[EXECUTION COPY]
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CREDIT AGREEMENT
dated as of
April 15, 2005
among
UNISOURCE ENERGY CORPORATION,
an Arizona corporation,
as Borrower,
THE LENDERS PARTY HERETO,
THE BANK OF NEW YORK,
as Syndication Agent,
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
as Documentation Agent,
and
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent
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UNION BANK OF CALIFORNIA, N.A.,
as Lead Arranger
TABLE OF CONTENTS
Page
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ARTICLE I Definitions
SECTION 1.01. Defined Terms.................................................1
SECTION 1.02. Classification of Loans and Borrowings.......................22
SECTION 1.03. Terms Generally..............................................22
SECTION 1.04. Accounting Terms; GAAP.......................................23
SECTION 1.05. Pro Forma Calculations.......................................23
ARTICLE II The Credits
SECTION 2.01. Commitments..................................................23
SECTION 2.02. Loans and Borrowings.........................................24
SECTION 2.03. Requests for Borrowings......................................24
SECTION 2.04. Funding of Borrowings........................................25
SECTION 2.05. Interest Elections...........................................25
SECTION 2.06. Termination and Reduction of Commitments.....................27
SECTION 2.07. Repayment of Loans; Evidence of Debt.........................27
SECTION 2.08. Amortization of Term Loans...................................28
SECTION 2.09. Prepayment of Loans..........................................28
SECTION 2.10. Fees.........................................................29
SECTION 2.11. Interest.....................................................30
SECTION 2.12. Alternate Rate of Interest...................................31
SECTION 2.13. Increased Costs..............................................31
SECTION 2.14. Break Funding Payments.......................................32
SECTION 2.15. Taxes........................................................33
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..34
SECTION 2.17. Mitigation Obligations; Replacement of Lenders...............35
SECTION 2.18. Illegality...................................................36
ARTICLE III Representations and Warranties
SECTION 3.01. Organization; Powers.........................................36
SECTION 3.02. Authorization; Enforceability................................36
SECTION 3.03. Governmental Approvals; No Conflicts.........................37
SECTION 3.04. Financial Condition; No Material Adverse Change..............37
SECTION 3.05. Properties...................................................37
SECTION 3.06. Litigation and Environmental Matters.........................38
SECTION 3.07. Compliance with Laws and Agreements..........................38
SECTION 3.08. Federal Regulations..........................................38
SECTION 3.09. Investment and Holding Company Status........................39
SECTION 3.10. Taxes........................................................39
SECTION 3.11. ERISA........................................................39
SECTION 3.12. Security Documents...........................................39
SECTION 3.13. Disclosure...................................................40
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TABLE OF CONTENTS
(Continued)
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SECTION 3.14. Solvency.....................................................40
SECTION 3.15. Labor Matters................................................40
SECTION 3.16. Anti-Terrorism Laws..........................................40
SECTION 3.17. Ownership of Subsidiaries....................................41
ARTICLE IV Conditions Precedent
SECTION 4.01. Effective Date...............................................41
SECTION 4.02. Each Credit Event............................................43
ARTICLE V Affirmative Covenants
SECTION 5.01. Financial Statements; Ratings Change and Other Information...44
SECTION 5.02. Notices of Material Events...................................46
SECTION 5.03. Information Regarding Collateral.............................46
SECTION 5.04. Existence; Conduct of Business...............................47
SECTION 5.05. Payment of Obligations.......................................47
SECTION 5.06. Maintenance of Properties; Insurance.........................47
SECTION 5.07. Books and Records; Inspection Rights.........................47
SECTION 5.08. Compliance with Laws.........................................48
SECTION 5.09. Use of Proceeds..............................................48
SECTION 5.10. Environmental Laws...........................................48
SECTION 5.11. Further Assurances...........................................48
SECTION 5.12. Additional Security..........................................49
SECTION 5.13. TEP Recapitalization.........................................49
SECTION 5.14. Maintain Ownership of Subsidiaries...........................49
ARTICLE VI Negative Covenants
SECTION 6.01. Indebtedness.................................................49
SECTION 6.02. Liens........................................................50
SECTION 6.03. Fundamental Changes..........................................51
SECTION 6.04. Investments, Loans, Advances and Acquisitions................53
SECTION 6.05. Asset Sales..................................................55
SECTION 6.06. Sale and Leaseback Transactions..............................56
SECTION 6.07. Limitation on Hedge Agreements...............................56
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness........56
SECTION 6.09. Transactions with Affiliates.................................57
SECTION 6.10. Restrictive Agreements.......................................57
SECTION 6.11. Amendment of Material Documents..............................58
SECTION 6.12. Cash Coverage Ratio..........................................58
SECTION 6.13. Leverage Test................................................58
ARTICLE VII Events of Default..............................................59
ARTICLE VIII The Administrative Agent.......................................61
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TABLE OF CONTENTS
(Continued)
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ARTICLE IX Miscellaneous
SECTION 9.01. Notices......................................................64
SECTION 9.02. Waivers; Amendments..........................................64
SECTION 9.03. Expenses; Indemnity; Damage Waiver...........................66
SECTION 9.04. Successors and Assigns.......................................67
SECTION 9.05. Survival.....................................................70
SECTION 9.06. Counterparts; Integration; Effectiveness.....................70
SECTION 9.07. Severability.................................................71
SECTION 9.08. Right of Setoff..............................................71
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process...71
SECTION 9.10. WAIVER OF JURY TRIAL.........................................72
SECTION 9.11. Headings.....................................................72
SECTION 9.12. Confidentiality..............................................72
SECTION 9.13. Interest Rate Limitation.....................................73
SECTION 9.14 Patriot Act Notice...........................................73
SCHEDULES:
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Schedule 2.01 - Commitments
Schedule 3.04 - Acquisitions
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.10 - Existing Restrictions
EXHIBITS:
Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Borrower Pledge Agreement
Exhibit C - Form of Opinion of Xxxxxx Xxxx & Priest LLP, New York counsel
for the Borrower
Exhibit D - Form of Opinion of the General Counsel of the Borrower
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This CREDIT AGREEMENT, dated as of April 15, 2005, among UNISOURCE
ENERGY CORPORATION, the LENDERS party hereto, THE BANK OF NEW YORK, as
Syndication Agent, COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as
Documentation Agent, and UNION BANK OF CALIFORNIA, N.A., as Administrative
Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms 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.
"ACC" means the Arizona Corporation Commission.
"Acquired EBITDA" means, with respect to any Pro Forma Entity for any
period, the Consolidated Net Income of such Pro Forma Entity for such period
plus the sum, without duplication, of the amounts for such period of the
following to the extent deducted in calculating such Consolidated Net Income:
(a) interest expense, (b) tax expense based on income, (c) depreciation expense,
(d) amortization expense, including amortization of deferred financing fees, (e)
extraordinary losses and non-recurring charges, (f) non-cash charges (including
the non-cash portion of pension expense and non-cash interest expense), (g)
losses on asset sales, (h) expenses or charges incurred in connection with the
issuance of debt or equity securities, (i) deductions for minority interest
expense and (j) restructuring charges or provisions, minus, to the extent added
in computing such Consolidated Net Income, without duplication, the sum of (i)
interest income, (ii) extraordinary or non-recurring gains, (iii) gains on asset
sales, (iv) additions for minority interest income and (v) other non-cash items
increasing Consolidated Net Income of such Pro Forma Entity, all as determined
on a consolidated basis in accordance with GAAP.
"Acquired Entity or Business" shall have the meaning provided in the
definition of the term "Consolidated EBITDA".
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate
for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means Union Bank of California, N.A., in its
capacity as administrative agent for the Lenders.
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"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, 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.
"Agents" means the Syndication Agent, the Documentation Agent and the
Administrative Agent.
"Agreement" means this Credit Agreement, dated as of April 15, 2005,
by and among the Borrower, the Lenders party hereto, the Syndication Agent, the
Documentation Agent and the Administrative Agent.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greater of (a) the Reference Rate in effect on such day, and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Reference Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Reference Rate or the Federal Funds Effective Rate, respectively.
"Anti-Terrorism Laws" has the meaning assigned to such term in Section
3.16(a).
"Applicable Percentage" means (a) with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment, and (b) with respect to any Term Lender, (i)
prior to the Initial Funding Date, the percentage of the total Term Commitments
represented by such Lender's Term Commitment, and (ii) thereafter, the
percentage of the principal amount of the Term Loans represented by such
Lender's Term Loans. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, (a) for each ABR Loan, a rate
per annum equal to 0.75% and (b) for each Eurodollar Loan, a rate per annum
equal to 1.75%; provided, however, that in the event that, and at all times
during which, after June 30, 2005, TEP shall not have the ability under all
Requirements of Law (including all orders of the ACC) to distribute 100% of its
current year net income to its shareholders, "Applicable Rate" shall mean (i)
for each ABR Loan, a rate per annum equal to 1.0% and (ii) for each Eurodollar
Loan, a rate per annum equal to 2.0%.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Arranger" means Union Bank, as Lead Arranger for the credit
facilities established by this Agreement.
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"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means UniSource Energy Corporation, an Arizona corporation.
"Borrower Cash Flow" means, for any period, (a) the aggregate amount
of Restricted Payments received by the Borrower from the Subsidiaries during
such period; plus (b) the aggregate amount of payments received by the Borrower
during such period under the UniSource Tax Sharing Agreement; plus (c) the
aggregate amount of cash interest earnings and cash dividends received by the
Borrower during such period in respect of any Permitted Investments of the
Borrower; minus (d) the aggregate amount of Taxes paid by the Borrower in cash
during such period.
"Borrower Debt Service" means, for any period, (a) the aggregate
amount of all cash payments made by the Borrower during such period that, in
accordance with GAAP, are or should be included in "interest paid, net of
amounts capitalized" and "capital lease interest paid" reflected in the
statement of cash flows for the Borrower on a stand alone basis, plus (b) the
aggregate amount of all scheduled principal payments on Indebtedness of the
Borrower made or required to be made by the Borrower during such period
(including any such scheduled principal payments required to be made during such
period that were prepaid by the Borrower during such period), determined for the
Borrower on a stand alone basis; provided, however, that principal and interest
payments with respect to a debt obligation in the principal amount of
$95,000,000 owed by the Borrower to TEP, which debt obligation (and all accrued
interest thereon) was repaid in full on March 1, 2005, shall be excluded for
purposes of calculating Borrower Debt Service.
"Borrower Pledge Agreement" means the Borrower Pledge Agreement in the
form of Exhibit B, to be executed and delivered by the Borrower.
"Borrower Subsidiary" means a Subsidiary of the Borrower that is not a
TEP Subsidiary or a UES Subsidiary.
"Borrowing" means Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Los Angeles, California or New York City are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
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any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capital Lease Investment" of any Person means the aggregate
outstanding capitalized amount of Capital Lease Obligations of such Person and
its subsidiaries that are owned by such Person or its subsidiaries and in
respect of which such Person or one or more of its subsidiaries has the right to
receive all future payments to be made.
"Capital Lease Obligations" of any Person means the obligations of
such Person and its subsidiaries 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 the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Term Loans, and when used in reference to any Commitment, refers to whether
such Commitment is a Revolving Commitment or Term Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means all "Collateral", as defined in any applicable
Security Document.
"Commitment" means a Revolving Commitment, a Term Commitment or any
combination thereof (as the context requires).
