Exhibit 10.101
THREE-YEAR CREDIT AGREEMENT
Dated as of May 21, 2004
ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
(the "Initial Lenders") and initial issuing banks (the "Initial Issuing Banks")
listed on the signature pages hereof, CITIGROUP GLOBAL MARKETS INC. and KEYBANK
NATIONAL ASSOCIATION, as joint lead arrangers (the "Arrangers"), KEYBANK
NATIONAL ASSOCIATION, as syndication agent, BANK OF AMERICA, N.A. and THE BANK
OF NEW YORK, as co-documentation agents, and CITIBANK, N.A. ("Citibank"), as
agent (the "Agent") for the Lenders (as hereinafter defined), agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means an advance by a Lender to the Borrower as part of a
Borrowing or pursuant to Section 2.03(c) and refers to a Base Rate Advance
or a Eurodollar Rate Advance (each of which shall be a "Type" of Advance).
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the
Agent at Citibank at its office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 00000000, Attention: Bank Loan Syndications.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as
set forth below:
Public Debt Rating Applicable Margin for Applicable Margin for
S&P/Xxxxx'x Base Rate Advances Eurodollar Rate Advances
------------------ --------------------- ------------------------
Level 1
A- or A3 or above 0.000% 0.625%
Xxxxx 0
Xxxxx xxxx Xxxxx 0 but at least BBB+ 0.000% 0.750%
or Baa1
Xxxxx 0
Xxxxx xxxx Xxxxxx 0 and 2 but at 0.000% 0.875%
least BBB or Baa2
Xxxxx 0
Xxxxx xxxx Xxxxxx 0, 0, and 3 but at 0.125% 1.125%
least BBB- or Baa3
Xxxxx 0
Xxxxx xxxx Xxxxxx 0, 0, 0 and 4 but 0.500% 1.500%
at least BB+ and Ba1
Xxxxx 0
Xxxxx xxxx Xxxxx 0 0.750% 1.750%
"Applicable Percentage" means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as
set forth below:
Public Debt Rating Applicable
S&P/Xxxxx'x Percentage
------------------ ----------
Level 1
A- or A3 or above 0.125%
Xxxxx 0
Xxxxx xxxx Xxxxx 0 but at least BBB+ 0.150%
or Baa1
Xxxxx 0
Xxxxx xxxx Xxxxxx 0 and 2 but at 0.175%
least BBB or Baa2
Xxxxx 0
Xxxxx xxxx Xxxxxx 0, 0, and 3 but at 0.200%
least BBB- or Baa3
Xxxxx 0
Xxxxx xxxx Xxxxxx 0, 0, 0 and 4 but 0.300%
at least BB+ and Ba1
Xxxxx 0
Xxxxx xxxx Xxxxx 0 0.400%
"Applicable Utilization Fee" means, as of any date that the sum of the
aggregate Advances plus the Available Amount of all Letters of Credit
exceed 50% of the aggregate Commitments, a percentage per annum determined
by reference to the Public Debt Rating in effect on such date as set forth
below:
Public Debt Rating Applicable
S&P/Xxxxx'x Utilization Fee
------------------ ---------------
Level 1
A- or A3 or above 0.125%
Xxxxx 0
Xxxxx xxxx Xxxxx 0 but at least BBB+ 0.125%
or Baa1
Xxxxx 0
Xxxxx xxxx Xxxxxx 0 and 2 but at 0.125%
least BBB or Baa2
Xxxxx 0
Xxxxx xxxx Xxxxxx 0, 0, and 3 but at 0.125%
least BBB- or Baa3
Xxxxx 0
Xxxxx xxxx Xxxxxx 0, 0, 0 and 4 but 0.250%
at least BB+ and Ba1
Xxxxx 0
Xxxxx xxxx Xxxxx 0 0.500%
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit C hereto.
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"Authorized Officer" means the chairman of the board, chief executive
officer, chief operating officer, chief financial officer, president, any
vice president, treasurer, controller or any assistant treasurer of the
Borrower.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate; and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Borrower Information" has the meaning specified in Section 8.08.
"Borrowing" means a borrowing consisting of simultaneous Advances of
the same Type made by each of the Lenders pursuant to Section 2.01.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City or Phoenix, Arizona and, if
the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"Commitment" means a Revolving Credit Commitment or a Letter of Credit
Commitment.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Cash Coverage Ratio" means, with respect to the Borrower
and its Consolidated Subsidiaries, for each twelve-month period ending on
the last day of each fiscal quarter (determined as of the last day of such
fiscal quarter), the ratio of:
(a) an amount equal to:
(i) Consolidated net income of the Borrower and its
Consolidated Subsidiaries for such period, plus
(ii) all material non-recurring items which decreased said
net income for such period, minus
(iii) all material non-recurring items which increased said
net income for such period, plus
(iv) income taxes deducted in determining said net income
for such period, plus
(v) total "Interest Charges", as defined in clause (b)
below, of the Borrower and its Consolidated Subsidiaries for such
period, plus
(vi) depreciation and amortization, and nuclear fuel
amortization for such period, minus
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(vii) allowance for equity and borrowed funds used during
construction for such period, minus
(viii) deferrals as described in Financial Accounting
Standards Board Statement No. 71 for such period, plus or minus
(ix) other significant noncash items for such period as may
be specified under Financial Accounting Standards Board
Statements or other accounting guidelines, to
(b) without duplication of any item, an amount equal to the sum
(such amount being the "Interest Charges") of:
(i) interest on long-term debt for such period as reported
in the consolidated income statement for such period, plus
(ii) interest on short-term debt for such period as reported
in the consolidated income statement for such period, plus
(iii) imputed interest on the Sale Leaseback Obligation
Bonds for such period, such amount being equal to the product of
(A) the principal amount of Sale Leaseback Obligation Bonds
outstanding during such period and (B) the rate of interest
applicable to such Sale Leaseback Obligation Bonds during such
period, plus
(iv) all rental payments in respect of operating leases
(excluding any portion of such rental payments attributable to
operating expenses and excluding any payments in respect of Sale
Leaseback Obligation Bonds) with respect to which the payment
obligations of the Borrower or a Consolidated Subsidiary of the
Borrower have a present value of at least $25,000,000.
"Consolidated Indebtedness" means, at any date, the Indebtedness of
the Borrower and its Consolidated Subsidiaries determined on a Consolidated
basis as of such date.
"Consolidated Net Worth" means, at any date, the sum as of such date
of (a) the par value (or value stated on the books of the Borrower) of all
classes of capital stock of the Borrower and its Subsidiaries, excluding
the Borrower's capital stock owned by the Borrower and/or its Subsidiaries,
plus (or minus in the case of a surplus deficit) (b) the amount of the
Consolidated surplus, whether capital or earned, of the Borrower,
determined in accordance with GAAP as of the end of the most recent
calendar month (excluding (x) cumulative charges of up to $300,000,000 to
Consolidated surplus resulting from, or in anticipation of, discontinuation
of Financial Accounting Standards Board Statement No. 71, accounting for
all or part of the business and (y) the effect on the Borrower's
accumulated other comprehensive income/loss of the ongoing application of
Financial Accounting Standards Board Statement No. 133).
"Consolidated Subsidiary" means, at any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the
Borrower on its Consolidated financial statements if such financial
statements were prepared as of such date.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section
2.08, 2.09 or 2.12.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and
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Acceptance pursuant to which it became a Lender, or such other office of
such Lender as such Lender may from time to time specify to the Borrower
and the Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender
(that is not a natural person); and (iii) any other Person (that is not a
natural person) approved by the Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in
accordance with Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that neither the
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, Environmental
Permit or Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment, including, without limitation,
(a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance relating to pollution
or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (without regard to subsection (2) of such Section) are met
with respect to a contributing sponsor, as defined in Section 4001(a)(13)
of ERISA, of a Plan, and an event described in paragraph (9), (10), (11),
(12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur
with respect to such Plan within the following 30 days; (b) the application
for a minimum funding waiver with respect to a Plan; (c) the provision by
the administrator of any Plan of a notice of intent to terminate such Plan
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA); (d)
the cessation of operations at a facility of the Borrower or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by the Borrower or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; (f) the conditions for the
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, a Plan.
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"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum) appearing on Moneyline Telerate Markets
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in U.S. dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period or, if for any reason such rate is not
available, the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by the principal
office of each of the Reference Banks in London, England to prime banks in
the London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount substantially
equal to such Reference Bank's Eurodollar Rate Advance comprising part of
such Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period, subject, however, to the provisions
of Section 2.08.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to 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 for such day (or, if such day is not a Business Day, for the next
preceding 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 on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by
it.
"GAAP" has the meaning specified in Section 1.03.
