swing Line Bank and in like funds as received by the
Administrative Agent. The Swing Line Loans shall be included in the Lenders'
aggregate Commitment, and each Swing Line Borrowing will reduce correspondingly
the amount of the available Commitment of each Lender on a Pro Rata Share basis.
16
(b) Each Swing Line Borrowing shall be in the aggregate principal
amount of $500,000 or any multiple of $100,000 in excess thereof, or such lesser
amount as shall be equal to the aggregate amount of the unborrowed Commitment on
such date.
(c) Notwithstanding anything in this Section 2.03 above to the
contrary:
the aggregate amount of the Swing Line Loans outstanding at any
time shall not exceed the Swing Line Commitment;
no more than one (1) Swing Line Loan may be made on the same
Business Day.
(d) Upon request by the Swing Line Bank with an outstanding Swing
Line Loan, and notwithstanding whether a Default or Event of Default shall have
occurred and be continuing, each other Lender shall purchase from the Swing Line
Bank, and the Swing Line Bank shall sell and assign to each such other Lender,
such other Lender's Pro Rata Share of such outstanding Swing Line Loan as of the
date of such demand, by such Lender making available for the account of its
LIBOR Lending Office to the Administrative Agent for the account of the Swing
Line Bank, by deposit to the Administrative Agent's account, in same day funds,
an amount equal to the sum of (i) the portion of the outstanding principal
amount of such Swing Line Loan to be purchased by such Lender, plus (ii)
----
interest accrued and unpaid to and as of such date on such portion of the
outstanding principal amount of such Swing Line Loan. Each Lender agrees to
purchase its Pro Rata Share of an outstanding Swing Line Loan upon notice given
not later than one Business Day prior to the Business Day of proposed purchase.
Upon any such assignment by the Swing Line Bank to any other Lender of a portion
of a Swing Line Loan, the Swing Line Bank represents and warrants to such other
Lender that the Swing Line Bank is the legal and beneficial owner of such
interest being assigned by it, but makes no other representation or warranty and
assumes no responsibility with respect to such Swing Line Loan or the applicable
Loan Documents. If and to the extent that any Lender shall not have so made the
amount of such Swing Line Loan available to the Administrative Agent, such
Lender agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Swing Line Bank until the date such amount is paid to the Administrative Agent,
at the Federal Funds Rate; provided, that if payment is not made within three
(3) Business Days of demand, interest thereon shall accrue at the LIBOR Market
Index Rate plus the Applicable Percentage for Swing Line Loans for each day
thereafter. If such Lender shall pay to the Administrative Agent such amount for
the account of the Swing Line Bank, such amount so paid in respect of principal
shall constitute a Swing Line Loan by such Lender for purposes of this
Agreement, and the outstanding principal amount of the Swing Line Loan made by
the Swing Line Bank shall be reduced by such amount.
(e) The Swing Line Bank may resign at any time by giving written
notice thereof to the Lenders and the Borrower, with any such resignation to
become effective only upon the appointment of a successor Swing Line Bank
pursuant to this Section 2.03(e). Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Swing Line Bank,
17
which shall be a Lender or an Eligible Assignee acceptable to the Borrower. If
no successor Swing Line Bank shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Swing Line Bank's giving of notice of resignation, then the retiring
Swing Line Bank may, on behalf of the Lenders, appoint a successor Swing Line
Bank, which shall be a Lender or an Eligible Assignee. Upon the acceptance of
any appointment as Swing Line Bank hereunder by a successor Swing Line Bank,
such successor Swing Line Bank shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Swing Line Bank.
SECTION 2.04 Evidence of Loans.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement. Each Lender will make reasonable efforts to maintain
the accuracy of its account or accounts, and to update promptly its account or
accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 7.05(c) and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the date, amount, and
Interest Period, if applicable, of each Loan, and whether such Loan is a Base
Rate Loan, a LIBOR Rate Loan or a Swing Line Loan, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from or for the account of the Borrower and each Lender's
percentage share thereof. The Administrative Agent will make reasonable efforts
to maintain the accuracy of the subaccounts referred to in the preceding
sentence and to update promptly such subaccounts from time to time, as
necessary.
(c) The entries made in the Register and subaccounts maintained
pursuant to subsection (b) of this Section 2.04, to the extent permitted by
applicable law, shall be prima facie evidence of the existence and amounts of
such obligations of the Borrower therein recorded; provided, however, that the
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failure of the Administrative Agent or any Lender to maintain any such Register,
subaccount or account, as applicable, or any error therein, shall not in any
manner affect the obligations of the Borrower to repay the Loans in accordance
with the terms thereof.
(d) Upon the request of any Lender or the Swing Line Bank, which
request shall be made through the Administrative Agent to the Borrower, the
Borrower shall deliver to such Lender a duly executed Note in the form of
Exhibit A-1, or in the case of the Swing Line Bank, a duly executed Note in the
-----------
form of Exhibit A-2, in each case with appropriate insertions as to dates and
-----------
principal amounts.
SECTION 2.05 Maturity of Loans; Termination of Commitment.
18
(a) Each Loan shall mature, and the principal amount thereof shall be due
and payable in full, and the Commitments and the Swing Line Commitment shall
terminate, on the Termination Date.
(b) The Borrower may, upon written request made in writing and delivered
to the Administrative Agent on a Business Day not more than 90 days nor less
than 60 days prior to the then effective Termination Date (the "Current
Termination Date"), request that the Lenders agree to extend the Current
Termination Date for a period of 364 days, so that it will occur 364 days after
the Current Termination Date. In the case of such a written request by the
Borrower, the Administrative Agent promptly shall delivery a copy of the request
to each of the Lenders. Each Lender, acting in its sole discretion, shall by
notice made in writing and delivered to the Administrative Agent on a Business
Day not more than 60 days nor less than 45 days prior to the Current Termination
Date, advise the Administrative Agent as to whether or not such Lender agrees to
the extension (each Lender that so advises the Administrative Agent that it will
not extend the Termination Date being referred to herein as a "Non-Extending
Lender"); provided, that any Lender that does not provide such notice to the
Administrative Agent by the 45th day prior to the Current Termination Date shall
be deemed to be a Non-Extending Lender. The election of any Lender to agree to
such extension shall not obligate any other Lender to agree.
(c) If the Required Lenders on the 45th day prior to the Current
Termination Date, shall not have agreed to extend the Termination Date, then the
Current Termination Date shall not be so extended, the principal amount of all
Loans and all other amounts payable under this Agreement shall be payable in
full and the Commitment shall terminate on the Current Termination Date.
(d) If, and only if, the Required Lenders on or prior to the 45th day
prior to the Current Termination Date, shall have agreed to extend the
Termination Date, then the Termination Date applicable to Lenders that are not
Non-Extending Lenders shall be extended to be the day that is 364 days after the
Current Termination Date. In the event of such extension, the Commitment of each
Non-Extending Lender shall terminate on the Current Termination Date, the
principal amount of all Loans and other amounts payable to such Non-Extending
Lenders under this Agreement shall be payable in full on the Current Termination
Date, and the Lenders' aggregate Commitment shall be reduced by the amounts of
the Commitments of the Non-Extending Lenders so terminated.
(e) In the event that the conditions of subsection (d) above have been
satisfied, the Borrower shall have the right, on or before the Current
Termination Date, at the Borrower's sole expense and effort, to require any Non-
Extending Lender to assign to one or more Eligible Assignees all of its rights
and obligations under this Agreement; provided, that (i) such assignment shall
be in accordance with, and subject to the requirements and restrictions
contained in, Section 7.05 and (ii) such assignment shall become effective as of
the Current Termination Date.
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(f) Notwithstanding any of the foregoing provisions of this Section
2.05, no extension of the Termination Date shall become effective unless, on the
Current Termination Date, the conditions set forth in subsections (b), (c), (d)
and (f) of Section 3.02 (with all references in such subsections to a Borrowing
or Swing Line Borrowing being deemed to be references to the extension of the
Termination Date) shall be satisfied, and the Administrative Agent shall have
received a certificate to that effect, dated the Current Termination Date and
executed by an authorized officer of the Borrower and the Parent.
(g) Following any extension of the Termination Date pursuant to this
Section 2.05, the Borrower may, at it sole expense and effort, upon notice to
the Administrative Agent, cause additional banks or other financial institutions
to become parties hereto as Lenders to replace the Commitments of the Non-
Extending Lenders no longer parties hereto; provided, that the aggregate
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Commitment shall not exceed the aggregate Commitment existing prior to such
extension of the Termination Date. Such additional banks or other financial
institutions shall be subject to the approval of the Administrative Agent (the
consent of which will not be unreasonably withheld or delayed) and shall become
parties hereto by executing such supplements hereto as shall be satisfactory to
the Borrower and the Administrative Agent. Upon any such bank or other financial
institution so becoming a Lender, the Borrower will effect such borrowings and
prepayments as are necessary to cause all then outstanding Loans to be ratably
by all of the Lenders.
SECTION 2.06 Interest Rates.
(a) The Borrower shall pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such Loan shall be paid in full, at
the following rates per annum:
if such Loan is a Base Rate Loan, a variable rate per annum equal
at all times to the Base Rate in effect from time to time,
payable quarterly in arrears on each Payment Date while such Base
Rate Loan is outstanding and on the date such Base Rate Loan
shall be Converted or paid in full;
if such Loan is a LIBOR Rate Loan, a fixed rate per annum during
the Interest Period equal to the LIBOR Rate for such Interest
Period plus the Applicable Percentage, payable on the last day of
the Interest Period (and, in the case of any Interest Period of
six months, the last day of the third month of such Interest
Period) and on the date such LIBOR Rate Loan shall be Converted
or paid in full; and
if such Loan is a Swing Line Loan, a fixed rate per annum equal
to the LIBOR Market Index Rate plus the Applicable Percentage
payable quarterly in arrears on each Payment Date while such
Swing Line Loan is outstanding and on the date such Swing Line
Loan shall be paid in full.
20
(b) Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, for each day following the occurrence and
during the continuance of an Event of Default, the outstanding principal of and
(to the extent permitted by applicable law) overdue interest on the Loans shall
bear interest at a per annum rate equal to the Default Rate, payable on demand.
SECTION 2.07 Fees.
(a) The Borrower shall pay to the Administrative Agent, for the
ratable benefit of the Lenders, a facility fee (the "Facility Fee") equal to the
product of (i) the average daily amount of the Commitments (regardless of usage,
calculated from the later of the Closing Date or the preceding Payment Date)
times (ii) a per annum percentage equal to the Applicable Percentage. The
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Facility Fee shall accrue from and including the Closing Date to but excluding
the Termination Date and shall be payable in arrears on each Payment Date and on
the Termination Date; provided that should the Commitments be terminated at any
time prior to the Termination Date for any reason, the entire accrued and unpaid
Facility Fee shall be paid on the date of such termination.
(b) If at any time the aggregate principal amount of outstanding
Loans exceeds an amount equal to thirty-three percent (33%) of the Lenders'
aggregate Commitments, the Borrower shall pay to the Administrative Agent, for
the ratable benefit of the Lenders, a utilization fee (the "Utilization Fee")
equal to the product of (i) the average daily aggregate principal amount of
outstanding Loans, calculated from the date the aggregate principal amount of
outstanding Loans exceeds an amount equal to thirty-three percent (33%) of the
Lenders' aggregate Commitments to but excluding the date the aggregate principal
amount of outstanding Loans falls below an amount equal to thirty-three percent
(33%), times (ii) a per annum percentage equal to the Applicable Percentage. The
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Utilization Fee shall be payable in arrears on each Payment Date and on the
Termination Date; provided that should the Commitments be terminated at any time
prior to the Termination Date for any reason, the entire accrued and unpaid
Utilization Fee shall be paid on the date of such termination. The Utilization
Fee shall accrue from any date the aggregate principal amount of outstanding
Loans exceeds an amount equal to thirty-three percent (33%) of the Lenders'
aggregate Commitments to but excluding the date the aggregate principal amount
of outstanding Loans falls below an amount equal to thirty-three percent (33%)
of the Lenders' aggregate Commitments.
(c) In addition to the fees provided for in subsections (a) and (b)
above, the Borrower shall pay to the Administrative Agent, for the account of
the Administrative Agent and the Arranger, such other fees as are provided for
in the Fee Letter.
SECTION 2.08 Optional Termination or Reduction of Commitment. The Borrower
may, upon at least three Business Days' notice to the Lender, terminate at any
time, or reduce from time to time by an aggregate amount of at least $5,000,000
(and integrals of $1,000,000 in excess thereof), the Commitment or the Swing
Line Commitment. All accrued Facility Fees (as provided under Section 2.07) on
the Commitment (in the case of a termination of the
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Commitment) or on the portion of the Commitment being reduced (in the case of a
reduction of the Commitment) shall be payable on the effective date of such
reduction or termination. In the event the Commitment of the Swing Line Bank, in
its capacity as a Lender, is reduced at any time below the Swing Line
Commitment, the Swing Line Commitment automatically shall be reduced to equal
its Commitment.
SECTION 2.09 Mandatory Prepayments.
(a) On each date on which the Commitment is reduced pursuant to
Section 2.08, the Borrower shall repay or prepay such principal amount of the
outstanding Loans, if any (together with accrued interest thereon to the date of
prepayment and any compensation payable pursuant to Section 2.11), as may be
necessary so that after such payment the aggregate unpaid principal amount of
the Loans does not exceed the amount of the Commitment as then reduced.
(b) On each date on which the Swing Line Commitment is reduced
pursuant to Section 2.08, the Borrower shall repay or prepay such principal
amount outstanding of Swing Line Loans, if any (together with accrued interest
thereon to the date of prepayment), as may be necessary so that after such
payment the aggregate unpaid principal amount of Swing Line Loans does not
exceed the amount of the Swing Line Commitment as then reduced.
SECTION 2.10 Optional Prepayments. The Borrower may, (a) upon at least
one Business Day's notice to the Lender in the case of any Base Rate Loan or
Swing Line Loan, and (b) upon at least three Business Days notice in the case of
any LIBOR Rate Loan, prepay any such Loan in whole at any time, or from time to
time in part in amounts aggregating at least $5,000,000 (and integrals of
$1,000,000 in excess thereof), by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment and any
compensation payable pursuant to Section 2.11.
SECTION 2.11 Compensation after Prepayment or Conversion. The Borrower
shall, upon the demand of any Lender, pay to such Lender any amounts which are
required to compensate such Lender for any losses, costs or expenses which it
may reasonably incur as a result of the optional or mandatory prepayment or
Conversion of any LIBOR Rate Loan, on any date other than the last day of the
applicable Interest Period, or the failure to prepay any Loan on the date of
prepayment specified in any notice of prepayment, including, without limitation,
any loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain such Loan.
SECTION 2.12 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and
interest on, the Loans, the Utilization Fees and the Facility Fees hereunder not
later than 1:00 P.M. (Charlotte, North Carolina time) on the date when due in
federal or other funds immediately available to the Administrative Agent for the
account of each Lender at its Lending Office. Upon receipt by the
22
Administrative Agent of each such payment, the Administrative Agent shall
distribute to each Lender, at its Domestic Lending Office, its Pro Rata Share of
such payment, including, without limitation, each Lender's Pro Rata Share of
Swing Line Loans purchased by such Lender in accordance with Section 2.03(d).
(b) Subject to the qualifications set forth in the definition of
"Interest Period," whenever any payment of principal of, or interest on, the
Loans or of Facility Fees shall be due on a day which is not a Business Day, the
date for payment thereof shall be extended to the next succeeding 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.
SECTION 2.13 Computation of Interest and Fees.
(a) Facility Fees and Utilization Fees payable hereunder and interest
on LIBOR Rate Loans and Swing Line Loans shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed.
(b) Interest on Base Rate Loans shall be computed on the basis of a
365- or 366-day year and paid for the actual number of days elapsed for so long
as the Base Rate is based on the Prime Rate and on the basis of a 360-day year
and paid for the actual number of days elapsed so long as the Base Rate is based
on the Federal Funds Rate.
SECTION 2.14 Compensation, Additional Interest.
(a) If any Lender shall have determined that after the date hereof
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any existing or future law, rule or regulation, or
any change in the interpretation or administration thereof, or compliance by
such Lender (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any Authority,
other than as described in subsection (b) of this Section 2.14, has or would
have the effect of reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then such Lender shall promptly
notify the Borrower and from time to time, within 15 days after demand by such
Lender, the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction; provided that the Borrower
shall have no liability hereunder for any amount allocable to a period earlier
than 180 days before the date of such demand. If the Borrower is required to pay
additional amounts to or for the account of the Lender pursuant to this Section
2.14, then such Lender will agree to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its applicable Lending Office so as to eliminate or reduce such
additional payment amount which may thereafter accrue, if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.
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(b) The Borrower shall pay to each Lender, so long as such Lender
shall be required under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional interest on the
unpaid principal amount of each LIBOR Rate Loan and Swing Line Loan for the
Interest Period of such Loan, at an interest rate per annum equal at all times
to the remainder obtained by subtracting (i) the LIBOR Rate for the Interest
Period for such Loan from (ii) the rate obtained by dividing such LIBOR Rate by
a percentage equal to 100% minus the LIBOR Rate Reserve Percentage for such
Interest Period, payable on each date on which interest is payable on such LIBOR
Rate Loan or Swing Line Loan, as applicable; provided that Borrower shall have
no liability hereunder for any amount allocable to an Interest Period ending
earlier than 180 days before the date of the demand.