"Consolidated EBITDA" means, with respect to any Person for any
period, Consolidated Net Income of such Person and its subsidiaries for such
period plus, to the extent deducted in computing such Consolidated Net Income,
without duplication, the sum of (a) interest expense, (b) any tax expense based
on income, (c) depreciation expense, (d) amortization expense, including
amortization of deferred financing fees, (e) extraordinary losses and
non-recurring charges, (f) non-cash charges (including the non-cash portion of
pension expense and non-cash interest expense), (g) losses on asset sales, (h)
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restructuring charges or provisions, (i) in the case of any period that includes
a period ending during the fiscal year 2005, Transaction Expenses, (j) expenses
or charges incurred in connection with any issuance of debt or equity
securities, (k) any fees and expenses related to Permitted Acquisitions, (l)
deductions for minority interest expense and (m) one-time expenses resulting
from the consummation of the Transactions, minus, to the extent added in
computing such Consolidated Net Income, without duplication, the sum of (i)
interest income, (ii) extraordinary or non-recurring gains, (iii) gains on asset
sales, (iv) additions for minority interest income and (v) other non-cash items
increasing such Consolidated Net Income, all as determined on a consolidated
basis in accordance with GAAP; provided that (A) there shall be included in
determining Consolidated EBITDA for the Borrower for any period the Acquired
EBITDA of any Person, property, business or asset acquired to the extent not
subsequently sold, transferred or otherwise disposed of (but not including the
Acquired EBITDA of any related Person, property, business or assets to the
extent not so acquired) by the Borrower or any Subsidiary during such period
(each such Person, property, business or asset acquired and not subsequently so
disposed of, an "Acquired Entity or Business"), in each case based on the actual
Acquired EBITDA of such Acquired Entity or Business for such period (including
the portion thereof occurring prior to such acquisition), (B) for purposes of
the definition of the term "Permitted Acquisition" and Sections 6.04 and 6.13,
there shall be an adjustment to Consolidated EBITDA for the Borrower in respect
of each Acquired Entity or Business equal to the amount of the Pro Forma
Adjustment with respect to such Acquired Entity or Business for such period
(including the portion thereof occurring prior to such acquisition) as specified
in the Pro Forma Adjustment Certificate delivered to the Lenders and the
Administrative Agent, and (C) for purposes of Section 6.04 and 6.13 only, there
shall be excluded in determining Consolidated EBITDA for the Borrower for any
period the Acquired EBITDA of any Person, property, business or asset sold,
transferred or otherwise disposed of by the Borrower of any Subsidiary during
such period (each Person, property, business or asset so sold or disposed of, a
"Sold Entity or Business"), in each case based on the actual Acquired EBITDA of
such Sold Entity or Business for such period (including the portion thereof
occurring prior to such sale, transfer or disposition).
"Consolidated Net Income" means, for any fiscal period for any Person,
net income of such Person and its subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means, at any date, each Subsidiary the
accounts of which would be consolidated with those of the Borrower in the
Borrower's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date.
"Consolidated Total Indebtedness" means, as of the last day of any
fiscal quarter, (a) the sum (without duplication) for the Borrower and the
Subsidiaries as of such day of (i) the aggregate outstanding principal amount of
the Loans, (ii) the aggregate outstanding principal amount of other Indebtedness
for borrowed money (including Guarantees thereof), (iii) the principal amount of
all obligations in respect of Hedging Agreements of the Borrower and the
Subsidiaries (computed as set forth in the penultimate sentence of the
definition of "Material Indebtedness") and (iv) the aggregate outstanding
capitalized amount of Capital Lease Obligations, minus (b) the sum (without
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duplication) as of such day of (i) the aggregate outstanding capitalized amount
of the Capital Lease Investments of the Borrower and the Subsidiaries as of such
day and (ii) to the extent included in clause (a)(ii) above, any Treasury
Indebtedness of the Borrower and the Subsidiaries as of such day, all as
determined on a consolidated basis in accordance with GAAP.
"Control" means 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 ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosure Documents" means the Annual Report on Form 10-K of the
Borrower for the fiscal year ended December 31, 2004, as filed with the SEC.
"Documentation Agent" means Commerzbank AG New York and Grand Cayman
Branches, in its capacity as documentation agent for the Lenders.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC of any
notice of its intent to institute proceedings to terminate any Plan or to
appoint a trustee to administer any Plan under Section 4042 of ERISA or the
providing of notice by a plan administrator of the intent to terminate any Plan
under Section 4041 of ERISA; (f) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"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 Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which such recipient is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.17(b)), any withholding tax that is imposed by the United States of
America on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 2.15(d).
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"Fair Value" means, with respect to any assets or property owned by
the Borrower or any Subsidiary, the fair market value thereof as determined from
time to time by the Board of Directors (or a duly constituted committee thereof)
of the Borrower or such Subsidiary in good faith.
"Federal Funds Effective Rate" means, 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 published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"FERC" means the Federal Energy Regulatory Commission.
"Final Maturity Date" means the date that occurs five (5) years after
the Effective Date.
"Final Order" means, with respect to the ACC, a final order of the ACC
that is subject to no further proceedings before the ACC.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than the United States of America.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term "Guarantee" shall not
8
include endorsements for collection or deposit in the ordinary course of
business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement or other interest or currency exchange rate
hedging arrangement.
"Indebtedness" of any Person means, 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 acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable 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 Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information Memorandum
dated March 2005 relating to the Borrower and the Transactions.
"Initial Funding Date" means the first date on which all or any
portion of the Term Loan is made by the Term Lenders to the Borrower pursuant to
the terms and conditions contained herein.
"Interest Election Request" means a request by the Borrower to convert
or continue a Revolving Borrowing or a Term Borrowing in accordance with Section
2.05.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last Business Day of each March, June, September and December, and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
9
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing (which initially shall be the
date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing) and ending on
the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter, as the Borrower may elect; provided, that (i) 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 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 and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
"Leverage Ratio" means, as of any date, the ratio of (a) Consolidated
Total Indebtedness on the last day of the most recent fiscal quarter ended prior
to such date for which financial statements are required to be delivered to the
Lenders pursuant to Section 5.01(a) or (b) to (b) Consolidated EBITDA of the
Borrower and the Subsidiaries for the four-fiscal-quarter period ended on the
last day of such fiscal quarter.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers' Association Interest Settlement Rates for deposits in dollars (as set
forth by the Bloomberg Information Service or any successor thereto or any other
service selected by the Administrative Agent which has been nominated by the
British Bankers' Association as an authorized information vendor for the purpose
of displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate per annum at
which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period would be offered to the Administrative Agent in the London
interbank market at approximately 12:00 noon, London time, on the date that is
two Business Days prior to the beginning of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
10
foregoing) 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.
"Limited Subsidiaries" means all of the Subsidiaries other than TEP,
the Millennium Entities, and any other Person that becomes a Subsidiary after
the Effective Date.
"Loan Documents" means this Agreement, any promissory note delivered
pursuant to Section 2.07, and the Security Documents.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition, assets, operations or business of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of
its obligations under any Loan Document or (c) the rights of or benefits
available to the Administrative Agent or the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and the Significant Subsidiaries in an aggregate principal amount
exceeding $20,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time. "Material Indebtedness" shall not include at any time any
Indebtedness that is non-recourse to the Borrower and the Significant
Subsidiaries.
"MEG" means Millennium Environmental Group, Inc., an Arizona
corporation.
"Millennium" means Millennium Energy Holdings, Inc., an Arizona
corporation.
"Millennium Entities" means Millennium, all subsidiaries of Millennium
and all other Persons Controlled by Millennium and/or the subsidiaries of
Millennium.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
thereto.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Obligations" means (a)(i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
11
whether allowed or allowable in such proceeding), of the Borrower under this
Agreement, the other Loan Documents and the Specified Hedge Agreements; and (b)
the due and punctual performance of all other covenants, agreements, obligations
and liabilities of the Borrower under or pursuant to this Agreement, the other
Loan Documents and the Specified Hedge Agreements; provided, that (i)
obligations of the Borrower under any Specified Hedge Agreement shall be secured
pursuant to the Security Documents only to the extent that, and for so long as,
the other Obligations are so secured and (ii) any release of Collateral effected
in the manner permitted by this Agreement or the Security Documents shall not
require the consent of holders of obligations under Specified Hedge Agreements.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"Outside Funding Date" means June 30, 2005.
"Participant" has the meaning assigned to such term in Section 9.04.
"Patriot Act" has the meaning assigned to such term in Section 9.14.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisition" means the acquisition of Capital Stock by the
Borrower or the acquisition (whether pursuant to any acquisition of Capital
Stock, assets or otherwise) by any Subsidiary of (x) assets constituting a
business unit located in the United States or (y) Capital Stock of Persons
constituted a resident in the United States (or any state thereof), but only if
(a) such acquisition and all transactions related thereto shall be consummated
in accordance with applicable law; (b) no Default or Event of Default shall have
occurred and be continuing at the time of such acquisition or would occur after
giving effect to such acquisition and the Borrower and the Subsidiaries shall be
in compliance with Section 6.03(b) after giving effect to such acquisition; and
(c) the Borrower shall be in compliance, on a pro forma basis after giving
effect to such acquisition (including any Indebtedness assumed or permitted to
exist or incurred pursuant to Sections 6.01(a)(ix) or (x), respectively, and any
related Pro Forma Adjustment), with the covenants set forth in Sections 6.12 and
6.13, as such covenants are recomputed as at the last day of the most recently
ended fiscal quarter under such Sections as if such acquisition had occurred on
the first day of the four-fiscal-quarter period ended on such date, and such
compliance shall have been certified in a certificate of a Financial Officer, in
form and substance reasonably satisfactory to the Administrative Agent,
delivered to the Administrative Agent.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.05;
12
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) ground leases, easements and joint use agreements in respect of
real property on which facilities owned or leased by the Borrower or any of
the Subsidiaries are located and which in each case, do not interfere in
any material respect with the business of the Borrower and the Subsidiaries
taken as a whole;
(g) any interest or title of a lessor or secured by a lessor's
interest under any lease permitted by this Agreement and which in each
case, do not interfere in any material respect with the business of the
Borrower and the Subsidiaries taken as a whole;
(h) Liens incurred by the licensing of trademarks by the Borrower or
any Subsidiary to others in the ordinary course of business;
(i) leases or subleases granted to others, not interfering in any
material respect with the business of the Borrower and the Subsidiaries
taken as a whole;
(j) easements, licenses, restrictions, exceptions, reservations or
other outstanding interests in or against any property and/or rights-of-way
of the Borrower or any Subsidiary created or existing by way of, or for the
purpose of, public highways, private roads, railroads, railroad sidetracks,
pipelines, coal-hauling facilities, ash disposal facilities and
fuel-handling activities used in connection with the operation of a
generating unit, gas transportation lines, transmission lines, distribution
lines, telegraph or telephone lines, mains, ditches, canals and other like
purposes; water rights of any Governmental Authorities or other Person; and
building and use restrictions, and which in each case, do not interfere in
any material respect with the business of the Borrower and the Subsidiaries
taken as a whole;
(k) any obligations or duties affecting the property of the Borrower
or any Subsidiary to any Governmental Authority with respect to any
franchise, grant, license or permit from such Governmental Authority;
13
(l) defects in title to overflow and flood lands and rights, and in
title to rights-of-way for roads, transmission lines, distribution lines,
mains, ditches, canals, telegraph or telephone lines, railroads, railroad
sidetracks or for other purposes of the Borrower or any Subsidiary over
public or private property, none of which materially impair the use of the
property affected thereby;
(m) rights reserved to or vested in any Governmental Authority by the
terms of any right, power, franchise, grant, license or permit, or by any
provision of law, to terminate such right, power, franchise, grant, license
or permit or to purchase or recapture or to designate a purchaser of any of
the property of the Borrower or any Subsidiary or otherwise to control or
regulate any property of the Borrower or any Subsidiary and which in each
case, do not interfere in any material respect with the business of the
Borrower and the Subsidiaries taken as a whole;
(n) rights granted or created or burdens assumed by the Borrower or
any Subsidiary under agreements for the joint use of poles and equipment,
and similar agreements; and burdens created under any law or governmental
regulation or permit requiring the Borrower or any Subsidiary to maintain
certain facilities or perform certain acts as a condition of the Borrower's
or any Subsidiary's occupancy of or interference with any public lands or
any river or stream or navigable waters or bridge or highway and which in
each case, do not interfere in any material respect with the business of
the Borrower and the Subsidiaries taken as a whole; and
(o) any right of use, ingress, egress, partition, easement, license or
reservation, contractual or otherwise, of any common owner in any property,
plant, system or facility owned by the Borrower or any Subsidiary with
another party; and any lien securing indebtedness of any such common owner,
neither payable by, nor assumed nor guaranteed by, the Borrower or any
Subsidiary, existing as to any undivided interest of such other common
owner in such common owned property and which in each case, do not
interfere in any material respect with the business of the Borrower and the
Subsidiaries taken as a whole;
provided, that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness except as set forth in clause (o) above.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within 24 months from the date of acquisition thereof;
(b) securities issued by any state of the United States or any
political subdivision or public instrumentality of any such state having
maturities of not more than 24 months from the date of acquisition thereof
14
and, at the time of acquisition, having an investment grade rating
generally obtainable from either S&P or Moody's;
(c) investments in commercial paper maturing within 12 months from the
date of acquisition thereof and having, at such date of acquisition, a
credit rating of at least A-2 or P-2 from S&P or Moody's (or, if at any
time neither S&P nor Moody's shall be rating such obligations, an
equivalent rating from another nationally recognized rating service);
(d) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 12 months from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000;
(e) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a), (b), (c) or (d) above
and entered into with a financial institution satisfying the criteria
described in clause (d) above or a securities dealer of nationally
recognized standing; and
(f) shares of investment companies that are registered under the
Investment Company Act of 1940 and invest solely in one or more of the
types of securities described in clauses (a) through (e) above.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pro Forma Adjustment" means, for any period that includes any of the
four fiscal quarters first following any Permitted Acquisition, with respect to
the Acquired EBITDA of the applicable Acquired Entity or Business and/or with
respect to the Consolidated EBITDA of the Borrower and the Subsidiaries after
giving effect to such Permitted Acquisition, the pro forma increase or decrease
in such Acquired EBITDA and/or the Consolidated EBITDA of the Borrower and the
Subsidiaries after giving effect to such Permitted Acquisition, as the case may
be, projected by the Borrower in good faith as a result of reasonably
identifiable and supportable net cost savings or additional net costs, as the
case may be, determined in accordance with Sections 1.04 and 1.05.