"Guaranteed Indebtedness" of any Person means, without duplication,
all Indebtedness guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance
or supply funds for the payment or purchase of such Indebtedness, or (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase
or sell services, primarily for the purpose of enabling the debtor to make
payment of such Indebtedness or to assure the holder of such Indebtedness
against loss, or (iii) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services
irrespective to whether or not such property is received or such services
are rendered), or (iv) otherwise to assure a creditor against loss.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreement" means any interest rate swap, cap or collar
agreement, interest rate future or option contract, currency swap
agreement, currency future or option contract or other similar agreement.
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"Indebtedness" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, excluding, however, trade accounts payable
arising in, and accrued expenses incurred in, the ordinary course of
business of such Person so long as such trade accounts payable are paid
within 180 days of the date incurred, (ii) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (iii) all
obligations under leases which shall have been or should be, in accordance
with GAAP, recorded as capital leases in respect of which such Person is
liable as lessee, (iv) all obligations of such Person upon which interest
charges are customarily paid, (v) all liabilities of such Person in respect
of unfunded vested benefits under plans covered by Title IV of ERISA, (vi)
all Guaranteed Indebtedness, and (vii) all Indebtedness referred to in
clause (i), (ii) or (iii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien, security interest or other charge or encumbrance upon or in
property (including, without limitation, accounts and contracts rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness.
"Information Memorandum" means the information memorandum dated April
20, 2004 used by the Arrangers in connection with the syndication of the
Commitments, as qualified in its entirety by the information provided in
the SEC Reports.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Agent not later
than 12:00 noon (New York City time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period that ends
after the Termination Date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Issuing Bank" means an Initial Issuing Bank or any other Lender
approved by the Borrower that may agree to issue Letters of Credit pursuant
to an Assignment and Acceptance or other agreement in form satisfactory to
the Borrower and the Agent, so long as such Lender expressly agrees to
perform in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be
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performed by it as an Issuing Bank and notifies the Agent of its Applicable
Lending Office (which information shall be recorded by the Agent in the
Register), for so long as such Initial Issuing Bank or Lender, as the case
may be, shall have a Letter of Credit Commitment.
"L/C Cash Deposit Account" means an interest bearing cash deposit
account to be established and maintained by the Agent, over which the Agent
shall have sole dominion and control, upon terms as may be satisfactory to
the Agent.
"L/C Related Documents" has the meaning specified in Section
2.06(b)(i).
"Lenders" means the Initial Lenders, each Issuing Bank and each Person
that shall become a party hereto pursuant to Section 8.07.
"Letter of Credit" has the meaning specified in Section 2.01(b).
"Letter of Credit Application" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to each Issuing
Bank, the obligation of such Issuing Bank to issue Letters of Credit for
the account of the Borrower from time to time in (a) the maximum aggregate
amount at any time outstanding set forth opposite the Issuing Bank's name
on the signature pages hereto under the caption "Letter of Credit
Commitment" or (b) if such Issuing Bank has entered into one or more
Assignments and Acceptances or other agreements pursuant to which it became
an Issuing Bank, the amount set forth for such Issuing Bank in the Register
maintained by the Agent pursuant to Section 8.07(d) as such Issuing Bank's
"Letter of Credit Commitment", in each case as such amount may be reduced
prior to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to the
least of (a) the aggregate amount of the Issuing Banks' Letter of Credit
Commitments at such time, (b) $75,000,000 and (c) the aggregate amount of
the Revolving Credit Commitments, as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"Lien" means any lien, security interest or other encumbrance of any
kind, or any other type of preferential arrangement that has the practical
effect of creating a security interest, including, without limitation, the
lien or retained security title of a conditional vendor and any easement,
right of way or other encumbrance on title to real property.
"Material Adverse Change" means any material adverse change in the
financial condition or financial prospects of the Borrower and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition or financial prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the rights and remedies of the Agent or
any Lender under this Agreement or any Note or (c) the ability of the
Borrower to perform its obligations under this Agreement or any Note.
"Material Subsidiary" means, at any time, a Subsidiary of the Borrower
which as of such time meets the definition of a "significant subsidiary"
included as of the date hereof in Regulation S-X of the Securities and
Exchange Commission or whose assets at such time exceed 10% of the assets
of the Borrower and the Subsidiaries (on a consolidated basis).
"Xxxxx'x" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making
or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make
contributions.
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"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the
Borrower and the ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"1984 Order" means Decision No. 54230, dated November 8, 1984, of the
Arizona Corporation Commission.
"1986 Order" means Decision No. 55017, dated May 6, 1986, of the
Arizona Corporation Commission.
"Note" means a promissory note of the Borrower payable to the order of
any Lender, delivered pursuant to a request made under Section 2.16 in
substantially the form of Exhibit A hereto, evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from the Advances
made by such Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Lien" of the Borrower or any Material Subsidiary means any
of the following:
(i) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without
penalty or being contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have
been made;
(ii) Liens imposed by or arising by operation of law, such as
Liens of carriers, warehousemen, mechanics, materialmen and landlords
incurred in the ordinary course of business, including, without
limitation, landlord's liens arising under Arizona law under leases
entered into by the Borrower in the 1986 sale and leaseback
transactions with respect to Palo Verde Unit 2 and securing the
payment of rent under such leases, in each case, for sums not overdue
for a period of more than 30 days or being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been made;
(iii) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits or other similar statutory
obligations;
(iv) Liens to secure obligations on surety or appeal bonds;
(v) rights of setoff and banker's Liens with respect to funds on
deposit in a financial institution in the ordinary course of business;
(vi) easements, restrictions, reservations, licenses, covenants,
and other defects of title that are not, in the aggregate, materially
adverse to the use of such property for the purpose for which it is
used;
(vii) Liens securing claims against any Person other than the
Borrower or any Subsidiary of the Borrower neither assumed nor
guaranteed by the Borrower or any Subsidiary of the Borrower nor on
which the Borrower or any Subsidiary of the Borrower customarily pays
interest, existing upon real estate or rights in or relating to real
estate acquired by the Borrower or
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any Subsidiary of the Borrower for substation, transmission line,
transportation line, distribution line or right of way purposes;
(viii) rights reserved to or vested in any municipality or public
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;
(ix) rights reserved to or vested in others to take or receive
any part of the power pursuant to firm power commitment contracts,
purchased power contracts, tolling agreements and similar agreements,
gas, oil or other minerals or timber generated, developed,
manufactured or produced by, or grown on, or acquired with, any
property of the Borrower;
(x) rights reserved to or vested in any municipality or public
authority to control or regulate any property of the Borrower, or to
use such property in a manner that does not materially impair the use
of such property for the purposes for which it is held by the
Borrower;
(xi) security interests granted in favor of the Unit 2 sale
leaseback transaction lessors in the Borrower's Decommissioning Trust
Agreement (PVNGS Unit 2) dated as of January 31, 1992 (such agreement,
as amended or otherwise modified from time to time, being the "Unit 2
Trust Agreement") to secure the Borrower's obligations in respect of
the decommissioning of PVNGS Unit 2 or related facilities;
(xii) Liens that may exist with respect to the Xxxx 0 Xxxxx
Xxxxxxxxx (other than as described in paragraph (xi) above) or with
respect to either of the Borrower's Decommissioning Trust Agreement
(PVNGS Unit 1) or Decommissioning Trust Agreement (PVNGS Unit 3), each
dated as of July 1, 1991, as amended or otherwise modified from time
to time, relating to the Borrower's obligation to set aside funds for
the decommissioning and retirement from service of such Units;
(xiii) pledges of pollution control bonds and related rights to
secure the Borrower's reimbursement obligations in respect of letters
of credit, bond insurance, and other credit or liquidity enhancements
supporting pollution control bond transactions, provided that such
pollution control bonds are not secured by any other assets of the
Borrower or any Material Subsidiary;
(xiv) interests of other participants under agreements governing
jointly-owned electric generating facilities and transmission
facilities and transfers of operational or other control of facilities
to a regional transmission organization or other similar body and
Liens on such facilities to cover expenses, fees and other costs of
such an organization or body;
(xv) Liens established on specified bank accounts of the Borrower
to secure the Borrower's reimbursement obligations in respect of
letters of credit supporting commercial paper issued by the Borrower
and similar arrangements for collateral security with respect to
refinancings or replacements of the same;
(xvi) rights of transmission users or any regional transmission
organizations or similar entities in transmission facilities; and
(xvii) Liens on property of the Borrower sold to another Person
pursuant to a conditional sales agreement where the Borrower retains
title;
provided, however, that no lien in favor of the PBGC shall, in any
event, be a Permitted Lien.