(c) The provisions of this Section 2.14 shall be applicable with
respect to any Participant or Assignee and, subject to Section 7.05(e), any
calculations required by such provisions shall be made based upon the
circumstances of such Participant or Assignee.
SECTION 2.15 Taxes.
(a) Any and all payments by the Borrower to or for the account of any
Lender or the Administrative Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
the Administrative Agent, taxes imposed on its income and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
applicable Lending Office) or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable under this
Agreement or any other Loan Document to any Lender or the Administrative Agent,
(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 2.15) such Lender or the Administrative Agent 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 7.01, the original
or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
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(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 2.15) paid by such Lender or
the Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender in the case of
each other Lender, and from time to time thereafter if requested in writing by
the Borrower or the Administrative Agent (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower and the
Administrative Agent with (i) Internal Revenue Service Form W-8 BEN or W-8 ECI,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces to zero the rate of
withholding tax on payments of interest 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, (ii) Internal Revenue Service Form W-8 or W-9,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, and/or (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to an
exemption from tax on payments pursuant to this Agreement or any of the other
Loan Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Administrative Agent with the appropriate form
pursuant to Section 2.15(d) (unless such failure is due to a change in treaty,
law, or regulation occurring subsequent to the date on which a form originally
was required to be provided), such Lender shall not be entitled to
indemnification under Section 2.15(a) or 2.15(b) with respect to Taxes imposed
by the United States; provided, however, that should a Lender, which is
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otherwise exempt from withholding tax, become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to recover such
Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 2.15, then such Lender will
agree to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to change the jurisdiction of its applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the repayment of the Loans and other obligations
under the Loan Documents and the termination of the Commitment hereunder.
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(h) If the Administrative Agent or any Lender receives a refund in
respect of Taxes or Other Taxes paid by the Borrower, which in the good faith
judgment of the Administrative Agent or such Lender is allocable to such
payment, it shall promptly pay such refund (together with any amounts received
solely attributable to such refund) to the Borrower, net of all out-of-pocket
expenses (including any taxes to which such Lender has become subject as a
result of its receipt of such refund) of the Administrative Agent or such Lender
incurred in obtaining such refund and without interest (other than any interest
paid by the relevant governmental authority with respect to such refund);
provided, however, that the Borrower agrees to promptly return such refund (plus
all out-of-pocket expenses including any penalties, interest or other charges
imposed by the relevant governmental authority) to the Administrative Agent or
the applicable Lender, as the case may be, if it receives notice from the
Administrative Agent or the applicable Lender that the Administrative Agent or
such Lender is required to repay such refund to such governmental authority.
Nothing contained in this Section 2.15(h) shall require the Administrative Agent
or any Lender to make available its tax returns (or an other information
relating to its taxes which it deems to be confidential) to the Borrower or any
other person.
(i) Notwithstanding anything to the contrary in this Section, if the
Internal Revenue Service determines that a Lender is participating in a conduit
financing arrangement as defined in Section 7701(l) of the Code and the
regulations thereunder ( a "Conduit Financing Arrangement"), any taxes that the
Borrower is required to withhold from payments to such Lender in excess of the
amount of taxes the Borrower would otherwise be required to withhold if such
Lender were not participating in a Conduit Financing Arrangement shall be
excluded from the definition of "Taxes". Each Lender represents that it is not
participating in a Conduit Financing Arrangement with respect to the Loans as of
Closing Date.
SECTION 2.16 Interest Rate Determination.
Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Borrower that the adoption of or any change in the interpretation or
administration of any law or regulation makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for such Lender or
its Lending Office to perform its obligations hereunder to make LIBOR Rate Loans
or Swing Line Loans, or to fund or maintain LIBOR Rate Loans or Swing Line Loans
hereunder, (i) the obligation of such Lender to make or to Convert Loans into
LIBOR Rate Loans, and to make Swing Line Loans, shall be suspended until such
Lender shall notify the Borrower that the circumstances causing such suspension
no longer exist and (ii) the Borrower shall forthwith prepay in full all LIBOR
Rate Loans and Swing Line Loans, together with interest thereon, unless (A) with
respect to LIBOR Rate Loans only, the Borrower, within five Business Days of
notice from such Lender, Converts all such LIBOR Rate Loans then outstanding
into Loans of another Type in accordance with Section 2.17, or (B) the
applicable Lender notifies the Borrower that the circumstances causing such
prepayment no longer exist. Each Lender shall use its reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if the making of such change would
avoid or eliminate such illegality and would not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender.
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SECTION 2.17 Conversion of Loans.
(a) The Borrower may on any Business Day, upon notice given to the
Administrative Agent not later than 1:00 PM (Charlotte, North Carolina time) on
the third Business Day prior to the date of any proposed Conversion into LIBOR
Rate Loans and on the Business Day prior to the date of any proposed Conversion
into Base Rate Loans subject to the provisions of Section 2.16, Convert all
Loans of one Type into Loans of another Type or Types or Loans of the same Type
having the same or a new Interest Period; provided that any Conversion of, or
with respect to, any LIBOR Rate Loan into Loans of another Type or Loans of the
same Type having the same or new Interest Periods shall be made on, and only on,
the last day of an Interest Period for such LIBOR Rate Loan, unless the Borrower
shall also reimburse the Lenders in respect thereof pursuant to Section 2.11 on
the date of such Conversion; provided further, that no Loan shall be converted
to a LIBOR Rate Loan if any Event of Default shall have occurred and be
continuing. Each such notice of a Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Loans to be
Converted and (iii) if such Conversion is into, or with respect to LIBOR Rate
Loans, the duration of the Interest Period for each such Loan.
(b) If the Borrower shall fail to select the Type of any Loan or the
duration of any Interest Period for any LIBOR Rate Loan in accordance with the
provisions contained in the definition of "Interest Period" and subsection (a)
of this Section 2.17 or if any proposed Conversion of a Loan to a LIBOR Rate
Loan upon Conversion shall not occur as a result of the circumstances described
in Section 2.16 or subsection (c) of this Section 2.17, such Loan will
automatically, on the last day of the then-existing Interest Period therefor,
Convert into a Base Rate Loan.
(c) Each notice of Conversion given pursuant to subsection (a) of
this Section 2.17 shall be irrevocable and binding on the Borrower. In the case
of any Loan that is to be converted to a LIBOR Rate Loan, the Borrower shall
indemnify the Lenders against any loss, cost or expense incurred by the Lenders
as a result of any failure to fulfill on the date specified for such Conversion
the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund such LIBOR Rate Loan upon such Conversion, when
such Conversion, as a result of such failure, does not occur. The Borrower's
obligations under this subsection (c) shall survive the repayment of all other
amounts owing to the Lenders under this Agreement and the other Loan Documents
and the termination of the Commitment.
(d) No more than twelve (12) Types of LIBOR Rate Loans may be
outstanding at any time.
(e) References in this Section 2.17 to "Loans" and "Types of Loans"
shall not include the Swing Line Loans.
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SECTION 2.18 Security; Set-off. The Borrower hereby grants to each
Lender, as security for the full and punctual payment and performance of the
obligations of the Borrower under this Agreement, a continuing Lien on and
security interest in all deposits and other sums credited by or due from such
Lender to the Borrower or subject to withdrawal by the Borrower; and regardless
of the adequacy of any collateral or other means of obtaining repayment of such
obligations, such Lender may at any time upon or after the occurrence of an
Event of Default, and without notice to the Borrower, set-off the whole or any
portion or portions of any or all such deposits and other sums against such
obligations, whether or not any other Person or Persons could also withdraw
money therefrom.
SECTION 2.19 Pro Rata Treatment. Except to the extent otherwise provided
herein:
(a) Loans. Each Loan, each payment or prepayment of principal of any
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Loan, and each payment of interest on the Loans shall be allocated first to the
payment or prepayment of principal of, or interest on, the Swing Lines Loans,
and second, pro rata among the Lenders in accordance with the respective
principal amounts of their outstanding Loans. Each payment of the Facility Fee
and Utilization Fee, each reduction of the Commitments and each conversion or
extension of any Loan shall be allocated pro rata among the Lenders in
accordance with the respective principal amounts of their outstanding Loans and
Participation Interests.
(b) Advances. Unless the Administrative Agent shall have been
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notified in writing by any Lender prior to a Borrowing that such Lender will not
make the amount that would constitute its Pro Rata Share of such Borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by such Lender within the time period specified therefor
hereunder, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon, for the period until such Lender makes such amount
immediately available to the Administrative Agent, at a rate equal to the
Federal Funds Rate; provided, however, that if payment is not made within three
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(3) Business Days of demand, interest shall accrue at the rate applicable at
that time to the Loans made in connection with such Borrowing. If such Lender's
Pro Rata Share of such Borrowing is not made available to the Administrative
Agent by such Lender within three (3) Business Days of the date of such
Borrowing, the Administrative Agent also shall be entitled to recover, on
demand, such amount with interest thereon, for the period until the Borrower
makes such repayment amount immediately available to the Administrative Agent,
at the rate applicable at that time to the Loans made in connection with such
Borrowing. A certificate of the Administrative Agent submitted to any Lender or
the Borrower with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
SECTION 2.20 Sharing of Payments. The Lenders agree among themselves
that, in the event that any Lender shall obtain payment in respect of any Loan
or any other obligation owing to such Lender under this Agreement through the
exercise of a right of set-off, banker's lien or counterclaim, or pursuant to a
secured claim under Section 506 of Title 11 of the United States
28
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its Pro Rata
Share of such payment as provided for in this Agreement, such Lender shall
promptly purchase from the other Lenders a Participation Interest in such Loans
and other obligations in such amounts, and make such other adjustments from time
to time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of set-off,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest may, to the fullest extent permitted by
law, exercise all rights of payment, including set-off, banker's lien or
counterclaim, with respect to such Participation Interest as fully as if such
Lender were a holder of such Loan or other obligation in the amount of such
Participation Interest. Except as otherwise expressly provided in this
Agreement, if any Lender or the Administrative Agent shall fail to remit to the
Administrative Agent or any other Lender an amount payable by such Lender or the
Administrative Agent to the Administrative Agent or such other Lender pursuant
to this Agreement on the date when such amount is due, such payments shall be
made together with interest thereon for each date from the date such amount is
due until the date such amount is paid to the Administrative Agent or such other
Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a set-off to which this Section 2.20 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 2.20 to share in the benefits of any recovery on such secured claim.
SECTION 2.21 Substitution of Lenders. Upon the receipt by the Borrower
from any Lender (an "Affected Lender") of a claim under Sections 2.14, 2.15 or
notice of illegality under Section 2.16, the Borrower may: (a) request one or
more of the other Lenders to acquire and assume all or part of such Affected
Lender's Loans and Commitment; or (b) replace such Affected Lender by
designating an Eligible Assignee that is willing to acquire such Loans and
assume such Commitment; provided that (i) such replacement does not conflict
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with any requirement of law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) the Borrower shall repay (or
the replacement Lender shall purchase, at par) all Loans, accrued interest, fees
and other amounts owing to such replaced Lender prior to the date of
replacement, (iv) the Borrower shall be liable to such replaced Lender under
Section 2.11 if any LIBOR Rate Loan owing to such replaced Lender shall be
prepaid (or purchased) other than on the last day of the Interest Period
relating thereto, (v) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 7.05 (provided that the
Borrower or replacement Lender shall be obligated to pay the registration and
processing fee) and (vi) the Borrower shall pay all additional amounts (if any)
required pursuant to Sections
29
2.14 or 2.15, as the case may be, to the extent such additional amounts were
incurred on or prior to the consummation of such replacement.
ARTICLE III
CONDITIONS TO BORROWINGS AND SWING LINE BORROWINGS
SECTION 3.01 Conditions to Closing. This effectiveness of this Agreement
is subject to the satisfaction of the conditions set forth in Section 3.02
(other than 3.02(f)) and the following additional conditions:
The Administrative Agent shall have received the following, each dated
as of the Closing Date (unless otherwise indicated), and each in form and
substance satisfactory to the Administrative Agent:
(a) this Agreement, duly executed by the Borrower, the Parent, each
of the Lenders and the Administrative Agent;
(b) if requested by any Lender, a Note, payable to the order of such
Lender, duly completed and executed by the Borrower;
(c) the Support Agreement, duly executed by Parent and the Borrower;
(d) an opinion of Dechert Price & Xxxxxx, counsel for the Borrower
and the Parent, and W. Xxxxxxx Xxxx, Esq., General Counsel to the Borrower and
the Parent, substantially in the forms of Exhibits B-1 and B-2, respectively,
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and covering such additional matters relating to the transactions contemplated
hereby as the Lenders may reasonably request;
(e) a certificate signed by a principal financial or accounting
officer of the Borrower and the Parent, to the effect that (i) no Default or
Event of Default has occurred and is continuing on the date of Closing (ii) no
event has occurred which has had, or could reasonably be expected to have, a
Material Adverse Effect, since December 31, 1999 and (iii) the representations
and warranties of the Borrower and the Parent contained in Article IV hereof are
true in all material respects as if made on and as of the date of Closing;
(f) receipt of all documents which the Administrative Agent and the
Lenders may reasonably request relating to the existence of the Borrower and the
Parent, the corporate authority for and the validity of this Agreement and the
other Loan Documents and any other matters relevant hereto, all in form and
substance satisfactory to the Administrative Agent and the Lenders, including
without limitation a certificate of incumbency of each of the Borrower and the
Parent, signed by the respective Secretary or an Assistant Secretary of the
Borrower and the Parent, certifying as to the names, true signatures and
incumbency of the officer or officers authorized to execute and deliver the Loan
Documents to which each is a party and certified copies of the following items:
(i) the Borrower's and the Parent's Articles of Incorporation, (ii)
30
the Borrower's and the Parent's By-laws, (iii) certificates of the Secretary of
State of the Delaware as to the existence of the Borrower and the Parent as
Delaware corporations, and (iv) the actions taken by the Board of Directors of
the Borrower and the Parent authorizing the Borrower's and the Parent's
execution, delivery and performance of this Agreement and the other Loan
Documents to which each is a party;
(g) satisfactory review by the Administrative Agent of the Borrower's
corporate structure and capital structure;
(h) the Financial Services Agreement, duly executed by the Borrower,
the Parent and certain Operating Utilities;
(i) receipt of the form of Xxxxx Notes, and any and all other
documentation relating to the Xxxxx Loans;
(j) receipt of an initial Senior Unsecured Debt Rating (i) by S&P of
at least BBB, and (ii) by Xxxxx'x of at least Baa2;
(k) satisfactory review of all legal issues (including tax
implications) and regulatory matters relating to the Loans;
(l) receipt by the Administrative Agent (for its own account and the
account of the Lenders, as applicable) of all fees required to be received in
connection with this Agreement; and
(m) receipt of such other documents, approvals, and opinions as the
Administrative Agent and the Lenders may reasonably request.
SECTION 3.02 Conditions to All Borrowings and Swing Line Borrowings. The
obligation of the Lenders to make Loans on the occasion of each Borrowing and
Swing Line Borrowing, including the first Borrowing or the first Swing Line
Borrowing, is subject to the satisfaction of the following conditions:
(a) the Administrative Agent's receipt of a Notice of Borrowing or
Notice of Swing Line Borrowing, as applicable;
(b) the fact that the representations and warranties of the Borrower
and the Parent contained in Article IV of this Agreement shall be true in all
material respects as if made on and as of the date of such Borrowing or Swing
Line Borrowing, as applicable;
(c) the fact that, immediately prior to and immediately after such
Borrowing or Swing Line Borrowing, as applicable, no Default or Event of Default
under this Agreement shall have occurred and be continuing;
31
(d) the fact that, immediately after such Borrowing or Swing Line
Borrowing, as applicable, the aggregate outstanding principal amount of the
Loans will not exceed the aggregate amount of the Commitment;
(e) with respect to the first Borrowing or first Swing Line Borrowing
only:
(i) The Borrower shall use (directly or indirectly through
the Parent and its Subsidiaries) the proceeds of such
Borrowing or Swing Line Borrowing to pay,
simultaneously with the funding of such proceeds under
this Agreement, in full all of the obligations of the
Parent and its Subsidiaries under the Senior credit
lines set forth on Schedule 3.02 (the "Existing Lines
-------------
of Credit");
(ii) The applicable borrower under each Existing Line of
Credit shall have irrevocably canceled each such
Existing Line of Credit prior to or upon the payment of
such Line of Credit as provided in clause (i) above,
and any and all collateral security for each such Line
of Credit shall have been released; and
(iii) The Borrower shall provide, or cause to be provided to
the Administrative Agent simultaneously with, or
promptly after, the first Borrowing or Swing Line
Borrowing, evidence reasonably satisfactory to the
Administrative Agent of the foregoing; and
(f) each Borrowing or Swing Line Borrowing, as applicable, hereunder
shall be deemed to be a representation and warranty by the Borrower on the date
of such Borrowing, as applicable, as to the facts specified in clauses (b), (c)
and (d) of this Section and, in the case of the earlier of the first Borrowing
or the first Swing Line Borrowing, clause (e).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and the Parent, as applicable, each represent and warrant
that:
SECTION 4.01 Corporate Existence and Status. Each of the Borrower, the
Parent and the Subsidiaries of the Parent is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, as the case may be, and is duly qualified to
transact business in every jurisdiction where, by the nature of its respective
business, such qualification is necessary, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect.