"Pro Forma Adjustment Certificate" means any certificate of a
Financial Officer delivered pursuant to Section 5.01(k).
15
"Pro Forma Entity" means any Acquired Entity or Business or any Sold
Entity or Business.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"Qualified Counterparty" means, with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.
"Rating Agencies" means either of Moody's or S&P.
"Reference Rate" means the variable rate of interest per annum
established by Union Bank from time to time as its "reference rate". Such
"reference rate" is set by Union Bank as a general reference rate of interest,
taking into account such factors as Union Bank may deem appropriate, it being
understood that many of Union Bank's commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or best rate
actually charged to any customer and that Union Bank may make various commercial
or other loans at rates of interest having no relationship to such rate. For
purposes of this Agreement, each change in the Reference Rate shall be effective
as of the opening of business on the date announced as the effective date of any
change in such "reference rate".
"Register" has the meaning assigned to such term in Section 9.04(c).
"Regulation D" means Regulation D of the Board.
"Regulation U" means Regulation U of the Board.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, trustees, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Repayment Date" means the last Business Day of each March, June,
September and December, commencing with (i) if the Initial Funding Date occurs
prior to June 1, 2005, June 30, 2005, or (ii) if the Initial Funding Date occurs
on or after June 1, 2005, September 30, 2005.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing a majority of the sum
of the total Revolving Exposures, Term Loans and unused Commitments at such
time.
"Requirement of Law" means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or assets or to which such
Person or any of its property or assets is subject.
16
"Restricted Payment" means, as to any Person, any dividend or other
distribution (whether in cash, securities or other property) with respect to any
Equity Interests in such Person, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in such Person or any option, warrant or other
right to acquire any such Equity Interests in such Person.
"Revolving Availability Period" means the period from and after the
Effective Date to but excluding the earlier of the Final Maturity Date and the
date of the termination of the Revolving Commitments.
"Revolving Borrowing" means Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Revolving
Loans, as to which a single Interest Period is in effect.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans hereunder, expressed
as an amount representing the maximum aggregate permitted amount of such
Lender's Revolving Exposure hereunder, as such commitment may be (a) reduced
from time to time pursuant to Section 2.06 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04. The initial amount of each Lender's Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is $15,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
the sum of the aggregate outstanding principal amount of such Lender's Revolving
Loans at such time.
"Revolving Lender" means a Lender with a Revolving Commitment, or if
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of Section
2.01.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or any successor thereto.
"San Xxxxxx" means San Xxxxxx Resources Inc., an Arizona corporation.
"SEC" means the Securities and Exchange Commission.
"Security Documents" means the Borrower Pledge Agreement and each of
the other security agreements, pledges, mortgages, assignments (collateral or
otherwise) and consents, if any, and each other security agreement or other
instrument or document executed and delivered pursuant to any of the foregoing
documents, in each case to secure any of the Obligations.
17
"Significant Subsidiary" means (a) TEP, (b) San Xxxxxx, (c) any
Subsidiary that directly or indirectly owns or Controls any other Significant
Subsidiary and (d) any other Subsidiary of the Borrower whose direct or indirect
proportionate share of consolidated total assets as of the end of the most
recent fiscal quarter for which financial statements have been delivered
pursuant to Section 5.01(a) or (b) was greater than or equal to 15% of the
consolidated total assets as of such date of the Borrower and the Subsidiaries,
taken as a whole. For purposes of making the determinations required by this
definition, revenues and assets of foreign Subsidiaries shall be converted into
dollars at the rates used in preparing the consolidated balance sheet of the
Borrower included in the applicable financial statements.
"Sold Entity or Business" shall have the meaning provided in the
definition of the term "Consolidated EBITDA".
"Solvent" means, with respect to any Person, as of any date of
determination, that (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Southwest Energy" means Southwest Energy Solutions, Inc.
"Specified Hedge Agreement" means any Hedging Agreement entered into
by the Borrower and any Qualified Counterparty.
"Statutory Reserve Rate" means 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 any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board with respect to the Adjusted LIBO Rate, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
18
"Subordinated Debt" means unsecured Indebtedness of the Borrower and
the Subsidiaries subordinated in right of payment to the Obligations.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled by the parent or one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Syndication Agent" means The Bank of New York, in its capacity as
syndication agent for the Lenders.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TEP" means Tucson Electric Power Company, an Arizona corporation.
"TEP Bond Delivery Agreement" means that certain Bond Delivery
Agreement, dated as of March 25, 2004, between TEP and the TEP Paying Agent.
"TEP Collateral Mortgage Bonds" means the Second Mortgage Bonds,
Collateral Series D, substantially in the form attached to the TEP Fifth
Supplemental Indenture.
"TEP Credit Agreement" means that certain Credit Agreement, dated as
of March 25, 2004, by and among TEP, the lenders party thereto, the issuing
banks party thereto, JPMorgan Chase Bank, Credit Suisse First Boston, acting
through its Cayman Island Branch, and Xxxxxx Brothers Inc., as co-administrative
agents, The Bank of New York, as documentation agent, and the TEP Paying Agent,
and any refinancing or renewal thereof so long as such refinancing or renewal
complies with the provisions of Section 6.11.
"TEP Fifth Supplemental Indenture" means Supplemental Indenture No. 5
under the TEP Second Indenture, by and between TEP and The Bank of New York
(successor in trust to Bank of Montreal Trust Company), as trustee.
"TEP First Indenture" means the Indenture, dated as of April 1, 1941,
of The Tucson Gas, Electric Light and Power Company, a predecessor to TEP, to
The Chase National Bank of the City of New York, as trustee, a predecessor to
JPMorgan Chase Bank, as amended, supplemented or otherwise modified from time to
time.
19
"TEP First Mortgage Bonds" means TEP's First Mortgage Bonds issued
under the TEP First Indenture.
"TEP Indentures" means the TEP First Indenture and the TEP Second
Indenture.
"TEP Loan Documents" means the TEP Credit Agreement, the TEP Bond
Delivery Agreement, the TEP Fifth Supplemental Indenture, the TEP Collateral
Mortgage Bonds, the TEP Revenue Bond Pledge Agreements and the other TEP
Security Documents.
"TEP Paying Agent" means Credit Suisse First Boston, acting through
its Cayman Island Branch, in its capacity as paying agent for the lenders under
the TEP Credit Agreement.
"TEP Revenue Bond Pledge Agreements" means, collectively, all pledge
agreements executed in connection with the TEP Credit Agreement.
"TEP Second Indenture" means the Indenture of Mortgage and Deed of
Trust, dated as of December 1, 1992, of TEP to The Bank of New York (successor
in trust to Bank of Montreal Trust Company), as trustee, as amended,
supplemented or otherwise modified from time to time.
"TEP Second Mortgage Bonds" means TEP's Second Mortgage Bonds issued
under the TEP Second Indenture.
"TEP Security Documents" means the TEP Indentures, the TEP Fifth
Supplemental Indenture, the TEP Collateral Mortgage Bonds, the TEP Bond Delivery
Agreement, the TEP Revenue Bond Pledge Agreements, and each other security
agreement or other instrument or document executed and delivered pursuant to the
TEP Loan Documents (including, without limitation, (i) any supplemental
indenture to the TEP Second Indenture providing for the issuance of TEP Second
Mortgage Bonds to secure the obligations of TEP under any refinancing or renewal
of the TEP Credit Agreement and (ii) any TEP Second Mortgage Bonds issued
pursuant to any such supplemental indenture).
"TEP Subsidiary" means any subsidiary of TEP.
"Term Borrowing" means Term Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Term Loans, as to
which a single Interest Period is in effect.
"Term Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Term Loans hereunder on or after the Effective
Date and on or before the Outside Funding Date, expressed as an amount
representing the maximum principal amount of the Term Loans to be made by such
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Term Commitment is set forth on Schedule 2.01, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Term Commitment, as applicable. The initial aggregate amount of the Lenders'
Term Commitments is $90,000,000.
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"Term Lender" means a Lender with a Term Commitment or an outstanding
Term Loan.
"Term Loan" means a Loan made pursuant to clause (a) of Section 2.01.
"Transaction Expenses" means any fees or expenses incurred or paid by
the Borrower or any Subsidiary in connection with the Transactions and the other
transactions contemplated hereby.
"Transactions" means the execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents, the borrowing of Loans
and the use of the proceeds thereof.
"Treasury Indebtedness" means, with respect to any Person, the
aggregate outstanding principal amount of Indebtedness of such Person and its
subsidiaries that is owned by such Person or its subsidiaries and in respect of
which such Person or one or more of its subsidiaries has the right to receive,
pursuant to the terms of such Indebtedness, all future principal, interest and
other payments to be made with respect thereto.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UED" means UniSource Energy Development Company, an Arizona
corporation.
"UES" means UniSource Energy Services, Inc., an Arizona corporation.
"UES Subsidiary" means any subsidiary of UES.
"Union Bank" means Union Bank of California, N.A., a national banking
association.
"UniSource Tax Sharing Agreement" means the Tucson Electric Power
Company and Subsidiaries Income Tax Allocation Policy & Procedures, Effective
Date: January 1, 1997, as the same may be amended, supplemented, replaced or
otherwise modified from time to time. The Borrower acknowledges and agrees that
references in the UniSource Tax Sharing Agreement (as in effect on the Effective
Date) to "TEP" and the "TEP Group" have been, and will continue to be, deemed to
comprise the Borrower and the Borrower and its Subsidiaries, respectively.
"Unrestricted Cash" means cash and Permitted Investments of the
Borrower and the Subsidiaries, in each case not subject to a Lien (including,
without limitation, any Lien permitted hereunder), setoff (other than ordinary
course setoff rights of a depository bank arising under a bank depository
agreement for customary fees, charges and other account-related expenses due to
such depository bank thereunder), counterclaim, recoupment, defense or other
right in favor of any Person and, in the case of any such cash and Permitted
Investments of any Subsidiary, not subject to any legal, contractual or other
21
restriction on the ability of such Subsidiary to distribute all such cash and
Permitted Investments to the Borrower.
"UNS Credit Agreement" means the Credit Agreement, dated as of April
15, 2005, among UNS Gas and UNS Electric, as borrowers, UES, as guarantor, the
banks named therein and the other lenders from time to time party thereto, and
Union Bank, as administrative agent.
"UNS Electric" means UNS Electric, Inc., an Arizona corporation.
"UNS Gas" means UNS Gas, Inc., an Arizona corporation.
"UNS Note Agreements" means, collectively, (i) the Note Purchase and
Guaranty Agreement, dated as of August 11, 2003, among UNS Electric, UES and the
Purchasers named therein, and (ii) the Note Purchase and Guaranty Agreement,
dated as of August 11, 2003, among UNS Gas, UES and the Purchasers named
therein.
"UNS Loan Documents" means the UNS Credit Agreement, the UNS Note
Agreements and all instruments, documents and agreements entered into by UES,
UNS Gas and UNS Electric in connection therewith.
