EXHIBIT 4(d)
EXECUTION COPY
================================================================================
CREDIT AGREEMENT
dated as of May 21, 2002
among
AVISTA CORPORATION,
THE BANKS PARTY HERETO,
KEYBANK and WASHINGTON MUTUAL BANK,
as Co-Agents,
U.S. BANK, NATIONAL ASSOCIATION
as Managing Agent,
FLEET NATIONAL BANK and XXXXX FARGO BANK,
as Documentation Agents,
UNION BANK OF CALIFORNIA, N.A.,
as Syndication Agent,
and
THE BANK OF NEW YORK,
as Administrative Agent and Issuing Bank
---------------
BNY CAPITAL MARKETS, INC. and UNION BANK OF CALIFORNIA, N.A.
Lead Arrangers and Book Managers
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS........................................................................1
Section 1.01 Defined Terms..................................................1
Section 1.02 Terms Generally...............................................11
ARTICLE II
THE CREDITS.......................................................................12
Section 2.01 Commitments...................................................12
Section 2.02 Loans.........................................................12
Section 2.03 Notice of Borrowings..........................................13
Section 2.04 Repayment of Loans; Evidence of Debt..........................14
Section 2.05 Letters of Credit.............................................14
(a) General.......................................................14
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions............................................15
(c) Expiration Date...............................................15
(d) Participations................................................15
(e) Reimbursement.................................................15
(f) Obligations Absolute..........................................16
(g) Disbursement Procedures.......................................17
(h) Interim Interest..............................................17
(i) Cash Collateralization........................................17
Section 2.06 Fees..........................................................18
Section 2.07 Interest on Loans.............................................18
Section 2.08 Default Interest..............................................19
Section 2.09 Alternate Rate of Interest....................................19
Section 2.10 Termination, Reduction and Extension of Commitments...........20
Section 2.11 Prepayment....................................................20
Section 2.12 Reserve Requirements; Change in Circumstances.................20
Section 2.13 Change in Legality............................................22
Section 2.14 Indemnity.....................................................22
Section 2.15 Pro Rata Treatment............................................23
i
Section 2.16 Sharing of Setoffs............................................23
Section 2.17 Payments......................................................23
Section 2.18 Taxes.........................................................24
Section 2.19 Termination or Assignment of Commitments Under
Certain Circumstances.........................................26
ARTICLE III
REPRESENTATIONS AND WARRANTIES....................................................27
Section 3.01 Organization; Powers..........................................27
Section 3.02 Authorization.................................................27
Section 3.03 Enforceability................................................27
Section 3.04 Governmental Approvals........................................28
Section 3.05 Financial Statements..........................................28
Section 3.06 No Material Adverse Change....................................28
Section 3.07 Litigation; Compliance with Laws..............................28
Section 3.08 Federal Reserve Regulations...................................28
Section 3.09 Investment Company Act; Public Utility Holding Company Act....29
Section 3.10 No Material Misstatements.....................................29
Section 3.11 Employee Benefit Plans........................................29
Section 3.12 Environmental and Safety Matters..............................29
Section 3.13 Significant Subsidiaries......................................30
ARTICLE IV
CONDITIONS TO BORROWINGS AND LETTERS OF CREDIT....................................30
Section 4.01 All Borrowings and Letters of Credit..........................30
Section 4.02 First Borrowing or Letter of Credit...........................31
ARTICLE V
AFFIRMATIVE COVENANTS.............................................................33
Section 5.01 Existence; Businesses and Properties..........................33
Section 5.02 Insurance.....................................................33
Section 5.03 Taxes and Obligations.........................................34
Section 5.04 Financial Statements, Reports, etc............................34
ii
Section 5.05 Litigation and Other Notices..................................35
Section 5.06 ERISA.........................................................35
Section 5.07 Maintaining Records; Access to Properties and Inspections.....36
Section 5.08 Use of Proceeds and Letters of Credit.........................36
Section 5.09 Notes Credit Support..........................................36
ARTICLE VI
NEGATIVE COVENANTS................................................................36
Section 6.01 Liens.........................................................36
Section 6.02 Sale-Leaseback Transactions...................................39
Section 6.03 Mergers, Consolidations and Acquisitions......................39
Section 6.04 Disposition of Assets.........................................40
Section 6.05 Consolidated Total Debt to Consolidated Total
Capitalization Ratio..........................................41
Section 6.06 Avista Utilities Interest Coverage Ratio......................41
Section 6.07 Public Utility Regulatory Borrowing Limits....................41
Section 6.08 Avista Energy Guarantees......................................41
Section 6.09 Investments...................................................41
ARTICLE VII
EVENTS OF DEFAULT.................................................................41
ARTICLE VIII
THE ADMINISTRATIVE AGENT..........................................................44
Section 8.01 Appointment and Powers........................................44
Section 8.02 Limitation on Liability.......................................45
Section 8.03 Other Transactions with the Borrower..........................46
Section 8.04 Reimbursement; Indemnification................................46
Section 8.05 Absence of Reliance...........................................46
Section 8.06 Syndication Agent; Documentation Agents; Managing
Agent; Co-Agents..............................................47
ARTICLE IX
MISCELLANEOUS.....................................................................47
Section 9.01 Notices.......................................................47
iii
Section 9.02 Survival of Agreement.........................................48
Section 9.03 Binding Effect; Successors and Assigns........................48
Section 9.04 Successors and Assigns........................................48
Section 9.05 Expenses; Indemnity...........................................51
Section 9.06 Right of Setoff...............................................52
Section 9.07 Applicable Law................................................52
Section 9.08 Waivers; Amendment............................................52
Section 9.09 Interest Rate Limitation......................................53
Section 9.10 Entire Agreement..............................................53
Section 9.11 Waiver of Jury Trial..........................................53
Section 9.12 Severability..................................................54
Section 9.13 Counterparts..................................................54
Section 9.14 Headings......................................................54
Section 9.15 Jurisdiction; Consent to Service of Process...................54
Exhibit A Form of Note
Exhibit B Form of Assignment and Assumption
Exhibit C Form of Administrative Questionnaire
Schedule 2.01 Names, Commitments, Addresses of Initial Banks
Schedule 3.13 Significant Subsidiaries
Schedule 4.02(a)(ii) Required Governmental Approvals
Schedule 6.01 Existing Secured Indebtedness
iv
CREDIT AGREEMENT dated as of May 21, 2002, among
AVISTA CORPORATION, a Washington corporation, the
Banks listed in Schedule 2.01, KEYBANK and WASHINGTON
MUTUAL BANK, as Co-Agents, U.S. BANK, NATIONAL
ASSOCIATION, as Managing Agent, FLEET NATIONAL BANK
and XXXXX FARGO BANK, as Documentation Agents, UNION
BANK OF CALIFORNIA, N.A., as Syndication Agent, and
THE BANK OF NEW YORK, as Administrative Agent and
Issuing Bank.
The Borrower has requested that the Banks agree to make loans and buy
participations in letters of credit issued by the Issuing Bank on a revolving
credit basis during the period commencing with the date hereof and ending on the
Expiration Date (as defined herein) in an aggregate principal amount not in
excess of $225,000,000 at any time outstanding. The proceeds of such borrowings
and such letters of credit are to be used for general corporate purposes.
In consideration of the mutual covenants and agreements contained
herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"Administrative Agent" shall mean The Bank of New York, as
administrative agent for the Banks and the Issuing Bank under the Loan
Documents, and any successor Administrative Agent appointed pursuant to Section
8.06.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit C.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the greater
of (a) the Prime Rate in effect on such day and (b) the sum of (i) the Federal
Funds Effective Rate in effect for such day plus (ii) 1/2 of 1%. If for any
reason the Administrative Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, the Alternate Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate shall be effective on the
date such change in the Prime Rate is adopted.
"Applicable Rate" shall mean on any date (a) with respect to Eurodollar
Loans, ABR Loans or the LC Participation Fee, the rate per annum set forth in
the following table in the "Eurodollar Margin", "ABR Margin" or "LC
Participation Fee" column, as applicable, for the Pricing Level in effect for
such date and (b) with respect to the Commitment Fee, the rate per annum set
forth in the following table in the "Commitment Fee" column for the applicable
Usage as of such date, for the Pricing Level in effect on such date.
---------------------------------------------------------------------------------------------------------------------
Commitment Fee
Commitment Fee (> 33.33% but
Pricing (less than or equal to less than or equal to Commitment Fee Eurodollar LC Participation ABR
Levels 33.33% Usage) 50.0% Usage) (> 50.0% Usage) Margin Fee Margin
---------------------------------------------------------------------------------------------------------------------
I 0.250% 0.200% 0.150% 1.250% 1.250% 0.250%
---------------------------------------------------------------------------------------------------------------------
II 0.375% 0.250% 0.200% 1.500% 1.500% 0.500%
---------------------------------------------------------------------------------------------------------------------
III 0.500% 0.375% 0.250% 1.750% 1.750% 0.750%
---------------------------------------------------------------------------------------------------------------------
IV 0.625% 0.500% 0.375% 2.000% 2.000% 1.000%
---------------------------------------------------------------------------------------------------------------------
V 0.750% 0.625% 0.500% 2.500% 2.500% 1.500%
---------------------------------------------------------------------------------------------------------------------
For purposes of the foregoing table:
"Pricing Level I" will be applicable for so long as (i) the Senior Debt
Rating is BBB+ or higher by S&P and (ii) the Senior Debt Rating is Baa1
or higher by Xxxxx'x;
"Pricing Level II" will be applicable for so long as (i) the Senior
Debt Rating is BBB or higher by S&P, (ii) the Senior Debt Rating is
Baa2 or higher by Xxxxx'x and (iii) Pricing Level I is not applicable;
"Pricing Level III" will be applicable for so long as (i) the Senior
Debt Rating is BBB- or higher by S&P, (ii) the Senior Debt Rating is
Baa3 or higher by Xxxxx'x and (iii) Pricing Levels I and II are not
applicable;
"Pricing Level IV" will be applicable for so long as (i) the Senior
Debt Rating is BB+ or higher by S&P, (ii) the Senior Debt Rating is Ba1
or higher by Xxxxx'x and (iii) Pricing Levels I, II, and III are not
applicable;
"Pricing Level V" will be applicable for so long as (i) the Senior Debt
Rating is less than BB+ by S&P or there is no Senior Debt Rating by S&P
or (ii) the Senior Debt Rating less than Ba1 by Xxxxx'x or there is no
Senior Debt Rating by Xxxxx'x; and
"Usage" shall mean the percentage equivalent to the quotient of (i)
total Revolving Credit Exposure divided by (ii) total Commitments.
2
If the Senior Debt Rating established or deemed to have been established by
Xxxxx'x or S&P shall be changed (other than as a result of a change in the
rating system of either Xxxxx'x or S&P), such change shall be effective as of
the day after the date on which such change is first announced by the rating
agency making such change. Each change in the Applicable Rate shall apply during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change. If the
rating system of either Xxxxx'x or S&P shall change, or if either such rating
agency shall cease to be in the business of rating corporate debt obligations,
the Borrower and the Banks shall negotiate in good faith to amend the references
to specific ratings in this definition to reflect such changed rating system or
the non-availability of ratings from such rating agency.
"Assignment and Assumption" shall mean an assignment and assumption
agreement entered into by a Bank and an assignee in the form of Exhibit B or
such other form as shall be approved by the Administrative Agent.
"Attributable Debt" shall mean, in connection with any Sale-Leaseback,
the present value (discounted in accordance with GAAP at the discount rate
implied in the lease) of the obligations of the lessee for rental payments
during the term of the lease.
"Availability Period" shall mean the period from and including the date
of this Agreement to but excluding the Expiration Date.
"Avista Utilities" means the operating division of the Borrower which
represents all the regulated utility operations of the Borrower that are
responsible for retail electric and natural gas distribution, electric
transmission services and electric generation and production.
"Avista Utilities EBITDA" means, for any period, (a) Avista Utilities
Net Income for such period plus (b) in each case, without duplication and to the
extent deducted in computing Avista Utilities Net Income for such period, the
sum for such period of (i) income tax expense, (ii) interest expense, (iii)
depreciation and amortization expense, (iv) any extraordinary or non-recurring
losses and (v) other non-cash items reducing such Avista Utilities Net Income
for such period, minus (c) in each case, without duplication and to the extent
added in computing Avista Net Income for such period, the sum of for such period
of (i) any extraordinary or non-recurring gains and (ii) other non-cash items
increasing Avista Utilities Net Income for such period, all as determined in
accordance with GAAP, plus (d) for any period including the fiscal quarter ended
December 31, 2001, $20,600,000 of power cost deferrals deducted in computing
Avista Utilities Net Income for such fiscal quarter but incurred with respect to
prior fiscal quarters.
"Avista Utilities Interest Expense" means, for any period, interest
expense of Avista Utilities for such period determined in accordance with GAAP.
"Avista Utilities Net Income" means, for any period, the net income or
loss of Avista Utilities for such period determined in accordance with GAAP.
"Bank" shall mean (a) any person listed on Schedule 2.01 and (b) any
person that has been assigned any or all of the rights or obligations of a Bank
pursuant to Section 9.04.
3
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"Bond Delivery Agreement" shall mean the Bond Delivery Agreement, dated
as of the date of this Agreement, between the Borrower and the Administrative
Agent.
"Borrower" shall mean Avista Corporation, a Washington corporation, and
its successors and assigns.
"Borrowing" shall mean a group of Loans of the same Type made on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided that when used in connection with a
Eurodollar Loan the term "Business Day" shall also exclude any day on which
banks are not open for dealings in deposits in dollars in the London interbank
market.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 30% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower; or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated; provided, that no
event described in clause (a) or clause (b) shall constitute a "Change in
Control" if the senior secured long-term debt rating of the Borrower shall be at
least BBB- or higher by S&P and Baa3 or higher by Xxxxx'x immediately after
giving effect to the transaction that would otherwise constitute a Change in
Control.