Each of the Borrower, the Parent and the Subsidiaries of the Parent has all
requisite corporate powers and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.
32
SECTION 4.02 Corporate Power and Authority; Enforceability. The
execution, delivery and performance by the Borrower and the Parent of this
Agreement and the other Loan Documents to which the Borrower or the Parent is a
party (i) are within the Borrower's and the Parent's respective corporate powers
and (ii) have been duly authorized by all necessary corporate action. This
Agreement and the other Loan Documents to which the Borrower or the Parent is a
party constitute valid and binding agreements of the Borrower and the Parent, as
the case may be, enforceable in accordance with their respective terms, and the
Notes, if and when executed and delivered in accordance with this Agreement,
will constitute valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms; provided that, in each case, (a) the
enforceability hereof and thereof may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws applicable to creditors' rights or
the collection of debtors' obligations generally and (b) the availability of
remedies may be limited by equitable principles of general applicability.
SECTION 4.03 Non-Contravention. The execution, delivery and performance
by the Borrower and the Parent of this Agreement and the other Loan Documents to
which the Borrower or the Parent is a party (i) do not contravene or constitute
a default under any provision of the articles of incorporation or by-laws (or
other analogous formation documents) of the Borrower or the Parent, or of any
material contract, agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or the Parent, (ii) do not contravene or
violate any law, rule or regulation applicable to the Borrower or the Parent,
and (iii) do not result in the creation or imposition of any Lien on any asset
of the Borrower, the Parent or any Subsidiary of the Parent (other than Liens,
if any, created under the Loan Documents).
SECTION 4.04 Litigation. Except as disclosed in the Parent's Annual
Report on Form 10-K for the Fiscal Year ended December 31, 1999, and its
Quarterly Report on Form 10-Q for the Fiscal Quarter ended March 31, 2000
(copies of which have been furnished to each Lender), to Parent or Borrower's
knowledge, there are no pending or threatened actions or proceedings (including,
without limitation, any Environmental Proceedings) affecting the Borrower, the
Parent or any Subsidiary of the Parent before any court, governmental agency or
arbitrator, which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.05 Financial Information.
(a) The consolidated balance sheet of the Parent and its
Subsidiaries, as of December 31, 1999, and the related statements of income and
cash flows for the Fiscal Year then ended, reported on by independent public
accountants of nationally recognized standing, and the unaudited consolidated
balance sheet of the Parent and its Subsidiaries, as of March 31, 2000, and the
related statements of income and cash flows for the Fiscal Quarter then ended
(copies of each which have been delivered to the Lenders), fairly present, in
conformity with GAAP, subject to normal year-end adjustments and the absence of
footnotes, the consolidated financial
33
position of the Parent and its Subsidiaries, as of such dates, and of their
results of operations and cash flows for such periods stated.
(b) Since December 31, 1999, there has occurred no event which has
had, or could reasonably be expected to have, a Material Adverse Effect.
SECTION 4.06 Approvals. Each of the Borrower, the Parent and the
Subsidiaries of the Parent has all governmental licenses, authorizations,
consents and approvals required to carry on its respective business as now
conducted, except where such failure to have such licenses, authorizations,
consents or approvals could not reasonably be expected to have a Material
Adverse Effect. The execution, delivery and performance by the Borrower and the
Parent of this Agreement and the other Loan Documents to which the Borrower or
the Parent is a party require no action by or in respect of, or filing with, any
governmental body, agency or official or any other Person.
SECTION 4.07 Use of Proceeds. The proceeds of the Loans shall be used by
the Borrower to make or facilitate the making of Xxxxx Loans and pay costs and
expenses of the Borrower incurred in the ordinary course of its business.
SECTION 4.08 Investment Company Act; Public Utility Holding Company Act;
Margin Stock. Neither the Borrower, the Parent nor any Subsidiary of the Parent
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "holding company" or a "subsidiary" of a "registered
holding company" within the meaning of the Public Utility Holding Company Act of
1935, as amended. Neither the Borrower, the Parent nor any Subsidiary of the
Parent will apply the proceeds of any of the Loans, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock.
SECTION 4.09 Compliance with Laws. Each of the Borrower, the Parent and
the Subsidiaries of the Parent is in compliance with all applicable laws,
regulations and similar requirements of governmental authorities (including,
without limitation, all Environmental Requirements), except where the failure to
be in compliance could not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.10 Compliance with ERISA.
(a) The Borrower, the Parent, any Significant Subsidiary of the
Parent and each member of the Controlled Group of the foregoing have fulfilled
their obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code and have not incurred any
liability to the PBGC (other than for premiums, which have been paid when due)
or a Plan under Title IV of ERISA (other than liabilities for benefits and
administration and operational expenses incurred in the ordinary course of Plan
operations). No Plan and, to the best of Borrower's knowledge, no Multi-employer
Plan, to which the Borrower, Parent, any
34
Significant Subsidiary of the Parent and/or each member of the Controlled Group
of the foregoing contributes or has contributed, has an "accumulated funding
deficiency" as defined in ERISA Section 302, using interest rates and other
actuarial assumptions that would be applied should the Plan terminate, the total
of which accumulated funding deficiency for all such Plans is in the aggregate
more than $10,000,000.
(b) All contributions that Borrower, Parent, or any Significant
Subsidiary of the Parent or any member of the Controlled Group of the foregoing
have been required to make to a Multi-employer Plan have been duly and timely
made and neither Borrower, Parent, or any Significant Subsidiary of the Parent
or any member of the Controlled Group of the foregoing has incurred any material
liability with respect to any Multi-employer Plan other than to make
contributions as and when due. Neither Borrower, Parent or any Significant
Subsidiary of the Parent or any member of the Controlled Group of the foregoing
has incurred any withdrawal liability with respect to any Multi-employer Plan
under Section 4201 of ERISA, nor any contingent withdrawal liability under
Section 4202 of ERISA, that has not been fully paid.
SECTION 4.11 Environmental Matters.
(a) Except as disclosed in the Parent's Annual Report on Form 10-K
for the Fiscal Year ended December 31, 1999, and its Quarterly Report on Form
10-Q for the Fiscal Quarter ended March 31, 2000, neither the Borrower, the
Parent nor any Subsidiary of the Parent is subject to any Environmental
Liability which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, and neither the Borrower, the Parent nor any
Subsidiary of the Parent has been designated as a potentially responsible party
under CERCLA or under any state statute similar to CERCLA with respect to any
matter or matters which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Except as disclosed in the Parent's
Annual Report on Form 10-K for the Fiscal Year ended December 31, 1999, and its
Quarterly Report on Form 10-Q for the Fiscal Quarter ended March 31, 2000, none
of the Properties of the Borrower, the Parent or any Subsidiary of the Parent
has been identified on any former, current or proposed (i) National Priorities
List under 40 C.F.R. (S) 300, (ii) CERCLIS list or (iii) any list arising from a
state statute similar to CERCLA relating to any matter or matters which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Except as disclosed in the Parent's Annual Report on Form 10-K
for the Fiscal Year ended December 31, 1999, and its Quarterly Report on Form
10-Q for the Fiscal Quarter ended March 31, 2000, no Hazardous Materials have
been or are being used, produced, manufactured, processed, generated, stored,
disposed of, managed or treated at, or shipped or transported to or from the
Properties of the Borrower, the Parent or any Subsidiary of the Parent or are
otherwise present at, on, in or under such Properties except for Hazardous
Materials used, produced, manufactured, processed, generated, stored, disposed
of and managed in the ordinary course of business in material compliance with
all applicable Environmental Requirements.
35
(c) Except as disclosed in the Parent's Annual Report on Form 10-K
for the Fiscal Year ended December 31, 1999, and its Quarterly Report on Form
10-Q for the Fiscal Quarter ended March 31, 2000, neither the Borrower, the
Parent nor any Subsidiary of the Parent has received any Environmental Notice
regarding any of its respective Properties which could reasonably be expected to
have a Material Adverse Effect.
SECTION 4.12 Taxes. There have been filed on behalf of the Borrower, the
Parent and the Subsidiaries of the Parent all federal, state and local income,
excise, property and other tax returns which are required to be filed by the
Borrower, the Parent and the Subsidiaries of the Parent, and all taxes shown to
be due pursuant to such returns or pursuant to any assessment received by or on
behalf of the Borrower, the Parent and the Subsidiaries of the Parent have been,
or within the times required by law will be, paid, except where the amount or
validity thereof currently is being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower, the Parent or any Subsidiary of the
Parent, as the case may be.
SECTION 4.13 No Defaults. Neither the Borrower, the Parent nor any
Subsidiary of the Parent is in default under or with respect to any material
agreement, instrument or undertaking to which it is a party, or by which it or
any of its properties is bound which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 4.14 Solvency. As of the Closing Date, the Borrower and the
Parent, on a consolidated basis in accordance with GAAP, are each Solvent, and
after giving effect to each Borrowing hereunder, the Borrower and the Parent, on
a consolidated basis in accordance with GAAP, each shall each be Solvent.
SECTION 4.15 Ownership of Borrower and Operating Utilities. All of the
outstanding shares of Common Stock of the Borrower, the Parent and the
Subsidiaries of the Parent have been duly authorized and validly issued, are
fully paid and non-assessable. The Parent owns directly or indirectly (i) 100%
of the Common Stock of the Borrower and (ii) at least 95% of the Common Stock of
each Operating Utility, in each case, free and clear of any Lien.
SECTION 4.16 Ownership of Properties and Assets. Each of the Borrower,
the Parent and the Significant Subsidiaries of the Parent has title to its
respective properties and assets sufficient for the conduct of its respective
business, and none of such properties or assets is subject to any Lien except as
permitted in Section 5.02(b) or as created by this Agreement.
SECTION 4.17 Enforceability of Xxxxx Notes. The Xxxxx Notes and the other
documents executed in connection with the Xxxxx Loans, when executed and
delivered, will constitute valid and binding obligations of each of the
Borrower, the Parent, the Operating Utilities and the other Subsidiaries of the
Parent, which is a party thereto, enforceable in accordance with their
respective terms; provided that (a) the enforceability thereof may be affected
by bankruptcy, insolvency, reorganization, moratorium or similar laws applicable
to creditors' rights or the
36
collection of debtors' obligations generally and (b) the availability of
remedies may be limited by equitable principles of general applicability.
SECTION 4.18 Full Disclosure. All information heretofore furnished by the
Borrower and the Parent to the Administrative Agent, the Arranger and the
Lenders for purposes of or in connection with this Agreement and the Loan
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by the Borrower and the Parent to the
Administrative Agent, the Arranger and the Lenders will be, as of the date
furnished, for the purposes for which such information is given and read
together with all other previously provided information, true, accurate and
complete in every material respect or based on reasonable estimates on the date
as of which such information is stated or certified. Each of the Borrower and
the Parent has disclosed to the Administrative Agent, the Arranger and the
Lenders in writing any and all facts which have had, or could reasonably be
expected to have, a Material Adverse Effect.
ARTICLE V
COVENANTS
SECTION 5.01 Affirmative Covenants. On and after the Closing Date, so
long as any Loan shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower and the Parent, as applicable, agree as follows:
(a) Parent Financial Reporting. The Parent will deliver to the
--------------------------
Administrative Agent and the Lenders:
(i) as soon as available and in any event within 120 days after
the end of each Fiscal Year, a consolidated balance sheet
of the Parent and its Subsidiaries as of the end of such
Fiscal Year and the related consolidated statements of
income and cash flows for such Fiscal Year, setting forth
in each case in comparative form the figures for the
previous Fiscal Year (for purposes hereof, delivery of the
Parent's appropriately completed Annual Report on Form 10-K
will be sufficient in lieu of delivery of such consolidated
financial statements), all reported on by independent
public accountants of nationally recognized standing, with
such report to be free of exceptions and qualifications not
reasonably acceptable to the Administrative Agent and the
Lenders;
(ii) as soon as available and in any event within 60 days after
the end of each Fiscal Quarter, a consolidated balance
sheet of the Parent and its Subsidiaries as of the end of
such Fiscal Quarter and the related consolidated statement
of income and cash flows for such Fiscal Quarter and for
the portion of the Fiscal Year ended at the end of such
Fiscal Quarter, setting forth in each case in comparative
form the figures for the
37
corresponding Fiscal Quarter and the corresponding portion
of the previous Fiscal Year (for purposes hereof, delivery
of the Parent's appropriately completed Quarterly Report on
Form 10-Q will be sufficient in lieu of delivery of such
consolidated financial statements), all certified (subject
to normal year-end adjustments) as to fairness of
presentation, GAAP and consistency by the chief financial
officer or the chief accounting officer of the Parent; and
(iii) simultaneously with the delivery of each set of financial
statements referred to in subsections (a)(i) and (a)(ii) of
this Section 5.01, a certificate of the chief financial
officer or the chief accounting officer of the Parent
demonstrating and certifying compliance with the financial
covenant set forth in Section 5.01(k).
(b) Borrower Financial Reporting. The Borrower will deliver to the
----------------------------
Administrative Agent and the Lenders:
(i) as soon as available and in any event within 120 days after
the end of each Fiscal Year, a consolidated balance sheet
of the Borrower as of the end of such Fiscal Year and the
related consolidated statements of income and cash flows
for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year,
all certified as to fairness of presentation, GAAP and
consistency by the chief financial officer or chief
accounting officer of the Borrower.
(ii) as soon as available and in any event within 60 days after
the end of each Fiscal Quarter, a consolidated balance
sheet of the Borrower as of the end of such Fiscal Quarter
and the related consolidated statement of income and cash
flows for such Fiscal Quarter and for the portion of the
Fiscal Year ended at the end of such Fiscal Quarter,
setting forth in each case in comparative form the figures
for the corresponding Fiscal Quarter and the corresponding
portion of the previous Fiscal Year, all certified (subject
to normal year-end adjustments) as to fairness of
presentation, GAAP and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
and
(iii) simultaneously with the delivery of each set of financial
statements referred to in subsections (b)(i) and (b)(ii) of
this Section 5.01, a certificate of the chief financial
officer or the chief accounting officer of the Borrower
stating whether any Default or Event of Default exists on
the date of such certificate and, if any Default or Event
of Default then exists, setting forth the details thereof
and the action which the Borrower or the Parent, as
applicable, is taking or proposes to take with respect
thereto.
38
(c) Other Reporting Requirements. The Borrower and the Parent will
----------------------------
deliver to the Administrative Agent and the Lenders:
(i) within five Business Days after the Borrower or the Parent
becomes aware of the occurrence of any Default or Event of
Default, a certificate of the chief financial officer or
the chief accounting officer of the Borrower or the Parent,
as applicable, setting forth the details thereof and the
action which the Borrower or the Parent, as applicable, is
taking or proposes to take with respect thereto;
(ii) as soon as possible, and in any event within 30 days after,
(i) the Borrower, the Parent or any Subsidiary of the
Parent has been served with legal process in litigation of
such a nature that could reasonably be expected to have a
Material Adverse Effect, (ii) the Borrower, the Parent or
any Subsidiary of the Parent becomes aware of any pending,
threatened or anticipated proceeding by or before any
federal, state or local governmental instrumentality, body
or agency that could reasonably be expected to have a
Material Adverse Effect, notice of such litigation or
proceeding, or notice of such default describing the
factual basis alleged to underlie such litigation or
proceeding, or asserted in such notice of default and a
brief statement of the proposed actions of the Borrower or
the Parent, as applicable, in connection therewith;
(iii) as soon as possible, and in any event within 30 days after,
the Borrower or the Parent becomes aware of any
Environmental Liabilities, pending, threatened or
anticipated Environmental Proceedings, Environmental
Notices, Environmental Judgments and Orders, or
Environmental Releases at, on, in, under or in any way
affecting its respective Properties or, to the extent the
Borrower or the Parent has actual notice thereof, any
adjacent property, and all facts, events, or conditions
that could lead to any of the foregoing, notice of the
foregoing describing the factual basis alleged to underlie
same, together with copies of all correspondence,
environmental investigations and reports, soil and
groundwater sampling and analysis, and a brief statement of
the proposed actions of the Borrower or the Parent, as
applicable, in connection therewith; provided that the
Borrower or the Parent shall not be required to give such
notice unless it reasonably believes that any of the
foregoing could reasonably be expected to have a Material
Adverse Effect;
(iv) within 5 Business Days after the sending or filing thereof,
copies of all material reports which the Borrower, the
Parent or any Subsidiary of the Parent sends to any of its
security holders, and copies of all material reports and
registration statements which the Borrower, the Parent or
any
39
Subsidiary of the Parent files with the Securities and
Exchange Commission or any national securities exchange;
and
(v) if and when the Borrower, the Parent or any Significant
Subsidiary of the Parent or any member of a Controlled
Group of the foregoing (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 Plan which might
constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of
any 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, a copy of such notice or
(iii) receives notice from the PBGC under Title IV of ERISA
of an intent to terminate or appoint a trustee to
administer any Plan, a copy of such notice;
(vi) as soon as possible, and in any event within five (5)
Business Days, after the Borrower becomes aware of a
default under any of the Xxxxx Loans, a certificate of the
Borrower setting forth the details thereof and the action
the Borrower is taking or proposes to take with respect
thereto; and
(vii) from time to time such additional information regarding the
business, condition (financial or otherwise), results of
operations or prospects of the Borrower, the Parent or the
Subsidiaries of the Parent as the Administrative Agent and
the Lenders may reasonably request.