10
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Public Debt Rating" means, as of any date, the rating that has been
most recently announced by either S&P or Xxxxx'x, as the case may be, for
any class of non-credit enhanced long-term senior unsecured debt issued by
the Borrower or, if any such rating agency shall have issued more than one
such rating, the lowest such rating issued by such rating agency. For
purposes of the foregoing, (a) if only one of S&P and Xxxxx'x shall have in
effect a Public Debt Rating, the Applicable Margin, the Applicable
Percentage and the Applicable Utilization Fee shall be determined by
reference to the available rating; (b) if neither S&P nor Xxxxx'x shall
have in effect a Public Debt Rating, the Applicable Margin, the Applicable
Percentage and the Applicable Utilization Fee will be set in accordance
with Level 6 under the definition of "Applicable Margin", "Applicable
Percentage" or "Applicable Utilization Fee", as the case may be; (c) if the
ratings established by S&P and Xxxxx'x shall fall within different levels
above Xxxxx 0, the Applicable Margin, the Applicable Percentage and the
Applicable Utilization Fee shall be based upon the higher rating unless the
such ratings differ by two or more levels, in which case the applicable
level will be deemed to be one level above the lower of such levels; (d) if
any rating established by S&P or Xxxxx'x shall be changed, such change
shall be effective as of the date on which such change is first announced
publicly by the rating agency making such change; and (e) if S&P or Xxxxx'x
shall change the basis on which ratings are established, each reference to
the Public Debt Rating announced by S&P or Xxxxx'x, as the case may be,
shall refer to the then equivalent rating by S&P or Xxxxx'x, as the case
may be.
"PWCC" means Pinnacle West Capital Corporation.
"Ratable Share" of any amount means, with respect to any Lender at any
time, the product of such amount times a fraction the numerator of which is
the amount of such Lender's Revolving Credit Commitment at such time (or,
if the Revolving Credit Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, such Lender's Revolving Credit Commitment as in
effect immediately prior to such termination) and the denominator of which
is the aggregate amount of all Revolving Credit Commitments at such time
(or, if the Revolving Credit Commitments shall have been terminated
pursuant to Section 2.05 or 6.01, the aggregate amount of all Revolving
Credit Commitments as in effect immediately prior to such termination).
"Reference Banks" means Citibank, KeyBank National Association, Bank
of America, N.A. and The Bank of New York.
"Register" has the meaning specified in Section 8.07(d).
"Required Lenders" means at any time Lenders owed at least a majority
in interest of the then aggregate unpaid principal amount of the Advances
owing to Lenders, or, if no such principal amount is then outstanding,
Lenders having at least a majority in interest of the Revolving Credit
Commitments.
"Revolving Credit Commitment" means as to any Lender (a) the amount
set forth opposite such Lender's name on the signature pages hereof as such
Lender's "Revolving Credit Commitment" or (b) if such Lender has entered
into any Assignment and Acceptance, the amount set forth for such Lender in
the Register maintained by the Agent pursuant to Section 8.07(d), as such
amount may be reduced pursuant to Section 2.05.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"Sale Leaseback Obligation Bonds" means PVNGS II Funding Corp.'s (i)
7.39% Secured Lease Obligation Bonds, Series 1993, due 2005; (ii) 8.00%
Secured Lease Obligation Bonds, Series 1993, due
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2015; (iii) any other bonds issued by the Borrower in connection with a
sale/leaseback transaction; and (iv) any refinancing or refunding of the
obligations specified in subclauses (i) through (iii) above.
"SEC Reports" means the Borrower's (i) Form 10-K Report for the year
ended December 31, 2003, (ii) Form 10-Q Report for the quarter ended March
31, 2004 and (iii) Form 8-K Reports filed on January 9, January 28, January
29, February 4 and April 21, 2004.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and
the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Subsequent Order" means any decision, order or ruling of the Arizona
Corporation Commission issued after the Effective Date relating to the
incurrence or maintenance of Indebtedness by the Borrower and that amends,
supersedes or otherwise modifies the 1984 Order, the 1986 Order or any
successor decision, order or ruling.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate, is at the time
directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Termination Date" means the earlier of (a) May 21, 2007 and (b) the
date of termination in whole of the Commitments pursuant to Section 2.05 or
6.01.
"Unissued Letter of Credit Commitment" means, with respect to any
Issuing Bank, the obligation of such Issuing Bank to issue Letters of
Credit for the account of the Borrower in an amount equal to the excess of
(a) the amount of its Letter of Credit Commitment over (b) the aggregate
Available Amount of all Letters of Credit issued by such Issuing Bank.
"Unused Commitment" means, with respect to each Lender at any time,
(a) such Lender's Revolving Credit Commitment at such time minus (b) the
sum of (i) the aggregate principal amount of all Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time, plus
(ii) such Lender's Ratable Share of (A) the aggregate Available Amount of
all the Letters of Credit outstanding at such time and (B) the aggregate
principal amount of all Advances made by each Issuing Bank pursuant to
Section 2.03(c) that have not been ratably funded by such Lender and
outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared, in accordance with generally accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Borrower's
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independent public accountants) with the most recent audited Consolidated
financial statements of the Borrower delivered to the Agent ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT
SECTION 2.01. The Advances and Letters of Credit. (a) The Advances.
Each Lender severally agrees, on the terms and conditions hereinafter set forth,
to make Advances to the Borrower from time to time on any Business Day during
the period from the Effective Date until the Termination Date in an amount not
to exceed such Lender's Unused Commitment. Each Borrowing shall be in an
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof and shall consist of Advances of the same Type made on the same day by
the Lenders ratably according to their respective Revolving Credit Commitments.
Within the limits of each Lender's Revolving Credit Commitment, the Borrower may
borrow under this Section 2.01(a), prepay pursuant to Section 2.10 and reborrow
under this Section 2.01(a).
(b) Letters of Credit. Each Issuing Bank agrees, on the terms and
conditions hereinafter set forth, in reliance upon the agreements of the other
Lenders set forth in this Agreement, to issue letters of credit (each, a "Letter
of Credit") for the account of the Borrower from time to time on any Business
Day during the period from the Effective Date until 30 days before the
Termination Date in an aggregate Available Amount (i) for all Letters of Credit
issued by each Issuing Bank not to exceed at any time the lesser of (x) the
Letter of Credit Facility at such time and (y) such Issuing Bank's Letter of
Credit Commitment at such time and (ii) for each such Letter of Credit not to
exceed an amount equal to the Unused Commitments of the Lenders at such time. No
Letter of Credit shall have an expiration date (including all rights of the
Borrower or the beneficiary to require renewal) later than five Business Days
before the Termination Date. Within the limits referred to above, the Borrower
may from time to time request the issuance of Letters of Credit under this
Section 2.01(b). Each letter of credit listed on Schedule 2.01(b) shall be
deemed to constitute a Letter of Credit issued hereunder, and each Lender that
is an issuer of such a Letter of Credit shall, for purposes of Section 2.03, be
deemed to be an Issuing Bank for each such letter of credit, provided than any
renewal or replacement of any such letter of credit shall be issued by an
Issuing Bank pursuant to the terms of this Agreement. The terms "issue",
"issued", "issuance" and all similar terms, when applied to a Letter of Credit,
shall include any renewal, extension or amendment thereof.
SECTION 2.02. Making the Advances. (a) Except as otherwise provided
in Section 2.03(c), each Borrowing shall be made on notice, given not later than
(x) 12:00 noon (New York City time) on the third Business Day prior to the date
of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar
Rate Advances or (y) 12:00 noon (New York City time) on the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the
Borrower to the Agent, which shall give to each Lender prompt notice thereof by
facsimile. Each such notice of a Borrowing (a "Notice of Borrowing") shall be in
writing or by facsimile in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing,
and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances,
initial Interest Period for each such Advance. Each Lender shall, in the case of
a Borrowing consisting of Base Rate Advances, before 2:00 P.M. (New York City
time) on the date of such Borrowing, and in the case of a Borrowing consisting
of Eurodollar Rate Advances, before 11:00 A.M. (New York City time) on date of
such Borrowing, make available for the account of its Applicable Lending Office
to the Agent at the Agent's Account, in same day funds, such Lender's ratable
portion of such Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent
will make such funds available to the Borrower at the Agent's address referred
to in Section 8.02.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for any Borrowing if
the aggregate amount of such Borrowing is less than $10,000,000 or if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.08 or 2.12 and (ii) at no time shall there be
more than eight different Interest Periods outstanding for Eurodollar Rate
Advances.