"Code" shall mean the Internal Revenue Code of 1986, as the same maybe
amended from time to time.
"Commitment" shall mean, with respect to each Bank, (a) (i) in the case
of a Bank listed on Schedule 2.01, the amount set forth opposite such Bank's
name under the heading "Commitment" on such Schedule and (ii) in the case of a
Bank that becomes a Bank pursuant to an assignment under Section 9.04, the
amount specified as assigned to such Bank in the Assignment and Assumption
pursuant to which such Bank becomes a Bank, in each case, as the same may be
reduced from time to time pursuant to Section 2.10(b), or reduced or increased
from time to time pursuant to assignments in accordance with Section 9.04, or
(b) as the context
4
may require, the obligation of such Bank to make Loans or acquire participations
in Letters of Credit in an aggregate unpaid principal amount not exceeding such
amount.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.06(a).
"Consolidated Total Capitalization" on any date means the sum, without
duplication, of the following with respect to the Borrower and its consolidated
subsidiaries: (a) total capitalization as of such date, as determined in
accordance with GAAP, (b) the current portion of liabilities which as of such
date would be classified in whole or part as long-term debt in accordance with
GAAP (it being understood that the noncurrent portion of such liabilities is
included in the total capitalization referred to in clause (a)), (c) all
obligations as lessee which, in accordance with GAAP, are capitalized as
liabilities (including the current portion thereof), and (d) all other
liabilities which would be classified as short-term debt in accordance with
GAAP.
"Consolidated Total Debt" on any date means the sum, without
duplication, of the following with respect to the Borrower and its consolidated
subsidiaries: (a) all liabilities which as of such date would be classified in
whole or in part as long-term debt in accordance with GAAP (including the
current portion thereof), (b) all obligations as lessee which, in accordance
with GAAP, are capitalized as liabilities (including the current portion
thereof), (c) all other liabilities which would be classified as short-term debt
in accordance with GAAP, and (d) all Guarantees of or by the Borrower.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Equity Interests" shall mean shares of stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a person, and all options, warrants
or other rights to acquire any such equity ownership interests in a person.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Eurodollar Rate.
5
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the provisions
of Article II.
"Eurodollar Rate" shall mean, for any Interest Period, the rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not available for any
Interest Period, "Eurodollar Rate" shall mean, for such Interest Period, the
arithmetic mean (rounded upward, if necessary, to the nearest 1/16 of 1%) of the
rates quoted by major banks in New York City selected by the Administrative
Agent and reasonably acceptable to the Borrower at approximately 11:00 a.m. (New
York City time) two Business Days prior to the first day of such Interest Period
for loans in dollars to leading European banks for a term comparable to such
Interest Period commencing on the first day of such Interest Period and in an
amount of $1,000,000.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Existing Credit Agreement" shall mean the Amended and Restated Credit
Agreement dated as of May 31, 2001 among Avista Corporation, the banks listed in
Schedule 2.01 thereof, Toronto Dominion (Texas), Inc., as agent for the banks,
and The Bank of New York, as documentation agent, as the same has been amended,
modified or supplemented to date.
"Existing LC Exposure" shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Existing Letters of Credit at such
time plus (b) the aggregate amount of all unreimbursed drawings under Existing
Letters of Credit at such time.
"Existing Letters of Credit" shall mean all letters of credit issued
and outstanding under the Existing Credit Agreement as of the date of this
Agreement.
"Expiration Date" shall mean May 20, 2003.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as reported on such
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
reported for any day that is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Fees" shall mean the Commitment Fee and the other fees referred to in
Section 2.06.
"Financial Officer" of any corporation shall mean the chief financial
officer or Treasurer of such corporation.
6
"First Mortgage" shall mean the Mortgage and Deed of Trust dated as of
June 1, 1939, made by the Borrower in favor of Citibank, N.A., as successor
trustee, as the same has been amended, modified or supplemented to date and as
the same may be further amended, modified or supplemented from time to time
hereafter.
"First Mortgage Bond" shall mean a bond of the Twenty-Eighth Series
issued under the Supplemental Indenture, in a principal amount equal to the
total Commitments on the date of this Agreement, payable to the Administrative
Agent.
"GAAP" shall mean generally accepted accounting principles, applied on
a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided, however, that the term Guarantee
shall not include endorsements for collection or deposit, in either case in the
ordinary course of business.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, but limited, if such obligations are without
recourse to such person, to the lesser of the principal amount of such
Indebtedness or the fair market value of such property, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease Obligations of such
person, (i) all obligations of such person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements (the amount of any such obligation to be the
amount that would be payable upon the acceleration, termination or liquidation
thereof) and (j) all obligations of such person as an account party in respect
of letters of credit and bankers' acceptances. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner.
7
"Interest Payment Date" shall mean (a) in the case of any Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and (b) in addition, in the case of a Eurodollar Loan that is part of
a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect, and (b) as to any ABR Borrowing, the period commencing on
the date of such Borrowing and ending on the earlier of (i) the next succeeding
March 31, June 30, September 30 or December 31 and (ii) the Expiration Date;
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"Investment" by any person shall mean (a) the purchase or other
acquisition of any Equity Interest in any other person, (b) any loan, advance or
extension of credit to any other person, (c) any contribution to the capital of
any other person, (d) any Guarantee of the Liabilities of any other person or
(e) any other investment in any other person.
"Issuing Bank" shall mean The Bank of New York in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity. The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of the Issuing Bank, in which case the term "Issuing
Bank" shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.
"LC Disbursement" shall mean a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Bank at any time
shall be its Pro Rata Share of the total LC Exposure at such time.
"LC Participation Fee" shall have the meaning assigned to such term in
Section 2.06(b).
"Letter of Credit" shall mean any letter of credit issued pursuant to
this Agreement.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
8
"Loan Documents" shall mean this Agreement, the First Mortgage Bond,
the First Mortgage, the Supplemental Indenture, the Bond Delivery Agreement, any
Notes, and any letter of credit applications executed and delivered by the
Borrower in connection with Letters of Credit.
"Loans" shall mean loans made by the Banks to the Borrower pursuant to
this Agreement.
"Margin Stock" shall have the meaning given such term under Regulation
U.
"Material Adverse Effect" shall mean an effect on the business, assets,
operations or financial condition of the Borrower and the Subsidiaries taken as
a whole which could reasonably be expected to have a material adverse effect on
the creditworthiness of the Borrower.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Notes" shall mean any promissory notes of the Borrower, substantially
in the form of Exhibit A, evidencing Loans, as may be delivered pursuant to
Section 2.04.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"person" shall mean a corporation, association, partnership, trust,
limited liability company, organization, business, individual or government or
governmental agency or political subdivision thereof.
"Plan" shall mean any pension plan subject to the provisions of Title
IV of ERISA or Section 412 or the Code which is maintained for employees of the
Borrower or any ERISA Affiliate.
"Prime Rate" means the prime U.S. commercial lending rate of The Bank
of New York, as publicly announced to be in effect from time to time. The Prime
Rate shall be adjusted automatically, without notice, on the effective date of
any change in such prime U.S. commercial lending rate. The Prime Rate is not
necessarily The Bank of New York's lowest rate of interest.
"Pro Rata Share" shall mean, with respect to any Bank, the percentage
of the total Commitments represented by such Bank's Commitment. If the
Commitments have terminated or expired, the Pro Rata Shares of the Banks shall
be determined based upon the Commitments most recently in effect.
"Register" shall have the meaning given to such term in Section
9.04(c).
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof and shall include any successor or other regulation or official
interpretation of the Board relating to reserve requirements applicable to
member banks of the Federal Reserve System.
9
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Required Banks" shall mean, at any time, Banks having Revolving Credit
Exposures representing more than 66 2/3% of the aggregate Revolving Credit
Exposures or, if there shall be no Revolving Credit Exposure, Banks having
Commitments representing more than 66 2/3% of the aggregate Commitments.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Revolving Credit Exposure" shall mean, with respect to any Bank at any
time, the sum of the outstanding principal amount of such Bank's Loans and its
LC Exposure at such time.
"RTO Transaction" shall mean any sale, transfer or other disposition of
transmission assets entered into in connection with the formation of a regional
transmission organization pursuant to or in a manner consistent with regulatory
requirements applicable to the Borrower.
"S&P" shall mean Standard & Poor's Ratings Services.
"Sale-Leaseback" shall mean any arrangement whereby any person shall
sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred.
"Senior Debt Rating" shall mean the rating by Moody's or S&P, as
applicable, of the Borrower's senior secured long-term debt obligations.
"Significant Subsidiary" shall mean a Subsidiary meeting any one of the
following conditions: (a) the investments in and advances to such Subsidiary by
the Borrower and the other Subsidiaries, if any, as at the end of the Borrower's
latest fiscal quarter exceeded 10% of the total assets of the Borrower and its
Subsidiaries at such date, computed and consolidated in accordance with GAAP; or
(b) the Borrower's and the other Subsidiaries' proportionate share of the total
assets (after intercompany eliminations) of such Subsidiary as at the end of the
Borrower's latest fiscal quarter exceeded 10% of the total assets of the
Borrower and its Subsidiaries at such date, computed and consolidated in
accordance with GAAP; or (c) the equity in the income from continuing operations
before income taxes, extraordinary items and cumulative effect of a change in
accounting principles of such Subsidiary for the period of four consecutive
fiscal quarters ending at the end of the Borrower's latest fiscal quarter
exceeded 10%
10
of such income of the Borrower and its Subsidiaries for such period, computed
and consolidated in accordance with GAAP; or (d) such Subsidiary is the parent
of one or more Subsidiaries and, together with such Subsidiaries would, if
considered in the aggregate, constitute a Significant Subsidiary.
"Statutory Reserves" shall mean, with respect to any Eurodollar Loan
for any date, a fraction (expressed as a decimal) the numerator of which is the
number one and the denominator of which is the number one minus the aggregate of
the maximum reserve percentages (including, without limitation, any marginal,
special, emergency or supplemental reserves) in effect for such date with
respect to Eurodollar funding (including with respect to Eurocurrency
Liabilities as defined in Regulation D) in an amount approximately equal to such
Eurodollar Loan and with a term approximately equal to the Interest Period for
such Eurodollar Loan expressed as a decimal established by the Board or by any
other United States banking authority to which the Administrative Agent is
subject. Such reserve percentages shall include, without limitation, those
imposed under Regulation D. Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
"subsidiary" shall mean, for any person (the "Parent"), any
corporation, partnership or other entity of which securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) are at the time directly or
indirectly owned or controlled by the Parent or one or more of its subsidiaries
or by the Parent and one or more of its subsidiaries.
"Subsidiary" shall mean a subsidiary of the Borrower.
"Supplemental Indenture" shall mean the Thirtieth Supplemental
Indenture, dated as of May 1, 2002, between the Borrower and Citibank, N.A., as
trustee under the First Mortgage.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, "Rate" shall mean, in the
case of a Loan or Borrowing, the Eurodollar Rate or the Alternate Base Rate.
Section 1.02 Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided,
however, that if the Borrower notifies the Administrative Agent that the
11
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Banks request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
ARTICLE II
THE CREDITS
Section 2.01 Commitments. (a)Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Bank
agrees, severally and not jointly, to make Loans to the Borrower, at any time
and from time to time during the Availability Period, in an aggregate principal
amount at any time outstanding that will not result in (a) the Revolving Credit
Exposure of any Bank exceeding such Bank's Commitment or (b) the total Revolving
Credit Exposures exceeding the total Commitments (less any Existing LC
Exposure). Within the limits set forth in the preceding sentence, the Borrower
may borrow, pay or prepay and reborrow Loans during the Availability Period,
subject to the terms, conditions and limitations set forth herein.
Section 2.02 Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Banks ratably in accordance with their
Commitments. The failure of any Bank to make any Loan required to be made
hereunder shall not in itself relieve any other Bank of its obligation to lend
hereunder (it being understood, however, that no Bank shall be responsible for
the failure of any other Bank to make any Loan required to be made by such other
Bank). The Loans comprising each Borrowing shall be in an aggregate principal
amount of not less than $1,000,000.
(b) Subject to Section 2.09, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans, as the Borrower may request pursuant
to Section 2.03. Each Bank may at its option fulfill its Commitment with respect
to any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Bank to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement or any applicable Note. Borrowings of more than one Type
may be outstanding at the same time; provided, however, that the Borrower shall
not be entitled to request any Borrowing which, if made, would result in an
aggregate of more than seven separate Eurodollar Loans of any Bank being
outstanding hereunder at any one time. For purposes of the foregoing, Loans
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Loans.
(b) Subject to paragraph (e) below, each Bank shall make a
Loan in the amount of its Pro Rata Share of each Borrowing on the proposed date
thereof by wire transfer of immediately available funds to the Administrative
Agent in New York, New York, not later than 2:00 p.m., New York City time, and
the Administrative Agent shall by 3:00 p.m., New York City
12
time, make available to the Borrower in immediately available funds the amounts
so received (i) by wire transfer for credit to the account of the Borrower with
Bank of America, N.A., Account Number 12332 29152; ABA # 000000000, or (ii) as
otherwise specified by the Borrower in its notice of Borrowing or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Banks. Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's portion of such Borrowing, the
Administrative Agent may assume that such Bank has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
this paragraph (c) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have made such portion available
to the Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Bank, the Federal Funds Effective Rate. If such Bank shall repay to
the Administrative Agent such corresponding amount, such amount shall constitute
such Bank's Loan as part of such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Expiration Date.
(e) The Borrower may refinance all or any part of any
Borrowing with a new Borrowing of the same or a different Type, subject to the
conditions and limitations set forth in this Agreement. Any Borrowing or part
thereof so refinanced shall be deemed to be repaid or prepaid in accordance with
Section 2.04 or 2.11, as applicable, with the proceeds of the new Borrowing, and
the proceeds of the new Borrowing, to the extent they do not exceed the
principal amount of the Borrowing being refinanced, shall not be paid by the
Banks to the Administrative Agent or by the Administrative Agent to the Borrower
pursuant to paragraph (c) above.