(d) Compliance with Laws and Contractual Obligations.
------------------------------------------------
(i) Each of the Borrower, the Parent and the Subsidiaries of
the Parent will comply with the requirements of all
applicable laws (including, without limitation, ERISA and
Environmental Requirements), rules, regulations and orders,
the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
(ii) Each of the Borrower, the Parent and the Subsidiaries of
the Parent will comply with the requirements of all
material contractual obligations, except (a) where the
necessity of such compliance currently is being contested
in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been
provided on the books of the Borrower, the Parent or any
Subsidiary of the Parent, as the case may be, or (b) where
the failure to so comply could not reasonably be expected
to have a Material Adverse Effect.
40
(e) Payment of Taxes. Each of the Borrower, the Parent and the
----------------
Subsidiaries of the Parent will pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a Lien against the Properties of the Borrower,
the Parent or any Subsidiary of the Parent, except (i) liabilities are currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of the
Borrower, the Parent or any Subsidiary of the Parent, as the case may be, or
(ii) where nonpayment could not reasonably be expected to have a Material
Adverse Effect.
(f) Maintenance of Insurance. Each of the Borrower, the Parent and
------------------------
the Significant Subsidiaries of the Parent will maintain with financially sound
and reputable insurance companies, insurance on all of their respective
Properties in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies of established
repute engaged in the same or similar business as the Borrower, the Parent or
such Significant Subsidiary of the Parent, as the case may be.
(g) Maintenance of Properties; Inspection of Property, Books and
------------------------------------------------------------
Records.
-------
(i) Each of the Borrower, the Parent and the Subsidiaries of
the Parent will maintain all of its respective Properties
and assets in good condition, repair and working order,
ordinary wear and tear excepted, in accordance with
standards observed by companies of established repute
engaged in the same or similar business and similarly
situated as the Borrower, the Parent or such Subsidiaries
of the Parent, as the case may be, except where the failure
to so maintain its respective Properties and assets could
not reasonably be expected to have a Material Adverse
Effect.
(ii) Each of the Borrower, the Parent and the Significant
Subsidiaries of the Parent will keep proper books of record
and account in which full, true and correct entries in
conformity with GAAP shall be made of all dealings and
transactions in relation to its respective business and
activities and will permit representatives of the
Administrative Agent or any Lender to visit and inspect any
of its respective Properties at reasonable business hours
upon reasonable notice, to examine and make abstracts from
any of its books and records and to discuss its affairs,
finances and accounts with its respective officers,
employees and independent public accountants.
(h) Xxxxx Loans. The Borrower will make the Xxxxx Loans on the terms
-----------
set forth in the Xxxxx Notes and each Xxxxx Loan shall be evidenced by a Xxxxx
Note. The Borrower will use reasonable best efforts to enforce the Xxxxx Notes
and other documents executed in connection with the Xxxxx Loans in accordance
with their respective terms.
(i) Maintenance of Existence. Each of the Borrower, the Parent and
------------------------
each Significant Subsidiary of the Parent shall maintain its corporate existence
and carry on its business in
41
substantially the same manner and in substantially the same fields as such
business is now carried on and maintained, except (i) if permitted under Section
5.02(c) below or (ii) where the failure to so maintain its existence or carry on
its business could not reasonably be expected to have a Material Adverse Effect.
(j) Further Assurances. Each of the Borrower and the Parent promptly
------------------
shall execute and deliver all further instruments, and take all further action,
that may be reasonably necessary or that the Administrative Agent or any Lender
may reasonably request in order to give full effect to the interests and
properties purported to be covered by this Agreement and the other Loan
Documents.
(k) Debt Capitalization. The Parent will maintain at the end of each
-------------------
Fiscal Quarter a ratio of Consolidated Total Debt to Consolidated Total
Capitalization of not more than .725 to 1.0.
SECTION 5.02 Negative Covenants. On and after the Closing Date, so long
as any Loan shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower and the Parent, as applicable, agree as follows:
(a) Short-Term Loans; Xxxxx Loans. The Borrower shall not allow at
-----------------------------
any time:
(i) the aggregate outstanding principal amount of Debt of the
Borrower having a maturity of one-year or less from the
issuance thereof to exceed by more than $50,000,000, the
aggregate outstanding principal amount of Short-Term Loans
made to the Parent and the Operating Utilities; or
(ii) the aggregate outstanding principal amount of Debt of the
Borrower to exceed by more than $50,000,000, the aggregate
outstanding principal amount of Xxxxx Loans made to the
Parent and the Operating Utilities.
(b) Restrictions on Liens. The Borrower, the Parent and the
---------------------
Significant Subsidiaries of the Parent shall not incur any Debt secured by any
Lien, or suffer to exist any Lien, upon or with respect to their respective
Properties or assets (including, without limitation, their capital stock),
except:
(iii) Liens existing on the date hereof;
(iv) Liens consisting of (a) pledges or deposits in the ordinary
course of business to secure obligations under workmen's
compensation laws or similar legislation, (b) deposits in
the ordinary course of business to secure or in lieu of
surety, appeal or customs bonds to which the Borrower, the
Parent or a Significant Subsidiary of the Parent is a
party, (c) Liens created by or resulting from any
litigation or legal proceeding which is currently being
contested in good faith by appropriate proceedings
diligently
42
conducted, (d) pledges or deposits in the ordinary course
of business to secure performance in connection with
bids, tenders or contracts (other than contracts for the
payment of money) or (e) materialmen's, mechanics',
carriers', workmen's, repairmen's or other like Liens
incurred in the ordinary course of business for sums not
yet due or currently being contested in good faith by
appropriate proceedings diligently conducted;
(v) Liens created to secure tax-exempt Debt, in connection
with the financing or refinancing of the purchase, lease
or construction of Properties or other assets;
(vi) Any Lien on any asset of any Person existing at the time
such Person is merged or consolidated with or into, or
such asset is acquired by, the Borrower, the Parent or a
Significant Subsidiary of the Parent and not created in
contemplation of such event;
(vii) Liens created to secure sales of accounts receivable and
other receivables;
(viii) Liens, securing indebtedness which has neither been
assumed by the Borrower, the Parent or a Significant
Subsidiary nor upon which it customarily pays interest
charges, existing upon real property, or rights in or
relating thereto, which real property or rights were
acquired for right-of-way purposes;
(ix) Zoning laws and ordinances;
(x) Capitalized Leases;
(xi) Easements, rights-of-way, restrictions, conditions and
other similar encumbrances, minor defects or
irregularities of title, and alleys, streets and
highways, which in the aggregate do not materially impair
the usefulness of the mortgaged property in the present
business of the Borrower, the Parent or Significant
Subsidiary;
(xii) Any Lien (not otherwise permitted hereunder) on any asset
of any Significant Subsidiary securing Debt not exceeding
in the aggregate $100,000,000 in any Fiscal Year; and
(xiii) Liens created for the sole purpose of extending, renewing
or replacing in whole or in part Debt secured by any
Lien, mortgage or security interest referred to in the
foregoing subsections (i) through (x); provided, however,
-------- -------
that the principal amount of Debt or obligations secured
thereby shall not exceed the principal amount of Debt or
obligations so secured at the time of such extension,
43
renewal or replacement and that such extension, renewal
or replacement, as the case may be, shall be limited to
all or a part of the Property or assets that secured the
Lien or mortgage so extended, renewed or replaced (and
any improvements on such Property or assets).
(c) Consolidations; Mergers; Sales of Assets. The Borrower, the
----------------------------------------
Parent and the Significant Subsidiaries of the Parent shall not consolidate or
merge with or into, or sell, lease or otherwise transfer all or a significant
portion of their respective assets to, any other Person, or, except in
connection with any such sale, lease or transfer, discontinue or eliminate any
business line or segment other than in the ordinary course of business; provided
that (i) the Parent may merge with another Person if (A) the Parent is the
corporation surviving such merger and (B) immediately after giving effect to
such merger, no Default or Event of Default shall have occurred and be
continuing and (ii) any Significant Subsidiary may merge with, or sell or
otherwise transfer all or a significant portion of its assets to, the Parent or
any other Subsidiary of the Parent, if immediately after giving effect to such
merger, sale or transfer, no Default or Event of Default shall have occurred and
be continuing.
(d) Dividends and Distributions. The Borrower shall not declare or
---------------------------
pay any dividends upon any of its Common Stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its Common Stock, or
make any distribution of cash, property or assets among the holder of shares of
its Common Stock, or make any change in its capital structure, if an Event of
Default has occurred and is continuing, or would occur, either before or after
giving effect to any of the foregoing.
(e) Loans or Advances; Investments. The Borrower shall not make
------------------------------
loans or advances to, or investments in, any Person, except that so long as no
Event of Default has occurred and is continuing, the Borrower may make Xxxxx
Loans and other loans or advances to, or investments in, Operating Utilities
pursuant to the terms of the Financial Services Agreement.
(f) Transactions with Affiliates. Neither the Borrower, the Parent
----------------------------
nor any Subsidiary of the Parent shall enter into any transaction with any of
its respective Affiliates (other than Subsidiaries of the Parent, provided that
the Parent owns directly or indirectly 95% of the Common Stock of such
Subsidiary), unless such transaction is on terms no less favorable to the
Borrower, the Parent or any such Subsidiary than if the transaction had been
negotiated in good faith on an arm's length basis with a non-Affiliate.
(g) Use of Proceeds. No portion of the proceeds of the Loans will be
---------------
used by the Borrower (i) directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any Margin Stock or
(ii) for any purpose in violation of any applicable law, rule or regulation. The
proceeds of the Loans will be used solely for the purposes provided in Section
4.07.
(h) Support Agreement. Subject to Section 7.04 (viii), the Borrower
-----------------
and the Parent shall not cancel, terminate, amend or otherwise modify the terms
of the Support Agreement,
44
except for non-material amendments and modifications that do not materially or
adversely affect the rights of the Lenders hereunder, without the prior written
consent of the Required Lenders.
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay (i) any principal of any Loan on
the date such payment is due, or (ii) interest on any Loan or any fee or other
amount payable hereunder, within three (3) Business Days of the date such
payment is due; or
(b) the Borrower or the Parent, as applicable, shall fail to observe
or perform any covenant or agreement contained in Sections 5.01(c)(i), 5.01(i),
5.01(k), 5.02(b), 5.02(c), 5.02(d), 5.02(e) or 5.02(h); or
(c) the Borrower or the Parent shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those covered by
subsections (a) or (b) of this Section 6.01) for 30 days after written notice
thereof has been given to the Borrower by the Administrative Agent or any
Lender; or
(d) any representation, warranty, certification or statement made or
deemed made by the Borrower or the Parent in Article IV of this Agreement, under
any other Loan Document or in any certificate, financial statement or other
document delivered pursuant to this Agreement or any other Loan Document shall
prove to have been incorrect in any material respect when made (or deemed made);
or
(e) the Borrower, the Parent or any Significant Subsidiary shall fail
to pay any principal of or premium or interest on any Debt (other than Debt
evidenced by this Agreement and the other Loan Documents) thereof in the
aggregate in excess of (i) $5,000,000, in the case of the Borrower, (ii)
$25,000,000, in the case of the Parent, (iii) $25,000,000, in the case of any
Significant Subsidiary of the Parent or (iv) $50,000,000, in the aggregate, in
the case of all of the Significant Subsidiaries of the Parent, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;
or
45
(f) the Borrower or the Parent shall default in the payment when due,
or in the performance or observance of, any obligation or condition under the
Support Agreement; or
(g) the Borrower, the Parent or any Significant Subsidiary of the
Parent 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 fail
generally, or shall admit in writing its inability, to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower, the Parent or any Significant Subsidiary of the Parent
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 60 days; or an order for relief shall be entered against the Borrower,
the Parent or any such Significant Subsidiary under the federal bankruptcy laws
as now or hereafter in effect; or
(i) one or more judgments or orders for the payment of money in an
aggregate amount in excess of (i) $5,000,000, in the case of the Borrower, (ii)
$25,000,000, in the case of the Parent, (iii) $25,000,000, in the case of any
Significant Subsidiary of the Parent or (iv) $50,000,000, in the aggregate, in
the case of all of the Significant Subsidiaries of the Parent, on claims not
covered by insurance shall be rendered against the Borrower, the Parent or any
such Significant Subsidiary, and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days; or
(j) the Borrower, the Parent or any Significant Subsidiary of the
Parent, or any member of the Controlled Group of the foregoing shall fail to pay
when due any amount, in excess of $10,000,000, which it shall have become liable
to pay to the PBGC or to a Plan under Title IV of ERISA; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a trustee
to be appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30
days thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or the Borrower, the Parent or any such Significant Subsidiary, or
any member of the Controlled Group of the foregoing shall incur any withdrawal
liability in the aggregate in excess of $10,000,000, with respect to one or more
Multi-employer Plans or Plans; or
46
(k) the obligations of the Borrower or the Parent under this
Agreement, any of the other Loan Documents or the Support Agreement, shall
become unenforceable, or any court or governmental or regulatory body having
jurisdiction over the Borrower or the Parent, shall assert the unenforceability
of any such obligations in writing, or the Borrower, or the Parent contests in
any manner the validity or enforceability of any such obligations; or
(l) a Change of Control shall occur with respect to the Parent; or
(m) the Parent shall cease to own, directly or indirectly, at least
(i) 100% of the Common Stock of the Borrower, or (ii) 95% of the Common Stock of
each Operating Utility;
then, and in every such event, the Administrative Agent, on behalf of the
Lenders, may (or shall at the request of the Required Lenders) (i) by notice to
the Borrower terminate the Commitment and it shall thereupon terminate, and (ii)
by notice to the Borrower declare the Loans (together with accrued interest
thereon) and all other amounts payable hereunder and under the other Loan
Documents to be, and the Loans (together with all accrued interest thereon) and
all other amounts payable hereunder and under the other Loan Documents 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 if any Event of Default specified in subsection (g) or
(h) of this Section 6.01 occurs, without any notice to the Borrower or any other
act by the Administrative Agent or any Lender, the Commitment shall thereupon
automatically terminate and the Loans (together with accrued interest thereon)
and all other amounts payable hereunder and under the other Loan Documents shall
automatically become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party at its address, or telecopy
number set forth on Schedule 1.01B or such other address or telecopy number as
--------------
such party may hereafter specify for the purpose by notice to each other party.
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopy number
specified as provided in this Section and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid, or (iii)
if given by any other means, when delivered at the address specified as provided
in this Section; provided that Notices of Borrowings to the Administrative Agent
and Notices of Swing Line Borrowings to the Swing Line Bank under Article II
shall not be effective until received.
SECTION 7.02 No Waivers. No failure or delay by the Administrative Agent
or any Lender in exercising any right, power or privilege hereunder or under any
of the other Loan Documents 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
47
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 7.03 Expenses: Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the
Administrative Agent (including reasonable fees and disbursements of counsel for
the Administrative Agent) and the Arranger in connection with the preparation of
this Agreement and the other Loan Documents, any waiver or consent hereunder or
thereunder or any amendment hereof or thereof or any Default hereunder or
thereunder, and (ii) if an Event of Default occurs, all out-of-pocket expenses
incurred by the Administrative Agent and each of the Lenders, including fees and
disbursements of counsel of the Administrative Agent and each Lender, in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom, including out-of-pocket expenses incurred in
enforcing this Agreement and the other Loan Documents.
(b) The Borrower shall indemnify the Lenders against any transfer
taxes, documentary taxes, assessments or charges made by any Authority by reason
of the execution and delivery of this Agreement or the other Loan Documents;
provided that no Assignee shall be entitled to receive any greater payment under
this subsection (b) than the related transferor Lender would have been entitled
to receive.
(c) Borrower shall indemnify the Administrative Agent, the Arranger,
each Lender, and each Affiliate thereof and their respective directors,
officers, employees and agents from, and hold each of them harmless against, any
and all losses, liabilities, claims or damages to which any of them may become
subject, insofar as such losses, liabilities, claims or damages arise out of or
result from or relate in any way to this Agreement or the other Loan Documents
or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including, without limitation, from
any use by the Borrower of the proceeds of any extension of credit by any Lender
hereunder or breach by the Borrower of this Agreement or any other Loan
Document) and any actions taken by the Administrative Agent or such Lender to
enforce this Agreement or any of the other Loan Documents relating to the
foregoing and the Borrower shall reimburse the Administrative Agent, each
Lender, the Arranger and each Affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any reasonable expenses
(including, without limitation, legal fees and expenses) incurred in connection
with any of the foregoing; but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified. The indemnity provisions of this
subsection (c) shall supersede and replace the indemnities provided by the
Borrower in the Commitment Letter.
SECTION 7.04 Amendments, Waivers and Consents. Neither this Agreement nor
any other Loan Document nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing and signed by the Required Lenders, the
Borrower and the Parent; provided that no such
48
amendment, change, waiver, discharge or termination shall without the consent of
each Lender affected thereby,
(i) extend the final maturity of any Loan, or any portion
thereof,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of
any post-default increase in interest rates) or fees
hereunder,
(iii) reduce or waive the principal amount of any Loan,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a
waiver of any Default or Event of Default or a mandatory
reduction in the Commitments shall not constitute a
change in the terms of any Commitment of any Lender),
(v) release the Borrower or the Parent from its respective
obligations under the Loan Documents,
(vi) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders,
(vii) consent to the assignment or transfer by the Borrower or
the Parent of any of either's respective rights and
obligations under (or in respect of) the Loan Documents
except as permitted thereby,
(viii) terminate or otherwise cancel the Support Agreement, or
(ix) amend or otherwise modify this Section 7.04.