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(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense reasonably incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior to
the time of any Borrowing that such Lender will not make available to the Agent
such Lender's ratable portion of such Borrowing, the Agent may assume that such
Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent within one Business Day after
demand for such Lender and within three Business Days after demand for the
Borrower such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the Borrower, the interest
rate applicable at the time to Advances comprising such Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If such Lender shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters
of Credit. (a) Request for Issuance. (i) Each Letter of Credit shall be issued
upon notice, given not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed issuance of such Letter of Credit
(or on such shorter notice as the applicable Issuing Bank may agree), by the
Borrower to any Issuing Bank, and such Issuing Bank shall give the Agent, prompt
notice thereof. Each such notice by the Borrower of issuance of a Letter of
Credit (a "Notice of Issuance") shall be by facsimile or telephone, confirmed
immediately in writing, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount of such Letter of
Credit, (C) expiration date of such Letter of Credit (which shall not be later
than five Business Days before the Termination Date), (D) name and address of
the beneficiary of such Letter of Credit and (E) form of such Letter of Credit.
Each Letter of Credit shall be issued pursuant to such application for letter of
credit as such Issuing Bank may specify to the Borrower for use in connection
with such requested Letter of Credit (a "Letter of Credit Application"). If the
requested form of such Letter of Credit is acceptable to such Issuing Bank in
its sole discretion, such Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article III, make such Letter of Credit available to the
Borrower at its office referred to in Section 8.02 or as otherwise agreed with
the Borrower in connection with such issuance. In the event and to the extent
that the provisions of any Letter of Credit Application shall conflict with this
Agreement, the provisions of this Agreement shall govern. Without limitation of
the immediately preceding sentence, no such Letter of Credit Application may
impose any additional conditions on the issuance of a Letter of Credit nor
obligations of the Borrower to the Issuing Bank, other than as stated in this
Agreement.
(b) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the Lenders, such
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
such Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Ratable Share of the Available Amount of such Letter of Credit. The
Borrower hereby agrees to each such participation. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Agent, for the account of such Issuing Bank, such Lender's
Ratable Share of each drawing made under a Letter of Credit funded by such
Issuing Bank and not reimbursed by the Borrower on the date made, or of any
reimbursement payment required to be refunded to the Borrower for any reason,
which amount will be advanced, and deemed to be an Advance to the
14
Borrower hereunder, regardless of the satisfaction of the conditions set forth
in Section 3.02. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Revolving Credit Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender further acknowledges and agrees that its participation
in each Letter of Credit will be automatically adjusted to reflect such Lender's
Ratable Share of the Available Amount of such Letter of Credit at each time such
Lender's Revolving Credit Commitment is amended pursuant to an assignment in
accordance with Section 8.07 or otherwise pursuant to this Agreement.
(c) Drawing and Reimbursement. The payment by an Issuing Bank of a
draft drawn under any Letter of Credit which is not reimbursed by the Borrower
on the date made shall constitute for all purposes of this Agreement the making
by any such Issuing Bank of an Advance regardless of the conditions set forth in
Section 3.02, which shall be a Base Rate Advance, in the amount of such draft,
without regard to whether the making of such an Advance would exceed such
Issuing Bank's Unused Commitment. Each Issuing Bank shall give prompt notice of
each drawing under any Letter of Credit issued by it to the Borrower and the
Agent. Upon written demand by such Issuing Bank, with a copy of such demand to
the Agent and the Borrower, each Lender shall pay to the Agent such Lender's
Ratable Share of such outstanding Advance pursuant to Section 2.03(b). Each
Lender acknowledges and agrees that its obligation to make Advances pursuant to
this paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Revolving Credit Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Promptly after receipt thereof, the Agent
shall transfer such funds to such Issuing Bank. Each Lender agrees to fund its
Ratable Share of an outstanding Advance on (i) the Business Day on which demand
therefor is made by such Issuing Bank, provided that notice of such demand is
given not later than 11:00 A.M. (New York City time) on such Business Day, or
(ii) the first Business Day next succeeding such demand if notice of such demand
is given after such time. If and to the extent that any Lender shall not have so
made the amount of such Advance available to the Agent, such Lender agrees to
pay to the Agent forthwith on demand such amount together with interest thereon,
for each day from the date of demand by any such Issuing Bank until the date
such amount is paid to the Agent, at the Federal Funds Rate for its account or
the account of such Issuing Bank, as applicable. If a Lender shall pay to the
Agent any amount for the account of any such Issuing Bank on any Business Day,
such amount so paid in respect of principal shall constitute an Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Advance made by such Issuing Bank shall be
reduced by such amount on such Business Day.
(d) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to
the Agent and each Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued by
such Issuing Bank during the preceding month and drawings during such month
under all such Letters of Credit and (B) to the Agent and each Lender on the
first Business Day of each calendar quarter a written report setting forth the
average daily aggregate Available Amount during the preceding calendar quarter
of all Letters of Credit issued by such Issuing Bank.
(e) Failure to Make Advances. The failure of any Lender to make the
Advance to be made by it on the date specified in Section 2.03(c) shall not
relieve any other Lender of its obligation hereunder to make its Advance on such
date, but no Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on such date.
SECTION 2.04. Fees. (a) Commitment Fee. The Borrower agrees to pay to
the Agent for the account of each Lender a commitment fee on such Lender's
Unused Commitment from the Effective Date in the case of each Initial Lender and
from the later of the Effective Date and the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date at a rate per annum equal to the
Applicable Percentage in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December, commencing June 30,
2004, and on the Termination Date.
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(b) Letter of Credit Fees. (i) The Borrower shall pay to the Agent
for the account of each Lender a commission on such Lender's Ratable Share of
the average daily aggregate Available Amount of all Letters of Credit
outstanding from time to time at a rate per annum equal to the Applicable Margin
for Eurodollar Rate Advances in effect from time to time plus the Applicable
Utilization Fee, if any, during such calendar quarter, payable in arrears
quarterly on the last day of each March, June, September and December,
commencing with the quarter ended June 30, 2004, and on the Termination Date;
provided that the Applicable Margin shall be 2% above the Applicable Margin in
effect upon the occurrence and during the continuation of an Event of Default if
the Borrower is required to pay default interest pursuant to Section 2.07(b).
(ii) The Borrower shall pay to each Issuing Bank, for its own account,
a fronting fee of 0.125% per annum on the Available Amount of each Letter
of Credit issued by such Issuing Bank, payable in arrears quarterly on the
last day of each March, June, September and December, commencing with the
first such quarter in which any Letter of Credit is issued, and such other
commissions, issuance fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of Credit as
the Borrower and such Issuing Bank shall agree promptly following receipt
of an invoice therefor.
(c) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as are agreed between the Borrower and the Agent pursuant to
the Fee Letter dated April 20, 2004, as amended from time to time.
SECTION 2.05. Optional Termination or Reduction of the Commitments.
The Borrower shall have the right, upon at least three Business Days' notice to
the Agent, to terminate in whole or permanently reduce ratably in part the
Unused Commitments or the Unissued Letter of Credit Commitments of the Lenders,
provided that each partial reduction shall be in the aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
SECTION 2.06. Repayment of Advances and Letter of Credit Drawings.
(a) The Borrower shall repay to the Agent for the ratable account of the Lenders
on the Termination Date the aggregate principal amount of the Advances then
outstanding.
(b) The obligations of the Borrower hereunder relating to any Letter
of Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including,
without limitation, the following circumstances (it being understood that any
such payment by the Borrower is without prejudice to, and does not constitute a
waiver of, any rights the Borrower might have or might acquire as a result of
the payment by any Lender of any draft or the reimbursement by the Borrower
thereof):
(i) any lack of validity or enforceability of this Agreement, any
Note, any Letter of Credit or any other agreement or instrument relating
thereto (all of the foregoing being, collectively, the "L/C Related
Documents");
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any Persons for which any such beneficiary or any
such transferee may be acting), any Issuing Bank, any Agent, any Lender or
any other Person, whether in connection with the transactions contemplated
by the L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
16
(v) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(vi) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any
guarantee, for all or any of the obligations of the Borrower in respect of
the L/C Related Documents; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor;
provided, however, that nothing in this Section 2.06 shall limit the rights
of the Borrower under Section 8.12.
SECTION 2.07. Interest on Advances. (a) Scheduled Interest. The
Borrower shall pay interest on the unpaid principal amount of each Advance owing
to each Lender from the date of such Advance until such principal amount shall
be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (x) the
Base Rate in effect from time to time plus (y) the Applicable Margin in
effect from time to time plus (z) the Applicable Utilization Fee, if any,
in effect from time to time, payable in arrears quarterly on the last day
of each March, June, September and December during such periods and on the
date such Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance is
a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Advance plus (y) the Applicable Margin in
effect from time to time plus (z) the Applicable Utilization Fee, if any,
in effect from time to time, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than
three months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the date
such Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default under Section 6.01(a), the Agent may, and upon the
request of the Required Lenders shall, require the Borrower to pay interest
("Default Interest") on (i) the unpaid principal amount of each Advance owing to
each Lender, payable in arrears on the dates referred to in clause (a)(i) or
(a)(ii) above, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance pursuant to clause (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above,
provided, however, that following acceleration of the Advances pursuant to
Section 6.01, Default Interest shall accrue and be payable hereunder whether or
not previously required by the Agent.