"Utility Business" means the business of producing, developing,
generating, transmitting, distributing, selling or supplying electrical energy
or natural gas for any purpose, or any business incidental thereto or necessary
in connection therewith, or any business reasonably desirable in connection
therewith which the ACC or other utility regulatory body shall have authorized
TEP, any TEP Subsidiary, UES or any UES Subsidiary to enter.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to 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". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
22
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. 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
that, if the Borrower notifies the Administrative Agent that the 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 (including the effects of the application or
discontinuance of the application of accounting for the effects of regulation to
all or any portion of the Borrower's operations), or if the Administrative Agent
notifies the Borrower that the Required Lenders 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.
SECTION 1.05. Pro Forma Calculations. All pro forma calculations
permitted or required to be made by the Borrower or any Subsidiary pursuant to
this Agreement shall (a) include only those adjustments that would be permitted
or required by Regulation S-X under the Securities Act of 1933, as amended, and
(b) be certified to by a Financial Officer as having been prepared in good faith
based upon assumptions believed to be reasonable.
ARTICLE II
The Credits
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SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) to make Term Loans to the Borrower from
time to time during the period from and including the Effective Date to and
including the Outside Funding Date (but in any event on no more than five (5)
dates during such period) in an aggregate principal amount not exceeding its
Term Commitment and (b) to make Revolving Loans to the Borrower from time to
time during the Revolving Availability Period in an aggregate principal amount
that will not result in (x) such Lender's Revolving Exposure exceeding such
Lender's Revolving Commitment or (y) the sum of the total Revolving Exposures
exceeding the Revolving Commitments. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans. Amounts repaid in respect of Term Loans may not be
reborrowed.
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SECTION 2.02. Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans
of the same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.12, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender 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.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $1,000,000; provided that an
ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Revolving Commitments. Borrowings of more
than one Type and Class may be outstanding at the same time; provided that there
shall not at any time be more than a total of eight (8) Eurodollar Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Final Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., Los Angeles, California time, three Business Days before
the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not
later than 11:00 a.m., Los Angeles, California time, one Business Day before the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing or a Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
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(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which
funds are to be disbursed.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 10:00
a.m., Los Angeles, California time, to the account of the Administrative Agent
most recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
designated by the Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may in its sole discretion assume that such
Lender has made such share available on such date in accordance with paragraph
(a) of this Section and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.05. Interest Elections.
(a) Each Revolving Borrowing and Term Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
25
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing (i) no outstanding Borrowing may be
26
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.06. Termination and Reduction of Commitments.
(a) Unless previously terminated, (i) the unused Term Commitments
shall terminate at 2:00 p.m., Los Angeles, California time, on the Outside
Funding Date and (ii) the Revolving Commitments shall terminate on the Final
Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $1,000,000, and (ii) the Borrower shall not
terminate or reduce any Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.09,
the aggregate Revolving Exposures would exceed the aggregate Revolving
Commitments.
(c) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Revolving Commitments delivered by the Borrower may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments of any Class shall be
permanent. Each reduction of the Commitments of any Class shall be made ratably
among the Lenders in accordance with their respective Commitments of such Class.
SECTION 2.07. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Revolving Lender the then unpaid
principal amount of each Revolving Loan on the Final Maturity Date; and (ii) to
the Administrative Agent for the account of each Term Lender the then unpaid
principal amount of the Term Loans of such Term Lender as provided in Section
2.08.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in
which it shall record (i) the amount of each Loan made hereunder, the Class and
Type thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
27
the Administrative Agent hereunder for the account of the Lenders and each
Lender'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
Lender 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 Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.08. Amortization of Term Loans.
(a) Subject to adjustment pursuant to paragraph (c) of this Section,
on each Repayment Date occurring prior to the Final Maturity Date, the Borrower
shall pay to the Administrative Agent, for the account of the Term Lenders, a
principal amount of the Term Loans in an aggregate amount equal to $1,250,000.
(b) To the extent not previously paid, all Term Loans shall be due and
payable on the Final Maturity Date.
(c) Any prepayment of a Term Borrowing shall be applied to reduce the
subsequent scheduled repayments of Term Borrowings to be made pursuant to this
Section ratably.
SECTION 2.09. Prepayment of Loans.
(a) Subject to prior notice in accordance with paragraph (e) of this
Section, the Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, without premium or penalty (subject,
in the case of any prepayment of a Eurodollar Borrowing, to Section 2.14).
(b) On the date of any termination of the Revolving Commitments, the
Borrower shall repay or prepay all outstanding Revolving Borrowings. If, as a
result of any partial reduction of the Revolving Commitments, the sum of the
Revolving Exposures would exceed the total Revolving Commitments after giving
effect thereto, then the Borrower shall, on the date of such reduction, repay or
prepay Revolving Borrowings in an amount equal to such excess.
28
(c) In the event that (i) all or a majority of the voting Capital
Stock of UNS Gas or UNS Electric is sold, transferred or otherwise conveyed to
any Person (other than a wholly-owned Subsidiary of UES), or (ii) all or
substantially all of the assets of UNS Gas or UNS Electric are sold,
transferred, leased or otherwise conveyed to any Person (other than a
wholly-owned Subsidiary of UES), in each case in any one transaction or series
of transactions, and at any time thereafter UES pays or makes a Restricted
Payment in cash to the Borrower, the Borrower shall repay or prepay outstanding
Borrowings (if any) in a principal amount equal to 50% of each such cash
Restricted Payment; provided, however, that (A) the Borrower shall repay or
prepay in full the outstanding principal amount of the Term Loan prior to
prepaying any Revolving Borrowings, and (B) the aggregate amount of repayments
and prepayments required to be made by the Borrower pursuant to this paragraph
(c) shall not exceed 50% of the aggregate net proceeds from any such transaction
or transactions. The Borrower acknowledges and agrees that this paragraph (c)
shall not constitute (1) a waiver of any Default or Event of Default that may
occur if and to the extent that any such transaction is not permitted by the
terms of this Agreement or any other Loan Document or (2) a consent by the
Lenders to any such prohibited transaction.
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (e) of this Section.
(e) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Los Angeles,
California time, three Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., Los
Angeles, California time, one Business Day before the date of prepayment. Each
such notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.06,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.06. Promptly following receipt of any such
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.11 and any
amounts required to be paid pursuant to Section 2.14 in connection with such
prepayment.
SECTION 2.10. Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at a rate equal to
0.50% per annum on the daily unused amount of each Commitment of such Lender
during the period from and including the Effective Date to but excluding the
date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears (i) in the case of commitment fees in respect of the
29
Revolving Commitments, on the last Business Day of March, June, September and
December of each year and on the date on which the Revolving Commitments
terminate, and (ii) in the case of commitment fees in respect of the Term
Commitments, on the Outside Funding Date or any earlier date on which such
Commitments terminate. All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
by the Borrower and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of commitment fees, to the Lenders entitled thereto. Fees paid shall
not be refundable under any circumstances.
SECTION 2.11. Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default, (i) each ABR Loan shall bear interest at a
rate of 2.0% per annum in excess of the rate set forth in paragraph (a) of this
Section and (ii) each Eurodollar Loan shall bear interest at a rate of 2.0% per
annum in excess of the rate set forth in paragraph (b) of this Section until the
Interest Period applicable thereto shall have expired and thereafter at a per
annum rate equal to the Alternate Base Rate plus the Applicable Rate for ABR
Loans plus 2.0%. In addition, if any principal of or interest on any Loan or any
fee or other amount payable by the Borrower hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to (A) in the case of overdue principal of any Loan, 2.0% plus the rate
otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section or (B) in the case of any other amount, 2.0% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
30
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Reference Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.13. Increased Costs.
(a) If any Change in Law shall:
(i) 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 Lender or the Administrative Agent
(except any such reserve requirement reflected in the Adjusted LIBO Rate);
or
(ii) impose on any Lender, the Administrative Agent or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender or the Administrative Agent hereunder (whether of
principal, interest or otherwise), then the Borrower will pay to such Lender or
the Administrative Agent, as the case may be, such additional amount or amounts
31
as will compensate such Lender or the Administrative Agent, as the case may be,
for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender, to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.06(c) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.17, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any applicable Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
32
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.15. Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder or under any other Loan Document shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; provided that
if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) The Borrower shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(c) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(d) Any Foreign Lender shall deliver to the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by the law of the
jurisdiction in which the Borrower is located, or by any treaty to which such
jurisdiction is a party, or reasonably requested by the Borrower as will permit
such payments to be made without withholding.
(e) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
33
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest or
fees, or of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise)
prior to 10:00 a.m., Los Angeles, California time, on the date when due, in
immediately available funds, without set-off, counterclaim, recoupment or
deduction of any kind. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at its offices
located at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (or such
other office as the Administrative Agent shall from time to time designate to
the Borrower), except that payments pursuant to Sections 2.13, 2.14, 2.15 and
9.03 shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified therein.
The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder or under any other Loan Document shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any
commitments fees or any payment accruing interest, such commitment fees and such
interest shall be payable for the period of such extension. All payments under
each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
34
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(b) or 2.16(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.13, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If (i) any Lender requests compensation under Section 2.13, (ii)
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
(iii) any Lender defaults in its obligation to fund Loans hereunder, or (iv) any
Lender has not consented to a proposed amendment, waiver or modification under
this Agreement that requires the consent of all Lenders and which has been
approved by the Required Lenders, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all of its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (A) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
35
unreasonably be withheld, (B) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (C) in the case of
any such assignment resulting from a claim for compensation under Section 2.13
or payments required to be made pursuant to Section 2.15, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.18. Illegality. Notwithstanding any other provision of this
Agreement, if any Change in Law makes it unlawful, or any Governmental Authority
asserts that it is unlawful, for any Lender to perform its obligations hereunder
to make, continue or convert into Eurodollar Loans, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Administrative Agent,
(a) the obligation of such Lender to make, continue or convert into Eurodollar
Loans shall be suspended until the Administrative Agent notifies the Borrower
that such Lender has determined that the circumstances causing such suspension
no longer exist, and (b) the Borrower shall forthwith prepay in full all
Eurodollar Loans of such Lender then outstanding, together with accrued and
unpaid interest thereon, unless the Borrower, within five Business Days of such
notice and demand, converts all Eurodollar Loans of all Lenders then outstanding
into ABR Loans in accordance with the terms hereof.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and each Subsidiary
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite corporate, partnership,
limited liability company or other applicable organizational power and authority
to carry on its business as now conducted and, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect, is qualified to do business, and is in good
standing, in every jurisdiction where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions are
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes, and each other
Loan Document to which the Borrower is to be a party, when executed and
delivered by the Borrower, will constitute, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
36
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect and except filings necessary
to perfect Liens created under the Loan Documents, (b) will not violate any
Requirement of Law, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any
Subsidiary or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any Subsidiary, and (d) will not result in
the creation or imposition of any Lien on any asset of the Borrower or any
Subsidiary, except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The audited consolidated balance sheet and related statements of
income, stockholders' equity and cash flows of the Borrower and the Subsidiaries
for the fiscal year ended December 31, 2004 and the most recent financial
statements delivered by the Borrower pursuant to Section 5.01(a) or (b) present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and the Subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements delivered
pursuant to Section 5.01(b). Neither the Borrower nor any Subsidiary had, at the
date of the most recent balance sheet referred to above, any Guarantee,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including any interest rate or foreign currency
swap or exchange transaction, which, in any case, was material to the Borrower
and the Subsidiaries, taken as a whole, and which was not reflected in the
foregoing statements or in the notes thereto. Except as set forth on Schedule
3.04, during the period from December 31, 2004 to and including the Effective
Date there has been no sale, transfer or other disposition by the Borrower or
any Subsidiary of any part of its business or property, and no purchase or other
acquisition of any business or property (including any Capital Stock of any
other Person), which, in either case, is material in relation to the
consolidated financial condition of the Borrower and the Subsidiaries taken as a
whole at December 31, 2004.
(b) Except to the extent that any specific change is explicitly
disclosed in the Disclosure Documents, since December 31, 2004, there has been
no material adverse change in the financial condition, results of operations,
business or prospects of the Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties.