SECTION 7.05 Benefit of Agreement.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto; provided that neither the Borrower nor the Parent may assign or transfer
any of its interests and obligations without prior written consent of each of
the Lenders; provided further that the rights of each Lender to transfer, assign
or grant participations in its rights and/or obligations hereunder shall be
limited as set forth in this Section 7.05.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans, its Notes, and its Commitment);
provided, however, that
-------- -------
(i) each such assignment shall be to an Eligible Assignee;
49
(ii) except in the case of an assignment to another Lender, an
Affiliate of an existing Lender or any fund that invests
in bank loans and is advised or managed by an investment
advisor to an existing Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, any
such partial assignment shall be in an amount at least
equal to $5,000,000 (or, if less, the remaining amount of
the Commitment being assigned by such Lender) or an
integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender of any portion of its
Loans shall be accompanied by an assignment of a constant,
and not varying, percentage of all of such Loans, and each
such assignment by a Lender of any portion of its Loans
shall be accompanied by an assignment of a constant, and
not varying, percentage of all of such Lender's Loans; and
(iv) the parties to such assignment shall execute and deliver
to the Administrative Agent for its acceptance an
Assignment and Acceptance, together with any Note subject
to such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section 7.05, the assignor, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, new Notes are issued to the assignor and the assignee. If the
assignee is not a United States person under Section 7701(a)(30) of the Code, it
shall deliver to the Borrower and the Administrative Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section
2.14. To the extent that an assignment of all or any portion of a Lender's
Commitment pursuant to this Section 7.05 would, at the time of such assignment,
result in increased costs under Section 2.14 or Section 2.15 from those being
charged by the respective assigning Lender prior to such assignment, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
(c) The Administrative Agent shall maintain at its address referred
to in Section 7.01 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from
50
time to time upon reasonable prior notice. Any assignment of any Loan or other
obligations shall be effective only upon an entry with respect thereto being
made in the Register.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
---------
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
parties thereto.
(e) Each Lender may sell participations to one or more Persons (each
a "Participant") in all or a portion of its rights, obligations or rights and
obligations under this Agreement (including all or a portion of its Commitment
or its Loans); provided, however, that (i) any such participation shall be in an
-------- -------
amount at least equal to $5,000,000, (ii) such Lender's obligations under this
Agreement shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iv) the participant shall be entitled to the benefit of the yield protection
provisions, and the right of set-off contained in Section 2.18, and (v) the
Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower hereunder owing to such Lender and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal of or
the rate at which interest is payable on such Loans or Notes, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans or Notes, or extending its Commitment).
(f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Notes to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(g) Any Lender may furnish any information concerning the Borrower in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants), subject, however, to the
provisions of Section 7.06 hereof.
SECTION 7.06 Confidentiality. The Administrative Agent and each Lender
(each, a "Lending Party") agrees to keep confidential any information furnished
or made available to it by or on behalf of the Borrower and the Parent pursuant
to this Agreement; provided that nothing herein shall prevent any Lending Party
from disclosing such information (a) to any other Lending Party or any Affiliate
of any Lending Party, or any officer, director, employee, agent, or advisor of
any Lending Party or Affiliate of any Lending Party, (b) to any other Person if
reasonably incidental to the administration of this Agreement or the other Loan
Documents, (c) as required by any law, rule, or regulation, (d) upon the order
of any court or administrative
51
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by any Lending Party
prohibited by this Agreement, (g) in connection with any litigation to which
such Lending Party or any of its Affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, (j) to any direct
or indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty (i) has been approved in
writing by the Borrower or the Parent, as applicable, and (ii) agrees in a
writing enforceable by the Borrower or the Parent, as applicable, to be bound by
the provisions of this Section 7.06), and (k) subject to provisions
substantially similar to those contained in this Section 7.06, to any actual or
proposed Participant or assignee.
SECTION 7.07 Representation by Lender. Each Lender hereby represents that
it is a commercial lender or financial institution which makes loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided that, subject
to Section 7.05 of this Agreement, the disposition of the Loans and the Notes
held by such Lender shall at all times be within its exclusive control.
SECTION 7.08 North Carolina Law. This Agreement and each of the other
Loan Documents shall be construed in accordance with and governed by the law of
the State of North Carolina.
SECTION 7.09 Consent to Jurisdiction; Waiver of Jury Trial.
(a) Each of the Borrower and the Parent (i) submits to personal
jurisdiction in the State of North Carolina, the courts thereof and the United
States District Courts sitting therein, for the enforcement of this Agreement
and the other Loan Documents and (ii) waives any and all personal rights under
the law of any jurisdiction to object on any basis (including, without
limitation, inconvenience of forum) to jurisdiction or venue within the State of
North Carolina for the purpose of litigation to enforce this Agreement and the
other Loan Documents. Nothing herein contained, however, shall prevent any
Lender from bringing any action or exercising any rights against any security
and against the Borrower personally or against any assets of the Borrower,
within any other state or jurisdiction.
(b) THE ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER AND THE
PARENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT AND ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR
52
WRITTEN), OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER OR
THE PARENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT
AND THE LENDERS ENTERING INTO THIS AGREEMENT.
SECTION 7.10 Interpretation. No provision of this Agreement or any other
Loan Document shall be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or dictated such
provision.
SECTION 7.11 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 7.12 Entire Agreement. This Agreement and the other Loan
Documents embody the entire agreement and understanding between the parties
hereto and thereto in respect of the transactions contemplated hereby and
thereby and supersede all prior negotiations, understandings and agreements
between such parties or any of them in respect of such transactions.
ARTICLE VIII
AGENCY PROVISIONS
SECTION 8.01 Appointment. Each Lender hereby designates and appoints
First Union National Bank, as Administrative Agent of such Lender to act as
specified herein and the other Loan Documents, and each such Lender hereby
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated by the terms hereof
and of the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere herein and in the other Loan Documents, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth herein
and therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any of the other Loan Documents, or shall
otherwise exist against the Administrative Agent. The provisions of this Section
are solely for the benefit of the Administrative Agent and the Lenders, and
neither the Borrower nor the Parent shall have any rights as a third party
beneficiary of the provisions hereof. In performing its functions and duties
under this Agreement and the other Loan Documents, the Administrative Agent
shall act solely as Administrative Agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency or
trust with or for the Borrower, the Parent or any of their respective
Affiliates.
53
SECTION 8.02 Delegation of Duties. The Administrative Agent may execute
any of its duties hereunder or under the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys-
in-fact selected by it with reasonable care.
SECTION 8.03 Exculpatory Provisions. The Administrative Agent and its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall
not be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection herewith or in connection with any of the
other Loan Documents (except for its or such Person's own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
the Parent contained herein or in any of the other Loan Documents or in any
certificate, report, document, financial statement or other written or oral
statement referred to or provided for in, or received by the Administrative
Agent under or in connection herewith or in connection with the other Loan
Documents, or enforceability or sufficiency therefor of any of the other Loan
Documents, or for any failure of the Borrower or the Parent to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement, or any of the
other Loan Documents or for any representations, warranties, recitals or
statements made herein or therein or made by the Borrower or the Parent in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Borrower or the Parent to the Administrative Agent or any Lender or be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Borrower, the Parent or any of their
respective Affiliates.
SECTION 8.04 Reliance on Communications. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
statement, order or other document or conversation believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower, independent accountants and other
experts selected by the Administrative Agent with reasonable care). The
Administrative Agent may deem and treat the Lenders as the owner of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 7.05 hereof. The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or under any of the other Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by It by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or
54
in refraining from acting, hereunder or under any of the other Loan Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 7.04, all the Lenders) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
SECTION 8.05 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, the Borrower or the Parent referring to the Loan Document, describing
such Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders.
SECTION 8.06 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that each of the Administrative Agent and its
officers, directors, employees, agents, attorneys-in-fact or affiliates has not
made any representations or warranties to it and that no act by the
Administrative Agent or any affiliate thereof hereinafter taken, including any
review of the affairs of the Borrower, the Parent or any of their respective
Affiliates, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower, the Parent or their respective
Affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower, the Parent and their respective Affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Borrower, the Parent or
their respective Affiliates which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
SECTION 8.07 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and the Arranger and each of their
respective directors, officers, employees and agents (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Commitments (or if the
55
Commitments have expired or been terminated, in accordance with the respective
principal amounts of outstanding Loans of the Lenders), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including without limitation at any time following the final payment of
all of the obligations of the Borrower hereunder and under the other Loan
Documents) be imposed on, incurred by or asserted against the Administrative
Agent in its capacity as such or the Arranger in any way relating to or arising
out of this Agreement or the other Loan Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent in its
capacity as such or the Arranger under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent in its capacity as
such or the Arranger. If any indemnity furnished to the Administrative Agent for
any purpose shall, in the opinion of the Administrative Agent, be insufficient
or become impaired, the Administrative Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished (which additional indemnity shall be furnished
in accordance with the terms of this Section 8.07). The agreements in this
Section shall survive the repayment of the Loans and other obligations under the
Loan Documents and the termination of the Commitments hereunder.
SECTION 8.08 Administrative Agent in its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, the Parent,
their respective Subsidiaries or their respective Affiliates as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to the Loans and all obligations of the Borrower and the Parent hereunder and
under the other Loan Documents, the Administrative Agent shall have the same
rights and powers under this Loan Agreement as any Lender and may exercise the
same as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
SECTION 8.09 Successor Agent. The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders, with any such
resignation or removal to become effective only upon the appointment of a
successor Administrative Agent pursuant to this Section 8.09. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. Such successor shall be subject to the approval
of the Borrower, such approval not to be unreasonably withheld or delayed,
provided that such approval shall not be necessary if at the time such successor
is appointed there shall have occurred and be continuing a Default or Event of
Default. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative
56
Agent, which shall be a Lender or shall be another commercial bank or trust
company organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $400,000,000. Upon
the acceptance of any 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, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 8.10 Other Agents. Neither the Arranger nor any Lender identified
as an "Agent" (other than the Administrative Agent) shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
Lenders so identified shall have or be deemed to have any fiduciary relationship
with any other Lender. Each Lender acknowledges that it has not relied, and will
not rely, on any of the Lenders so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
[Remainder of Page Intentionally Left Blank]
57
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.
BORROWER:
AMERICAN WATER CAPITAL CORP.
By:/s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President and Treasurer
Address for Notices:
-------------------
0000 Xxxxxx Xxx Xxxx
Xxxxxxxx, XX 00000
Attention: Treasurer
Telecopy number: 856.346.8363
PARENT:
AMERICAN WATER WORKS COMPANY, INC.
By:/s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President and CFO
Address for Notices:
-------------------
0000 Xxxxxx Xxx Xxxx
Xxxxxxxx, XX 00000
Attention: Treasurer
Telecopy number: 856.346.8363
58
FIRST UNION NATIONAL BANK,
as Administrative Agent, as Swing
Line Bank and as a Lender
By:/s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: XXXXXXX X. XXXXXXXXXX
Title: VICE PRESIDENT
Signature Page
to
American Water Works Corp.
$600,000,000
364-Day Credit Agreement
59
MELLON BANK, N.A., as Documentation
Agent and as a Lender
By:/s/ J. Xxxx Xxxx
--------------------------------
Name: J. Xxxx Xxxx
Title: Vice President
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
60
PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agent and as Lender
By:/s/ Xxxxxxx X. Xxxxxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: Director
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
61
FLEET NATIONAL BANK
By:/s/ Xxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Senior Vice President
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
62
THE NORINCHUKIN BANK, New York Branch
By:/s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: General Manager
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
63
BANK ONE, N.A.
By:/s/ Xxxxxxxxx X. Xxxxxx
---------------------------------
Name: XXXXXXXXX X. XXXXXX
Title: Assistant Vice President
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
64
NATIONAL CITY BANK
By:/s/ Xxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: VP
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
65
BANCO di NAPOLI, S.P.A
By:/s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Executive Vice President
By:/s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: First Vice President
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
66
THE CHASE MANHATTAN BANK
By:/s/ Wing Xxx-Xxx
------------------------------
Name: Wing Xxx-Xxx
Title: VP
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
67
SUMMIT BANK
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
68
THE FIFTH THIRD BANK
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Corporate Banking Officer
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
69
UNION PLANTERS BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President / Commercial Lending Division
Signature Page
to
American Water Capital Corp.
$600,000,000
364-Day Credit Agreement
70
SCHEDULE 1.01A
COMMITMENTS OF LENDERS
LENDER COMMITMENT INITIAL PRO RATA SWING LINE
PERCENTAGE COMMITMENT
------------------------------------------------------------------------------------------------
First Union National Bank $100,000,000 16.67% $20,000,000
------------------------------------------------------------------------------------------------
Mellon Bank, N.A. $ 90,000,000 15.00% N/A
------------------------------------------------------------------------------------------------
PNC Bank, National Association $ 90,000,000 15.00% N/A
------------------------------------------------------------------------------------------------
Fleet National Bank $ 65,000,000 10.83% N/A
------------------------------------------------------------------------------------------------
The Norinchukin Bank, New York $ 65,000,000 10.83% N/A
Branch
------------------------------------------------------------------------------------------------
Bank One, N.A. $ 45,000,000 7.50% N/A
------------------------------------------------------------------------------------------------
National City Bank $ 45,000,000 7.50% N/A
------------------------------------------------------------------------------------------------
Banco di Napoli, S.P.A. $ 30,000,000 5.00% N/A
------------------------------------------------------------------------------------------------
The Chase Manhattan Bank $ 22,500,000 3.75% N/A
------------------------------------------------------------------------------------------------
Summit Bank $ 22,500,000 3.75% N/A
------------------------------------------------------------------------------------------------
The Fifth Third Bank $ 12,500,000 2.08% N/A
------------------------------------------------------------------------------------------------
Union Planters Bank, N.A. $ 12,500,000 2.08% N/A
------------------------------------------------------------------------------------------------
TOTAL $600,000,000 100% $20,000,000
------------------------------------------------------------------------------------------------
1.01A-1
SCHEDULE 1.01B
NOTICE AND LENDING OFFICES OF LENDERS
---------------------------------------------------------------------------------------------------
Lender Notice and Domestic Lending Office Libor Lending Office
---------------------------------------------------------------------------------------------------
First Union National One First Union Center One First Union Center
Bank 000 Xxxxx Xxxxxxx Xxxxxx 201 South College Street
Charlotte, North Carolina Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000 28288-0735
Attn.: Agency Services Attn.: Agency Services
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
With a copy of Notices to:
First Union Securities, Inc.