SECTION 2.08. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate. If any one or more of the Reference Banks shall not
furnish such timely information to the Agent for the purpose of determining any
such interest rate, the Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks. The Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest
rate determined by the Agent for purposes of Section 2.07(a)(i) or (ii), and the
rate, if any, furnished by each Reference Bank for the purpose of determining
the interest rate under Section 2.07(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest
17
Period, the Agent shall forthwith so notify the Borrower and the Lenders,
whereupon (i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance,
and (ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
(c) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the Lenders and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default, (i) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
(f) If Moneyline Telerate Markets Page 3750 is unavailable and fewer
than two Reference Banks furnish timely information to the Agent for determining
the Eurodollar Rate for any Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower and the Lenders that
the interest rate cannot be determined for such Eurodollar Rate Advances,
(ii) with respect to Eurodollar Rate Advances, each such Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance (or if such Advance is then a
Base Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances
or to Convert Advances into Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.09. Optional Conversion of Advances. The Borrower may on
any Business Day, upon notice given to the Agent not later than 12:00 noon (New
York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.08 and 2.12, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Base Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b) and no Conversion of any Advances shall result in
more separate Borrowings than permitted under Section 2.02(b). Each such notice
of a Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Advance. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
SECTION 2.10. Prepayments of Advances. (a) Optional. The Borrower
may, upon notice at least two Business Days' prior to the date of such
prepayment, in the case of Eurodollar Rate Advances, and not later than 11:00
A.M. (New York City time) on the date of such prepayment, in the case of Base
Rate Advances, to the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in
the event of any such prepayment of a
18
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(c).
(b) Mandatory. The Borrower shall prepay the aggregate principal
amount of the Advances, together with accrued interest to the date of prepayment
on the principal amount prepaid, without requirement of demand therefor, or
shall pay or prepay any other Indebtedness then outstanding at any time when and
to the extent required to comply with applicable Arizona laws, rules or
regulations, including the 1984 Order and the 1986 Order, or applicable
resolutions of the Board of Directors of the Borrower.
SECTION 2.11. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any new guideline or unanticipated
request from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to any Lender
of agreeing to make or making, funding or maintaining Eurodollar Rate Advances
or agreeing to issue or of issuing or maintaining or participating in Letters of
Credit (excluding for purposes of this Section 2.11 any such increased costs
resulting from (i) Taxes or Other Taxes (as to which Section 2.14 shall govern),
(ii) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender is organized or has its Applicable Lending Office or
any political subdivision thereof and (iii) reserve requirements included in the
calculation required by Section 2.11(d)), then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender additional amounts that the Lender
reasonably determines sufficient to compensate such Lender for such increased
cost. A certificate as to the amount of such increased cost, submitted to the
Borrower and the Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If any Lender determines that compliance with any new law or
regulation or any new guideline or unanticipated request from any central bank
or other governmental authority (whether or not having the force of law) affects
or would affect the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and that the amount of
such capital is increased by or based upon the existence of such Lender's
commitment to lend or to issue or participate in Letters of Credit hereunder and
other commitments of this type, then, upon demand by such Lender (with a copy of
such demand to the Agent), the Borrower shall pay to the Agent for the account
of such Lender, from time to time as specified by such Lender, additional
amounts that the Lender reasonably determines sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend or to issue or participate
in Letters of Credit hereunder. A certificate as to such amounts submitted to
the Borrower and the Agent by such Lender shall be conclusive and binding for
all purposes, absent manifest error.
(c) Each Lender will notify the Borrower of any change that will
entitle such Lender to compensation under Section 2.11(a) or (b) as promptly as
practicable, but in any event within 90 days after such Lender obtains knowledge
thereof; provided, however, that, if any Lender fails to give such notice within
90 days after it obtains knowledge of such change, such Lender shall, with
respect to compensation payable in respect of any costs resulting from such
change, only be entitled to payment for costs incurred from and after the date
that such Lender does give such notice plus, if such change shall have
retroactive effect, costs resulting from such change during the period of
retroactive effect thereof. Any Lender claiming any additional amounts payable
pursuant to this Section agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
(d) The Borrower shall pay to the Agent for the account of each Lender
that requests such a payment, so long as such Lender shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to Eurocurrency Liabilities, an additional amount
determined by such Lender up to but not exceeding an amount equal to the sum of
the products of the following for each Eurodollar Rate Advance for each day
during the applicable Interest Period therefor:
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(i) the principal amount of such Eurodollar Rate Advance outstanding
on such day; multiplied by
(ii) the remainder of (x) a fraction the numerator of which is the
rate (expressed as a decimal) at which interest accrues on such Eurodollar
Rate Advance for such Interest Period as provided in this Agreement (less
the Applicable Eurodollar Margin and any Applicable Utilization Fee), and
the denominator of which is one minus the effective rate (expressed as a
decimal) at which such reserve requirements are imposed on such Lender on
such day, minus (y) such numerator; multiplied by
(iii) 1/360.
Such additional amount shall be determined by such Lender and notified
to the Borrower through the Agent and shall be payable on each date on which
interest is payable on such Eurodollar Rate Advance. Any such determination,
when submitted by a Lender to the Borrower and accompanied by the calculations
showing the basis for such determination, shall be conclusive and binding for
all purposes absent manifest error.
SECTION 2.12. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate Advances hereunder, (a) each Eurodollar Rate Advance will automatically, on
the last day of the applicable Interest Period or, if required by applicable
law, immediately upon such demand, Convert into a Base Rate Advance and (b) the
obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 2.13. Payments and Computations. (a) The Borrower shall make
each payment hereunder, irrespective of any right of counterclaim or set-off,
not later than 1:00 P.M. (New York City time) on the day when due in U.S.
dollars to the Agent at the Agent's Account in same day funds. The Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal, interest, fees or commissions ratably (other than amounts payable
pursuant to Section 2.11, 2.14 or 8.04(c)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 8.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Eurodollar Rate or the Federal Funds
Rate and of fees and Letter of Credit commissions shall be made by the Agent on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, fees or commissions are payable. Each determination by the
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, fees or commissions, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may
20
assume that the Borrower has made such payment in full to the Agent on such date
and the Agent may, in reliance upon such assumption, cause to be distributed to
each Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower to or
for the account of any Lender or the Agent hereunder or under the Notes or any
other documents to be delivered hereunder shall be made, in accordance with
Section 2.13 or the applicable provisions of such other documents, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, taxes imposed on
its overall net income, and franchise taxes imposed on it in lieu of net income
taxes, by the United States and the jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or does business or any
political subdivision thereof and, in the case of each Lender, taxes imposed on
its overall net income, and franchise taxes imposed on it in lieu of net income
taxes, by the jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or any other documents to be delivered
hereunder to any Lender or the Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.14) such
Lender or the Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or any
other documents to be delivered hereunder or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement
or the Notes or any other documents to be delivered hereunder (hereinafter
referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for and
hold it harmless against the full amount of Taxes or Other Taxes (including,
without limitation, taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.14) imposed on or paid by such Lender or
the Agent (as the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or the Agent (as the case
may be) makes written demand therefor. Such demand shall be made as promptly as
practicable, but in any event within 90 days after such Lender or the Agent (as
the case may be) obtains actual knowledge of such event; provided, however, that
if any Lender or the Agent fails to make such demand within 90 days after such
Lender or the Agent (as the case may be) obtains knowledge of such event, such
Lender or the Agent shall, with respect to compensation payable in respect of
such event, not be entitled to compensation in respect of the costs and losses
incurred between the 90th day after such Lender or the Agent (as the case may
be) obtains actual knowledge of such event and the date such Lender or the Agent
makes such demand.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment to the
extent such a receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Agent. In the case of any payment
hereunder or under the Notes or any other documents to be delivered hereunder by
or on behalf of the Borrower through an account or branch outside the United
States or by or on behalf of the Borrower by a payor that is not a United States
person, if the Borrower determines that no Taxes are payable in respect thereof,
the Borrower shall furnish, or shall cause such payor to furnish, to the Agent,
at such address, an opinion of counsel acceptable to the Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and subsection
(e), the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
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(e) Each Lender organized under the laws of a jurisdiction outside the
United States (i) on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, (ii) at any time that a change of circumstances occurs of which such
Lender is aware that makes any information on the form so provided incorrect and
(iii) from time to time thereafter as reasonably requested in writing by the
Borrower (but only so long as such Lender remains lawfully able to do so), shall
provide each of the Agent and the Borrower with two original Internal Revenue
Service Forms W-8BEN or W-8ECI or other relevant Form W-8, as appropriate, or
any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or the
Notes. Further, each such Lender that is not an exempt recipient listed in
Section 6049(b)(4) of the Internal Revenue Code shall provide the Borrower and
the Agent with the appropriate Internal Revenue Service Form W-8 or Internal
Revenue Service Form W-9, as appropriate, or other successor form prescribed by
the Internal Revenue Service, certifying that it is exempt from United States
back-up withholding. If the form provided by a Lender at the time such Lender
first becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of the Assignment
and Acceptance pursuant to which a Lender assignee becomes a party to this
Agreement, the Lender assignor was entitled to payments under subsection (a) in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender assignee on such date. If any form or document referred to
in this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service Form W-8BEN or W-8ECI, that the Lender
reasonably considers to be confidential, the Lender shall give notice thereof to
the Borrower and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form, certificate or other document
described in Section 2.14(e) (other than if such failure is due to a change in
law, or in the interpretation or application thereof, occurring subsequent to
the date on which a form, certificate or other document originally was required
to be provided, or if such form, certificate or other document otherwise is not
required under subsection (e) above), such Lender shall not be entitled to gross
up under Section 2.14(a) and shall not be entitled to indemnification under
Section 2.14(a) or (c) with respect to Taxes imposed by the United States by
reason of such failure; provided, however, that should a Lender become subject
to Taxes because of its failure to deliver a form, certificate or other document
required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.14 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Advances owing to it (other than as
payment of an Advance made by an Issuing Bank pursuant to the first sentence of
Section 2.03(c) or pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its
Ratable Share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Advances owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise
22
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.16. Evidence of Debt. (a) 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 Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower
(with a copy of such notice to the Agent) to the effect that a Note is required
or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a Note
payable to the order of such Lender in a principal amount up to the Revolving
Credit Commitment of such Lender.