Section 2.03 Notice of Borrowings. (a) To request a Borrowing, the
Borrower shall give the Administrative Agent notice thereof (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before a proposed borrowing and (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, the day of a proposed
borrowing. Such notice shall be irrevocable and shall in each case refer to this
Agreement and specify (i) whether the Borrowing then being requested is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day) and the amount thereof; and (iii) if such Borrowing is
to be a Eurodollar Borrowing, the Interest Period with respect thereto. If no
election as to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. If the Borrower shall not have given notice in accordance with this
Section 2.03 of its election to refinance a Borrowing or
13
given notice to the Administrative Agent not later than 12:00 noon, New York
City time, on the last day of the Interest Period applicable to such Borrowing
that it will not refinance such Borrowing, then the Borrower shall be deemed to
have given notice of an election to refinance such Borrowing with an ABR
Borrowing. The Administrative Agent shall promptly advise the Banks of any
notice given pursuant to this Section 2.03 and of each Bank's portion of the
requested Borrowing.
Section 2.04 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay each Bank the then unpaid principal
amount of each Loan of such Bank on the last day of the Interest Period
applicable to such Loan and on the Expiration Date. Each Loan shall bear
interest on the outstanding principal balance thereof as set forth in Section
2.07.
(b) Each Bank shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Bank resulting from each Loan made by such Bank, including the amounts of
principal and interest payable and paid to such Bank from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount and date of each Loan made hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal, interest or fees due and payable or to become due and payable from
the Borrower to each Bank hereunder and (iii) the amount of any principal,
interest or fees received by the Administrative Agent hereunder for the account
of the Banks and each Bank's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Bank or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans in accordance with the terms of this Agreement.
(e) Any Bank may request that Loans made by it be evidenced by
a Note. In such event, the Borrower shall prepare, execute and deliver to such
Bank a Note payable to the order of such Bank (or, if requested by such Bank, to
such Bank and its registered assigns). Thereafter, the Loans evidenced by such
Note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more Notes in such form
payable to the order of the payee named therein (or, if such Note is a
registered Note, to such payee and its registered assigns).
Section 2.05 Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
14
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $50,000,000
(less any Existing LC Exposure) and (ii) the total Revolving Credit Exposures
shall not exceed the total Commitments (less any Existing LC Exposure).
(c) Expiration Date. Each Letter of Credit shall expire not
later than the close of business on the date that is five Business Days prior to
the Expiration Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Banks, the Issuing
Bank hereby grants to each Bank, and each Bank hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Bank's Pro Rata
Share of the aggregate amount available to be drawn under such Letter of Credit.
In consideration and in furtherance of the foregoing, each Bank hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Bank's Pro Rata Share of (i) each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section and (ii) any reimbursement
payment required to be refunded to the Borrower for any reason to the extent
received by such Bank. Each Bank acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives notice of such LC Disbursement, if such notice is
received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii)
the Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt;
provided that, if
15
such LC Disbursement is not less than $1,000,000, the Borrower may, subject to
the conditions to borrowing set forth herein, request in accordance with Section
2.03 that such payment be financed with an ABR Borrowing in an equivalent amount
and, to the extent so financed, the Borrower's obligation to make such payment
shall be discharged and replaced by the resulting ABR Borrowing. If the Borrower
fails to make such payment when due, the Administrative Agent shall notify each
Bank of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Bank's Pro Rata Share thereof. Promptly following
receipt of such notice, each Bank shall pay to the Administrative Agent its Pro
Rata Share of the payment then due from the Borrower, in the same manner as
provided in Section 2.02 with respect to Loans made by such Bank (and Section
2.02 shall apply, mutatis mutandis, to the payment obligations of the Banks),
and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Banks. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Banks have made payments pursuant to this paragraph
to reimburse the Issuing Bank, then to such Banks and the Issuing Bank as their
interests may appear. Any payment made by a Bank pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Banks nor the Issuing Bank, nor any of their
respective directors, officers, employees or agents, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
gross negligence or wilful misconduct. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
16
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Banks with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.08 shall apply. Interest accrued
pursuant to this paragraph shall be for the account of the Issuing Bank, except
that interest accrued on and after the date of payment by any Bank pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Bank to the extent of such payment.
(i) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent, at the request of the Issuing Bank or the
Required Banks, demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Issuing Bank and the Banks, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (g) or (h) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under the Loan Documents. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or be applied to
satisfy other obligations of the Borrower under the Loan Documents. If the
Borrower is required
17
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three Business Days after all Events of
Default have been cured or waived.
Section 2.06 Fees. (a) The Borrower agrees to pay to each Bank, through
the Administrative Agent, on the first Business Day of January, April, July and
October of each year and on the date on which the Commitment of such Bank shall
be reduced or terminated as provided herein, a commitment fee at the Applicable
Rate (a "Commitment Fee") on the average daily unused amount of the Commitment
of such Bank during the preceding quarter (or shorter period commencing with the
date hereof or ending with the Expiration Date or the date on which the
Commitment of such Bank shall be reduced or terminated). The Commitment Fees
shall accrue on each day at a rate per annum equal to the Applicable Rate in
effect on such day. All Commitment Fees shall be computed on the basis of a year
of 365 or 366 days, as the case may be, and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
Commitment Fee due to each Bank shall commence to accrue on the date of this
Agreement and shall cease to accrue on the date on which the Commitment of such
Bank shall be terminated as provided herein.
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Bank a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the Applicable Rate
(an "LC Participation Fee") on the average daily amount of such Bank's LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the date of this Agreement
to but excluding the later of the date on which such Bank's Commitment
terminates and the date on which such Bank ceases to have any LC Exposure, and
(ii) to the Administrative Agent for the account of the Issuing Bank a fronting
fee for Letters of Credit, which shall accrue at the rate per annum of 0.125% on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure. LC Participation Fees and Letter of Credit fronting fees shall be
payable on the first Business Day of January, April, July and October of each
year and on the date on which the Commitments terminate as provided herein;
provided that all such fees accruing after the date on which the Commitments
terminate shall be payable on demand. All LC Participation Fees and Letter of
Credit fronting fees shall be computed on the basis of a year of 365 or 366
days, as the case may be, and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, the fees separately agreed between the Administrative Agent
and the Borrower.
(d) Once paid, none of the Fees shall be refundable under any
circumstances.
Section 2.07 Interest on Loans. (a) Subject to the provisions of
Section 2.08, the Loans comprising each ABR Borrowing shall bear interest at a
rate per annum equal to the Alternate Base Rate plus the Applicable Rate.
18
(b) Subject to the provisions of Section 2.08, the Loans
comprising each Eurodollar Borrowing shall bear interest at a rate per annum
equal to the Eurodollar Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in this
Agreement.
(d) Interest computed on the basis of the Alternative Base
Rate (including interest payable on overdue amounts under Section 2.08) shall be
computed on the basis of a year of 365 or 366 days, as the case may be, for the
actual number of days elapsed so long as the Prime Rate is the applicable rate
for calculation of the Alternate Base Rate, and on the basis of a year of 360
days for the actual number of days elapsed so long as the Federal Funds
Effective Rate is the applicable rate for calculation of the Alternate Base
Rate. Interest computed on the basis of the Eurodollar Rate (including interest
payable on overdue amounts under Section 2.08) shall be computed on the basis of
a year of 360 days for the actual number of days elapsed.
(e) The applicable Alternate Base Rate or Eurodollar Rate for
each Interest Period or day within an Interest Period, as the case may be, shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
Section 2.08 Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due under the Loan Documents, by acceleration or otherwise, the Borrower shall
on demand from time to time pay interest, to the extent permitted by law, on
such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum equal to the Alternate
Base Rate plus the Applicable Rate plus 2% (except that the interest rate
applicable to an overdue amount of principal of a Eurodollar Borrowing that
became due on a day other than on the last day of the Interest Period applicable
thereto shall, for the period until the last day of such Interest Period, be
equal to 2% above the rate that would otherwise be applicable thereto during
such Interest Period).
Section 2.09 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
in good faith determined that dollar deposits in the principal amounts of the
Loans comprising such Borrowing are not generally available in the London
interbank market, or that the rates at which such dollar deposits are being
offered will not adequately and fairly reflect the cost to the majority in
interest of the Banks of making or maintaining their Eurodollar Loans during
such Interest Period, or that reasonable means do not exist for ascertaining the
Eurodollar Rate, the Administrative Agent shall, as soon as practicable
thereafter, give notice of such determination to the Borrower and the Banks. In
the event of any such determination, any request by the Borrower for a
Eurodollar Borrowing pursuant to Section 2.03 shall, until the Administrative
Agent shall have advised the Borrower and the Banks that the circumstances
giving rise to such notice no longer exist, be deemed to be a request for an ABR
Borrowing. Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
19
Section 2.10 Termination, Reduction and Extension of Commitments. (a)
The Commitments shall be automatically terminated on the Expiration Date.
(b) Upon at least three Business Days' prior irrevocable
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
unused portion of the Commitments; provided, however, that (i) each partial
reduction of the Commitments shall be in an aggregate amount of not less than
$5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.11, the sum of the Revolving Credit Exposures would exceed the
total Commitments.
(c) The Borrower may request an extension of this Agreement
upon 60 days' prior notice to the Administrative Agent; provided, that, such
extension will be at the sole option of the Banks and the Issuing Bank and will
require the written agreement of each Bank and the Issuing Bank in order to
become effective.
Section 2.11 Prepayment. The Borrower shall have the right at any time
and from time to time to prepay any Borrowing, in whole or in part, upon at
least three Business Days' prior notice to the Administrative Agent; provided,
however, that each partial prepayment shall be in an amount of not less than
$1,000,000. Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.11 shall be subject to Section 2.14 but otherwise without premium or penalty.
All prepayments under this Section 2.11 shall be accompanied by accrued interest
on the principal amount being prepaid to (but excluding) the date of payment.
Section 2.12 Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
there is adopted any new law, rule or regulation or any change in applicable law
or regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) which shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by any Bank (except
any such reserve requirement which is reflected in the Eurodollar Rate) or shall
impose on such Bank or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Bank or any
Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Bank of making or maintaining
any Eurodollar Loan or to increase the cost to such Bank or the Issuing Bank of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Bank or the Issuing Bank
hereunder or under any Notes (whether of principal, interest or otherwise) by an
amount deemed by such Bank to be material, then the Borrower will pay to such
Bank or the Issuing Bank, as the case may be, upon demand such additional amount
or amounts as will compensate such Bank or the Issuing Bank for such additional
costs incurred or reduction suffered.
20
(b) If any Bank or the Issuing Bank shall have determined that
the applicability of any law, rule, regulation, agreement or guideline adopted
after the date hereof regarding capital adequacy, or any change in any of the
foregoing or the adoption after the date hereof of any change in any law, rule,
regulation, agreement or guideline existing on the date hereof or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank or the Issuing Bank (or any
lending office thereof) or any Bank's or the Issuing Bank's holding company with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Bank's or the
Issuing Bank's capital or on the capital of such Bank's or the Issuing Bank's
holding company, if any, with respect to this Agreement or Loans made by such
Bank or any Letter of Credit or participation therein to a level below that
which such Bank or the Issuing Bank or such Bank's or the Issuing Bank's holding
company could have achieved but for such applicability, adoption, change or
compliance (taking into consideration such Bank's or the Issuing Bank's policies
and the policies of such Bank's or the Issuing Bank's holding company with
respect to capital adequacy) by an amount deemed by such Bank or the Issuing
Bank to be material, then from time to time the Borrower shall pay to such Bank
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Bank or the Issuing Bank or such Bank's or the Issuing
Bank's holding company for any such reduction suffered. It is acknowledged that
this Agreement is being entered into by the Banks and the Issuing Bank on the
understanding that the Banks and the Issuing Bank will not be required to
maintain capital against their obligations to make Loans or issue Letters of
Credit or purchase participations therein under currently applicable laws,
regulations and regulatory guidelines. In the event Banks or the Issuing Bank
shall be advised by any Governmental Authority or shall otherwise determine on
the basis of pronouncements of any Governmental Authority that such
understanding is incorrect, it is agreed that the Banks and the Issuing Bank
will be entitled to make claims under this paragraph based upon market
requirements prevailing on the date hereof for commitments under comparable
credit facilities against which capital is required to be maintained.
(c) A certificate of a Bank or the Issuing Bank setting forth
in reasonable detail such amount or amounts as shall be necessary to compensate
such Bank or the Issuing Bank or such Bank's or the Issuing Bank's holding
company as specified in paragraph (a) or (b) above, as the case may be, and the
manner in which such Bank or the Issuing Bank has determined the same, shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay the Bank or the Issuing Bank, as the case may be, the amount
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same.
(d) Failure on the part of any Bank or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Bank's or the Issuing Bank's right to demand
compensation with respect to such period or any other period. The protection of
this Section shall be available to each Bank and the Issuing Bank regardless of
any possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred or
been imposed.
21
Section 2.13 Change in Legality. (a) Notwithstanding any other
provision herein, if any change in, or adoption of, any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Bank to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by notice to the
Borrower and to the Administrative Agent, such Bank may:
(i) declare that Eurodollar Loans will not thereafter
be made by such Bank hereunder, whereupon any request by the Borrower
for a Eurodollar Borrowing shall, as to such Bank only, be deemed a
request for an ABR Loan unless such declaration shall be subsequently
withdrawn; and
(ii) require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below.
In the event any Bank shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Bank or the
converted Eurodollar Loans of such Bank shall instead be applied to repay the
ABR Loans made by such Bank in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.13, a notice to the
Borrower by any Bank shall be effective as to each Eurodollar Loan, if lawful,
on the last day of the Interest Period currently applicable to such Eurodollar
Loan.