Structuring & Underwriting -
Utilities
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
Mellon Bank, N.A. 3 Mellon Bank Center 3 Mellon Bank Center
12/th/ Floor - 153-1203 12/th/ Floor - 153-1203
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxx Attn: Xxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
PNC Bank, National 0000 Xxxxxx Xxxxxx, 22/nd/ Floor 1600 Xxxxxx Xxxxxx, 00/xx/ Xxxxx
Association Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx Attn: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
1.01B-1
---------------------------------------------------------------------------------------------------
Lender Notice and Domestic Lending Office Libor Lending Office
---------------------------------------------------------------------------------------------------
Fleet National Bank 0 Xxxxxxx Xxxxxx 0 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxxxxx 00000
MA OF XX0X XX XX XX0X
Attn: Xxxxxxx Xxxxxxxx Attn: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
The Xxxxxxxxxxx Xxxx, 000 Xxxx Xxxxxx, 00/xx/ Xxxxx 245 Park Avenue, 00/xx/ Xxxxx
Xxx Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx, Attn: Xxxxxxx Xxxxx,
Vice President Vice President
(Primary) (Primary)
Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx Xxxxxxxxx,
Vice President & Manager Vice President & Manager
(Backup) (Backup)
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
Bank One, N.A. 0 Xxxx Xxx Xxxxx, Xxxxx 0000 1 Bank Xxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
National City Bank One Xxxxxxxx Xxxx Xxxxxx, Xxxxx Xxx Xxxxxxxx Xxxx Xxxxxx, Xxxxx
000X 200E
Xxxxxxxxxxxx, Xxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Trips Attn: Xxxxx Trips
(Primary) (Primary)
Xxx Xxxxxxx Xxxxxx Xxx Xxxxxxx Xxxxxx
(Backup) (Backup)
Telephone: (000) 000-0000 Telephone: (000) 000-0000
(Primary) (Primary)
(000) 000-0000 (000) 000-0000
(Backup) (Backup)
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
(Primary) (Primary)
(000) 000-0000 (000) 000-0000
(Backup) (Backup)
---------------------------------------------------------------------------------------------------
1.01B-2
---------------------------------------------------------------------------------------------------
Lender Notice and Domestic Lending Office Libor Lending Office
---------------------------------------------------------------------------------------------------
Banco di Napoli, S.P.A. 4 East 00/xx/ Xxxxxx 0 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 10022 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxx Attn: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
The Chase Xxxxxxxxx Xxxx 0 Xxxxxx Xxxxx, 0/xx/ Xxxxx 0 Xxxxxx Xxxxx, 0/xx/ Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxxxxx Attn: Xxxxx Xxxxxxxx (Primary)
(Primary) Xxxxx Xxxxxxx (Backup)
Xxxxx Xxxxxxx Telephone: (000) 000-0000
(Backup) (Primary)
Telephone: (000) 000-0000 (000) 000-0000
(Primary) (Backup)
(000) 000-0000 Facsimile: (000) 000-0000
(Backup)
Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
Summit Bank 000 Xxxxxx Xxxxxx, 1/st/ Floor 000 Xxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxx Attn: Xxxxx Xxxxx
(Primary) (Primary)
Xxxxxxxxx Xxxxxx Xxxxxxxxx Xxxxxx
(Backup) (Backup)
Telephone: (000) 000-0000 Telephone: (000) 000-0000
(Primary) (Primary)
(000) 000-0000 (000) 000-0000
(Backup) (Backup)
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
1.01B-3
---------------------------------------------------------------------------------------------------
Lender Notice and Domestic Lending Office Libor Lending Office
---------------------------------------------------------------------------------------------------
The Fifth Third Bank 00 Xxxxxxxx Xxxxxx Xxxxx 38 Fountain Square Plaza
MD 109054 MD 109054
Xxxxxxxxxx, Xxxx 00000 Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxxxx Xxxx (Primary) Attn: Xxxxxxxx Xxxx (Primary)
Xxx Xxxxx (Backup) Xxx Xxxxx (Backup)
Telephone: (000) 000-0000 Telephone: (000) 000-0000
(Primary) (Primary)
(000) 000-0000 (000) 000-0000
(Backup) (Backup)
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
(Primary) (Primary)
(000) 000-0000 (000) 000-0000
(Backup) (Backup)
---------------------------------------------------------------------------------------------------
Union Planters Bank, 0000 Xxxx Xxxx Xxxxxx 0000 Xxxx Xxxx Xxxxxx
X.X. Xxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx Attn: Xxxxxxxx X. Xxxxx
(Primary) (Primary)
Xxxx Xxxx Xxxxx Xxxx Xxxx Xxxxx
(Backup) (Backup)
Telephone: (000) 000-0000 Telephone: (000) 000-0000
(Primary) (Primary)
(000) 000-0000 (000) 000-0000
(Backup) (Backup)
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
---------------------------------------------------------------------------------------------------
1.01B-4
SCHEDULE 3.02
TERMINATED SENIOR CREDIT LINES
---------------------------------------------------------------------------------------------------------------------------------
Borrower Facility Maturity Date
-------- -------- -------------
---------------------------------------------------------------------------------------------------------------------------------
Iowa-American Water Company Money Market Master Note dated July 1, 1999, made by June 30, 2000
Iowa-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
Kentucky-American Water Company Money Market Master Note dated July 1, 1999, made by June 30, 2000
Kentucky-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
Long Island Water Corporation Money Market Master Note dated June 25, 1999, made by Long June 30, 2000
Island Water Corporation to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
Maryland-American Water Company Money Market Master Note dated July 1, 1999, made by June 30, 2000
Maryland-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
Missouri-American Water Company Money Market Master Note dated July 1, 1999, made by June 30, 2000
Missouri-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
New Jersey-American Water Company, Promissory Note dated July 1, 1999, made by New Jersey-American June 30, 2000
Inc. Water Company, Inc. to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
Ohio-American Water Company Money Market Master Note dated July 1, 1999, made by June 30, 2000
Ohio-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania-American Water Company Promissory Note dated July 1, 1999, made by June 30, 2000
Pennsylvania-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
Tennessee-American Water Company Money Market Master Note dated July 1, 1999, made by June 30, 2000
Tennessee-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
3.02-1
---------------------------------------------------------------------------------------------------------------------------------
Borrower Facility Maturity Date
-------- -------- -------------
---------------------------------------------------------------------------------------------------------------------------------
Virginia-American Water Company Money Market Master Note dated July 1, 1999, made by June 30, 2000
Virginia-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
West Virginia-American Water Promissory Note dated July 1, 1999, made by West June 30, 2000
Company Virginia-American Water Company to First Union National Bank
---------------------------------------------------------------------------------------------------------------------------------
American Water Works Company, Inc. Promissory Note dated July 1, 1999, made by American Water June 30, 2000
Works Company, Inc. to Mellon Bank
---------------------------------------------------------------------------------------------------------------------------------
American Water Works Company, Inc. Promissory Note dated July 1, 1999, made by American Water June 30, 2000
Works Company, Inc. to PNC Bank
---------------------------------------------------------------------------------------------------------------------------------
Arizona-American Water Company Promissory Note dated July 1, 1999, made by Arizona- American June 30, 2000
Water Company to Mellon Bank
---------------------------------------------------------------------------------------------------------------------------------
California-American Water Company Promissory Note dated July 1, 1999, made by California American June 30, 2000
Water Company to Mellon Bank
---------------------------------------------------------------------------------------------------------------------------------
Connecticut-American Water Company Promissory Note dated July 1, 1999, made by June 30, 2000
Connecticut-American Water Company to State Street Bank and
assumed by Citizens Bank
---------------------------------------------------------------------------------------------------------------------------------
Hampton Water Works Company Promissory Note dated July 1, 1999, made by Hampton Water Works June 30, 2000
Company to State Street Bank and assumed by Citizens Bank
---------------------------------------------------------------------------------------------------------------------------------
Illinois-American Water Company Promissory Note dated December 1, 1999, made by September 29, 2000
Illinois-American Water Company to National City Bank
---------------------------------------------------------------------------------------------------------------------------------
Indiana-American Water Company, Promissory Note dated May 30, 1999, and amended May 30, 2000, August 30, 2000
Inc. made by Indiana-American Water Company, Inc. to National City
Bank
---------------------------------------------------------------------------------------------------------------------------------
3.02-2
---------------------------------------------------------------------------------------------------------------------------------
Borrower Facility Maturity Date
-------- -------- -------------
---------------------------------------------------------------------------------------------------------------------------------
Massachusetts-American Water Promissory Note dated July 1, 1999, made by
Company Massachusetts-American Water Company to State Street Bank and June 30, 2000
assumed by Citizens Bank
---------------------------------------------------------------------------------------------------------------------------------
New Jersey-American Water Company, Promissory Note dated July 1, 1999, made by New Jersey-American June 30, 2000
Inc. Water Company, Inc. to Mellon Bank
---------------------------------------------------------------------------------------------------------------------------------
New Jersey-American Water Company, Promissory Note dated July 1, 1999, made by New Jersey-American June 30, 2000
Inc. Water Company, Inc. to PNC Bank
---------------------------------------------------------------------------------------------------------------------------------
New Mexico-American Water Company, Promissory Note dated July 1, 1999, made by New Mexico-American June 30, 2000
Inc. Water Company, Inc. to Mellon Bank
---------------------------------------------------------------------------------------------------------------------------------
New York-American Water Company, Promissory Note dated July 1, 1999, made by New York-American June 30, 2000
Inc. Water Company, Inc. to State Street Bank and assumed by
Citizens Bank
---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania-American Water Company Promissory Note dated July 1, 1999, made by June 30, 2000
Pennsylvania-American Water Company to Mellon Bank
---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania-American Water Company Promissory Note dated July 1, 1999, made by June 30, 2000
Pennsylvania-American Water Company to PNC Bank
---------------------------------------------------------------------------------------------------------------------------------
Pennsylvania-American Water Company Promissory Note dated July 1, 1999, made by June 30, 2000
Pennsylvania-American Water Company to Woodstreet
---------------------------------------------------------------------------------------------------------------------------------
West Virginia-American Water Promissory Note dated July 1, 1999, made by West June 30, 2000
Company Virginia-American Water Company to One Valley Bank
---------------------------------------------------------------------------------------------------------------------------------
3.02-3
EXHIBIT X-0
XXXX
Xxxxxxxxx, Xxxxx Xxxxxxxx June ________, 2000
For value received, AMERICAN WATER CAPITAL CORP., a Delaware corporation
(the "Borrower"), promises to pay to the order of ___________________________
(the "Lender"), for the account of its Lending Office, the principal sum of
_____________________ Dollars ($_________), or such lesser amount as shall equal
the unpaid principal amount of each Loan made by the Lender to the Borrower
pursuant to the Credit Agreement referred to below, on the dates provided in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of this Note on the dates and at the rate or rates provided for in the
Credit Agreement. Following the occurrence of an Event of Default, principal of
and, to the extent permitted by law, overdue interest on the principal amount
hereof shall bear interest at the Default Rate, as 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 Lending Office of the Lender as set forth in the Credit Agreement.
All Loans made by Lender, the length of the respective Interest Periods and
the effective interest rates from time to time applicable thereto and all
prepayments of the principal thereof and whether such Loans are Base Rate Loans
or LIBOR Rate Loans shall be recorded by Lender and, prior to any transfer
hereof, endorsed by Lender on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof, provided that the failure
of Lender to make, or any error of Lender in making, 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 364-Day Credit Agreement
(as the same may be amended from time to time in accordance with its terms, the
"Credit Agreement") dated as of June 27, 2000 among the Borrower, the lenders
party thereto (including the Lender) and First Union National Bank, as
Administrative Agent. Terms defined in the Credit Agreement are used herein
with the same meanings.
The Borrower hereby waives presentment, demand, protest, notice of demand,
protest and nonpayment and any other notice required by law relative hereto,
except to the extent as otherwise may be expressly provided for in the Credit
Agreement.
The Borrower agrees, in the event that this Note or any portion hereof is
collected by law or through an attorney at law, to pay all reasonable costs of
collection, including, without limitation, reasonable attorneys' fees, to the
extent expressly provided for in the Credit Agreement.
This Note shall be construed in accordance with and governed by the law of
the State of North Carolina.
A1-1
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
under seal, by its duly authorized officer as of the day and year first above
written.
AMERICAN WATER CAPITAL CORP.
By:________________________________________
Name:
Title:
(SEAL)
A1-2
Note (cont'd)
LOANS AND PREPAYMENTS OF PRINCIPAL
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Type Amount Amount of Length of
of Interest of Principal Interest Notation
Date Loan Rate Loan Prepaid Period Made By
---- ---- ---- ---- ------- ------ -------
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A1-3
EXHIBIT A-2
SWING LINE NOTE
Charlotte, North Carolina June ____________, 2000
For value received, AMERICAN WATER CAPITAL CORP., a Delaware corporation
(the "Borrower"), promises to pay to the order of FIRST UNION NATIONAL BANK (the
"Lender"), for the account of its Lending Office, the principal sum of TWENTY
MILLION Dollars ($20,000,000), or such lesser amount as shall equal the unpaid
principal amount of each Loan made by the Lender to the Borrower pursuant to the
Credit Agreement referred to below, on the dates provided in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal amount
of this Swingline Note on the dates and at the rate or rates provided for in the
Credit Agreement. Following the occurrence of an Event of Default, principal of
and, to the extent permitted by law, overdue interest on the principal amount
hereof shall bear interest at the Default Rate, as 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 Lending Office of the Lender as set forth in the Credit Agreement.
All Swingline Loans made by Lender, the length of the respective Interest
Periods, if any, and the effective interest rates from time to time applicable
thereto and all prepayments of the principal thereof and shall be recorded by
Lender and, prior to any transfer hereof, endorsed by Lender on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof, provided that the failure of Lender to make, or any error of Lender
in making, any such recordation or endorsement shall not affect the obligations
of the Borrower hereunder or under the Credit Agreement.
This Swingline Note is one of the Notes referred to in the 364-Day Credit
Agreement (as the same may be amended from time to time in accordance with its
terms, the "Credit Agreement") dated as of June 27, 2000 among the Borrower, the
lenders party thereto (including the Lender) and First Union National Bank, as
Administrative Agent. Terms defined in the Credit Agreement are used herein
with the same meanings.
The Borrower hereby waives presentment, demand, protest, notice of demand,
protest and nonpayment and any other notice required by law relative hereto,
except to the extent as otherwise may be expressly provided for in the Credit
Agreement.
The Borrower agrees, in the event that this Note or any portion hereof is
collected by law or through an attorney at law, to pay all reasonable costs of
collection, including, without limitation, reasonable attorneys' fees, to the
extent expressly provided for in the Credit Agreement.
This Swingline Note shall be construed in accordance with and governed by
the law of the State of North Carolina.
A2-1
IN WITNESS WHEREOF, the Borrower has caused this Swingline Note to be duly
executed under seal, by its duly authorized officer as of the day and year first
above written.
AMERICAN WATER CAPITAL CORP.
By:_________________________________
Name:
Title:
(SEAL)
Swingline Note (cont'd)
SWINGLINE LOANS AND PREPAYMENTS OF PRINCIPAL
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Amount Amount of Length of
of Interest Principal Interest Notation
Date Loan Rate Prepaid Period (if any) Made By
---- ---- ---- ------- --------------- -------
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A2-3
EXHIBIT B-1
[TO FOLLOW]
B1-1
EXHIBIT B-2
[TO FOLLOW]
B2-1
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364-Day Credit Agreement dated as of June 27, 2000
(as amended and modified from time to time, the "Credit Agreement") among
AMERICAN WATER CAPITAL CORP., a Delaware corporation, AMERICAN WATER WORKS
COMPANY, INC., a Delaware corporation, the Lenders identified therein and FIRST
UNION NATIONAL BANK, as Administrative Agent. Terms defined in the Credit
Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I agree as
----------
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement and the
other Loan Documents as of the date hereof equal to the percentage interest
specified on Schedule I of all outstanding rights and obligations under the
Credit Agreement and the other Loan Documents. After giving effect to such sale
and assignment, the Assignee's Commitment and the amount of the Loans owing to
the Assignee will be as set forth on Schedule I.
----------
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or to other Loan Documents or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or to other Loan Documents or
any other instrument or document furnished pursuant thereto; and (iv) attaches
the Notes held by the Assignor and requests that the Administrative Agent
exchange such Notes for new Notes payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto and to
the Assignor in an amount equal to the Commitment retained by the Assignor, if
any, as specified on Schedule I.
----------
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.05(a) and (b) and Section 5.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the
C-1
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vi)
attaches any U.S. Internal Revenue Service or other forms required under Section
2.05.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance
(the "Effective Date") shall be the date of acceptance hereof by the
Administrative Agent, unless otherwise specified on Schedule 1.
----------
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement and the Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of North Carolina.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule I to this Assignment and Acceptance by telecopier shall
----------
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
C-2
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
________________________________, as Assignor
By:______________________________
Name:
Title:
________________________________, as Assignee
By:______________________________
Name:
Title:
Notice address of Assignee:
____________________________
____________________________
Attn: ______________________
Telephone: (___) ___________
Telecopy: (___) ____________
CONSENTED TO:
FIRST UNION NATIONAL BANK,*
as Administrative Agent
By:______________________________
Name:
Title:
AMERICAN WATER CAPITAL CORP.*
By:______________________________
Name:
Title:
_____________________________________
*Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee."
C-3
SCHEDULE I
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment*:
(e) Pro Rata Percentage Assigned
(expressed as a percentage set forth to at least 8
decimals): _______%
(f) Pro Rata Percentage of Assignee
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 _______%
decimals)
(g) Pro Rata Percentage of Assignor
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 _______%
decimals)
(h) Outstanding Balance of Loans as of Effective Date $
(i) Dollar Amount of Assignor's portion of the Loans after
giving effect to this Assignment and Acceptance on
Effective Date (the amount set forth in (h) multiplied by
the percentage set forth in (g)) $
(j) Dollar Amount of Assignee's portion of the Loans after
giving effect to this Assignment and Acceptance on
Effective Date (the amount set forth in (h) multiplied by
the percentage set forth in (f)) $
__________________
*This date should be no earlier than five Business Days after delivery of this
Assignment and Acceptance to the Administrative Agent.
C-4
EXHIBIT D-1
NOTICE OF BORROWING
[Date]
This Notice of Borrowing is given under and pursuant to Section 2.02 of the
364-Day Credit Agreement (as amended from time to time, the "Credit Agreement")
dated as of June 27, 2000, by and among AMERICAN WATER CAPITAL CORP., a Delaware
corporation, AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation, the
Lenders identified therein and First Union National Bank, as Administrative
Agent. Capitalized terms used and not defined herein shall have the meanings
assigned to them in the Credit Agreement.
1. The date of the Borrowing in connection with which this Notice of
Borrowing is given shall be ______________________________.
2. The Type of the Loan shall be _______________________.
3. The aggregate amount of such Borrowing shall be $___________________.
In the case of a Borrowing comprising LIBOR Rate Loans the initial Interest
Period is: [1, 2, 3 or 6] months.
---------------------
The Borrower hereby represents and warrants that on the date the Borrowing
requested hereunder is made (both before and after giving effect to the making
of such Borrowing and after giving effect to the application, directly or
indirectly, of the proceeds of such Borrowing):
(a) no Default or Event of Default has occurred and is continuing; and
(b) the representations and warranties of the Borrower and the Parent
contained in Article IV of the Credit Agreement are true and correct
in all material respects as if made on and as of the date of such
Borrowing.
The Borrower has caused this Notice of Borrowing to be executed and
delivered and the certification and warranties contained herein to be made by
its duly authorized officer this _______ day of ________________________, 20___.