(b) The Register maintained by the Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assignment and Acceptance delivered to and accepted by it, (iii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iv) the amount of any sum received by
the Agent from the Borrower hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Lender in its account or accounts pursuant
to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrower under this Agreement.
SECTION 2.17. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
general corporate purposes of the Borrower.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied:
(a) Nothing shall have come to the attention of the Lenders during the
course of their due diligence investigation to lead them to believe that
the Information Memorandum was or has become misleading, incorrect or
incomplete in any material respect; without limiting the generality of the
foregoing, the Lenders shall have been given such access to the management,
records, books of account, contracts and properties of the Borrower and its
Subsidiaries as they shall have requested.
(b) The Borrower shall have paid all accrued fees and agreed expenses
of the Agent and the Lenders and the reasonable accrued fees and expenses
of counsel to the Agent that have been invoiced at least one Business Day
prior to the Effective Date.
(c) On the Effective Date, the following statements shall be true and
the Agent shall have received for the account of each Lender a certificate
signed by a duly authorized officer of the Borrower, dated the Effective
Date, stating that:
(i) The representations and warranties contained in Section 4.01
are correct on and as of the Effective Date, and
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(ii) No event has occurred and is continuing that constitutes a
Default.
(d) The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the
Agent and (except for the Notes) in sufficient copies for each Lender:
(i) The Notes, payable to the order of the Lenders to the extent
requested by any Lender pursuant to Section 2.16.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement and the Notes, and
of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and the
Notes.
(iii) A certificate of the Secretary or an Associate Secretary of
the Borrower certifying the names and true signatures of the officers
of the Borrower authorized to sign this Agreement and the Notes and
the other documents to be delivered hereunder.
(iv) A favorable opinion of Xxxxx & Xxxxxx L.L.P., counsel for
the Borrower, substantially in the form of Exhibit D hereto and as to
such other matters as any Lender through the Agent may reasonably
request.
(v) A favorable opinion of Shearman & Sterling LLP, counsel for
the Arrangers, in form and substance satisfactory to the Arrangers.
(e) The Borrower shall have terminated the commitments, and paid in
full all advances, interest, fees and other amounts outstanding, under the
364-Day Credit Agreement dated as of May 30, 2003, as amended, among the
Borrower, the lenders parties thereto and Citibank, as agent, and each of
the Lenders that is a party to such credit facility hereby waives, upon
execution of this Agreement, the three Business Days' notice required by
Section 2.04 of said Credit Agreement relating to the termination of
commitments thereunder.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Lender to make an Advance (other than an Advance made by
any Issuing Bank or any Lender pursuant to Section 2.03(c)) on the occasion of
each Borrowing and the obligation of each Issuing Bank to issue a Letter of
Credit shall be subject to the conditions precedent that the Effective Date
shall have occurred and on the date of such Borrowing or such issuance (as the
case may be) the following statements shall be true (and each of the giving of
the applicable Notice of Borrowing or Notice of Issuance, and the acceptance by
the Borrower of the proceeds of such Borrowing shall constitute a representation
and warranty by the Borrower that on the date of such Borrowing or date of such
issuance such statements are true):
(a) the representations and warranties contained in Section 4.01
(other than Section 4.01(l), and in the case of a Borrowing the proceeds of
which are used to refund commercial paper, Sections 4.01(e)(ii), (f)(ii)
and (j)) are correct on and as of such date, before and after giving effect
to such Borrowing or issuance and to the application of the proceeds
therefrom, as though made on and as of such date,
(b) no event has occurred and is continuing, or would result from such
Borrowing or such issuance or from the application of the proceeds
therefrom, that constitutes a Default,
(c) before and after giving effect to such Borrowing or such issuance
and to the application of the proceeds therefrom, as though made on and as
of such date, to the extent that the applicable Borrowings are required to
be treated as short-term debt pursuant to the 1984 Order, the aggregate
amount of Authorized Short Term Debt (as such term is defined in the 1984
Order) including the aggregate
24
principal amount of all outstanding Advances that are required to be
treated by the Borrower as short-term debt does not exceed 7% of the
Borrower's total capitalization,
(d) to the extent that the applicable Borrowings or issuances are
required to be treated as long-term debt pursuant to the 1986 Order, the
aggregate amount of Continuing Debt (as such term is defined in the 1986
Order) including the aggregate principal amount of all outstanding Advances
and Letters of Credit that are required to be treated by the Borrower as
long-term debt has not exceeded, during any period of more than 30 days
immediately prior to and including the date of the Borrowing or issuance,
and will not exceed, during any period of more than 30 days at any time
such Borrowing or Letter of Credit is outstanding, $2,698,917,000, and
(e) before and after giving effect to such Borrowing or such issuance
and to the application of the proceeds therefrom, as though made on and as
of such date, the Indebtedness of the Borrower does not exceed that
permitted by (i) applicable resolutions of the Board of Directors of the
Borrower or (ii) applicable Arizona laws, rules or regulations;
provided, however, that if the 1984 Order or the 1986 Order is superseded
or modified by any Subsequent Order, the Borrower may, in consultation with
the Lenders, revise the Notices of Borrowing or Notice of Issuance to the
extent necessary to take into account any applicable limitations on the
incurrence or maintenance of Indebtedness, so long as any revised Notice of
Borrowing or Notice of Issuance (x) demonstrates that such Borrowing or
issuance is authorized by the Subsequent Order and (y) is accompanied by a
favorable opinion of Xxxxx & Xxxxxx L.L.P. or such other counsel to the
Borrower as the Borrower may select and the Agent and the Required Lenders
may approve, concerning such Subsequent Order, in form and substance
satisfactory to the Lenders.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower
designates as the proposed Effective Date, specifying its objection thereto. The
Agent shall promptly notify the Lenders and the Borrower of the occurrence of
the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each of the Borrower and each Material Subsidiary: (i) is a
corporation or other entity duly organized and validly existing under the
laws of the jurisdiction of its incorporation or organization; (ii) has all
requisite corporate or if the Material Subsidiary is not a corporation,
other comparable power necessary to own its assets and carry on its
business as presently conducted; (iii) has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as presently conducted, unless the failure to have
any such license, authorization, consent or approval would not have a
Material Adverse Effect and except as disclosed to the Lenders in the SEC
Reports or by means of a letter from the Borrower to the Lenders delivered
prior to the execution and delivery of this Agreement; and (iv) is
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where
failure so to qualify would have a Material Adverse Effect.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes to be delivered by it, and the consummation of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and do
not
25
(i) contravene the Borrower's articles of incorporation or by-laws, (ii)
contravene any law or any contractual restriction binding on or affecting
the Borrower or (iii) cause the creation or imposition of any Lien upon the
assets of the Borrower or any Material Subsidiary.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Borrower of this
Agreement or the Notes to be delivered by it, except for the 1984 Order and
the 1986 Order, both of which have been duly obtained and are in full force
and effect (except to the extent that the 1986 Order modifies or supersedes
the 1984 Order with respect to long-term debt).