(a) Other than as explicitly disclosed in the Disclosure Documents,
each of the Borrower and the Subsidiaries has good title to, or valid leasehold
interests in, and enjoys peaceful and undisturbed possession of, all of its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
37
(b) Each of the Borrower and the Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary (i) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely determined, would, individually or in the aggregate, result in a
Material Adverse Effect (except as explicitly disclosed in the Disclosure
Documents) or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except as explicitly disclosed in the Disclosure Documents and
except with respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, neither
the Borrower nor any Subsidiary (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in the
status of any matters disclosed in the Disclosure Documents that, individually
or in the aggregate, has resulted in, or materially increased the likelihood of,
a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Except as
explicitly disclosed in the Disclosure Documents, each of the Borrower and the
Subsidiaries is in compliance with all Requirements of Law, including the Fair
Labor Standards Act, the Americans with Disabilities Act, the Foreign Corrupt
Practices Act and Anti-Terrorism Laws, applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
38
SECTION 3.09. Investment and Holding Company Status.
(a) Neither the Borrower nor any Subsidiary is an "investment company"
or a company "controlled" by an "investment company" as defined in, or subject
to regulation under, the Investment Company Act of 1940, as amended.
(b) The Borrower and the Subsidiaries are exempt from all provisions
of PUHCA, except Section 9(a)(2) thereof; and no order, consent, approval or
authorization is required under PUHCA in connection with the making of the Loans
hereunder or the consummation of any of the other Transactions. The Borrower and
the Subsidiaries are not subject to regulation under any Requirement of Law
(other than Regulation X of the Board and Requirements of Law pertaining to
utility regulation) which limits its ability to incur Indebtedness.
SECTION 3.10. Taxes. Each of the Borrower and the Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.11. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan by an amount that has resulted or could
reasonably be expected to result in a Material Adverse Effect. The present value
of all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans by an amount that has resulted or could reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.12. Security Documents. On the Effective Date, the
provisions of the Security Documents are effective to create, in favor of the
Administrative Agent for the benefit of the secured parties thereunder, legal,
valid and enforceable Liens on or in all of the Collateral subject thereto, and
all necessary deliveries of property to the Administrative Agent and all
necessary and appropriate recordings and filings have been made in all necessary
and appropriate public offices so that the Liens created by such Security
Documents constitute perfected Liens on or in all rights, titles, estates and
interests of the Borrower and any applicable Subsidiaries in the Collateral
covered thereby, prior and superior to all other Liens, and all necessary and
appropriate consents to the creation and perfection of such Liens have been
obtained. No mortgage or financing statement or other instrument or recordation
covering all or any part of the Collateral is on file in any recording office
39
which has not been terminated or released, except as may have been filed in
favor of the Administrative Agent.
SECTION 3.13. Disclosure. The Borrower has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which it or
any Subsidiary is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. Neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or any other Loan Document or delivered
hereunder (as modified or supplemented by, and taken together with, other
information so furnished) contains any material misstatement of a fact or omits
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that, with respect to forward looking statements, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time and notes that there can be no assurance that such
expectations, beliefs or projections will be achieved or accomplished and that
such projections are subject to an increasing degree of uncertainty as they
relate to later periods of time.
SECTION 3.14. Solvency. The Borrower is Solvent.
SECTION 3.15. Labor Matters. There are no strikes or other labor
disputes against the Borrower or any Subsidiary pending or, to the knowledge of
the Borrower, threatened that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. Hours worked by and
payment made to employees of the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
the Borrower or any Subsidiary on account of employee health and welfare
insurance that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of the Borrower or the relevant Subsidiary.
SECTION 3.16. Anti-Terrorism Laws.
(a) Neither the Borrower nor, to the knowledge of the Borrower, any of
its Affiliates is in violation of any Requirement of Law relating to terrorism
or money laundering ("Anti-Terrorism Laws"), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the "Executive Order"),
and the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.
(b) Neither the Borrower nor, to the knowledge of the Borrower, any of
its Affiliates is any of the following:
(i) a Person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;
40
(ii) a Person owned or controlled by, or acting for or on behalf
of, any Person that is listed on the Annex to, or is otherwise subject to
the provisions of, the Executive Order;
(iii) a Person with whom the Borrower is prohibited from dealing
or otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a Person who commits, threatens or conspires to commit or
supports "terrorism" as defined in the Executive Order; or
(v) a Person that is named as a "specially designated national or
blocked person" on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control at its official website or any
replacement website or other replacement official publication of such list.
(c) Neither the Borrower nor, to the knowledge of the Borrower, any of
its Affiliates (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Person
described in clause (b)(i), (ii), (iii) or (v) above or, to the knowledge of the
Borrower, clause (b)(iv) above; (ii) deals in, or otherwise engages in any
transaction relating to, any property or interest in property blocked pursuant
to the Executive Order; or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purposes of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
(d) No broker or other agent (other than the Arranger) is acting for
the benefit of the Borrower or any of its Affiliates, or benefiting in any
capacity, in each case in connection with the Loan Documents.
SECTION 3.17. Ownership of Subsidiaries. The Borrower is the legal and
beneficial owner of all of the outstanding Capital Stock of TEP (other than 121
shares of Capital Stock thereof owned by independent third parties), UES,
Millennium and UED. None of such Capital Stock owned by the Borrower is subject
to any Lien, except for Liens on the Capital Stock of UES, Millennium and UED in
favor of the Administrative Agent.
ARTICLE IV
Conditions Precedent
--------------------
SECTION 4.01. Effective Date. The obligations of the Lenders under
this Agreement shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
41
(b) The Administrative Agent shall have received a counterpart of
the Borrower Pledge Agreement signed on behalf of the Borrower, together
with (i) all documents, instruments and filings creating or perfecting the
Lien of the Borrower Pledge Agreement; (ii) certificates representing the
interest of the Borrower in each of its direct domestic Subsidiaries
required to be pledged pursuant to the Borrower Pledge Agreement,
accompanied by instruments of transfer and stock powers endorsed in blank;
and (iii) all other documents and instruments required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded
to create or perfect the Liens intended to be created under the Borrower
Pledge Agreement.
(c) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders and
dated the Effective Date) of (i) Xxxxxx Xxxx & Priest LLP, New York counsel
for the Borrower, substantially in the form of Exhibit C, and (ii) Xxxxxxx
Xxxxxx, Xx., Esq., General Counsel for the Borrower, substantially in the
form of Exhibit D. The Borrower hereby requests such counsel to deliver
such opinion.
(d) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the
Borrower, the authorization of the Transactions and any other legal matters
relating to the Borrower, the Loan Documents or the Transactions, all in
form and substance satisfactory to the Administrative Agent and its
counsel.
(e) The representations and warranties of the Borrower set forth
in this Agreement and the other Loan Documents shall be true and correct,
no Default shall have occurred and be continuing, and the Administrative
Agent shall have received a certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer,
confirming the same as of the Effective Date.
(f) Except for any specific change explicitly disclosed in the
Disclosure Documents, since December 31, 2004, there shall have been no
material adverse change in the financial condition, results of operations,
business or prospects of the Borrower and the Subsidiaries, taken as a
whole.
(g) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or a
Financial Officer, confirming compliance with the conditions set forth in
this Section 4.01.
(h) The TEP Loan Documents shall be in full force and effect, and
the Administrative Agent shall have received copies of the TEP Loan
Documents, certified by a Financial Officer as complete and correct.
(i) The Administrative Agent and the Lenders shall have received
all documentation and other information required by bank regulatory
42
authorities under applicable "know your customer" and anti-money laundering
rules and regulations, including without limitation the Patriot Act.
(j) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date, including
all up-front fees and, to the extent invoiced, reimbursement or payment of
all out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document.
(k) All requisite Governmental Authorities and third parties, if
any, shall have approved or consented to this Agreement and the other Loan
Documents and the Transactions to the extent required and material (and the
Administrative Agent shall have received certified copies of all such
approvals and consents, which shall be in form and substance satisfactory
to the Administrative Agent and the Lenders), no stay of any applicable
regulatory approval shall have been issued and there shall be no
litigation, governmental, administrative or judicial action, actual or
threatened, that could reasonably be expected to restrain, prevent or
impose burdensome conditions on this Agreement and the other Loan Documents
or the Transactions.
(l) The Administrative Agent shall have received a
recapitalization plan for TEP, in form, scope and substance satisfactory to
the Administrative Agent, that evidences the Borrower's intent to cause TEP
to have the ability under applicable Arizona regulatory law (including
orders of the ACC) to distribute 100% of its net income to its
shareholders.
SECTION 4.02. Each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, is subject to the satisfaction of the
following conditions:
(a) The Administrative Agent shall have received a Borrowing
Request with respect to such Borrowing.
(b) The representations and warranties of the Borrower set forth
in this Agreement and the other Loan Documents shall be true and correct on
and as of the date of such Borrowing, both before and after giving effect
to such Borrowing and to the application of the proceeds thereof, as though
made on and as of such date (except where such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct as of such
earlier date).
(c) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a),
(b) and (c) of this Section.
43
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and other amounts payable
hereunder shall have been paid in full, the Borrower covenants and agrees with
the Administrative Agent and the Lenders that:
SECTION 5.01. Financial Statements; Ratings Change and Other
Information. The Borrower will furnish to the Administrative Agent (and the
Administrative Agent will forward such copies to the Lenders):
(a) as soon as available and in any event within 105 days after
the end of each fiscal year of the Borrower, or 15 days after the date on
which its annual report for such fiscal year is required to be filed with
the SEC, whichever is later, audited consolidated statements of income and
cash flows of the Borrower and the Subsidiaries for such year and the
related consolidated balance sheets as of the end of such year, setting
forth in each case in comparative form the corresponding consolidated
figures for the preceding fiscal year, and accompanied by an opinion of
independent public accountants of recognized national standing selected by
the Borrower, which opinion shall not contain any qualification or
exception as to the scope of such audit and shall state that the
consolidated financial statements fairly present in all material respects
the consolidated financial condition and results of operations of the
Borrower and the Subsidiaries as of the end of, and for, such fiscal year
and have been prepared in accordance with GAAP, consistently applied
(except where noted);
(b) as soon as available and in any event within 60 days after
the end of each of the first three fiscal quarterly periods of each fiscal
year of the Borrower, or 15 days after the date on which its quarterly
report for such fiscal quarterly period is required to be filed with the
SEC, whichever is later, consolidated statements of income of the Borrower
and the Subsidiaries for such period and for the period from the beginning
of the respective fiscal year to the end of such period, consolidated
statements of cash flows of the Borrower and the Subsidiaries from the
beginning of the applicable fiscal year to the end of such period and the
related consolidated balance sheets as of the end of such period, setting
forth in each case in comparative form the corresponding consolidated
figures for the corresponding period in the preceding fiscal year,
accompanied by a certificate of a Financial Officer, which certificate
shall state that the financial statements fairly present in all material
respects the consolidated financial condition and results of operations, as
the case may be, of the Borrower and the Subsidiaries in accordance with
GAAP, consistently applied (except where noted), as of the end of, and for,
such period (subject to normal year-end audit adjustments and the absence
of footnotes);
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer (i)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) setting forth reasonably detailed
44
calculations demonstrating compliance with Sections 6.08, 6.12 and 6.13 and
(iii) stating whether any change in GAAP or in the application thereof not
disclosed in any prior such certificate has occurred since December 31,
2004 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting
rules or guidelines);
(e) promptly upon their becoming available, copies of all
registration statements (other than on Form S-8 or any successor form) and
regular periodic reports, if any, that the Borrower or any Subsidiary shall
have filed pursuant to Section 13(a) or 15 of the Exchange Act with the SEC
(or any governmental agency substituted therefor) or with any national
securities exchange;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) as soon as practicable and in any event within five Business
Days after TEP receives written notice of an upgrading or a downgrading of
the TEP First Mortgage Bonds or the TEP Second Mortgage Bonds by any Rating
Agency, a notice of such upgrading or downgrading;
(h) promptly upon their becoming available, copies of all current
reports on Form 8-K filed by the Borrower or any Subsidiary with the SEC,
and all similar reports filed with any national securities exchange;
(i) promptly upon their becoming available, copies of any written
notices from the ACC or any other Governmental Authority of non-compliance
by TEP or any TEP Subsidiary with any material decision of the ACC or the
applicable Governmental Authority, as the case may be, or with any other
rules, regulations or orders of the ACC or the applicable Governmental
Authority, as the case may be, and any written notices of any extraordinary
audit or investigation by the ACC or the applicable Governmental Authority,
as the case may be, into the business, affairs or operations of TEP or any
TEP Subsidiary;
(j) concurrently with any delivery of financial statements under
clause (a) or (b) above with regard to each fiscal quarter in which the
Borrower elects to make a Pro Forma Adjustment, a certificate of a
Financial Officer setting forth the amount of such Pro Forma Adjustment
and, in reasonable detail, the calculation and basis therefor; and
45
(k) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the terms
of any Loan Document, as the Administrative Agent or any Lender may
reasonably request.