Section 2.14 Indemnity. The Borrower shall indemnify each Bank against
any loss or expense which such Bank may sustain or incur as a consequence of (a)
any failure by the Borrower to fulfill on the date of any Eurodollar Borrowing
hereunder the applicable conditions set forth in Article IV, (b) any failure by
the Borrower to borrow any Eurodollar Loan hereunder after irrevocable notice of
such borrowing has been given or deemed given pursuant to Section 2.03, (c) any
payment or prepayment of a Eurodollar Loan required by any provision of this
Agreement or otherwise made or deemed made on a date other than the last day of
the Interest Period applicable thereto, (d) any assignment of a Eurodollar Loan
pursuant to Section 2.19(b) made or deemed made on a date other than the last
day of the Interest Period applicable thereto, or (e) any default in payment or
prepayment of the principal amount of any Eurodollar Loan or any part thereof or
interest accrued thereon, as and when due and payable (at the due date thereof,
whether by scheduled maturity, acceleration, irrevocable notice of prepayment or
otherwise) including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in liquidating or employing
deposits from third parties acquired to effect or maintain such Loan or any part
thereof as a Eurodollar Loan. Such loss or reasonable expense shall include an
amount equal to the excess, if any, as reasonably determined by such Bank, of
(i) its cost of obtaining the funds for the Eurodollar Loan being paid, prepaid,
assigned or not borrowed (assumed to be the Eurodollar Rate applicable thereto)
for the period from the date of such payment, prepayment, assignment or failure
to borrow to the last day of the Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Eurodollar Loan which would
have commenced on the date of such failure) over (ii) the amount
22
of interest (as reasonably determined by such Bank) that would be realized by
such Bank in reemploying the funds so paid, prepaid, assigned or not borrowed
for such period or Interest Period, as the case may be. A certificate of any
Bank setting forth any amount or amounts which such Bank is entitled to receive
pursuant to this Section, and the manner in which such Bank has determined the
same, shall be delivered to the Borrower and shall be conclusive absent manifest
error.
Section 2.15 Pro Rata Treatment. Except as required under Section 2.13,
each Borrowing, each payment or prepayment of principal of any Borrowing or LC
Disbursement, each payment of interest on the Loans or LC Disbursements, each
payment of the Fees, and each reduction of the Commitments shall be allocated
among the Banks in accordance with their respective Pro Rata Shares. Each Bank
agrees that in computing such Bank's portion of any Borrowing to be made
hereunder, the Administrative Agent may, in its discretion, round each Bank's
Pro Rata Share of such Borrowing to the next higher or lower whole dollar
amount.
Section 2.16 Sharing of Setoffs. Each Bank agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Bank under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of its Loans or participations in
LC Disbursements as a result of which the unpaid principal portion of its Loans
or participations in LC Disbursements shall be proportionately less than the
unpaid principal portion of the Loans or participations in LC Disbursements of
any other Bank, it shall be deemed simultaneously to have purchased from such
other Bank at face value, and shall promptly pay to such other Bank the purchase
price for, a participation in the Loans or participations in LC Disbursements,
as applicable, of such other Bank ("Sharing Participations"), so that (i) the
aggregate unpaid principal amount of the Loans, participations in LC
Disbursements and Sharing Participations held by each Bank shall be in the same
proportion to the aggregate unpaid principal amount of all Loans and LC
Disbursements then outstanding as (ii) the principal amount of its Loans,
participations in LC Disbursements and Sharing Participations prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all Loans and LC Disbursements outstanding prior to such
exercise of banker's lien, setoff or counter claim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest. The Borrower expressly consents to the foregoing arrangements
and agrees that any Bank holding a participation in a Loan or in a participation
in an LC Disbursement deemed to have been so purchased may exercise any and all
rights of banker's lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Bank by reason thereof as fully as if such
Bank had made a Loan directly to the Borrower or had acquired a participation in
an LC Disbursement directly from the Issuing Bank, as the case may be, in the
amount of such participation.
Section 2.17 Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or reimbursements of LC
Disbursements or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 noon, New
23
York City time, on the date when due in dollars to the Administrative Agent at
its offices at One Wall Street, New York, New York, in immediately available
funds.
(b) Whenever any payment (including principal of or interest
on any Borrowing or reimbursements of LC Disbursements or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
Section 2.18 Taxes. (a) Any and all payments by the Borrower hereunder
and under any other Loan Document shall be made, in accordance with Section
2.17, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding taxes imposed on the net income of the
Administrative Agent, any Bank or the Issuing Bank (or any transferee or
assignee thereof, including a participation holder (any such entity being called
a "Transferee")) and franchise taxes imposed on the Administrative Agent, any
Bank or the Issuing Bank (or Transferee) by the United States or any
jurisdiction under the laws of which the Administrative Agent, any such Bank or
the Issuing Bank (or such Transferee) or the applicable lending office, is
organized or any political subdivision thereof (all such nonexcluded taxes,
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 any Loan Document
to the Banks or the Issuing Bank (or any Transferee) or the Administrative
Agent, (i) the sum payable shall be increased by the amount necessary so that
after making all required deductions of Taxes (including deductions applicable
to additional sums payable under this Section 2.18) such Bank or the Issuing
Bank (or such Transferee) or the Administrative Agent (as the case may be) shall
receive an amount equal to the sum it would have received had no such deductions
of Taxes been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other Governmental Authority in accordance with applicable law; provided,
however, that no Transferee of any Bank shall be entitled to receive any greater
payment under this paragraph (a) than such Bank would have been entitled to
receive with respect to the rights assigned, participated or other wise
transferred except to the extent that such greater payment arises from
circumstances not in existence at the time such assignment, participation or
transfer shall have been made.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made under any Loan Document or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Bank (or Transferee), the
Issuing Bank (or Transferee) and the Administrative Agent for the full amount of
any Taxes and Other Taxes paid by such Bank (or such Transferee), the Issuing
Bank (or such Transferee) or the Administrative Agent, as the case may be, and
any liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, whether or not such Taxes or
24
Other Taxes were correctly or legally asserted by the relevant taxing authority
or other Governmental Authority. Such indemnification shall be made within 30
days after the date any Bank or the Issuing Bank (or Transferee) or the
Administrative Agent, as the case may be, makes written demand therefor. If a
Bank or the Issuing Bank (or Transferee) or the Administrative Agent shall
become aware that it is entitled to receive a refund in respect of Taxes or
Other Taxes as to which it has been indemnified by the Borrower pursuant to this
Section 2.18, it shall promptly notify the Borrower of the availability of such
refund and shall, within 30 days after receipt of a request by the Borrower,
apply for such refund at the Borrower's expense.
(d) If any Bank or the Issuing Bank (or Transferee) or the
Administrative Agent receives a refund in respect of any Taxes or Other Taxes as
to which it has been indemnified by the Borrower pursuant to this Section 2.18,
it shall promptly notify the Borrower of such refund and shall repay such refund
to the Borrower (to the extent of amounts that have been paid by the Borrower
under this Section 2.18 with respect to such refund) within 30 days (or promptly
upon receipt, if the Borrower has requested application for such refund pursuant
hereto), net of all reasonable out of pocket expenses of such Bank or the
Issuing Bank (or Transferee) and without interest (other than interest included
in such refund); provided that the Borrower, upon the request of such Bank or
the Issuing Bank (or such Transferee) or the Administrative Agent, agrees to
return such refund (plus penalties, interest or other charges) to such Bank or
the Issuing Bank (or such Transferee) or the Administrative Agent in the event
such Bank or the Issuing Bank (or such Transferee) or the Administrative Agent
is required to repay such refund. Nothing contained in this paragraph (c) shall
require any Bank or the Issuing Bank (or Transferee) or the Administrative Agent
to make available any of its tax returns (or any other information relating to
its taxes which it deems to be confidential); provided that Borrower, at its
expense, shall have the right to receive an opinion from a firm of independent
public accountants of recognized national standing acceptable to the Borrower
that the amount due hereunder is correctly calculated.
(e) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to any Bank or
the Issuing Bank (or Transferee) or the Administrative Agent, the Borrower will
furnish to the Administrative Agent, at its address referred to in Section 9.01,
the original or a certified copy of a receipt received by the Borrower
evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.18
shall survive the payment in full of the principal of and interest on all Loans
made hereunder.
(g) On or prior to the execution of this Agreement and on or
before the transfer to a Transferee, the Administrative Agent shall notify the
Borrower of each Bank's or the Issuing Bank's (or Transferee's) address. On or
prior to the Banks' or the Issuing Bank's (or Transferee's) first Interest
Payment Date, and from time to time as required by law, each Bank or the Issuing
Bank (or Transferee) that is not a United States Person within the meaning of
Section 770(a)(30) of the Code (a "Non-U.S. Person") shall, if legally able to
do so, deliver to the Borrower and the Administrative Agent (i) one duly
completed and executed copy of United States Internal Revenue Service Form
W-8BEN or W-8ECI, (ii) if claiming exemption from United States Federal
withholding tax pursuant to Sections 871(h) or 881(c) of the Code, one
25
duly completed and executed copy of a United States Internal Revenue Service
Form W-8BEN and a certificate representing that such Non-U.S. Person is not a
bank for purposes of Section 881(c) of the Code, is not a 10 percent shareholder
(within the meaning of Section 871(h)(3)(b) of the Code) of the Borrower and is
not a controlled foreign corporation related to the Borrower (within the meaning
of Section 864(d)(4) of the Code) or (iii) any successor applicable form of any
thereof, establishing in each case that such Bank or Issuing Bank (or
Transferee) is entitled to receive payments under the Loan Documents payable to
it without deduction or withholding of any United States Federal income taxes,
or subject to a reduced rate thereof. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that such payments under the Loan Documents are not subject to United States
Federal withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower shall withhold taxes from such payments at
the applicable statutory rate.
(h) The Borrower shall not be required to pay any additional
amounts to any Bank or the Issuing Bank (or Transferee) in respect of United
States Federal withholding tax pursuant to paragraph (a) above if the obligation
to pay such additional amounts would not have arisen but for a failure by such
Bank or such Issuing Bank (or Transferee) to comply with the provisions of
paragraph (g) above; provided, however, that the Borrower shall be required to
pay those amounts to any Bank or the Issuing Bank (or Transferee) that it was
required to pay hereunder prior to the failure of such Bank or such Issuing Bank
(or Transferee) to comply with the provisions of such paragraph (g).
Section 2.19 Termination or Assignment of Commitments Under Certain
Circumstances. (a) Any Bank or the Issuing Bank (or Transferee) claiming any
additional amounts payable pursuant to Section 2.12 or Section 2.18 or
exercising its rights under Section 2.13 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may
thereafter accrue or avoid the circumstances giving rise to such exercise and
would not, in the sole determination of such Bank or such Issuing Bank, be
otherwise disadvantageous to such Bank or such Issuing Bank (or Transferee).
(b) In the event that any Bank shall have delivered a notice
or certificate pursuant to Section 2.13, or the Borrower shall be required to
make additional payments under Section 2.12 or 2.18 to any Bank or the Issuing
Bank (or Transferee) or to the Administrative Agent with respect to any Bank or
the Issuing Bank (or Transferee), the Borrower shall have the right, at its own
expense, upon notice to such Bank or the Issuing Bank (or Transferee) and the
Administrative Agent (and, if a Commitment is being terminated or assigned, the
Issuing Bank), (a) to terminate the Commitment of such Bank or such Issuing Bank
(or Transferee) or (b) to require such Bank or the Issuing Bank (or Transferee)
to transfer and assign without recourse (in accordance with and subject to the
restrictions contained in Section 9.04) all its interests, rights and
obligations under the Loan Documents to another financial institution which
shall assume such obligations; provided that (i) no such termination or
assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the Borrower or the assignee, as the case may
be, shall pay to the affected Bank or the Issuing Bank (or Transferee) in
immediately available funds on the date of such termination or assignment the
principal of and interest accrued to the date of payment on the Loans made by it
hereunder and all other amounts
26
accrued for its account or owed to it under the Loan Documents and, in the case
of a termination or assignment by the Issuing Bank, shall cause all Letters of
Credit to be surrendered for cancellation on or prior to the date of such
termination or assignment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Banks and the
Issuing Bank that:
Section 3.01 Organization; Powers. Each of the Borrower and the
Significant Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Effect, and (d) in the case of the Borrower, has the corporate power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents and each other agreement or instrument contemplated thereby to which
it is or will be a party and to borrow hereunder.
Section 3.02 Authorization. The execution, delivery and performance by
the Borrower of each of the Loan Documents and the Borrowings and procurement of
Letters of Credit hereunder (collectively, the "Transactions") (a) have been
duly authorized by all requisite corporate and, if required, stockholder action
and (b) will not (i) violate (A) any provision of law, statute, rule or
regulation the violation of which could reasonably be expected to impair the
validity and enforceability of this Agreement or any other Loan Document or
materially impair the rights of or benefits available to the Banks or the
Issuing Bank under the Loan Documents, or of the certificate or articles of
incorporation or other constitutive documents or by laws of the Borrower or any
Significant Subsidiary, (B) any order of any Governmental Authority the
violation of which could reasonably be expected to impair the validity or
enforceability of this Agreement or any other Loan Document, or materially
impair the rights of or benefits available to the Banks or the Issuing Bank
under the Loan Documents, or (C) any provision of any indenture or other
material agreement or instrument evidencing or relating to borrowed money to
which the Borrower or any Significant Subsidiary is a party or by which any of
them or any of their property is or may be bound in a manner which could
reasonably be expected to impair the validity and enforceability of this
Agreement or any other Loan Document or materially impair the rights of or
benefits available to the Banks or the Issuing Bank under the Loan Documents,
(ii) be in conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument in a manner which could reasonably be expected to impair the
validity and enforceability of this Agreement or any other Loan Document or
materially impair the rights of or benefits available to the Banks or the
Issuing Bank under the Loan Documents or (iii) result in the creation or
imposition under any such indenture, agreement or other instrument of any Lien
upon or with respect to any property or assets now owned or hereafter acquired
by the Borrower.
Section 3.03 Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by
27
the Borrower will constitute, a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms.