(d) This Agreement has been, and each of the Notes to be delivered by
it when delivered hereunder will have been, duly executed and delivered by
the Borrower. This Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their respective terms,
subject, however, to the application by a court of general principles of
equity and to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally.
(e) (i) The Consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 2003, and the related
Consolidated statements of income and cash flows of the Borrower and its
Consolidated Subsidiaries for the fiscal year then ended, accompanied by an
opinion thereon of Deloitte & Touche LLP, independent public accountants,
and the Consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at March 31, 2004, and the related Consolidated statements
of income and cash flows of the Borrower and its Consolidated Subsidiaries
for the three months then ended, duly certified by the chief financial
officer of the Borrower, copies of which have been furnished to each
Lender, fairly present in all material respects, subject, in the case of
said balance sheet at March 31, 2004, and said statements of income and
cash flows for the three months then ended, to year-end audit adjustments,
the Consolidated financial condition of the Borrower and its Consolidated
Subsidiaries as at such dates and the Consolidated results of the
operations of the Borrower and its Consolidated Subsidiaries for the
periods ended on such dates, all in accordance with GAAP (except as
disclosed therein). (ii) Except as disclosed in the SEC Reports or by means
of a letter delivered to the Lenders prior to the execution and delivery of
this Agreement, since December 31, 2003, there has been no Material Adverse
Change.
(f) There is no pending or, to the knowledge of an Authorized Officer
of the Borrower, threatened action, suit, investigation, litigation or
proceeding, including, without limitation, any Environmental Action,
affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator that (i) purports to affect the legality,
validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby or (ii) would be
reasonably likely to have a Material Adverse Effect (except as disclosed to
the Lenders in the SEC Reports or by means of a letter from the Borrower to
the Lenders delivered prior to the execution and delivery of this
Agreement) and there has been no adverse change in the status, or financial
effect on the Borrower or any of its Subsidiaries, of such disclosed
litigation that would be reasonably likely to have a Material Adverse
Effect.
(g) No proceeds of any Advance will be used to acquire any equity
security not issued by the Borrower of a class that is registered pursuant
to Section 12 of the Securities Exchange Act of 1934.
(h) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning
of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to purchase or carry
any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
(i) The Borrower and its Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any of
its Subsidiaries, except to the extent that (i) such taxes are being
contested in good faith and by appropriate proceedings and
26
that appropriate reserves for the payment thereof have been maintained by
the Borrower and its Subsidiaries in accordance with GAAP or (ii) the
failure to make such filings or such payments is not likely to have a
Material Adverse Effect. The charges, accruals and reserves on the books of
the Borrower and its Material Subsidiaries as set forth in the most recent
financial statements of the Borrower delivered to the Lenders pursuant to
Section 4.01(e) or Section 5.01(h)(i) or (ii) hereof in respect of taxes
and other governmental charges are, in the opinion of the Borrower,
adequate.
(j) The operations and properties of the Borrower and its Subsidiaries
comply in all material respects with all Environmental Laws, the
noncompliance with which would have a Material Adverse Effect, except as
set forth in the SEC Reports or by means of a letter from the Borrower to
the Lenders delivered prior to the execution and delivery of this
Agreement.
(k) Set forth on Schedule 4.01(k) hereto (as such schedule may be
modified from time to time by the Borrower by written notice to the Agent)
is a complete and accurate list of all the Subsidiaries of the Borrower
and, as of the Effective Date, no such Subsidiary of the Borrower is a
Material Subsidiary.
(l) Set forth on Schedule 4.01(l) hereto is a complete and accurate
list identifying any Indebtedness of the Borrower outstanding in a
principal amount equal to or exceeding $5,000,000 and which is not
described in the financial statements referred to in Section 4.01(e).
(m) The Borrower is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) Compliance with Laws, Etc. (i) Comply, and cause each of its
Material Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders of governmental or
regulatory authorities, such compliance to include, without limitation,
compliance with ERISA and Environmental Laws, unless the failure to so
comply would not have a Material Adverse Effect and (ii) comply at all
times with the 1984 Order, the 1986 Order, any Subsequent Order, Arizona
Revised Statutes, Section 40-302 and all similar or comparable Arizona
laws, rules or regulations relating to the incurrence or maintenance of
Indebtedness by the Borrower, unless the failure to so comply could not
affect the validity or enforceability of the indebtedness of the Borrower
pursuant to this Agreement.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
all taxes, assessments and governmental charges or levies imposed upon it
or upon its property; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or levy (i) that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained in accordance with GAAP or (ii) if the failure to pay such tax,
assessment, charge or levy is not likely to have a Material Adverse Effect.
(c) Maintenance of Insurance. Maintain, and cause each of its
Material Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates; provided, however, that the Borrower and its
Subsidiaries may self-insure to the same extent as other companies engaged
in similar businesses and owning similar properties in the same general
areas in which the Borrower or such Subsidiary operates and to the extent
consistent with prudent business practice.
27
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Material Subsidiaries to preserve and maintain, its
corporate existence, rights (charter and statutory) and franchises (other
than "franchises" as described in Arizona Revised Statutes, Section 40-283
or any successor provision) reasonably necessary in the normal conduct of
its business, unless the failure to maintain such rights or privileges
would not have a Material Adverse Effect, and use its commercially
reasonable efforts to preserve and maintain such franchises reasonably
necessary in the normal conduct of its business, except that (i) the
Borrower from time to time may make minor extensions of its lines, plants,
services or systems prior to the time a related franchise, certificate of
convenience and necessity, license or permit is procured, (ii) from time to
time communities served by the Borrower may become incorporated and
considerable time may elapse before such a franchise is procured, (iii)
certain such franchises may have expired prior to the renegotiation
thereof, (iv) certain minor defects and exceptions may exist which,
individually and in the aggregate, are not material and (v) certain
franchises, certificates, licenses and permits may not be specific as to
their geographical scope; provided, however, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted under
Section 5.02(b).
(e) Visitation Rights. At any reasonable time and from time to time,
permit and cause each of its Subsidiaries to permit the Agent or any of the
Lenders or any agents or representatives thereof, to examine and make
copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any of its Subsidiaries, and to discuss
the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors; provided, however,
that the Borrower and its Subsidiaries reserve the right to restrict access
to any of its properties in accordance with reasonably adopted procedures
relating to safety and security; and provided further that the costs and
expenses incurred by such Lender or agents or representatives in connection
with any such examinations, copies, abstracts, visits or discussions shall
be, upon the occurrence and during the continuation of a Default, for the
account of the Borrower and, in all other circumstances, for the account of
such Lender.
(f) Keeping of Books. Keep, and cause each of its Material
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets
and business of the Borrower and each such Subsidiary in accordance with
GAAP.
(g) Maintenance of Properties, Etc. Keep, and cause each Material
Subsidiary to keep, all property useful and necessary in its business in
good working order and condition (ordinary wear and tear excepted), it
being understood that this covenant relates only to the working order and
condition of such properties and shall not be construed as a covenant not
to dispose of properties.