So long as the Borrower is subject to the financial reporting requirements of
the Exchange Act and the financial statements contained in any quarterly or
annual reports filed with the SEC are prepared in accordance with the Exchange
Act and the rules and regulations promulgated thereunder, such financial
statements may be delivered by the Borrower in satisfaction of its obligations
to deliver consolidated financial statements pursuant to clauses (a) or (b), as
the case may be, of this Section 5.01.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting
the Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and the Subsidiaries in an
aggregate amount exceeding $25,000,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. The Borrower will
furnish to the Administrative Agent prompt written notice of any change (i) in
the Borrower's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of the Borrower's chief executive office, its jurisdiction of
organization, its principal place of business, any office in which it maintains
books or records relating to Collateral owned by it or any office or facility at
which Collateral owned by it is located (including the establishment of any such
new office or facility), (iii) in the Borrower's identity or corporate structure
or (iv) in the Borrower's Federal Taxpayer Identification Number. The Borrower
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower also agrees promptly to notify the
46
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.
SECTION 5.04. Existence; Conduct of Business. The Borrower will, and
will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business, except to the extent the failure to do so could
not reasonably be expected to result in a Material Adverse Effect; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and will
cause each of the Subsidiaries to, pay its obligations, including Tax
liabilities and assessments (including water assessments by the Arizona State
Land Department), that, if not paid, could reasonably be expected to result in a
Material Adverse Effect, before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto to the extent required by and
otherwise in accordance with GAAP and (c) the failure to make payment pending
such contest could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.06. Maintenance of Properties; Insurance. The Borrower will,
and will cause each of the Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted; provided that the Borrower or any of the
Subsidiaries may discontinue the operation of any of its properties to the
extent, in the judgment of the Borrower, it is no longer advisable to operate
such property, or to the extent the Borrower or such Subsidiary intends to sell
or otherwise dispose of such property, which disposition is not prohibited by
Section 6.05; and (b) maintain, with financially sound and reputable insurance
companies, or through its own program of self-insurance, insurance in such
amounts (with no greater risk retention) and against such risks and with such
self insurance as are customarily maintained by companies of established
reputations engaged in the same or similar businesses operating in the same or
similar locations. The Borrower will furnish to the Lenders, upon reasonable
request of the Administrative Agent, information in reasonable detail as to the
insurance so maintained.
SECTION 5.07. Books and Records; Inspection Rights. The Borrower will,
and will cause each of the Subsidiaries to, keep proper books of record and
account in which entries are made of all dealings and transactions in relation
to its business and activities, all in accordance with customary and prudent
business practices. The Borrower will, and will cause each of the Subsidiaries
to, permit any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice, to visit and inspect its properties, and,
subject to contractual or statutory limitations regarding confidential or
proprietary information, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
47
SECTION 5.08. Compliance with Laws. The Borrower will, and will cause
each of the Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property (including,
without limitation, ERISA and Environmental Laws), except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.09. Use of Proceeds. The proceeds of the Term Loans will be
used only for the payment of capital contributions to TEP and UES, fees and
expenses payable in connection with the Transactions and, with respect to up to
$10,000,000 of the proceeds of the Term Loans, other general corporate purposes.
The proceeds of the Revolving Loans will be used only for general corporate
purposes of the Borrower and the Subsidiaries. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations G, U
and X.
SECTION 5.10. Environmental Laws.
(a) The Borrower will, and will cause each of the Subsidiaries to,
comply with, and use commercially reasonable efforts to insure compliance by all
tenants and subtenants, if any, with, all Environmental Laws, and will, and will
cause each of the Subsidiaries to, obtain and comply with and maintain, and use
commercially reasonable efforts to insure that all tenants and subtenants obtain
and comply with and maintain, any and all licenses, approvals, registrations or
permits required by Environmental Laws, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
(b) The Borrower will, and will cause each of the Subsidiaries to,
conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, except to
the extent that the failure to take such actions could not reasonably be
expected to have a Material Adverse Effect, and promptly comply with all lawful
orders and directives of all Governmental Authorities respecting Environmental
Laws, except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.11. Further Assurances. The Borrower will, and will cause
each of the Subsidiaries to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust and other documents), which may be required under any
applicable law, or which the Administrative Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Borrower. The Borrower also agrees to
provide to the Administrative Agent, from time to time upon request, evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.
48
SECTION 5.12. Additional Security. The Borrower will cause all of the
Capital Stock of each direct domestic Subsidiary, and 66-2/3% of the Capital
Stock of each direct foreign Subsidiary, in each case which is not subject to
utility regulation and which is formed or otherwise purchased or acquired by the
Borrower after the date hereof to be deposited in pledge with the Administrative
Agent pursuant to a Security Document in form and substance reasonably
satisfactory to the Administrative Agent and will deliver or cause to be
delivered such officer's certificates and legal opinions in connection therewith
as may reasonably be requested by the Administrative Agent.
SECTION 5.13. TEP Recapitalization. The Borrower will use commercially
reasonable efforts to cause TEP, on or before June 30, 2005, to have the ability
under applicable Arizona regulatory law (including orders of the ACC) to
distribute 100% of its net income to its shareholders.
SECTION 5.14. Maintain Ownership of Subsidiaries. The Borrower will
maintain legal and beneficial ownership of all of the outstanding Capital Stock
of TEP (other than 121 shares of Capital Stock thereof owned by independent
third parties), UES, Millennium and UED, free and clear of any Lien (except for
Liens on the Capital Stock of UES, Millennium and UED in favor of the
Administrative Agent); provided that the foregoing shall not prohibit any merger
or consolidation permitted under Section 6.03.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees and other amounts payable hereunder have
been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness.
(a) The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness of TEP or any TEP Subsidiary that is not
prohibited to be incurred pursuant to the TEP Loan Documents;
(iii) Indebtedness of UES or any UES Subsidiary that is not
prohibited to be incurred pursuant to the UNS Loan Documents;
(iv) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof;
(v) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary; provided that to the
49
extent such Indebtedness is owed to the Borrower, it is pledged pursuant to
the Borrower Pledge Agreement;
(vi) (A) Indebtedness of the Borrower or any Borrower Subsidiary
incurred to finance the acquisition, construction or improvement of any
fixed or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such assets
or secured by a Lien on any such assets prior to the acquisition thereof,
and extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof, provided that such
Indebtedness is incurred prior to or within 270 days after such acquisition
or the completion of such construction or improvement and (B) any
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;
(vii) Indebtedness of the Borrower or any Subsidiary as an
account party in respect of trade letters of credit; and
(viii) other Indebtedness of the Borrower or any Subsidiary
which, if created, incurred, assumed or permitted to exist, would not
result in the occurrence of a Default or an Event of Default (including,
without limitation, a violation of Section 6.13; provided, that for
purposes of determining compliance with Section 6.13, such Indebtedness
shall be deemed to have been incurred as of the last day of the most
recently ended fiscal quarter).
(b) The Borrower will not permit any Subsidiary to issue any preferred
stock or other preferred Equity Interests except to a wholly-owned Subsidiary.
SECTION 6.02. Liens.
(a) The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(other than accounts receivable) or rights in respect of any thereof, except
(subject to paragraph (b) of this Section):
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of TEP or any TEP
Subsidiary not prohibited by the TEP Loan Documents;
(iv) any Lien on any property or asset of UES or any UES
Subsidiary not prohibited by the UNS Loan Documents;
(v) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (A) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary and (B) such Lien shall secure only those
50
obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal
amount thereof;
(vi) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Borrower Subsidiary; provided that (A) such
security interests secure Indebtedness permitted by Section 6.01(a)(vi),
(B) such security interests and the Indebtedness secured thereby are
incurred prior to or within 270 days after such acquisition or the
completion of such construction or improvement, and (C) such security
interests shall not apply to any other property or assets of the Borrower
or any Borrower Subsidiary;
(vii) Liens existing on the assets of any Person that becomes a
Subsidiary, or existing on assets acquired, pursuant to a Permitted
Acquisition to the extent the Liens on such assets secure Indebtedness
permitted by Section 6.01(a)(viii); provided that (A) such Liens shall not
apply to any other property or assets of the Borrower or any Subsidiary and
(B) such Liens attach at all times only to the same assets that such Liens
attached to and secure only the same Indebtedness that such Liens secured,
immediately prior to such Permitted Acquisition, and extensions, renewals
and replacements thereof permitted pursuant to Section 6.01(a)(viii);
(viii) (A) Liens placed upon the Capital Stock or assets of any
Subsidiary acquired pursuant to a Permitted Acquisition to secure
Indebtedness of the Borrower or any Subsidiary incurred pursuant to Section
6.01(a)(ix) in connection with such Permitted Acquisition and (B) Liens
placed upon the assets of such Subsidiary acquired pursuant to a Permitted
Acquisition to secure a Guarantee by such Subsidiary of any such
Indebtedness of the Borrower or any Subsidiary to the extent such Guarantee
is permitted pursuant to Section 6.01(a)(ix) in connection with such
Permitted Acquisition;
(ix) Liens comprised by escrow arrangements entered into in
connection with assets sales, transfers or other dispositions permitted
pursuant to Section 6.05; and
(x) additional Liens so long as the aggregate principal amount of
the obligations secured by such Liens does not exceed $25,000,000.
(b) The Borrower will not, and will not permit UES to, create, incur,
assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by the Borrower or UES (including Capital Stock in TEP, UNS
Gas, UNS Electric or any other Subsidiary), or assign or sell any income or
revenues (other than accounts receivable) or rights with respect thereto, except
Liens created under the Loan Documents and Permitted Encumbrances.
SECTION 6.03. Fundamental Changes.
(a) The Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
51
of (in one transaction or in a series of transactions) all or any substantial
part of its assets, or all or substantially all of the Capital Stock of any
Subsidiary (in each case, whether now owned or hereafter acquired), or liquidate
or dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing:
(i) any TEP Subsidiary, MEG or Southwest Energy may merge into
TEP in a transaction in which TEP is the surviving corporation;
(ii) any TEP Subsidiary, MEG or Southwest Energy may (A) merge
into any other TEP Subsidiary or (B) sell, transfer, lease or otherwise
dispose of its assets to TEP or any other TEP Subsidiary;
(iii) any UES Subsidiary may merge into UES in a transaction in
which UES is the surviving corporation;
(iv) any UES Subsidiary may (A) merge into any other UES
Subsidiary or (B) sell, transfer, lease or otherwise dispose of its assets
to UES or any other UES Subsidiary;
(v) any Person (other than the Borrower, TEP, any TEP Subsidiary,
UES and any UES Subsidiary) may merge into any Borrower Subsidiary in a
transaction in which the surviving entity is a Borrower Subsidiary;
provided, that in any merger involving Millennium or UED, Millennium or UED
(as the case may be) shall be the surviving entity;
(vi) any Borrower Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Borrower or to another Borrower
Subsidiary; provided, however, that neither UES nor UED shall sell,
transfer, lease or otherwise dispose of all or any substantial part of its
assets except to the Borrower, UES or UED;
(vii) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the
Lenders;
(viii) any transaction permitted pursuant to Section 6.05 (to the
extent not prohibited by any other clause contained in this Section);
(ix) any transaction by TEP or any TEP Subsidiary permitted
pursuant to the TEP Loan Documents;
(x) any transaction by UES or any UES Subsidiary permitted
pursuant to the UNS Loan Documents; provided, that in any merger involving
UES, UES shall be the surviving entity;
52
(xi) any Person (other than TEP, any TEP Subsidiary, UES and any
UES Subsidiary) may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation;
(xii) the Borrower may merge with or into or consolidate with or
transfer its assets as an entirety or substantially as an entirety to any
Person, so long as (A) immediately prior to and immediately after giving
effect to such merger, consolidation or transfer, the Person with or into
which the Borrower shall ultimately merge or consolidate or to whom the
Borrower shall ultimately transfer its assets as an entirety or
substantially as an entirety is in the Utility Business; (B) the Person
formed by any such merger, consolidation or transfer of assets or into
which the Borrower shall be merged or consolidated or to which such assets
are transferred shall be in compliance, on a pro forma basis after giving
effect to such merger, consolidation or transfer of assets, with the
covenants set forth in Section 6.12 and 6.13 as such covenants are
recomputed as at the last day of the most recently ended fiscal quarter
under each such Section as if such merger, consolidation or transfer of
assets had occurred on the first day of the four-fiscal-quarter period
ended on such date; (C) in the case of any merger or consolidation or
transfer of assets in which the Borrower is not the surviving corporation,
the Person formed by any such consolidation or transfer of assets or into
which the Borrower shall be merged or consolidated or to which such assets
are transferred shall have executed an agreement in form reasonably
satisfactory to the Administrative Agent containing an assumption by the
surviving Person of the due and punctual performance of each obligation,
agreement, covenant and condition of each of the Loan Documents to be
performed or complied with by the Borrower; and (D) the Administrative
Agent shall have received an opinion of counsel, in form and substance
reasonably satisfactory to the Administrative Agent and its counsel, with
respect to the due authorization, execution, delivery, validity and
enforceability of the assumption agreement referred to in clause (C) of
this clause (xii), of the enforceability and continuation of the Liens
created pursuant to the Security Documents and such other matters as the
Required Lenders may reasonably require;
provided that any such merger involving a Person that is not a wholly-owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.05.