AMERICAN WATER CAPITAL CORP.
By:_____________________________________
Name:
Title:
D1-1
EXHIBIT D-2
NOTICE OF SWING LINE BORROWING
[Date]
This Notice of Borrowing is given under and pursuant to Section 2.03 of the
364-Day Credit Agreement (as amended from time to time, the "Credit Agreement")
dated as of June 27, 2000, by and among AMERICAN WATER CAPITAL CORP., a Delaware
corporation, AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation, the
Lenders identified therein and First Union National Bank, as Administrative
Agent. Capitalized terms used and not defined herein shall have the meanings
assigned to them in the Credit Agreement.
1. The date of the Swing Line Borrowing in connection with which this
Notice of Swing Line Borrowing is given shall be ________________________.
2. The aggregate amount of such Swing Line Borrowing shall be
$__________________________.
3. The Borrower hereby represents and warrants that on the date the Swing
Line Borrowing requested hereunder is made (both before and after giving effect
to the making of such Swing Line Borrowing and after giving effect to the
application, directly or indirectly, of the proceeds of such Swing Line
Borrowing):
(a) no Default or Event of Default has occurred and is continuing; and
(b) the representations and warranties of the Borrower and the Parent
contained in Article IV of the Credit Agreement are true and correct in all
material respects as if made on and as of the date of such Borrowing.
The Borrower has caused this Notice of Swing Line Borrowing to be executed
and delivered and the certification and warranties contained herein to be made
by its duly authorized officer this _______ day of ________________________,
20___.
AMERICAN WATER CAPITAL CORP.
By:___________________________________
Name:
Title:
D2-1
EXHIBIT E-1
PROMISSORY NOTE
FOR SHORT-TERM LOANS
--------------------
$____________________ _______________, 2000
FOR VALUE RECEIVED, [NAME OF COMPANY], a _____________________ corporation
(herein "Borrower") hereby promises to pay ON DEMAND to the order of American
Water Capital Corp., a Delaware corporation ("Lender"), in same day funds at its
offices at Voorhees, New Jersey or such other place as Lender may from time to
time designate, the principal sum of ___________________________ dollars
($_________________________) (the "Maximum Principal Sum"), or such lesser
amount as shall equal the aggregate unpaid principal amount of the loans made by
Lender to Borrower (other than loans evidenced by a promissory note under which
the principal amount is due and payable in one or more scheduled installments
more than one year after the date of its issue), together with interest thereon
from the date hereof until paid in full. Interest will be charged on the unpaid
outstanding principal balance of this Note at a rate per annum equal to Lender's
actual cost of funds to make such loan, such rate to change as Lender's actual
cost of funds changes. Interest on borrowings shall be due and payable on the
first business day of each month, commencing with the first business day of the
month after the month in which this Note is executed. In the absence of
manifest error, the records maintained by Lender of the amount and term, if any,
of borrowings hereunder shall be deemed conclusive.
Borrower may borrow, repay and reborrow hereunder in amounts which do not,
in the aggregate outstanding at any time, exceed the Maximum Principal Sum.
The occurrence of one or more of any of the following shall constitute an
event of default hereunder:
(a) Borrower shall fail to make any payment of principal and/or
interest due hereunder or under any other promissory note between Lender and
Borrower within five business days after the same shall become due and payable,
whether at maturity or by acceleration or otherwise;
(b) Borrower shall apply for or consent to the appointment of a
receiver, trustee or liquidator of itself or any of its property, admit in
writing its inability to pay its debts as they mature, make a general assignment
for the benefit of creditors, be adjudicated a bankrupt or insolvent or file a
voluntary petition in bankruptcy or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation of law or statute, or an answer admitting the material allegations
of a petition filed against it in any proceeding under any such law, or if
action shall be taken by Borrower for the purposes of effecting any of the
foregoing; or
E1-1
(c) Any order, judgment or decree shall be entered by any court of
competent jurisdiction, approving a petition seeking reorganization of Borrower
or all or a substantial part of the assets of Borrower, or appointing a
receiver, trustee or liquidator of Borrower or any of its property, and such
order, judgment or decree shall continue unstayed and in effect for any period
of sixty (60) days.
Upon the occurrence of any event of default, the entire unpaid principal
sum hereunder plus all interest accrued thereon plus all other sums due and
payable to Lender hereunder shall, at the option of Lender, become due and
payable immediately. In addition to the foregoing, upon the occurrence of any
event of default, Lender may forthwith exercise singly, concurrently,
successively or otherwise any and all rights and remedies available to Lender by
law, equity, statute or otherwise.
Borrower hereby waivers presentment, demand, notice of nonpayment, protest,
notice of protest or other notice of dishonor in connection with any default in
the payment of, or any enforcement of the payment of, all amounts due hereunder.
To the extent permitted by law, Borrower waives the right to any stay of
execution and the benefit of all exemption laws now or hereafter in effect.
Following the occurrence of any event of default, Borrower will pay upon
demand all costs and expenses (including all amounts paid to attorneys,
accountants, and other advisors employed by Lender), incurred by Lender in the
exercise of any of it rights, remedies or powers hereunder with respect to such
event of default, and any amount thereof not paid promptly following demand
therefor shall be added to the principal sum hereunder and will bear interest at
the contract rate set forth herein from the date of such demand until paid in
full. In connection with and as part of the foregoing, in the event that this
Note is placed in the hands of an attorney for the collection of any sum payable
hereunder, Borrower agrees to pay reasonable attorneys' fees for the collection
of the amount being claimed hereunder, as well as all costs, disbursements and
allowances provided by law.
If for any reason one or more of the provisions of this Note or their
application to any entity or circumstances shall be held to be invalid, illegal
or unenforceable in any respect or to any extent, such provisions shall
nevertheless remain valid, legal and enforceable in all such other respects and
to such extent as may be permissible. In addition, any such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
This Note inures to the benefit of Lender and binds Borrower and Lender's
and Borrower's respective successors and assigns, and the words "Lender" and
"Borrower" whenever occurring herein shall be deemed and construed to include
such respective successors and assigns.
E1-2
This Promissory Note is one of the promissory notes referred to in the
Financial Services Agreement dated ______________________, 2000 between
Borrower and Lender to which reference is made for a statement of additional
rights and obligations of the parties hereto.
IN WITNESS WHEREOF, Borrower has executed this Promissory Note the day and
year first written above.
[BORROWER]
By:________________________________
Name:
Title:
E1-3
EXHIBIT E-2
PROMISSORY NOTE
FOR LONG-TERM BORROWINGS
------------------------
$________________ ______________, 2000
FOR VALUE RECEIVED, [NAME OF COMPANY], a ____________________ corporation
(herein "Borrower") hereby promises to pay to the order of American Water
Capital Corp., a Delaware corporation ("Lender"), in same day funds at its
offices at ________________________ or such other place as Lender may from time
to time designate, the principal sum of __________________________________
dollars ($____________________________), together with interest thereon from the
date hereof until paid in full. Interest shall be charged on the unpaid
outstanding principal balance hereof at a rate per annum equal to the rate paid
and to be paid by Lender with respect to the borrowings it made in order to
provide funds to Borrower hereunder. Interest on borrowings shall be due and
payable in immediately available funds on the same business day on which the
Lender must pay interest on the borrowings it made in order to provide funds to
the Borrower hereunder. The principal amount hereof shall be due and payable
hereunder at such times and in such amounts and in such installments hereunder
as the Lender must pay with respect to the borrowings it made in order to
provide funds to the Borrower hereunder. Lender has provided Borrower with a
copy of the documentation evidencing the borrowings made by Lender in order to
provide funds to Borrower hereunder. In the absence of manifest error, such
documentation and the records maintained by Lender of the amount and term, if
any, of borrowings hereunder shall be deemed conclusive.
The occurrence of one or more of any of the following shall constitute an
event of default hereunder:
(a) Borrower shall fail to make any payment of principal and/or
interest due hereunder or under any other promissory note between Lender and
Borrower within five business days after the same shall become due and payable,
whether at maturity or by acceleration or otherwise;
(b) Borrower shall apply for or consent to the appointment of a
receiver, trustee or liquidator of itself or any of its property, admit in
writing its inability to pay its debts as they mature, make a general assignment
for the benefit of creditors, be adjudicated a bankrupt or insolvent or file a
voluntary petition in bankruptcy or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation of law or statute, or an answer admitting the material allegations
of a petition filed against it in any proceeding under any such law, or if
action shall be taken by Borrower for the purposes of effecting any of the
foregoing; or
(c) Any order, judgment or decree shall be entered by any court of
competent jurisdiction, approving a petition seeking reorganization of Borrower
or all or a substantial part
E2-1
of the assets of Borrower, or appointing a receiver, trustee or liquidator of
Borrower or any of its property, and such order, judgment or decree shall
continue unstayed and in effect for any period of sixty (60) days.
Upon the occurrence of any event of default, the entire unpaid principal
sum hereunder plus all interest accrued thereon plus all other sums due and
payable to Lender hereunder shall, at the option of Lender, become due and
payable immediately. In addition to the foregoing, upon the occurrence of any
event of default, Lender may forthwith exercise singly, concurrently,
successively or otherwise any and all rights and remedies available to Lender by
law, equity, statute or otherwise.
Borrower hereby waivers presentment, demand, notice of nonpayment, protest,
notice of protest or other notice of dishonor in connection with any default in
the payment of, or any enforcement of the payment of, all amounts due hereunder.
To the extent permitted by law, Borrower waives the right to any stay of
execution and the benefit of all exemption laws now or hereafter in effect.
Following the occurrence of any event of default, Borrower will pay upon
demand all costs and expenses (including all amounts paid to attorneys,
accountants, and other advisors employed by Lender), incurred by Lender in the
exercise of any of it rights, remedies or powers hereunder with respect to such
event of default, and any amount thereof not paid promptly following demand
therefor shall be added to the principal sum hereunder and will bear interest at
the contract rate set forth herein from the date of such demand until paid in
full. In connection with and as part of the foregoing, in the event that this
Note is placed in the hands of an attorney for the collection of any sum payable
hereunder, Borrower agrees to pay reasonable attorneys' fees for the collection
of the amount being claimed hereunder, as well as all costs, disbursements and
allowances provided by law.
If for any reason one or more of the provisions of this Note or their
application to any entity or circumstances shall be held to be invalid, illegal
or unenforceable in any respect or to any extent, such provisions shall
nevertheless remain valid, legal and enforceable in all such other respects and
to such extent as may be permissible. In addition, any such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
This Note inures to the benefit of Lender and binds Borrower and Lender's
and Borrower's respective successors and assigns, and the words "Lender" and
"Borrower" whenever occurring herein shall be deemed and construed to include
such respective successors and assigns.
This Promissory Note is one of the promissory notes referred to in the
Financial Services Agreement dated _______________________, 2000 between
Borrower and Lender to which reference is made for a statement of additional
rights and obligations of Lender and Borrower.
E2-2
IN WITNESS WHEREOF, Borrower has executed this Promissory Note the day and
year first written above.
[BORROWER]
By:____________________________________
Name:
Title:
E2-3
EXHIBIT F
SUPPORT AGREEMENT
BETWEEN
AMERICAN WATER WORKS COMPANY, INC.
AND
AMERICAN WATER CAPITAL CORP.
This Agreement is made the ____ day of ___________, 2000, by and between
AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation ("Parent") and
AMERICAN WATER CAPITAL CORP., a Delaware corporation ("Subsidiary").
BACKGROUND
Parent is the owner of 100% of the outstanding common stock of Subsidiary:
From time to time Subsidiary intends to borrow from, and issue debt
securities or other obligations to, and incur other obligations and liabilities
to, parties other than Parent ("Debt"), so that Subsidiary will be in a position
to provide financing for Parent and some or all of Parent's directly and
indirectly owned, water utility subsidiaries;
Parent and Subsidiary desire to take certain actions to enhance and
maintain the financial condition of Subsidiary as set forth below in order to
enable the Subsidiary to issue the Debt on more advantageous and reasonable
terms; and
Third party creditors will rely upon this Agreement in making loans or
extending credit to Subsidiary;
AGREEMENT
THEREFORE, in consideration of the premises, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
-----------
terms have the respective meanings set forth below.
(a) "Debt", means (a) all indebtedness for borrowed money; (b) all
obligations evidenced by notes, bonds, debentures or other similar instruments;
(c) all obligations as lessee under leases that have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases; (d) all obligations contingent or otherwise under letter of credit or
similar facilities; (e) all obligations to purchase, redeem, retire, defease or
otherwise make any payment in respect of any capital stock of or other ownership
or profit interest of any warrants, rights or options to acquire such capital
stock; (f) all obligations in respect of hedge agreements (including, without
limitation, interest rate swap, cap or collar
F-1
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar currency agreements); (g)
any other obligations or liabilities involving financial or monetary payment;
and (h) guarantees of any of the foregoing.
(b) "Lender", means any person, firm, corporation or other entity to
which Subsidiary is indebted for money borrowed or to which Subsidiary otherwise
owes any Debt or that is acting as trustee or authorized representative on
behalf of such person, firm, corporation or other entity.
2. Stock Ownership. Parent owns and, during the term of this Agreement
---------------
shall continue to own, all of the voting stock of Subsidiary, free and clear any
lien, security interest or other charge or encumbrance.
3. Net Worth. Parent agrees that it will cause Subsidiary to have at all
---------
times a positive tangible net worth (total assets less liabilities less
intangible assets), as determined in accordance with generally accepted
accounting principles.
4. Liquidity Provision. If, during the term of this Agreement,
-------------------
Subsidiary is unable to make timely payment of interest, principal or premium,
if any, on any Debt issued by it, Parent promptly shall provide to Subsidiary,
at its request or at the request of any Lender, such funds (in the form of cash
or liquid assets) as equity or if Parent and Subsidiary shall agree as a loan.
If such funds are advanced to Subsidiary as a loan, that loan will be on such
terms and conditions, including maturity and rate of interest, as Parent and
Subsidiary will agree. Notwithstanding the foregoing, any such loan will be
subordinated in all respects to any and all Debt of Subsidiary, whether or not
such Debt is outstanding at the time of such loan.
5. Waivers; Subrogation. Parent hereby waives any failure or delay on
--------------------
the part of Subsidiary in asserting or enforcing any of its rights or in making
any claims or demands hereunder. Subsidiary or any Lender may at any time,
without Parent's consent, without notice to Parent and without affecting or
impairing Subsidiary's or such Lender's rights or Parent's obligations
hereunder, do any of the following with respect to any Debt: (a) make changes,
modifications, amendments or alterations, by operation of law or otherwise, (b)
grant renewals and extensions of time, for payment or otherwise, (c) accept new
or additional documents, instruments or agreements relating to or in
substitution of said Debt, or (d) otherwise handle the enforcement of their
respective rights and remedies in accordance with their business judgment. To
the extent any rights of subrogation exist, the Parent shall not be entitled to
be subrogated to any rights of any Lender against the Subsidiary for the payment
of the Debt until all Debt is indefeasibly paid in full.
6. Termination; Amendment. This Agreement may be terminated by written
----------------------
agreement signed by both parties or, at any time no Debt is outstanding or
committed to, by Parent upon three days' prior written notice to Subsidiary.
This Agreement may be amended at any time by written amendment signed by both
parties. However, no amendment to the Agreement that adversely affects the
rights of any Lender and no termination of this Agreement shall be effective
until such time as all Debt shall have been irrevocably paid in full and all
F-2
commitments for Debt have been terminated, unless the Lenders holding a majority
of the aggregate principal amount of Debt outstanding and (to the extent not
outstanding) committed to consent in writing thereto. Notwithstanding the
foregoing,
(a) any amendment to this Agreement for the purpose of (i) increasing
the minimum net worth as provided in paragraph 3 of this Agreement; (ii)
establishing or increasing a minimum interest coverage ratio; (iii) establishing
or reducing a maximum amount of debt leverage; (iv) increasing the aggregate
principal amount of debt outstanding whose holders are required to consent to
the termination or amendment of this agreement; or, (v) any combination of (i),
(ii), (iii) and (iv) above, shall be effective without the consent of any Lender
or the holder of any Debt, and
(b) nothing in this Section 6 shall derogate from, or override, any
provision in an instrument, indenture, agreement or other document pursuant to
which Debt is or will be issued that requires the written consent of the holders
of a specified amount or percentage of such Debt to consent to an amendment or
termination of this Agreement.
7. Rights of Lenders. Any Lender to Subsidiary shall have the right to
-----------------
demand that Subsidiary enforce Subsidiary's rights under paragraphs 2, 3 4 and 5
of this Agreement, and, if Subsidiary fails or refuses to take timely action to
enforce its rights under paragraphs 2, 3, 4 and 5 of this Agreement or if
Subsidiary defaults in the timely payment of interest, principal or premium, if
any, on any Debt owed to Lender when due, that Lender may proceed directly
against Parent to enforce Subsidiary's rights under paragraphs 1, 2, and 3 of
this Agreement or to obtain payment of such defaulted interest, principal or
premium, if any, owed to such Lender.
8. Notices. Any notice, instruction, request, consent, demand or other
-------
communication required or contemplated by this Agreement shall be in writing,
shall be given or made or communicated by United States first class mail, telex,
facsimile transmission or hand delivery, addressed as follows:
If to Parent: American Water Works Company, Inc.