Section 3.04 Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except such as have
been made or obtained and are in full force and effect.
Section 3.05 Financial Statements. The Borrower has heretofore
furnished to the Banks and the Issuing Bank its consolidated balance sheets and
statements of income and statements of cash flow as of and for the fiscal year
ended December 31, 2001, audited by and accompanied by the opinion of Deloitte &
Touche LLP, independent public accountants. Such financial statements present
fairly the financial condition and results of operations of the Borrower and its
consolidated subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto, together with the Borrower's Annual Report on Form
10-K for the fiscal year ended December 31, 2001, reflect all liabilities,
direct or contingent, of the Borrower and its consolidated Subsidiaries as of
the dates thereof which are material on a consolidated basis. Such financial
statements were prepared in accordance with GAAP applied (except as noted
therein) on a consistent basis.
Section 3.06 No Material Adverse Change. Except as disclosed in the
Borrower's Annual Report on Form 10-K for the fiscal year ended December 31,
2001 and in any document filed after December 31, 2001, but prior to the date of
this Agreement pursuant to Sections 13(a), 14 or 15(d) of the Securities
Exchange Act of 1934, there has been no change in the business, assets,
operations or financial condition of the Borrower and the Subsidiaries, taken as
a whole, since December 31, 2001, which could reasonably be expected to have a
material adverse effect on the creditworthiness of the Borrower.
Section 3.07 Litigation; Compliance with Laws. (a) Except as set forth
in the Annual Report of the Borrower on Form 10-K for the year ended December
31, 2001 or in any document filed after December 31, 2001, but prior to the date
of this Agreement pursuant to Sections 13(a), 14 or 15(d) of the Securities
Exchange Act of 1934, there are not any actions, suits or proceedings at law or
in equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or any business, property or rights of any such person (i) which
involve any Loan Document or the Transactions or (ii) which could reasonably be
anticipated, individually or in the aggregate, to result in a Material Adverse
Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where such
violation or default would be reasonably likely to result in a Material Adverse
Effect.
Section 3.08 Federal Reserve Regulations. (a) Neither the Borrower nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
28
(b) No part of the proceeds of any Loan or Letter of Credit
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase or carry Margin Stock or to extend
credit to others for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose, or (ii) for any
purpose which entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including Regulation U or X.
Section 3.09 Investment Company Act; Public Utility Holding Company
Act. The Borrower is not (a) an "investment company" as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) subject to
regulation as a "holding company" under the Public Utility Holding Company Act
of 1935.
Section 3.10 No Material Misstatements. No information, report,
financial statement, exhibit or schedule furnished by or on behalf of the
Borrower to the Administrative Agent, the Issuing Bank or any Bank in connection
with the negotiation of any Loan Document or included therein or delivered
pursuant thereto contained, contains or will contain any material misstatement
of fact or, when considered together with all reports theretofore filed with the
Securities and Exchange Commission, omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading.
Section 3.11 Employee Benefit Plans. Each of the Borrower and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which the Borrower or any
ERISA Affiliate was required to file a report with the PBGC, and the present
value of all benefit liabilities under each Plan (based on those assumptions
used to fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed by more than $10,000,000 the value of the assets of such Plan.
Section 3.12 Environmental and Safety Matters. Each of the Borrower and
each Subsidiary has complied with all Federal, state, local and other statutes,
ordinances, orders, judgments, rulings and regulations relating to environmental
pollution or to environmental or nuclear regulation or control or to employee
health or safety, except where noncompliance would not be reasonably likely to
result in a Material Adverse Effect. Neither the Borrower nor any Subsidiary has
received notice of any failure so to comply, except where noncompliance would
not be reasonably likely to result in a Material Adverse Effect. The Borrower's
and the Subsidiaries' plants do not manage any hazardous wastes, hazardous
substances, hazardous materials, toxic substances, toxic pollutants or
substances similarly denominated, as those terms or similar terms are used in
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Hazardous Materials Transportation
Act, the Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or
any other applicable law relating to environmental pollution or employee health
and safety, or any nuclear fuel or other radioactive materials, in all cases in
violation of any law or any regulations promulgated pursuant thereto, where such
violation would be reasonably likely to result in a Material Adverse Effect. The
Borrower is aware of no events, conditions or circumstances involving
environmental pollution or contamination or employee health or safety that could
reasonably be expected to result in a Material Adverse Effect. The
representations and
29
warranties set forth in this Section 3.12 are, however, subject to any matters,
circumstances or events set forth in the Borrower's Annual Report on Form 10-K
for the fiscal year ended December 31, 2001 and in any document filed after
December 31, 2001, but prior to the date of this Agreement pursuant to Sections
13(a), 14 or 15(d) of the Securities Exchange Act of 1934; provided, however,
that the inclusion of such matters, circumstances or events as exceptions (or
any other exceptions contained in the representations and warranties which refer
to the Borrower's Annual Report on Form 10-K for the fiscal year ended December
31, 2001 or in any document filed after December 31, 2001, but prior to the date
of this Agreement pursuant to Sections 13(a), 14 or 15(d) of the Securities
Exchange Act of 1934) shall not be construed to mean that the Borrower has
concluded that any such matter, circumstance or effect is likely to result in a
Material Adverse Effect.
Section 3.13 Significant Subsidiaries. Schedule 3.13 sets forth as of
the date hereof a list of all Significant Subsidiaries of the Borrower and the
percentage ownership interest of the Borrower therein.
ARTICLE IV
CONDITIONS TO BORROWINGS AND LETTERS OF CREDIT
The obligations of the Banks to make Loans and of the Issuing Bank to
issue, amend, renew or extend Letters of Credit, are subject to the satisfaction
of the following conditions:
Section 4.01 All Borrowings and Letters of Credit. On the date of each
Borrowing (including each Borrowing in which Loans are refinanced with new Loans
as contemplated by Section 2.02(e)) or issuance, amendment, renewal or extension
of a Letter of Credit:
(a) The Administrative Agent shall have received (i) in the
case of a Borrowing, a notice of such Borrowing as required by Section
2.03 and (ii) in the case of an issuance, amendment, renewal or
extension of a Letter of Credit, a notice requesting the same and any
letter of application as required by Section 2.05.
(b) The representations and warranties set forth in Article
III hereof (excluding, in the case of a refinancing of Loans or the
issuance, amendment, renewal or extension of a Letter of Credit or the
refinancing of an LC Disbursement that does not increase the Revolving
Credit Exposure of any Bank, the representations set forth in Sections
3.06 and 3.07) shall be true and correct in all material respects on
and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) The Borrower shall be in compliance with all the terms and
provisions set forth herein and in each other Loan Document on its part
to be observed or performed, and at the time of and immediately after
such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit no Event of Default or Default shall have
occurred and be continuing.
30
Each Borrowing and issuance, amendment, renewal or extension of such Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (b) and
(c) of this Section 4.01.
Section 4.02 First Borrowing or Letter of Credit. On the date of this
Agreement:
(a) The Administrative Agent shall have received each of the
following, in form and substance satisfactory to it:
(i) Opinions of Xxxxxx Xxxxxx White & XxXxxxxxx, LLP,
counsel to the Borrower, and Xxxxxx Xxxx & Priest, dated the date of
this Agreement and addressed to the Administrative Agent, the Banks and
the Issuing Bank, with respect to such matters relating to the Borrower
and the Loan Documents as the Administrative Agent, the Issuing Bank or
any Bank may reasonably request. The Borrower hereby instructs such
counsel to deliver such opinion to the Administrative Agent.
(ii) Evidence satisfactory to the Administrative
Agent and set forth on Schedule 4.02(a)(ii) that the Borrower shall
have obtained all consents and approvals of, and shall have made all
filings and registrations with, any Governmental Authority required in
order to consummate the Transactions, in each case without the
imposition of any condition which, in the judgment of the Banks or the
Issuing Bank, could adversely affect their rights or interests under
the Loan Documents.
(iii) A copy of the certificate or articles of
incorporation, including all amendments thereto, of the Borrower,
certified as of a recent date by the Secretary of State of the state of
its organization, and a certificate as to the good standing of the
Borrower as of a recent date, from such Secretary of State.
(iv) A certificate of the Secretary or Assistant
Secretary of the Borrower dated the date of this Agreement and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of the Borrower as in effect on the date of this Agreement and
at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board of directors of
the Borrower authorizing the execution, delivery and performance of the
Loan Documents and borrowings and procurement of letters of credit
hereunder, and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (C) that the certificate
or articles of incorporation of the Borrower have not been amended
since the date of the last amendment thereto shown on the certificate
of good standing furnished pursuant to clause (iii) above, and (D) as
to the incumbency and specimen signature of each officer executing any
Loan Document or any other document delivered in connection therewith
on behalf of the Borrower
(v) A certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to clause (iv) above.
31
(vi) A certificate, dated the date of this Agreement
and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b)
and (c) of Section 4.01.
(vii) Evidence satisfactory to the Administrative
Agent that this Agreement, the Supplemental Indenture, the Bond
Delivery Agreement, the First Mortgage Bond and any Notes requested by
the Banks for issuance on the date of this Agreement, have been
executed and delivered by all parties thereto.
(viii) A copy of the First Mortgage, certified by the
Secretary or Assistant Secretary of the Borrower.
(ix) A paid mortgage title insurance policy, naming
the trustee under the First Mortgage as the insured, insuring the
Borrower's title to the real property subject to Lien of the First
Mortgage, and the validity and first priority of the Lien of the First
Mortgage (subject to Liens permitted to exist by the terms of the First
Mortgage), in an amount not less than the principal amount of the First
Mortgage Bond.
(x) Such other documents as the Administrative Agent,
the Banks, the Issuing Bank or their respective legal counsel may
reasonably request.
(b) All fees payable by the Borrower to the Administrative
Agent, the Issuing Bank, the Banks or any of their Affiliates or any on
or prior to the date of this Agreement with respect to this Agreement,
and all amounts payable by the Borrower pursuant to Section 9.05 for
which invoices have been delivered to the Borrower on or prior to such
date, shall have been paid in full or arrangements satisfactory to the
Administrative Agent shall have been made to cause them to be paid in
full concurrently with the disbursement of the proceeds of any
Borrowing to be made on such date.
(c) The Lenders shall have received a copy of each document
filed after December 31, 2001, but prior to the date of this Agreement
pursuant to Sections 13(a), 14 or 15(d) of the Securities Exchange Act
of 1934.
(d) The Administrative Agent shall be satisfied that (i) on
the date of this Agreement, all commitments to make loans or issue
letters of credit under the Existing Credit Agreement will be
terminated, and all amounts accrued or owing under the Existing Credit
Agreement will be paid in full, and (ii) all Existing Letters of Credit
will expire on May 22, 2002.
(e) All legal matters incident to the Loan Documents and the
transactions contemplated thereby shall be reasonably satisfactory to
the Administrative Agent, the Banks, the Issuing Bank and their
respective legal counsel.
32
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Bank and the Issuing Bank
that so long as any Commitment shall remain in effect or the principal of or
interest on any Loan or LC Disbursement, any Fees or any other amounts payable
under any Loan Document shall be unpaid or any Letter of Credit remains
outstanding:
Section 5.01 Existence; Businesses and Properties. (a) The
Borrower shall, and shall cause each Significant Subsidiary to, do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.03.
(b) The Borrower shall, and shall cause each Significant
Subsidiary to, (i) do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and trade
names utilized in the conduct of its business, except where the failure so to
obtain, preserve, renew, extend or maintain any of the foregoing would not
result in a Material Adverse Effect; maintain and operate such business in
substantially the manner in which it is presently conducted and operated, except
as otherwise expressly permitted under this Agreement; (ii) comply in all
material respects with all applicable laws, rules, regulations and orders of any
Governmental Authority, whether now in effect or hereafter enacted if failure to
comply with such requirements would result in a Material Adverse Effect; and
(iii) at all times maintain and preserve all property material to the conduct of
its business and keep such property in good repair, working order and condition
and from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times; provided, however, that the Borrower or any Significant Subsidiary
may cause the discontinuance of the operation or a reduction in the capacity of
any of its facilities, or any element or unit thereof including, without
limitation, real and personal properties, facilities, machinery and equipment,
(i) if, in the judgment of the Borrower or such Significant Subsidiary, it is no
longer advisable to operate the same, or to operate the same at its former
capacity, and such discontinuance or reduction would not result in a Material
Adverse Effect, or (ii) if the Borrower or a Significant Subsidiary intends to
sell and dispose of its interest in the same in accordance with the terms of
this Agreement and within a reasonable time shall endeavor to effectuate the
same.
Section 5.02 Insurance. (a) The Borrower shall, and shall cause each
Significant Subsidiary to, maintain insurance, to such extent and against such
risks, as is customary with companies in the same or similar businesses and
owning similar properties in the same general area in which it operates and (b)
maintain such other insurance as may be required by law. All insurance required
by this Section 5.02 shall be maintained with financially sound and reputable
insurers or through self-insurance; provided, however, that the portion of such
insurance constituting self-insurance shall be comparable to that usually
maintained by companies engaged in the same or similar businesses and owning
similar properties in the same general area in which
33
it operates and the reserves maintained with respect to such self-insured
amounts are deemed adequate by its officer or officers responsible for insurance
matters.
Section 5.03 Taxes and Obligations. The Borrower shall, and shall cause
each Significant Subsidiary to, pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment and
discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower shall, to
the extent required by GAAP, have set aside on its books adequate reserves with
respect thereto.