(b) The Borrower will not, and will not permit any Subsidiary to,
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances and Acquisitions. The
Borrower will not, and will not permit any of the Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly-owned Subsidiary prior to such merger) any Capital Stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any other interest in,
53
any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit, except:
(a) Permitted Investments;
(b) investments, loans and advances existing on the date hereof
and set forth on Schedule 6.04 and extensions, renewals or reinvestments
thereof, so long as the aggregate amount of all such investments, loans and
advances pursuant to this clause (b) is not increased at any time above the
amount of such investments, loans and advances on the date hereof;
(c) investments by the Borrower and the Subsidiaries in Equity
Interests in their respective Subsidiaries;
(d) loans or advances made by the Borrower to any Subsidiary or
made by any Subsidiary to the Borrower or any other Subsidiary; provided,
that any such loans or advances made to the Borrower shall be Subordinated
Debt;
(e) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(f) investments by the Borrower and the Subsidiaries (other than
the Millennium Entities) in the Millennium Entities in an amount not to
exceed $10,000,000; and investments by any Millennium Entity in another
Millennium Entity;
(g) extensions of trade credit and asset purchases in the
ordinary course of business;
(h) to the extent permitted by applicable law, loans and advances
to officers, directors and employees of the Borrower or any Subsidiary (i)
to finance the purchase of Capital Stock of the Borrower or any direct or
indirect shareholder of the Borrower; and (ii) for additional purposes not
contemplated by subclause (i) above in an aggregate principal amount at any
time outstanding with respect to this clause (ii) not exceeding $5,000,000;
(i) Permitted Acquisitions; provided that the Borrower shall be
in compliance, on a pro forma basis after giving effect to such Permitted
Acquisition, with the covenants set forth in Sections 6.12 and 6.13, as
such covenants are recomputed as of the last day of the most recently ended
fiscal quarter under each such Section as if such Permitted Acquisition had
occurred on the first day of the four-fiscal-quarter period ended on such
date;
(j) investments to the extent that payment for such investments
is made solely with Capital Stock of the Borrower;
(k) Capital Lease Investments;
54
(l) investments permitted pursuant to Section 6.08;
(m) investments by TEP constituting an acquisition by TEP of the
Capital Stock or assets of Southwest Energy or MEG; and
(n) other investments, loans and advances by the Borrower or the
Subsidiaries (other than the Millennium Entities) in an amount not to
exceed $50,000,000.
Notwithstanding anything to the contrary contained above, the Borrower and the
Subsidiaries (other than the Millennium Entities) will not be permitted to
invest more than $10,000,000 in the Millennium Entities after the Effective
Date.
SECTION 6.05. Asset Sales.
(a) The Borrower will not, and will not permit any Subsidiary to,
convey, sell, lease, assign, transfer or otherwise dispose of any of its
property, business or assets (including leasehold interests), whether now owned
or hereafter acquired, except:
(i) inventory and other property in the ordinary course of
business;
(ii) sales of accounts receivable;
(iii) conveyances, sales, leases, transfers and other
dispositions of property, business or assets of TEP or any TEP Subsidiary
that is not prohibited pursuant to the TEP Loan Documents;
(iv) conveyances, sales, leases, transfers and other dispositions
of property, business or assets of UES or any UES Subsidiary that is not
prohibited pursuant to the UNS Loan Documents;
(v) subject to Section 5.14, Capital Stock or assets of the
Millennium Entities and Southwest Energy;
(vi) transactions permitted pursuant to Section 6.03(a); and
(vii) the Borrower and the Subsidiaries may sell, transfer or
otherwise dispose of other assets for Fair Value in transactions not
permitted under clauses (i), (ii), (iii), (iv) or (v) above; provided that
(A) the aggregate consideration for all sales, transfers and disposals by
the Borrower and the Subsidiaries pursuant to this clause (vii) during the
term of this Agreement shall at no time exceed in the aggregate
$75,000,000; (B) with respect to any such sale, transfer or disposition (or
series of related sales, transfers or dispositions) with an aggregate
consideration in excess of $10,000,000, (I) the Board of Directors (or
authorized committee thereof) of the Borrower shall have approved such
sale, transfer or disposition, as the case may be, and (II) the Borrower
shall be in compliance, on a pro forma basis after giving effect to such
sale, transfer or disposition, as the case may be, with the covenants set
forth in Section 6.12 and 6.13, as such covenants are recomputed as at the
55
last day of the most recently ended fiscal quarter under each such Section
as if such sale, transfer or disposition had occurred on the first day of
the four-fiscal-quarter period ended on such date; and (C) no Default is
then existing and after giving effect to any such sale, transfer or
disposition, as the case may be, no Default shall have occurred and be
continuing;
provided, that the Borrower or any Subsidiary may convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets to the
Borrower or any other Subsidiary (other than a Millennium Entity), as the case
may be; provided further, that the Borrower cannot transfer any interest in any
Person pledged to the Administrative Agent as collateral for the Obligations.
Investments by the Borrower and the Subsidiaries in, and contributions by the
Borrower and the Subsidiaries to, Subsidiaries shall be deemed not to constitute
transfers of assets subject to the limitations of this Section 6.05 to the
extent such investments or contributions are made in cash.
(b) The Borrower will not, and will not permit any Subsidiary to,
convey, sell, lease, assign, transfer or otherwise dispose of all or any
substantial part of its generating assets (including leasehold interests),
whether now owned or hereafter acquired, except as required by applicable law.
SECTION 6.06. Sale and Leaseback Transactions. The Borrower will not,
and will not permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell, transfer or otherwise dispose of 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
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred, except for any such sale of any fixed or capital
assets that is made for Fair Value and is consummated within 270 days after the
Borrower or such Subsidiary acquires or completes the construction of such fixed
or capital asset.
SECTION 6.07. Limitation on Hedge Agreements. The Borrower will not,
and will not permit any of the Subsidiaries to, enter into any Hedge Agreement
other than Hedge Agreements entered into in the ordinary course of business.
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.
(a) The Borrower will not declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except:
(i) the Borrower may declare and pay dividends and make other
distributions with respect to its Equity Interests payable solely in
additional shares of its common stock;
(ii) the Borrower may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for management or
employees of the Borrower and the Subsidiaries and in accordance with the
terms of employment agreements or shareholder or partnership agreements of
the Borrower or any direct or indirect shareholder of the Borrower;
56
(iii) the Borrower may redeem in whole or in part any Capital
Stock of the Borrower (A) for another class of Capital Stock or rights to
acquire Capital Stock of the Borrower or (B) with proceeds from
substantially concurrent capital contributions or issuances of new classes
of Capital Stock; provided that such other class of Capital Stock contains
terms and provisions at least as advantageous to the Lenders in all
respects material to their interests as those contained in the Capital
Stock redeemed thereby; and
(iv) the Borrower may pay any cash dividend so long as (A) both
before and after giving effect to such payment, no Default has occurred and
is continuing and (B) on the date of such payment, after giving effect
thereto, the sum of (1) the aggregate amount of Unrestricted Cash then
existing plus (2) the unused amount of the Revolving Commitments equals or
exceeds $15,000,000.
(b) The Borrower will not, and will not permit any Subsidiary to, make
or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Subordinated Debt, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Subordinated Debt;
provided that so long as no Default has occurred and is continuing or would
result therefrom, the Borrower or any of its Subsidiaries may pay, prepay,
repurchase or redeem or otherwise defease all or any portion of any Subordinated
Debt.
SECTION 6.09. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) at prices and on terms and conditions not less favorable
to the Borrower or such Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties, (b) transactions between or among the
Borrower and the Subsidiaries not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 6.08, (d) shared corporate or
administrative services and staffing with Affiliates, including accounting,
legal, human resources and treasury operations, provided on customary terms for
similarly situated companies, (e) tax sharing arrangements on customary terms
for similarly situated companies, (f) customary fees paid to members of the
board of directors of the Borrower and the Subsidiaries who are not officers of
the Borrower or any Subsidiary and (g) transactions by TEP or any TEP Subsidiary
to acquire, either through asset purchases, mergers or purchases of Capital
Stock, the business and operations of Southwest Energy or MEG.
SECTION 6.10. Restrictive Agreements.
(a) The Borrower will not, and will not permit TEP to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of TEP to pay dividends or other distributions with respect to any shares of its
Capital Stock; provided that the foregoing shall not apply to restrictions and
conditions (i) imposed by law, (ii) imposed by any Loan Document or TEP Loan
Document, (iii) existing on the date hereof identified on Part A of Schedule
6.10 (but shall apply to any amendment or modification materially expanding the
57
scope of any such restriction or condition), (iv) contained in agreements
entered into after the Effective Date which contain restrictions no more
restrictive than those contained in the TEP Loan Documents and (v) contained in
agreements relating to the sale of a Subsidiary pending such sale; provided in
the case of this clause (v) such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder.
(b) In addition to the restrictions in paragraph (a) above, the
Borrower will not, and will not permit any of the Limited Subsidiaries to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its Capital Stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (x) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Documents, TEP Loan
Document or UNS Loan Document; (y) the foregoing shall not apply to restrictions
and conditions existing on the date hereof identified on Part B of Schedule 6.10
(but shall apply to any amendment or modification materially expanding the scope
of, any such restriction or condition); and (z) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder.
SECTION 6.11. Amendment of Material Documents. The Borrower will not,
and will not permit any Subsidiary to, amend, modify or change, or consent or
agree to any amendment, modification or change to, any TEP Loan Document, except
for amendments, modifications and changes that, individually and in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 6.12. Cash Coverage Ratio. The Borrower will not permit the
ratio of (a) Borrower Cash Flow to (b) Borrower Debt Service, in each case for
the four-fiscal-quarter period ended on the last day of any fiscal quarter,
commencing with the fiscal quarter ending June 30, 2005, to be less than 1.25 to
1.0.