0000 Xxxxxx Xxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000
ATTN: Treasurer
If to Subsidiary: American Water Capital Corp.
0000 Xxxxxx Xxx Xxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000
ATTN: Treasurer
9. Successors. This Agreement will be binding upon the parties hereto
----------
and their respective successors and assigns and is also intended for the benefit
of the holders from time to time of the Debt and, notwithstanding that such
holders are not parties hereto, each such holder
F-3
shall be entitled to the full benefits of this Agreement and to enforce the
covenants and agreements contained herein. This Agreement is not intended for
the benefit of any person other than holders of Debt, and will not confer or be
deemed to confer upon any other such person any benefits, rights or remedies
hereunder.
10. Governing Law. The laws of the State of New York shall govern this
-------------
Agreement.
11. Remedies. The parties to this Agreement acknowledge and agree that
--------
breach of any of the covenants of Parent set forth herein may not be compensable
by payment of money damages and, therefore, that the covenants of Parent set
forth herein may be enforced in equity by a decree requiring specific
performance. Such remedies shall be cumulative and non-exclusive and shall be
in addition to any other rights and remedies Subsidiary may have under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and affixed
their corporate seals as of the last day and year above written.
[SEAL] AMERICAN WATER WORKS COMPANY, INC.
Attest:__________________ By:____________________________________________
Secretary Vice President and Chief Financial Officer
[SEAL] AMERICAN WATER CAPITAL CORP.
Attest:__________________ By:____________________________________________
Secretary Vice President and Treasurer
F-4
EXHIBIT G
FINANCIAL SERVICES AGREEMENT
----------------------------
THIS AGREEMENT, dated _________________, 2000, by and between [INSERT NAME
OF BORROWER] (the "Company") and American Water Capital Corp. ("AWCC").
B A C K G R O U N D
The Company currently performs its own financial services.
However, the Company has determined that it can obtain these services more
efficiently through the consolidation of certain necessary management and staff
functions with those performed for other entities that may enter into agreement
with AWCC substantially similar to this one ("Co-Participants").
AWCC is dedicated to performing such consolidated functions.
Accordingly, the parties have determined to enter into this Agreement for
the provision of financial services by AWCC to the Company and for the proper
determination and allocation of the costs of providing such services.
Therefore, the parties agree as follows:
A G R E E M E N T
1. Services. AWCC will provide, either directly or through arrangements
--------
with third parties for the benefit of the Company, such financial services as
the Company and AWCC may from time to time agree, including but not limited to
those more fully described in Appendix I attached to this Agreement.
2. Costs. In consideration of the provision of the services contemplated
-----
by paragraph 1, the Company agrees to pay AWCC a portion of the costs and
appropriate overhead incurred by AWCC in providing those services, as follows.
The costs incurred by AWCC in connection with its bank credit lines and short-
term public borrowings will be divided among the Co-Participants in proportion
to the maximum principal amount that each Co-Participant requests be made
available to it during the course of a year. The costs incurred by AWCC in
connection with each long-term borrowing by AWCC will be divided among each Co-
Participant in proportion to the principal amount of that borrowing that is
loaned to that Co-Participant. AWCC's overhead will be allocated among the Co-
Participants in the same proportion as each Co-Participant's long-term and
maximum, requested short-term borrowings and investments in a calendar year bear
to all of the long and maximum short-term borrowings and investments by all Co-
Participants during the same year.
G-1
3. Statements. AWCC will prepare and deliver to the Company monthly
----------
statements of the services provided by AWCC and amounts payable to AWCC, giving
effect to all the provisions of this Agreement. The Company shall pay the net
amount shown on its statement within thirty (30) days after the billing date.
4. Inspection. Upon reasonable notice, AWCC will make available to the
----------
Company for its inspection AWCC's books, records, bills, accounts and any other
documents which describe or support the costs allocated to the Company under
this Agreement.
5. Obligations Not Joint. AWCC and the Company expressly agree: (a) that
---------------------
the obligations of the Company and each Co-Participant to AWCC are several and
not joint; (b) that the Company will not be responsible to any Co-Participant,
to AWCC or to any assignee or creditor of AWCC for any payment in excess of
payments due by the Company to AWCC under this Agreement or a Note in the form
attached to this Agreement; and (c) that no Co-Participant will be responsible
to the Company, to any other Co-Participant, to AWCC or to any assignee or
creditor of AWCC for any payment in excess of payments due by that Co-
Participant to AWCC under any agreement substantially similar to this Agreement
or under any Note attached to that other agreement. AWCC covenants and agrees
that it will require, as a condition to its entering into any such other
agreement with a Co-Participant, that such other agreement contains the same
provision as that contained in the immediately preceding sentence.
6. Notes. The Company's borrowings under this Agreement will be evidenced
-----
by one or more promissory note in the form of Exhibit A or Exhibit B attached to
this Agreement.
7. Non-Exclusivity. Nothing in this Agreement prohibits or restricts the
---------------
Company from borrowing from third parties, or obtaining services described in
this Agreement from third parties, whenever and on whatever terms it deems
appropriate.
8. Effectiveness. This Agreement shall be effective as of June 15, 2000,
-------------
provided that, if prior approval by the regulatory commission of any
jurisdiction is required before this Agreement may become effective as to the
Company, or before AWCC may provide a particular service hereunder to the
Company, this Agreement shall not be effective as to the Company or as to that
service, as the case may be, unless and until the required approval has been
obtained. Unless and until this Agreement becomes effective as to the Company
in whole or in part, the Company shall not be entitled to the benefits of, nor
shall it have any rights or duties under, this Agreement. This Agreement may be
amended or rescinded only by written instrument signed by the Company and AWCC.
9. Termination. The Company may terminate its participation in this
-----------
Agreement by giving ten (10) days prior written notice of such termination to
AWCC; and (b) AWCC may terminate this Agreement by giving ninety (90) days prior
written notice of such termination to the Company. Termination of this
Agreement will not affect: (a) the Company's obligations under any Promissory
Notes; (b) any party's obligations with respect to any amounts owing under
Sections 2 and 3 of this Agreement (including such amounts attributable to
obligations of any terminating party under any Promissory Notes that remain
outstanding after this Agreement
G-2
is terminated as to that party); or (c) AWCC's obligations to repay any
investments made by a Company pursuant to Appendix I.
10. Copies. This Agreement may be executed by the parties in one or more
------
copies and each executed copy shall be considered an original.
In witness of the foregoing, each of the Company and AWCC has caused its
respective corporate seal to be affixed to this Agreement and has caused this
Agreement to be signed on its behalf by its duly authorized officers.
ATTEST: [NAME OF COMPANY]
By:_________________________ By:_______________________________________
Title: Name:
Title:
ATTEST: AMERICAN WATER CAPITAL CORP.
By:_________________________ By:_______________________________________
Title: Name:
Title:
G-3
APPENDIX I
DESCRIPTION OF FINANCIAL SERVICES
Set forth below is a list of the services which AWCC agrees to provide to the
Company upon its request pursuant to the Agreement to which this Appendix is
attached.
1. Short-Term Loans. AWCC will provide Short-Term Loans to the Company
----------------
pursuant to the terms set forth in the promissory notes to be issued by the
Company to AWCC, each substantially in the form attached to this Agreement as
Exhibit A.
2. Long-Term Borrowings. AWCC will provide loans other than Short-Term
--------------------
Loans to the Company pursuant to the terms set forth in the promissory notes to
be issued by the Company to AWCC, each substantially in the form attached hereto
as Exhibit B.
3. Cash Management. Cash not required by the Company to pay its daily
---------------
disbursements or to pay when due the principal of and interest on, the Company's
borrowings from AWCC other than Short-Term Loans will be used by AWCC first to
reduce the outstanding principal balance of the Company's Short-Term Loans owing
to AWCC and any excess will be deemed to be invested with AWCC and will earn a
daily rate of interest that is equal to the interest income earned by AWCC on
those funds. Upon the request of that Company, AWCC shall execute one or more
promissory notes in favor of the Company, in form and substance substantially
similar to the Promissory Note attached as Exhibit A to the Agreement as
evidence of such investment.
G-4
EXHIBIT A
PROMISSORY NOTE
FOR SHORT-TERM LOANS
--------------------
$___________________ _______________, 2000
FOR VALUE RECEIVED, [NAME OF COMPANY], a _____________________ corporation
(herein "Borrower") hereby promises to pay ON DEMAND to the order of American
Water Capital Corp., a Delaware corporation ("Lender"), in same day funds at its
offices at Voorhees, New Jersey or such other place as Lender may from time to
time designate, the principal sum of __________________ dollars ($___________)
(the "Maximum Principal Sum"), or such lesser amount as shall equal the
aggregate unpaid principal amount of the loans made by Lender to Borrower (other
than loans evidenced by a promissory note under which the principal amount is
due and payable in one or more scheduled installments more than one year after
the date of its issue), together with interest thereon from the date hereof
until paid in full. Interest will be charged on the unpaid outstanding
principal balance of this Note at a rate per annum equal to Lender's actual cost
of funds to make such loan, such rate to change as Lender's actual cost of funds
changes. Interest on borrowings shall be due and payable on the first business
day of each month, commencing with the first business day of the month after the
month in which this Note is executed. In the absence of manifest error, the
records maintained by Lender of the amount and term, if any, of borrowings
hereunder shall be deemed conclusive.
Borrower may borrow, repay and reborrow hereunder in amounts which do not,
in the aggregate outstanding at any time, exceed the Maximum Principal Sum.
The occurrence of one or more of any of the following shall constitute an
event of default hereunder:
(a) Borrower shall fail to make any payment of principal and/or
interest due hereunder or under any other promissory note between Lender and
Borrower within five business days after the same shall become due and payable,
whether at maturity or by acceleration or otherwise;
(b) Borrower shall apply for or consent to the appointment of a
receiver, trustee or liquidator of itself or any of its property, admit in
writing its inability to pay its debts as they mature, make a general assignment
for the benefit of creditors, be adjudicated a bankrupt or insolvent or file a
voluntary petition in bankruptcy or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation of law or statute, or an answer admitting the material allegations
of a petition filed against it in any proceeding under any such law, or if
action shall be taken by Borrower for the purposes of effecting any of the
foregoing; or
(c) Any order, judgment or decree shall be entered by any court of
competent jurisdiction, approving a petition seeking reorganization of Borrower
or all or a substantial part
G-5
of the assets of Borrower, or appointing a receiver, trustee or liquidator of
Borrower or any of its property, and such order, judgment or decree shall
continue unstayed and in effect for any period of sixty (60) days.
Upon the occurrence of any event of default, the entire unpaid principal
sum hereunder plus all interest accrued thereon plus all other sums due and
payable to Lender hereunder shall, at the option of Lender, become due and
payable immediately. In addition to the foregoing, upon the occurrence of any
event of default, Lender may forthwith exercise singly, concurrently,
successively or otherwise any and all rights and remedies available to Lender by
law, equity, statute or otherwise.
Borrower hereby waivers presentment, demand, notice of nonpayment, protest,
notice of protest or other notice of dishonor in connection with any default in
the payment of, or any enforcement of the payment of, all amounts due hereunder.
To the extent permitted by law, Borrower waives the right to any stay of
execution and the benefit of all exemption laws now or hereafter in effect.
Following the occurrence of any event of default, Borrower will pay upon
demand all costs and expenses (including all amounts paid to attorneys,
accountants, and other advisors employed by Lender), incurred by Lender in the
exercise of any of it rights, remedies or powers hereunder with respect to such
event of default, and any amount thereof not paid promptly following demand
therefor shall be added to the principal sum hereunder and will bear interest at
the contract rate set forth herein from the date of such demand until paid in
full. In connection with and as part of the foregoing, in the event that this
Note is placed in the hands of an attorney for the collection of any sum payable
hereunder, Borrower agrees to pay reasonable attorneys' fees for the collection
of the amount being claimed hereunder, as well as all costs, disbursements and
allowances provided by law.
If for any reason one or more of the provisions of this Note or their
application to any entity or circumstances shall be held to be invalid, illegal
or unenforceable in any respect or to any extent, such provisions shall
nevertheless remain valid, legal and enforceable in all such other respects and
to such extent as may be permissible. In addition, any such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
This Note inures to the benefit of Lender and binds Borrower and Lender's
and Borrower's respective successors and assigns, and the words "Lender" and
"Borrower" whenever occurring herein shall be deemed and construed to include
such respective successors and assigns.
This Promissory Note is one of the promissory notes referred to in the
Financial Services Agreement dated _______________________________, 2000 between
Borrower and Lender to which reference is made for a statement of additional
rights and obligations of the parties hereto.
G-6
IN WITNESS WHEREOF, Borrower has executed this Promissory Note the day and
year first written above.
[BORROWER]
By:_____________________________________
Name:
Title:
G-7
EXHIBIT B
PROMISSORY NOTE
FOR LONG-TERM BORROWINGS
------------------------
$______________ _____________, 2000
FOR VALUE RECEIVED, [NAME OF COMPANY], a ____________________ corporation
(herein "Borrower") hereby promises to pay to the order of American Water
Capital Corp., a Delaware corporation ("Lender"), in same day funds at its
offices at ________________________ or such other place as Lender may from time
to time designate, the principal sum of __________________ dollars
($___________), together with interest thereon from the date hereof until paid
in full. Interest shall be charged on the unpaid outstanding principal balance
hereof at a rate per annum equal to the rate paid and to be paid by Lender with
respect to the borrowings it made in order to provide funds to Borrower
hereunder. Interest on borrowings shall be due and payable in immediately
available funds on the same business day on which the Lender must pay interest
on the borrowings it made in order to provide funds to the Borrower hereunder.
The principal amount hereof shall be due and payable hereunder at such times and
in such amounts and in such installments hereunder as the Lender must pay with
respect to the borrowings it made in order to provide funds to the Borrower
hereunder. Lender has provided Borrower with a copy of the documentation
evidencing the borrowings made by Lender in order to provide funds to Borrower
hereunder. In the absence of manifest error, such documentation and the records
maintained by Lender of the amount and term, if any, of borrowings hereunder
shall be deemed conclusive.
The occurrence of one or more of any of the following shall constitute an
event of default hereunder:
(a) Borrower shall fail to make any payment of principal and/or
interest due hereunder or under any other promissory note between Lender and
Borrower within five business days after the same shall become due and payable,
whether at maturity or by acceleration or otherwise;
(b) Borrower shall apply for or consent to the appointment of a
receiver, trustee or liquidator of itself or any of its property, admit in
writing its inability to pay its debts as they mature, make a general assignment
for the benefit of creditors, be adjudicated a bankrupt or insolvent or file a
voluntary petition in bankruptcy or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation of law or statute, or an answer admitting the material allegations
of a petition filed against it in any proceeding under any such law, or if
action shall be taken by Borrower for the purposes of effecting any of the
foregoing; or
(c) Any order, judgment or decree shall be entered by any court of
competent jurisdiction, approving a petition seeking reorganization of Borrower
or all or a substantial part of the assets of Borrower, or appointing a
receiver, trustee or liquidator of Borrower or any of its
G-8
property, and such order, judgment or decree shall continue unstayed and in
effect for any period of sixty (60) days.
Upon the occurrence of any event of default, the entire unpaid principal
sum hereunder plus all interest accrued thereon plus all other sums due and
payable to Lender hereunder shall, at the option of Lender, become due and
payable immediately. In addition to the foregoing, upon the occurrence of any
event of default, Lender may forthwith exercise singly, concurrently,
successively or otherwise any and all rights and remedies available to Lender by
law, equity, statute or otherwise.
Borrower hereby waivers presentment, demand, notice of nonpayment, protest,
notice of protest or other notice of dishonor in connection with any default in
the payment of, or any enforcement of the payment of, all amounts due hereunder.
To the extent permitted by law, Borrower waives the right to any stay of
execution and the benefit of all exemption laws now or hereafter in effect.
Following the occurrence of any event of default, Borrower will pay upon
demand all costs and expenses (including all amounts paid to attorneys,
accountants, and other advisors employed by Lender), incurred by Lender in the
exercise of any of it rights, remedies or powers hereunder with respect to such
event of default, and any amount thereof not paid promptly following demand
therefor shall be added to the principal sum hereunder and will bear interest at
the contract rate set forth herein from the date of such demand until paid in
full. In connection with and as part of the foregoing, in the event that this
Note is placed in the hands of an attorney for the collection of any sum payable
hereunder, Borrower agrees to pay reasonable attorneys' fees for the collection
of the amount being claimed hereunder, as well as all costs, disbursements and
allowances provided by law.
If for any reason one or more of the provisions of this Note or their
application to any entity or circumstances shall be held to be invalid, illegal
or unenforceable in any respect or to any extent, such provisions shall
nevertheless remain valid, legal and enforceable in all such other respects and
to such extent as may be permissible. In addition, any such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
This Note inures to the benefit of Lender and binds Borrower and Lender's
and Borrower's respective successors and assigns, and the words "Lender" and
"Borrower" whenever occurring herein shall be deemed and construed to include
such respective successors and assigns.
This Promissory Note is one of the promissory notes referred to in the
Financial Services Agreement dated ______________________________, 2000 between
Borrower and Lender to which reference is made for a statement of additional
rights and obligations of Lender and Borrower.
G-9
IN WITNESS WHEREOF, Borrower has executed this Promissory Note the day and
year first written above.
[BORROWER]
By:___________________________________
Name:
Title:
G-10