Section 5.04 Financial Statements, Reports, etc. The Borrower shall
furnish to the Administrative Agent, each Bank and the Issuing Bank:
(a) within 105 days after the end of each fiscal year,
consolidated and consolidating balance sheets and related statements of
income and statements of cash flow, showing the financial condition of
(i) Avista Utilities and (ii) the Borrower and its consolidated
Subsidiaries, in each case as of the close of such fiscal year, and the
results of each of their operations during such year, all (A) in the
case of Avista Utilities, certified by one of the Borrower's Financial
Officers as fairly presenting the financial condition and results of
operations of Avista Utilities in accordance with GAAP consistently
applied and (B) in the case of the Borrower and its consolidated
subsidiaries, audited by Deloitte & Touche or other independent public
accountants of recognized national standing acceptable to the Required
Banks and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial
condition and results of operations of the Borrower on a consolidated
basis (except as noted therein) in accordance with GAAP consistently
applied;
(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year, consolidated and, to the extent
otherwise available, consolidating balance sheets and related
statements of income and statements of cash flow, showing the financial
condition of (i) Avista Utilities and (ii) the Borrower and its
consolidated subsidiaries, in each case as of the close of such fiscal
quarter, and the results of each of their operations during such fiscal
quarter and the then elapsed portion of the fiscal year, all certified
by one of its Financial Officers as fairly presenting the financial
condition and results of operations of Avista Utilities or the Borrower
on a consolidated basis, as applicable, in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under (a) or (b) above, (i) a certificate of the relevant accounting
firm opining on or certifying such statements or Financial Officer
(which certificate, when furnished by an accounting firm, may be
limited to accounting matters and disclaim responsibility for legal
interpretations)
34
certifying that to the knowledge of the accounting firm or the
Financial Officer, as the case may be, no Event of Default or Default
has occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto, and (ii) a
certificate of a Financial Officer setting forth in reasonable detail
such calculations as are required to establish whether the Borrower was
in compliance with Sections 6.05 and 6.06 on the date of such financial
statements;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by it with the Securities and Exchange Commission, or any
governmental authority succeeding to any of or all the functions of
said Commission, or with any national securities exchange, or
distributed to its share holders, as the case may be; and
(e) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any Significant Subsidiary, or compliance with the
terms of any Loan Document, as the Administrative Agent, any Bank or
the Issuing Bank may reasonably request.
Section 5.05 Litigation and Other Notices. The Borrower shall furnish
to the Administrative Agent, each Bank and the Issuing Bank prompt notice of the
following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any written threat or
notice of intention of any person to file or commence, any action, suit
or proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Subsidiary thereof
which could reasonably be anticipated to result in a Material Adverse
Effect; and
(c) any development that has resulted in, or could reasonably
be anticipated to result in, a Material Adverse Effect.
Section 5.06 ERISA. (a) The Borrower shall, and shall cause each
Significant Subsidiary to, comply in all material respects with the applicable
provisions of ERISA and (b) the Borrower shall furnish to the Administrative
Agent, each Bank and the Issuing Bank (i) as soon as possible, and in any event
within 30 days after any Responsible Officer of the Borrower or any ERISA
Affiliate either knows or has reason to know that any Reportable Event has
occurred that alone or together with any other Reportable Event could reasonably
be expected to result in liability of the Borrower to the PBGC in an aggregate
amount exceeding $10,000,000, a statement of a Financial Officer setting forth
details as to such Reportable Event and the action proposed to be taken with
respect thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any
notice the Borrower or any ERISA Affiliate may receive from the PBGC relating to
the intention of the PBGC to terminate any Plan or Plans (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the
35
Code) or to appoint a trustee to administer any Plan or Plans and (iii) within
10 days after the due date for filing with the PBGC pursuant to Section 412(n)
of the Code of a notice of failure to make a required installment or other
payment with respect to a Plan, a statement of a Financial Officer setting forth
details as to such failure and the action proposed to be taken with respect
thereto, together with a copy of such notice given to the PBGC.
Section 5.07 Maintaining Records; Access to Properties and Inspections.
The Borrower shall, and shall cause each Significant Subsidiary to, (a) maintain
all financial records in accordance with GAAP and (b) permit any representatives
designated by the Administrative Agent, any Bank or the Issuing Bank to visit
and inspect its financial records and properties at reasonable times and as
often as requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent,
any Bank or the Issuing Bank to discuss its affairs, finances and condition with
its chief financial officer, or other person designated by the chief financial
officer, and independent accountants therefor.
Section 5.08 Use of Proceeds and Letters of Credit. The Borrower shall
use the proceeds of the Loans and the Letters of Credit only for the purposes
set forth in the preamble to this Agreement.
Section 5.09 Notes Credit Support. At any time that the Borrower's
9.75% Senior Notes due June 1, 2008, or any other medium term notes of the
Borrower (other than notes issued under the First Mortgage), are required to be
secured by any assets of the Borrower or any of its Subsidiaries or shall
benefit from any Guarantee or other form of credit enhancement provided by the
Borrower or any of its Subsidiaries (other than bonds issued under the First
Mortgage), the Borrower shall cause the obligations under the Loan Documents to
be secured by or to benefit from all such collateral and each such Guarantee or
other form of credit enhancement on a ratable basis with the holders of such
notes and any other creditors entitled to share therein.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees with each Bank and the Issuing Bank
that so long as any Commitment shall remain in effect or the principal of or
interest on any Loan or LC Disbursement, any Fees or any other amounts payable
under any Loan Document shall be unpaid or any Letter of Credit remains
outstanding:
Section 6.01 Liens. The Borrower shall not create, incur, assume or
permit to exist any Lien on any property or assets (including stock or other
securities of any person, including any Subsidiary) now owned or hereafter
acquired by it or on any income or revenues or rights in respect of any thereof,
except:
(a) Liens on property or assets of the Borrower created by the
documents, instruments or agreements existing on the date hereof and
which are listed as exhibits to the Borrower's Annual Report on Form
10-K for the fiscal year ended December 31,
36
2001, to the extent that such Liens secure only obligations arising
under such existing documents, agreements or instruments and the amount
of Indebtedness secured thereby does not exceed the amount thereof as
of the date hereof as set forth on Schedule 6.01;
(b) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition and
(ii) such Lien does not apply to any other property or assets of the
Borrower;
(c) the Lien of the First Mortgage and the Lien of any
collateral trust mortgage or similar instrument which would be intended
to eventually replace (in one transaction or a series of transactions)
the First Mortgage (as amended, modified or supplemented from time to
time, "Collateral Trust Mortgage") on properties or assets of the
Borrower to secure bonds, notes and other obligations of the Borrower
to the extent such Liens, collectively, secure Indebtedness in an
aggregate amount not exceeding the amount secured by the Lien of the
First Mortgage on the date hereof as set forth in Schedule 6.01;
(d) Liens permitted under the First Mortgage or the Collateral
Trust Mortgage (whether or not such permitted Liens cover properties or
assets subject to the Lien of the First Mortgage or the Collateral
Trust Mortgage) and any other Liens to which the Lien of the First
Mortgage or the Collateral Trust Mortgage is expressly made subject,
but only, in the case of Liens securing Indebtedness, to the extent the
aggregate amount of Indebtedness secured thereby does not exceed the
amount thereof as of the date hereof as set forth on Schedule 6.01;
(e) Liens for taxes, assessments or governmental charges not
yet due or which are being contested in compliance with Section 5.03;
(f) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due or which are being
contested in compliance with Section 5.03;
(g) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(h) Liens incurred or created in connection with or to secure
the performance of bids, tenders, trade contracts (other than for
Indebtedness), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of alike nature incurred in the
ordinary course of business;
(i) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
37
(j) Liens (i) which secure obligations not assumed by the
Borrower, (ii) on account of which the Borrower has not and does not
expect to pay interest directly or indirectly and (iii) which exist
upon real estate or rights in or relating to real estate in respect of
which the Borrower has a right-of-way or other easement for purposes of
substations or transmission or distribution facilities;
(k) rights reserved to or vested in any federal, state or
local governmental body or agency by the terms of any right, power,
franchise, grant, license, contract or permit, or by any provision of
law, to recapture or to purchase, or designate a purchase of or order
the sale of, any property of the Borrower or to terminate any such
right, power, franchise, grant, license, contract or permit before the
expiration thereof;
(l) Liens of judgments covered by insurance, or upon appeal
and covered by bond, or to the extent not so covered not exceeding at
one time $10,000,000 in aggregate amount;
(m) any Liens, moneys sufficient for the discharge of which
shall have been deposited in trust with the trustee or mortgagee under
the instrument evidencing such Lien, with irrevocable authority of such
trustee or mortgagee to apply such moneys to the discharge of such Lien
to the extent required for such purpose;
(n) rights reserved to or vested in any federal, state or
local governmental body or agency or other public authority to control
or regulate the business or property of the Borrower;
(o) any obligations or duties affecting the property of the
Borrower to any federal, state or local governmental body or agency or
other public authority with respect to any authorization, permit,
consent or license of such body, agency or authority, given in
connection with the purchase, construction, equipping, testing and
operation of the Borrower's utility property;
(p) with respect to any property which the Borrower may
hereafter acquire, any exceptions or reservations therefrom existing at
the time of such acquisition or any terms, conditions, agreements,
covenants, exceptions and reservations expressed or provided in the
deeds of other instruments, respectively, under and by virtue of which
the Borrower shall hereafter acquire the same, none of which materially
impairs the use of such property for the purposes for which it is
acquired by the Borrower;
(q) leases and subleases entered into in the ordinary course
of business;
(r) banker's Liens and other Liens in the nature of a right of
setoff;
(s) renewals, replacements, amendments, modifications,
supplements, refinancings or extensions of Liens set forth in clauses
(a)-(d) above to the extent that the principal amount of Indebtedness
secured by such Lien immediately prior thereto is not increased and
such Lien is not extended to other property;
38
(t) security deposits or amounts paid into trust funds for the
reclamation of mining properties;
(u) restrictions on transfer or use of properties and assets,
first rights of refusal, and rights to acquire properties and assets
granted to others;
(v) non-consensual equitable Liens on the Borrower's
tenant-in-common or other interest in joint projects;
(w) Liens on the Borrower's tenant-in-common or other interest
in joint projects incurred by the project sponsor without the express
consent of the Borrower to such incurrence;
(x) cash collateral contemplated under Section 2.05(i);
(y) Liens on receivables and related properties or interests
therein; and
(z) Liens not otherwise permitted under clauses (a)-(y) above
(including Liens referred to in such clauses to the extent securing
Indebtedness in excess of the amounts permitted thereunder), provided
that the aggregate amount of Indebtedness secured by such Liens
(exclusive of amounts permitted under such other clauses) does not
exceed $150,000,000.
Section 6.02 Sale-Leaseback Transactions. The Borrower shall not enter
into any Sale-Leaseback if as a result thereof the aggregate outstanding
principal amount of Attributable Debt outstanding in connection with all
Sale-Leasebacks entered into after the date hereof would exceed 5% of the total
tangible assets of Avista Utilities as of the date of the financial statements
most recently delivered under Section 5.04(a) or (b) at such time.
Section 6.03 Mergers, Consolidations and Acquisitions. The Borrower
shall not, and shall not permit any Significant Subsidiary (without the consent
of the Required Banks, not to be unreasonably withheld) to, merge with or into
or consolidate with any other person, or purchase, lease or otherwise acquire
(in one transaction or a series of transactions) all or substantially all of the
assets of any other person (whether directly by purchase, lease or other
acquisition of all or substantially all of the assets of such person or
indirectly by purchase or other acquisition of all or substantially all of the
capital stock of such other person) other than acquisitions in the ordinary
course of the Borrower's or such Significant Subsidiary's business, except that,
if at the time thereof and immediately after giving effect thereto no Event of
Default or Default shall have occurred and be continuing, (a) the Borrower or
any Significant Subsidiary may merge with or into or consolidate with the
Borrower or any Subsidiary provided that, in any transaction involving the
Borrower, the Borrower is the surviving person, (b) the Borrower or any
Significant Subsidiary may purchase, lease or otherwise acquire from any
Subsidiary all or substantially all of its assets, (c) the Borrower may merge
with or into or consolidate with any other person so long as (i) in the case
where the business of such other person, or an Affiliate of such other person,
entirely or primarily consists of an electric or gas utility business, (A) if
the Borrower is the surviving person, the senior secured long-term debt rating
of the Borrower shall be at least BBB- or higher by S&P and Baa3 or higher by
Xxxxx'x immediately after such merger or consolidation and (B) if the Borrower
is not the surviving person, (1) the surviving
39
person shall assume in writing the obligations of the Borrower under this
Agreement and any other Loan Documents and (2) the senior secured long-term debt
rating of the surviving person shall be at least BBB or higher by S&P and Baa2
or higher by Xxxxx'x immediately after such merger or consolidation and (ii) in
the case where such other person's business does not entirely or primarily
consist of an electric or gas utility business, (A) the assets of such person at
the time of such consolidation or merger do not exceed 10% of the total assets
of the Borrower and its Subsidiaries after giving effect to such merger or
consolidation, computed and consolidated in accordance with GAAP consistently
applied and (B) if the Borrower is not the surviving person, the surviving
person shall assume in writing the obligations of the Borrower under this
Agreement and any other Loan Documents, (d) the Borrower may purchase, lease or
otherwise acquire all or substantially all of the assets of any other person
(including by purchase or other acquisition of all or substantially all of the
capital stock of such person) so long as (i) the assets being purchased, leased
or acquired (or the assets of the person whose capital stock is being acquired)
entirely or primarily consist of electric or gas utility assets or (ii) in the
case where the assets being purchased, leased or acquired (or the assets of the
person whose capital stock is being acquired) do not entirely or primarily
consist of electric or gas utility assets, the assets being acquired (or the
Borrower's proportionate share of the assets of the person whose capital stock
is being acquired) do not exceed 10% of the total assets of the Borrower and its
Subsidiaries, after giving effect to such acquisition, computed and consolidated
in accordance with GAAP consistently applied, (e) any Significant Subsidiary may
merge with or into or consolidate with any other person so long as the assets of
such person at the time of such consolidation or merger do not exceed 10% of the
total assets of the Borrower and its Subsidiaries after giving effect to such
merger or consolidation, computed and consolidated in accordance with GAAP
consistently applied, and (f) any Significant Subsidiary may purchase, lease or
otherwise acquire all or substantially all of the assets of any other person
(including by purchase or other acquisition of all or substantially all of the
capital stock of such person) so long as the assets being acquired (or the
Significant Subsidiary's proportionate share of the assets of the person whose
capital stock is being acquired) do not exceed 10% of the total assets of the
Borrower and its Subsidiaries after giving effect to such acquisition, computed
and consolidated in accordance with GAAP consistently applied; provided,
however, that notwithstanding anything in this Section 6.03 to the contrary,
this Section 6.03 shall not be deemed to prohibit any merger, consolidation or
acquisition involving a Significant Subsidiary (and not also the Borrower) if,
after giving effect to the consummation of such transaction, such Significant
Subsidiary shall have or be deemed to have a ratio of total long-term
Indebtedness to total stockholders' equity equal to or less than 1.5 to 1.0.