SECTION 6.13. Leverage Test. The Borrower will not permit the ratio of
(a) Consolidated Total Indebtedness at the end of any fiscal quarter, commencing
with the fiscal quarter ending June 30, 2005, to (b) Consolidated EBITDA for the
four-fiscal-quarter period ended on such date to be greater than the amount
specified in the chart below for the period in which such date shall occur:
-------------------------------------------------------------------
Period Maximum Ratio
-------------------------------------------------------------------
From the Effective Date through and including 5.25
December 31, 2005
-------------------------------------------------------------------
From January 1, 2006 through and including 5.00
December 31, 2006
-------------------------------------------------------------------
58
-------------------------------------------------------------------
From January 1, 2007 through and including 4.75
December 31, 2008
-------------------------------------------------------------------
After December 31, 2008 4.50
-------------------------------------------------------------------
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with any Loan
Document or any amendment or modification hereof or waiver hereunder, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification hereof or waiver hereunder, shall prove to have been incorrect
in any material respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.04 (with respect to the
Borrower's existence), 5.09 or 5.14 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent to the Borrower (which notice will be given at the
request of any Lender);
(f) the Borrower or any Significant Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due
and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption (other than
pursuant to provisions permitting the tendering of such Indebtedness from
59
time to time for repurchase or redemption without regard to the occurrence
or non-occurrence of any event or condition) or defeasance thereof, prior
to its scheduled maturity; provided that this clause (g) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of the Borrower or any Significant Subsidiary or
its debts, or of a substantial part of its assets, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (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 its assets, and,
in any such case, such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(i) the Borrower or any Significant Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (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 its assets, (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 or (vi) take any action
for the purpose of effecting any of the foregoing;
(j) the Borrower or any Significant Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts
as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $20,000,000 shall be rendered against the
Borrower, any Significant Subsidiary or any combination thereof 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 attach or levy upon any assets of
the Borrower or any Significant Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, when taken together
with all other ERISA Events that have occurred, has resulted or could
reasonably be expected to result in a Material Adverse Effect;
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by the Borrower or any Subsidiary
not to be, a valid and perfected Lien on any Collateral subject thereto,
with the priority required by the applicable Security Document except (A)
as a result of the sale or other disposition of the applicable Collateral
60
in a transaction permitted under the Loan Documents or (B) as a result of
the Administrative Agent's failure to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it under
any Security Document; or
(n) any material provision of this Agreement or any other Loan
Document to which the Borrower is a party shall for any reason, except to
the extent permitted by the express terms hereof or thereof, cease to be
valid and binding on or enforceable against the Borrower, or the Borrower
shall so assert in writing;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take any or
all of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower, and/or (iii) subject
to the receipt of any required regulatory approvals and any other applicable
law, exercise in respect of the Collateral, in addition to the other rights and
remedies provided for herein and in the Security Documents or otherwise
available to the Administrative Agent or the Lenders, all the rights and
remedies of a secured party on default under the Uniform Commercial Code in
effect in the State of New York and in effect in any other jurisdiction in which
any Collateral is located at that time; and in case of any event with respect to
the Borrower described in clause (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto. The Required Lenders or the Borrower may
at any time, with the consent of the Borrower (provided that such consent shall
not be required if an Event of Default under clause (a), (b), (h), (i) or (j) of
Article VII shall have occurred and be continuing) or the Required Lenders, as
the case may be, replace the Administrative Agent (it being understood that any
such replacement Administrative Agent shall be a Person that serves as
administrative agent for other credit facilities of a comparable size), provided
that the Required Lenders or the Borrower may not replace the Administrative
Agent unless, after giving effect to such replacement and each contemporaneous
61
assignment the Required Lenders or the Borrower shall have arranged in
connection with such replacement, (i) neither the Administrative Agent nor any
of its Affiliates shall have outstanding any Loan or Commitment or other
obligation of any kind under this Agreement or any other Loan Document and (ii)
each of the Administrative Agent and its Affiliates shall have received payment
in full of all amounts owing to it under or in respect of this Agreement and
each other Loan Document.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of the Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent
or any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or in
connection with any Loan Document, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
Notwithstanding anything herein to the contrary, no Lender identified
as Syndication Agent or Documentation Agent shall have any separate duties,
responsibilities, obligations or authority as Syndication Agent or Documentation
Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
62
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be any commercial bank organized
under the laws of the United States of America or any State thereof having a
combined capital and surplus and undivided profits of not less than
$500,000,000. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
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ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to paragraph (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to the Borrower, to it at Xxx Xxxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxx 00000, Attention of Chief Financial Officer (Telecopy No. (520)
884-3612);
(ii) if to the Administrative Agent, to Union Bank of California,
N.A., 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention of Xxxxxx Xxxxx (Telecopy No. (000) 000-0000); and
(iii) if to any other Agent or any Lender, to it at its address
(or telecopy number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
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.
SECTION 9.02. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder or under any other Loan Document 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 and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any 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) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
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Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower and the
Required Lenders or by the Borrower and the Administrative Agent with the
consent of the Required Lenders, or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Borrower, in each case with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender; (ii) reduce
the principal amount of any Loan or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby; (iii) postpone the scheduled date of payment of the principal
amount of any Loan, or any interest thereon, or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby; (iv)
change Section 2.16(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender; (v)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision of any Loan Document specifying the number or
percentage of Lenders (or Lenders of any Class) required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender (or each Lender of such
Class, if applicable); (vi) change any provisions of any Loan Document in a
manner that by its terms adversely affects the rights in respect of payments or
Collateral of Lenders holding Loans of any Class differently from those holdings
Loans of any other Class, without the written consent of Lenders holding a
majority in interest of the outstanding Loans and unused Commitments of each
affected Class; (vii) release all or substantially all the Collateral from the
Liens of the Security Documents without the consent of each Lender; or (viii)
amend, modify or waive any condition precedent set forth in Section 4.02 with
respect to the making of Loans of any Class, without the prior written consent
of Lenders holding a majority in interest of the Commitments of such Class;
provided further that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent; and (B) any waiver, amendment
or modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Term Lenders) or the
Term Lenders (but not the Revolving Lenders) may be effected by an agreement or
agreements in writing entered into by the Borrower and the requisite percentage
in interest of the affected Class of Lenders that would be required to consent
thereto under this Section if such Class of Lenders were the only Class of
Lenders hereunder at such time. In furtherance of clause (viii) of this Section
9.02(b), (x) any amendment or modification to or waiver of Section 6.12 or 6.13
of this Agreement and (y) any amendment or modification to or waiver of any
provision of this Agreement or any other Loan Document at a time when any
Default or Event of Default has occurred and is continuing that would have the
effect of eliminating any such Default or Event of Default shall not be deemed
to be effective for purposes of determining whether the conditions precedent set
forth in Section 4.02 to the making of any Loan of any Class have been satisfied
unless the Lenders holding a majority in interest of the Commitments of such
Class shall have consented to such amendment, modification or waiver, provided
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that the foregoing shall not be construed to affect any amendment or
modification to any provision of this Agreement or any other Loan Document
(other than any amendment or modification to Section 6.12 or 6.13 of this
Agreement) if no Default or Event of Default has occurred and is continuing at
the time of such amendment or modification. Notwithstanding the foregoing, any
provision of this Agreement requiring the consent of a Lender unwilling to
provide such consent may be amended by an agreement in writing entered into by
the Borrower, the Required Lenders and the Administrative Agent if (1) by the
terms of such agreement the Commitment of each such opposing Lender shall
terminate upon the effectiveness of such amendment and (2) at the time such
amendment becomes effective, each such opposing Lender receives payment in full
of the principal of and interest accrued on each Loan made by it and all other
amounts owing to it or accrued for its account under the Loan Documents.
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Arranger and their respective
Affiliates (including due diligence expenses and the reasonable fees, charges
and disbursements of counsel for the Administrative Agent and the Arranger) in
connection with the arrangement and syndication of the credit facilities
provided for herein, the preparation, execution, delivery and administration of
the Loan Documents or any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated); (ii) all out-of-pocket expenses and charges of the Arranger in
connection with any evaluations of Collateral conducted by it; and (iii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent, the
Arranger and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "Indemnitee"), against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated thereby, (ii) any Loan or the use of the proceeds therefrom, (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Borrower or any Subsidiary or any
Environmental Liability related in any way to the Borrower or any Subsidiary or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether 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
66
judgment to have resulted primarily from the gross negligence, willful
misconduct or bad faith of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent or the Arranger under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Arranger, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Arranger in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for 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, any Loan or the use of the proceeds
thereof.
(e) All amounts due under this Section shall be payable promptly after
delivery to the Borrower of a reasonably detailed statement therefor.
SECTION 9.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the Agents,
the Arranger and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Revolving Commitment, its Term Commitment and the Loans at the time owing to
it); provided that (i) except in the case of an assignment of a Term Commitment
or a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund of any
Lender, the Administrative Agent must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund of any Lender, the Borrower must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (iii) except in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund of any Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitments, the aggregate amount of the Commitments of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
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Administrative Agent) shall be in an aggregate amount of not less than
$5,000,000 (or $1,000,000 in the case of an assignment of a Term Lender's Term
Commitment or Term Loans) unless each of the Borrower and the Administrative
Agent otherwise consent, (iv) each partial assignment by a Lender of its
Revolving Commitment and Revolving Exposure or its Term Commitment and Term
Loans shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement in respect of its
Revolving Commitment and Revolving Exposure or its Term Commitment and Term
Loans, as the case may be, (v) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500, and (vi) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Borrower otherwise
required under this paragraph shall not be required (A) if an Event of Default
shall have occurred and be continuing or (B) in connection with the initial
syndication of the Commitments and Loans. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Assumption 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 Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in California a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall be conclusive, and
the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender 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 Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
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(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Revolving Commitment,
its Term Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (f) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.16(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.13 or 2.15 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.15 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.15(d) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto. In
the case of any Lender that is a fund that invests in bank loans, such Lender
may, without the consent of the Borrower or Administrative Agent, assign or
pledge all or any portion of its rights under this Agreement, including the
Loans and notes or any other instrument evidencing its rights as a Lender under
this Agreement, to any holder of, trustee for, or any other representative of
holders of, obligations owed or securities issued, by such fund, as security for
such obligations or securities; provided that any foreclosure or similar action
by such trustee or representative shall be subject to the provisions of Section
9.04(b) concerning assignments.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
69
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any Loan and
(ii) if an SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof. The making of a Loan by an SPC shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC in connection
with its activities as an SPC hereunder any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary in this Section 9.04, any SPC may (i) with notice to, but without the
prior written consent of, the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by the Borrower and the Administrative Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis consistent with the
provisions of Section 9.12 any non-public information relating to its Loans to
any rating agency, commercial paper dealer or provider of any surety, guarantee
or credit or liquidity enhancement to such SPC. The provisions of this Section
relating any SPC may not be amended without the written consent of such SPC.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower in the Loan Documents and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement or
any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that any Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, 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 is outstanding and unpaid and so long as any Commitment has not
expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Agents and the Arranger constitute the entire contract among the parties
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relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof, and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, upon any amount becoming due and payable by the Borrower hereunder (whether
at the stated maturity, by acceleration or otherwise), to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Lender or
Affiliate 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 held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, 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 court 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 or any other Loan Document shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.
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(c) 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 any other Loan Document in any
court referred to in paragraph (b) of this Section. 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.
(d) 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 or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. 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 ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, 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 BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. 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 shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
auditors, legal counsel and other advisors (it being understood that the Persons
to whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to any Agent or any Lender on a nonconfidential basis from a
72
source other than the Borrower. For the purposes of this Section, "Information"
means all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to any Agent or any
Lender on a nonconfidential basis prior to disclosure by the Borrower; provided
that, in the case of information received from the Borrower after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.14. Patriot Act Notice. Each Lender and each Agent (for
itself and not on behalf of any other party) hereby notifies the Borrower that,
pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56, signed into law October 26, 2001 (the "Patriot Act"), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Bank or such Agent, as applicable, to identify the Borrower
in accordance with the Patriot Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
UNISOURCE ENERGY CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------
Title: Vice President
---------------------------
UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent and as a Lender
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
---------------------------
Title: Vice President
---------------------------
S-1
Signature Page to UniSource Energy Corporation Credit Agreement
COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES, as Documentation
Agent and as a Lender
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxx
---------------------------
Title: Senior Vice President
---------------------------
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------
Title: Vice President
---------------------------
S-2
Signature Page to UniSource Energy Corporation Credit Agreement
THE BANK OF NEW YORK, as Syndication
Agent and as a Lender
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
---------------------------
Title: Managing Director
Energy East Division
---------------------------
S-3
Signature Page to UniSource Energy Corporation Credit Agreement
CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch,
as a Lender
By: /s/ Xxxxx Xxxx
----------------------------------
Name: Xxxxx Xxxx
---------------------------
Title: Vice President
---------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
---------------------------
Title: Associate
---------------------------
S-4
Signature Page to UniSource Energy Corporation Credit Agreement
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------
Title: Vice President
---------------------------
S-5
Signature Page to UniSource Energy Corporation Credit Agreement
ALLIED IRISH BANKS, P.L.C.,
as a Lender
By: /s/ Xxxxxx Xxxx
----------------------------------
Name: Xxxxxx Xxxx
---------------------------
Title: Senior Vice President
---------------------------
By: /s/ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
---------------------------
Title: Vice President
---------------------------
S-6
Signature Page to UniSource Energy Corporation Credit Agreement