Section 6.04 Disposition of Assets. The Borrower shall not, and shall
not permit any Significant Subsidiary (without the consent of the Required
Banks, not to be unreasonably withheld) to, sell, lease, transfer, assign or
otherwise dispose of any assets or any interest therein (whether now owned or
hereafter acquired), except (a) dispositions of obsolete or retired property not
used or useful in its business, (b) grants of Liens by the Borrower permitted
under Section 6.01 and grants of Liens by Significant Subsidiaries, (c)
disposition by the Borrower of its interest in the Washington Public Power
Supply System Nuclear Project No. 3 in accordance with the settlement agreement
among the Borrower, the Washington Public Power Supply System and Bonneville
Power Administration, as the same may be amended, modified or supplemented from
time to time, (d) disposition by the Borrower of all or any portion of its
transmission assets in one or more RTO Transactions, (e) disposition by the
Borrower of its
40
interests in the Colstrip Project and related assets, (f) disposition by Avista
Energy, Inc. of its assets in the ordinary course of its trading operations, (g)
disposition of receivables and related properties or interests therein, (h)
other dispositions of assets (not otherwise permitted by clauses (a)-(g) of this
Section) made in the ordinary course of business not exceeding in any fiscal
year 5% of the assets of the Borrower and its Subsidiaries as of the end of the
prior fiscal year, computed and consolidated in accordance with GAAP
consistently applied, and (i) other dispositions of assets (not otherwise
permitted by clauses (a)-(h) of this Section) not exceeding in any fiscal year
10% of the assets of the Borrower and its Subsidiaries as of the end of the
prior fiscal year, computed and consolidated in accordance with GAAP
consistently applied; provided, however, that notwithstanding anything in this
Section 6.04 to the contrary, this Section 6.04 shall not be deemed to prohibit
any disposition by a Significant Subsidiary if, after giving effect to the
consummation of such transaction, such Significant Subsidiary shall have or be
deemed to have a ratio of total long-term Indebtedness to total stockholders'
equity equal to or less than 1.5 to 1.0.
Section 6.05 Consolidated Total Debt to Consolidated Total
Capitalization Ratio. The Borrower shall not permit the ratio of Consolidated
Total Debt to Consolidated Total Capitalization to be, at any time, greater than
0.65 to 1.00.
Section 6.06 Avista Utilities Interest Coverage Ratio. The Borrower
shall not permit the ratio of Avista Utilities EBITDA to Avista Utilities
Interest Expense to be less than 1.6 to 1 for (a) the two-fiscal-quarter period
ending Xxxxx 00, 0000, (x) the three-fiscal-quarter period ending June 30, 2002
or (c) any four-fiscal-quarter period ending thereafter.
Section 6.07 Public Utility Regulatory Borrowing Limits. The Borrower
shall not incur actual borrowings or commitments or issued and outstanding debt
of the Borrower in excess of the amount authorized by statute or by orders of
public utility commissions, as in effect from time to time.
Section 6.08 Avista Energy Guarantees. The Borrower shall not permit
itself to be obligated, at any time, under Guarantees of obligations of Avista
Energy, Inc. under which the Borrower's liability, in the aggregate for all such
Guarantees, might exceed $50,000,000.
Section 6.09 Investments. The Borrower shall not make any new
Investments in any Subsidiary, except for (a) Investments constituting
Guaranties permitted under Section 6.08 and (b) other Investments (including
Guaranties not permitted under Section 6.08) in an aggregate amount (calculated,
in the case of any acquisition or Investment, based on the amount of
consideration payable, and obligations incurred, by the Borrower for such
acquisition or Investment) not exceeding $75,000,000 for 2002 and 2003 combined,
net of any distributions or other amounts received by the Borrower during such
period on Investments in Subsidiaries.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening (and during the continuance) of any of the
following events ("Events of Default"):
41
(a) any representation or warranty made or deemed made in or
in connection with any Loan Document or the Borrowings or the issuance
of any Letter of Credit, or any representation or warranty contained in
any certificate or other document furnished in connection with or
pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made or deemed made;
(b) default shall be made in the payment of any principal of
any Loan or LC Disbursement when and as the same shall become due and
payable, whether at the scheduled maturity date thereof or at a date
fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or LC Disbursement or any Fee or any other amount (other than
an amount referred to in (b) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of five Business Days;
(d) default shall be made in the due observance or performance
by the Borrower of any covenant, condition or agreement contained in
Section 5.01(a), 5.05, 5.07(b) or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance
by the Borrower of any covenant, condition or agreement contained in
any Loan Document (other than those specified in (b), (c) or (d) above)
and such default shall continue unremedied for a period of 30 days
after notice thereof from the Administrative Agent, any Bank or the
Issuing Bank to the Borrower;
(f) the Borrower or any Significant Subsidiary shall (i) fail
to pay any principal or interest, regardless of amount, due in respect
of any Indebtedness when the aggregate unpaid principal amount is in
excess of $25,000,000, when and as the same shall become due and
payable (after expiration of any applicable grace period), or (ii) fail
to observe or perform any other term, covenant, condition or agreement
(after expiration of any applicable grace period) contained in any
agreement or instrument evidencing or governing any such Indebtedness
if the effect of any failure referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Indebtedness or a
trustee on its or their behalf (with or without the giving of notice,
the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Significant Subsidiary, or of a substantial part of the property or
assets of the Borrower or a Significant Subsidiary, under Title 11 of
the United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or
assets of the Borrower or a Significant Subsidiary or (iii) the
winding-up or liquidation of the Borrower or any Significant
Subsidiary; and such proceeding or petition shall continue undismissed,
or an
42
order or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 or more
days;
(h) the Borrower or any Significant Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any Significant Subsidiary or for a substantial part of the
property or assets of the Borrower or any Significant Subsidiary, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) a final judgment or judgments shall be rendered against
the Borrower, any Significant Subsidiary or any combination thereof for
the payment of money with respect to which an aggregate amount in
excess of $25,000,000 is not covered by insurance and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to levy upon assets or properties
of the Borrower or any Significant Subsidiary to enforce any such
judgment;
(j) a Reportable Event or Reportable Events, or a failure to
make a required installment or other payment (within the meaning of
Section 412(n)(1) of the Code), shall have occurred with respect to any
Plan or Plans that reasonably could be expected to result in liability
of the Borrower to the PBGC or to a Plan in an aggregate amount
exceeding $25,000,000 and, within 30 days after the reporting of any
such Reportable Event to the Administrative Agent or after the receipt
by the Administrative Agent of the statement required pursuant to
Section 5.06, the Administrative Agent shall have notified the Borrower
in writing that (i) the Required Banks have made a determination that,
on the basis of such Reportable Event or Reportable Events or the
failure to make a required payment, there are reasonable grounds (A)
for the termination of such Plan or Plans by the PBGC, (B) for the
appointment by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the imposition of
alien in favor of a Plan and (ii) as a result thereof an Event of
Default exists hereunder; or a trustee shall be appointed by a United
States District Court to administer any such Plan or Plans; or the PBGC
shall institute proceedings to terminate any Plan or Plans;
(k) any Loan Document, at any time after its execution and
delivery and for any reason, shall cease to be in full force and
effect, or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect; or the Borrower
denies that it has any or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind any Loan
Document;
43
(l) a Change in Control shall occur;
(m) the Lien purported to be created in any substantial
portion of the property of the Borrower purported to be made subject
thereto pursuant to the First Mortgage shall at any time fail to be a
valid, perfected, first priority Lien (subject to Liens permitted to
exist by the terms of the First Mortgage) securing the obligations of
the Borrower under the First Mortgage (including the obligations of the
First Mortgage Bond) and such failure shall constitute or have resulted
in a "Completed Default" under the First Mortgage; or
(n) the mortgage title insurance policy referred to in Section
4.02(a)(ix) or any other mortgage title insurance policy purported to
be issued for the benefit of the trustee under the First Mortgage, at
any time after its issuance and for any reason, shall cease to be in
full force and effect, or is declared by a court of competent
jurisdiction to be null and void, invalid or unenforceable in any
respect; or the issuer of such policy denies that it has any or further
liability or obligation under such policy, or purports to revoke,
terminate or rescind such policy.
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Banks, shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon (A) the Commitments will automatically be
terminated and (B) the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall become forthwith due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding, and (iii) deliver to the Borrower notice demanding
redemption of the First Mortgage Bond; and in any event with respect to the
Borrower described in paragraph (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.01 Appointment and Powers. In order to expedite the various
transactions contemplated by the Loan Documents, The Bank of New York is hereby
appointed to act as Administrative Agent on behalf of the Banks and the Issuing
Bank. Each of the Banks and the Issuing Bank hereby irrevocably authorizes and
directs the Administrative Agent to take such action on behalf of such Bank or
the Issuing Bank under the terms and provisions of the Loan
44
Documents, and to exercise such powers thereunder as are specifically delegated
to or required of the Administrative Agent by the terms and provisions thereof,
together with such powers as are reasonably incidental thereto. The
Administrative Agent is hereby expressly authorized on behalf of the Banks and
the Issuing Bank, without hereby limiting any implied authority, (a) to receive
on behalf of each of the Banks and the Issuing Bank any payment of principal of
or interest on the Loans outstanding hereunder, LC Reimbursements and all other
amounts accrued under the Loan Documents paid to the Administrative Agent, and
to distribute to each Bank and the Issuing Bank its proper share of all payments
so received as soon as practicable; (b) to give notice promptly on behalf of
each of the Banks and the Issuing Bank to the Borrower of any Event of Default
of which the Administrative Agent has actual knowledge acquired in connection
with its agency hereunder; and (c) to distribute promptly to each Bank and the
Issuing Bank copies of all notices, agreements and other material as provided
for in the Loan Documents as received by such Administrative Agent.
Section 8.02 Limitation on Liability. Neither the Administrative Agent
nor any of its directors, officers, employees or agents shall be liable to any
Bank or the Issuing Bank as such for any action taken or omitted by any of them
under the Loan Documents except for its or his own gross negligence or willful
misconduct, or be responsible for any statement, warranty or representation
therein or the contents of any document delivered in connection therewith or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrower of any of the terms, conditions, covenants or
agreements of the Loan Documents. The Administrative Agent shall not be
responsible to the Banks or the Issuing Bank for the due execution, genuineness,
validity, enforceability or effectiveness of the Loan Documents or any other
instrument to which reference is made therein. The Administrative Agent shall in
all cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Banks, and, except as otherwise
specifically provided herein, such instructions and any action taken or failure
to act pursuant thereto shall be binding on all the Banks and the Issuing Bank.
The Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any paper or document believed by it in good faith to be
genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrower on account of
the failure or delay in performance or breach by any Bank or the Issuing Bank of
any of its obligations under the Loan Documents or to any Bank or the Issuing
Bank on account of the failure of or delay in performance or breach by any other
Bank, the Issuing Bank or the Borrower of any of their respective obligations
thereunder or in connection therewith. The Administrative Agent may execute any
of its duties under the Loan Documents by or through agents or attorneys
selected by them using reasonable care 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 selected and authorized to act by it with reasonable care unless the
damage complained of directly results from an act or failure to act on part of
the Administrative Agent which constitutes gross negligence or wilful
misconduct. Delegation to an attorney or Administrative Agent shall not release
the Administrative Agent from its obligation to perform or cause to be performed
the delegated duty. The Administrative Agent shall be entitled to advice of
legal counsel selected by it with respect to all matters arising under the Loan
Documents and shall not be liable for any action taken or suffered in good faith
by it in accordance with the advice of such counsel.
45
Section 8.03 Other Transactions with the Borrower. The Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or other Affiliate thereof as
if it were not the Administrative Agent.
Section 8.04 Reimbursement; Indemnification. Each Bank agrees (a) to
reimburse the Administrative Agent in the amount of such Bank's Pro Rata Share
of any expenses incurred for the benefit of the Banks by the Administrative
Agent, including reasonable counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Banks, not reimbursed by
the Borrower and (b) to indemnify and hold harmless the Administrative Agent and
any of its directors, officers, employees or agents, on demand, in the amount of
its Pro Rata Share, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against it in its capacity as the Administrative Agent or any of
them in any way relating to or arising out of the Loan Documents or any action
taken or omitted by it or any of them under the Loan Documents, to the extent
not reimbursed by the Borrower; provided, however, that no Bank shall be liable
to the Administrative Agent for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of the
Administrative Agent or any of its directors, officers, employees or agents.
Section 8.05 Absence of Reliance. Each of the Banks and the Issuing
Bank acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Issuing Bank or any other Bank and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each of the Banks and the
Issuing Bank also acknowledges that it will, independently and without reliance
upon the Administrative Agent, the Issuing Bank or any other Bank based on such
documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under or based upon the
Loan Documents, any related agreement or any document furnished thereunder.
Section 8.06 Resignation of the Administrative Agent. The
Administrative Agent may at any time give notice of its resignation to the
Issuing Bank, the Banks and the Borrower. Upon receipt of any such notice of
resignation, the Required Banks may, with the consent of the Borrower (which
consent shall not be unreasonably withheld and shall not be required during an
Event of Default), appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Issuing Bank and the Banks and after
consultation with the Issuing Bank, the Banks and the Borrower, appoint a
successor Administrative Agent. Upon the acceptance by any Person of its
appointment as a successor Administrative Agent, such Person shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties and
obligations of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations as Administrative
Agent under the Loan Documents. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Article VIII shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.
46
Section 8.07 Syndication Agent; Documentation Agents; Managing Agent;
Co-Agents. None of the Syndication Agent, the Documentation Agents, the Managing
Agent or the Co-Agents shall have any rights, powers, obligations, liabilities,
responsibilities or duties under the Loan Document other than those applicable
to all Banks as such. Without limiting the foregoing, none of the Banks
identified as "Syndication Agent," "Documentation Agent," "Managing Agent" or
"Co-Agent" shall have or be deemed to have any fiduciary relationship with any
Bank. Each of the Banks and the Issuing Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy, graphic scanning or other telegraphic
communications equipment of the sending party, as follows:
(a) if to the Borrower, to:
Avista Corporation
East 0000 Xxxxxxx Xxxxxx (99202)
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Senior Vice President and Chief Financial
Officer
Telecopy: 000-000-0000
(b) if to the Administrative Agent or the Issuing Bank, to:
The Bank of Xxx Xxxx
Xxx Xxxx Xxxxxx
Agency Function Administration
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy: 212-635-6365 or 6366 or 6376
with a copy to:
The Bank of New York
Energy Industries Division
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopy: 000-000-0000 or 7924
47
(c) if to a Bank, to it at its address (or telecopy number)
set forth in Schedule 2.01 or in the Assignment and Assumption pursuant
to which such Bank shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or other telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.
Section 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties, including, without limitation, any indemnities
and reimbursement obligations, made by the Borrower in the Loan Documents and in
the certificates or other instruments prepared or delivered in connection
therewith or pursuant thereto shall be considered to have been relied upon by
the Banks and the Issuing Bank and shall survive the making by the Banks of the
Loans and issuance by the Issuing Bank of any Letters of Credit, and the
execution and delivery to the Banks of any Notes evidencing such Loans,
regardless of any investigation made by the Banks or the Issuing Bank, or on
their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any Fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated.
Section 9.03 Binding Effect; Successors and Assigns. This Agreement and
the amendment and restatement reflected hereby shall become effective when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have received copies hereof which, when taken
together, bear the signatures of each Bank and the Issuing Bank, and thereafter
shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent, the Issuing Bank and each Bank and their respective
successors and permitted assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and permitted assigns of such party; and all covenants, promises and agreements
by or on behalf of the Borrower, the Administrative Agent, the Issuing Bank or
the Banks that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and permitted assigns.
Section 9.04 Successors and Assigns. (a) Subject to Section 6.03, the
Borrower may not assign or delegate any of its rights or duties under any of the
Loan Documents without the prior written consent of each of the Banks and the
Issuing Bank.
(b) Each Bank (including the Administrative Agent or the
Issuing Bank when acting as a Bank) may assign to one or more assignees all or a
portion of its interests, rights and obligations under the Loan Documents
(including, without limitation, all or a portion of its Commitment and the same
portion of the applicable Loan or Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Bank or Affiliate of
a Bank, the Borrower and the Administrative Agent must give their prior written
consent to such
48
assignment (which consents shall not be unreasonably withheld), provided that
the consent of the Borrower shall not be required if an Event of Default shall
exist, (ii) in the case of an assignment to a person other than a Bank of all or
a portion of a Bank's Commitment or its obligation in respect of its LC
Exposure, the Issuing Bank must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (iii) that no
assignee of any Bank shall be entitled to receive any greater payment or
protection under Sections 2.12, 2.13(a) or 2.18 than such Bank would have been
entitled to receive with respect to the rights assigned or otherwise transferred
unless such assignment or transfer shall have been made at a time when the
circumstances giving rise to such greater payment did not exist, (iii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (iv) the amount of
the Commitment of the assigning Bank subject to each such assignment (determined
as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 (or, if
less, the total amount of their Commitments), (v) the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption and a processing and recordation fee of $3,500 and (vi) the
assignee, if it shall not be a Bank, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (d) of this Section 9.04, from and after the effective date specified
in each Assignment and Assumption, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Bank under the Loan
Documents and (B) the assigning Bank thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under the Loan Documents (and, in the case of an Assignment and
Assumption covering all or the remaining portion of an assigning Bank's rights
and obligations under the Loan Documents, such Bank shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.12, 2.14,
2.18 and 9.05, as well as to any Fees accrued for its account and not yet paid).
(c) The Administrative Agent shall maintain a copy of each
Assignment and Assumption delivered to it including the recordation of the names
and addresses of the Banks, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Bank pursuant to the terms hereof from
time to time (the "Register"). The Administrative Agent, the Issuing Bank and
the Banks may treat each person whose name is recorded in the Register pursuant
to the terms hereof as a Bank hereunder for all purposes of the Loan Documents.
The Register shall be available for inspection by the Borrower, the Issuing Bank
and any Bank, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Bank and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Bank hereunder), the processing and recordation fee referred to in
paragraph (b) above and, to the extent required, the written consent of the
Borrower, the Administrative Agent and the Issuing Bank to such assignment, the
Administrative Agent shall (i) accept such Assignment and Assumption, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Issuing Bank and the Borrower. Upon the request of the
assignee, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent, a new Note or Notes to the order of such
49
assignee in a principal amount equal to the applicable Commitment assumed by it
pursuant to such Assignment and Assumption and, if the assigning Bank has
retained a Commitment, upon the request of the assigning Bank, the Borrower
shall execute and deliver a new Note to the order of such assigning Bank in a
principal amount equal to the applicable Commitment retained by it. Canceled
Notes shall be returned to the Borrower.
(e) Each Bank may without the consent of the Borrower, the
Issuing Bank or the Administrative Agent sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
the Loan Documents (including all or a portion of its Commitment and the Loans
owing to it and any Notes held by it); provided, however, that (i) such Bank's
obligations under the Loan Documents shall remain unchanged, (ii) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.12, 2.14 and 2.18 to the same extent as if they were Banks (provided, that the
amount of such benefit shall be limited to the amount in respect of the interest
sold to which the seller of such participation would have been entitled had it
not sold such interest) and (iv) the Borrower, the Administrative Agent, the
Issuing Bank and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under the Loan
Documents, and such Bank shall retain the sole right to enforce the obligations
of the Borrower relating to the Loans and to approve any amendment, modification
or waiver of any provision of the Loan Documents (other than amendments,
modifications or waivers (i) decreasing any Fees or the amount of principal of
or the rate at which interest is payable on the Loans or LC Disbursements, (ii)
extending any scheduled date for the payment of Fees or principal of or interest
on Loans or LC Disbursements, (iii) extending the expiration date of the
Commitments or extending the expiration date of any Letter of Credit to a date
after the expiration date of the Commitments or (iv) releasing the First
Mortgage Bond or releasing all or substantially all of the collateral therefor.
(f) Any Bank or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Bank
by or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information.
(g) Notwithstanding anything to the contrary contained herein,
any Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC") the option to fund all or any part of any Loan that such Granting Bank
would otherwise be obligated to fund pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
and (ii) if an SPC elects not to exercise such option or otherwise fails to fund
all or any part of such Loan, the Granting Bank shall be obligated to fund such
Loan pursuant to the terms hereof. The funding of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Bank to the same extent, and as if,
such Loan were funded by such Granting Bank. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or payment under the Loan
Documents for which a Bank would otherwise be liable for so long as,
50
and to the extent, the Granting Bank provides such indemnity or makes such
payment. Notwithstanding anything to the contrary contained in this Agreement,
any SPC may disclose on a confidential basis any non-public information relating
to its funding of Loans to any rating agency, commercial paper dealer or
provider of any surety or guarantee to such SPC. This paragraph may not be
amended without the prior written consent of each Granting Bank, all or any part
of whose Loan is being funded by an SPC at the time of such amendment.
(h) Any Bank may at any time assign for security purposes all
or any portion of its rights under the Loan Documents to a Federal Reserve Bank;
provided that no such assignment shall release a Bank from any of its
obligations thereunder.
Section 9.05 Expenses; Indemnity, Damage Waiver. (a) The Borrower
agrees to pay all reasonable out-of-pocket expenses (including the reasonable
fees, charges and disbursements of internal or external legal counsel) (i)
incurred by the Administrative Agent in connection with the preparation of the
Loan Documents or in connection with any amendments, modifications or waivers of
the provisions thereof (whether or not the transactions thereby contemplated
shall be consummated), (ii) incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, or (iii) incurred by the Administrative Agent, any Bank
or the Issuing Bank in connection with the enforcement or protection of their
rights in connection with the Loan Documents or any Loan or any Letter of Credit
or participation therein.
(b) The Borrower agrees that it shall indemnify the
Administrative Agent, the Issuing Bank and the Banks from and hold them harmless
against any documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or any of
the other Loan Documents.
(c) The Borrower agrees to indemnify the Administrative Agent,
the Issuing Bank and each Bank and each of their respective directors, officers,
employees and agents (each such person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans and of the
Letters of Credit (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of Credit)
or (iii) any claim, litigation, investigation or proceeding relating to any of
the foregoing, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(d) To the fullest extent permitted by applicable law, the
Borrower shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for
51
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof; provided that such waiver shall not,
as to any Indemnitee, apply to special, indirect or consequential damages to the
extent resulting from, or punitive damages awarded on account of, conduct by
such Indemnitee that is determined by a court of competent jurisdiction by final
and nonappealable judgment to have constituted gross negligence or willful
misconduct by such Indemnitee.
(e) The provisions of this Section 9.05 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Issuing Bank or any Bank.
All amounts due under this Section 9.05 shall be payable on written demand
therefor.
Section 9.06 Right of Setoff. If an Event of Default shall have
occurred and be continuing and the Loans shall have been accelerated as set
forth in Article VII, each of the Banks and the Issuing Bank is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Bank or the Issuing Bank (or bank Controlling such Bank or
the Issuing Bank) to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement and other Loan Documents held by such Bank or the Issuing Bank,
irrespective of whether or not such Lender or the Issuing Bank shall have made
any demand under this Agreement or any other Loan Document and although such
obligations of the Borrower are owed to a branch or office of such Lender or the
Issuing Bank different from the branch or office holding such deposit or
obligated on such indebtedness. The rights of each Bank and the Issuing Bank
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Bank or the Issuing Bank may have. Any Bank or the
Issuing Bank, as the case may be, shall promptly notify the Borrower after
exercising its rights under this Section.
Section 9.07 Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
Section 9.08 Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Issuing Bank or any Bank in exercising any power or
right under the Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Banks
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall
52
be effective only in the specific instance and for the purpose for which given.
No notice or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.
(b) Neither the Loan Documents nor any provision thereof
(excluding letter of credit applications, which may be waived, amended or
modified by agreement of the Borrower and the Issuing Bank) may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Banks; provided, however, that no
such agreement shall (i) without the consent of the applicable Bank, (A)
decrease the principal of or the rate of interest on such Bank's Loans or the
Fees payable to such Bank, (B) extend the date for any scheduled payment of
principal of or interest on such Bank's Loans or the Fees payable to such Bank,
or (C) increase the amount or extend the expiration date of such Bank's
Commitment, or (ii) without the consent of each Bank, (A) decrease the principal
of or the rate of interest on any LC Disbursement, (B) extend the date for any
scheduled payment of principal of or interest on any LC Disbursement, (C) extend
the expiration date of any Letter of Credit to a date after the Expiration Date,
(D) release the First Mortgage Bond or release all or substantially all of the
collateral therefor or (E) amend or modify the provisions of Section 2.15, the
provisions of this Section, the definition of "Required Banks", or any other
provision requiring the consent or agreement of each of the Banks; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the Issuing Bank under the Loan
Documents without the prior written consent of the Administrative Agent or the
Issuing Bank, as the case may be. Each Bank and each holder of a Note shall be
bound by any waiver, amendment or modification authorized by this Section
regardless of whether its Note shall have been marked to make reference thereto,
and any consent by any Bank or holder of a Note pursuant to this Section shall
bind any person subsequently acquiring a Note from it, whether or not such Note
shall have been so marked.
Section 9.09 Interest Rate Limitation. Notwithstanding anything herein
or in any Notes to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") which maybe contracted for, charged, taken,
received or reserved by such Bank in accordance with applicable law, the rate of
interest payable under any Note held by such Bank, together with all Charges
payable to such Bank, shall be limited to the Maximum Rate.
Section 9.10 Entire Agreement. Each Loan Document constitutes the
entire contract between the parties relative to the subject matter thereof, and
any previous agreement among the parties with respect to the subject matter
thereof is superseded by such Loan Document. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any party
other than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
Section 9.11 Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly arising out of,
under or in connection with this Agreement or any of the other Loan Documents.
Each party hereto (a) certifies that no representative,
53
Administrative Agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement and the other Loan
Documents, as applicable, by, among other things, the mutual waivers and
certifications in this Section 9.11.
Section 9.12 Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
Section 9.13 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
Section 9.14 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
Section 9.15 Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, Issuing Bank or any other Bank may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan Documents
against the Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
54
WITNESS the due execution hereof as of the date first above written.
AVISTA CORPORATION
By:
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Administrative Agent, Issuing Bank
and a Bank
By:
--------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Syndication Agent and a Bank
By:
--------------------------------------
Name:
Title:
FLEET NATIONAL BANK,
as Documentation Agent and a Bank
By:
--------------------------------------
Name:
Title:
XXXXX FARGO BANK,
as Documentation Agent and a Bank
By:
--------------------------------------
Name:
Title:
U.S. BANK, NATIONAL ASSOCIATION,
as Managing Agent and a Bank
By:
--------------------------------------
Name:
Title:
KEYBANK,
as Co-Agent and a Bank
By:
--------------------------------------
Name:
Title:
WASHINGTON MUTUAL BANK,
as Co-Agent and a Bank
By:
--------------------------------------
Name:
Title:
BANK HAPOALIM, B.M.,
as a Bank
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