(h) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 60 days after
the end of each of the first three fiscal quarters of each fiscal year
of the Borrower, (A) for each such fiscal quarter of the Borrower,
statements of income and cash flows of the Borrower and its
Consolidated Subsidiaries for such fiscal quarter setting forth in
each case in comparative form the corresponding figures for the
corresponding fiscal quarter in the preceding fiscal year and (B) for
the period commencing at the end of the previous fiscal year and
ending with the end of each fiscal quarter, statements of income and
cash flows of the Borrower and its Consolidated Subsidiaries for such
period setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding
fiscal year; provided that so long as the Borrower remains subject to
the reporting requirements of the Securities Exchange Act of 1934, as
amended, the Borrower may provide, in satisfaction of the requirements
of this first sentence of this Section 5.01(h)(i), its report on Form
10-Q for such fiscal quarter. Each set of financial statements
provided under this Section 5.01(h)(i) shall be accompanied by a
certificate of an Authorized Officer, which certificate shall state
that said financial statements fairly present in all material respects
the financial condition and results of operations of the Borrower and
its Consolidated Subsidiaries in accordance with GAAP (except as
disclosed therein) as at the end of, and for, such period (subject to
normal year-end audit adjustments) and shall set forth reasonably
detailed calculations demonstrating compliance with Section 5.03;
28
(ii) as soon as available and in any event within 105 days after
the end of each fiscal year of the Borrower, statements of income and
cash flows of the Borrower and its Consolidated Subsidiaries for such
year and the related balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such year, setting forth in
each case in comparative form the corresponding figures for the
preceding fiscal year; provided that, so long as the Borrower remains
subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, the Borrower may provide, in satisfaction of the
requirements of this first sentence of this Section 5.01(h)(ii), its
report on Form 10-K for such fiscal year. Each set of financial
statements provided pursuant to this Section 5.01(h)(ii) shall be
accompanied by (A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that said financial statements fairly present in all material respects
the financial condition and results of operations of the Borrower and
its Consolidated Subsidiaries as at the end of, and for, such fiscal
year, in accordance with GAAP (except as disclosed therein) and (B) a
certificate of an Authorized Officer, which certificate shall set
forth reasonably detailed calculations demonstrating compliance with
Section 5.03;
(iii) as soon as possible and in any event within five days after
any officer of the Borrower knows of the occurrence of each Default
continuing on the date of such statement, a statement of an Authorized
Officer of the Borrower setting forth details of such Default and the
action that the Borrower has taken and proposes to take with respect
thereto;
(iv) promptly after the sending or filing thereof, copies of all
reports and registration statements that the Borrower or any
Subsidiary files with the Securities and Exchange Commission;
(v) promptly after an Authorized Officer becomes aware of the
commencement thereof, notice of all actions and proceedings before any
court, governmental agency or arbitrator affecting the Borrower or any
of its Subsidiaries of the type described in Section 4.01(f);
(vi) promptly after (A) any amendment or modification of the 1984
Order or the 1986 Order, (B) any amendment or modification of Arizona
Revised Statutes, Section 40-302, or the promulgation, amendment or
modification of any successor or similar statute, or (C) the
promulgation, amendment or modification of any Subsequent Order by the
Arizona Corporation Commission or any successor thereto, in any case
if such amendment, modification or promulgation could affect the
validity or enforceability of the indebtedness of the Borrower
pursuant to this Agreement, a copy thereof; and
(vii) such other information respecting the Borrower or any of
its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(i) Change in Nature of Business. Conduct the same general type of
business conducted on the date hereof.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Material Subsidiaries to create or suffer to exist, any Lien on or with
respect to any of its properties, whether now owned or hereafter acquired,
or assign, or permit any of its Material Subsidiaries to assign, any right
to receive income, other than:
(i) Permitted Liens,
(ii) Liens upon or in, or conditional sales agreements or other
title retention agreements with respect to, any real or personal
property acquired or held by the Borrower or any
29
Subsidiary in the ordinary course of business to secure the purchase
price of such property, or the construction of or improvements to such
property, or to secure Indebtedness incurred solely for the purpose of
financing the acquisition, construction or improvement of such
property to be subject to such Liens (including any Liens placed on
such property within 180 days after the latest of the acquisition,
completion of construction or improvement of such property), or Liens
existing on such property at the time of its acquisition (other than
any such Liens created in contemplation of such acquisition that were
not incurred to finance the acquisition of such property) or
extensions, renewals, refundings or replacements of any of the
foregoing for the same or a lesser amount, provided, however, that no
such Lien shall extend to or cover any properties of any character
other than the property being acquired, constructed or improved and
proceeds, improvements and replacements thereof and no such extension,
renewal, refunding or replacement shall extend to or cover any
properties not theretofore subject to the Lien being extended,
renewed, refunded or replaced,
(iii) assignments of the right to receive income, and Liens on
property, of a Person existing at the time such Person is merged into
or consolidated with the Borrower or any Subsidiary of the Borrower or
becomes a Subsidiary of the Borrower,
(iv) Liens on the leased interests in Unit 2 of the Palo Verde
Nuclear Generating Station and related rights if the Borrower
reacquires ownership in any of those interests or acquires any of the
equity or owner participants' interests in the trusts that hold title
to such leased interests, whether or not it also directly assumes the
Sale Leaseback Obligation Bonds, and Liens on the Borrower's interests
in the trusts that hold title to such leased interests and related
rights in the event that the Borrower acquires any of the equity or
owner participants' interests in such trusts pursuant to a "special
transfer" under the Borrower's existing Palo Verde Nuclear Generating
Station Unit 2 sale and leaseback transactions and any Liens resulting
or deemed to have resulted if the Unit 2 leases are required to be
accounted for as capital leases in accordance with GAAP,
(v) other assignments of the right to receive income and Liens
securing Indebtedness or claims in an aggregate principal amount not
to exceed 20% of the Borrower's total assets as stated on its balance
sheet for the year ended December 31, 2003 provided pursuant to
Section 4.01(e) hereof at any time outstanding, and
(vi) the replacement, extension or renewal of any Lien permitted
by clause (iii) or (iv) above upon or in the same property theretofore
subject thereto or the replacement, extension or renewal (without
increase in the amount or change in any direct or contingent obligor)
of the Indebtedness secured thereby.
(b) Mergers, Etc. Merge or consolidate with or into any Person, or
permit any of its Material Subsidiaries to do so, except that (i) any
Material Subsidiary of the Borrower may merge or consolidate with or into
any other Material Subsidiary of the Borrower, (ii) any Subsidiary of the
Borrower may merge into the Borrower or any Material Subsidiary of the
Borrower and (iii) the Borrower or any Material Subsidiary may merge with
any other Person so long as the Borrower or such Material Subsidiary is the
surviving corporation, provided, in each case, that no Default shall have
occurred and be continuing at the time of such proposed transaction or
would result therefrom.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Material Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any assets to any Person other than
the Borrower or any Subsidiary of the Borrower, except (i) sales of
inventory in the ordinary course of its business, (ii) in a transaction
authorized by subsection (b) of this Section, (iii) individual dispositions
occurring in the ordinary course of business which involve assets with a
book value not exceeding $5,000,000 and (iv) sales of assets during the
term of this Agreement having an aggregate book value not to exceed 20% of
the total of all assets properly appearing on the December 31, 2003 balance
sheet referred to in Section 4.01(e). No Lien on any asset will be
considered a sale, lease, transfer or disposition under this provision, but
will be governed exclusively under Section 5.02(a).
30
SECTION 5.03. Financial Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) Debt to Capitalization Ratio. Maintain a ratio of (i)
Consolidated Indebtedness to (ii) the sum of Consolidated Indebtedness
plus Consolidated Net Worth of not greater than 0.65 to 1.
(b) Consolidated Cash Coverage Ratio. Maintain for each twelve-month
period ending on the last day of each fiscal quarter (determined as of the
last day of such quarter) a Consolidated Cash Coverage Ratio of not less
than 2.00 to 1.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable; or the Borrower shall fail to pay any
interest on any Advance or make any other payment of fees or other amounts
payable under this Agreement or any Note within three Business Days after
the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein or by
the Borrower (or any of its officers) in any certificate or other document
delivered in connection with this Agreement shall prove to have been
incorrect in any material respect when made or deemed made; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d) (as to the corporate
existence of the Borrower), (h)(iii) or (h)(vi), 5.02 or 5.03, or (ii) the
Borrower shall fail to perform or observe any other term, covenant or
agreement contained in Section 5.01(e) if such failure shall remain
unremedied for 15 days after written notice thereof shall have been given
to the Borrower by the Agent or any Lender or (iii) the Borrower shall fail
to perform or observe any other term, covenant or agreement contained in
this Agreement on its part to be performed or observed if such failure
shall remain unremedied for 30 days after written notice thereof shall have
been given to the Borrower by the Agent or any Lender; or
(d) (i) The Borrower or any of its Material Subsidiaries shall fail to
pay any principal of or premium or interest on any Indebtedness that is
outstanding in a principal or notional amount of at least $5,000,000 in the
aggregate (but excluding Indebtedness outstanding hereunder), or fail to
pay an amount, or post collateral as contractually required in an amount,
of at least $5,000,000 in respect of any Hedge Agreement, of the Borrower
or such Material Subsidiary (as the case may be), in each case, when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness or Hedge Agreement;
(ii) any event of default shall exist under any agreement or instrument
relating to any such Indebtedness and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such event is to accelerate, or to permit the acceleration of,
the maturity of such Indebtedness; or
(e) The Borrower shall fail to pay any principal of or premium or
interest in respect of any operating lease in respect of which the payment
obligations of the Borrower have a present value of at least $25,000,000,
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any, specified in such
operating lease, if the effect of such failure is to terminate, or to
permit the termination of, such operating lease; or
31
(f) The Borrower or any of its Material Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Material Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed for a
period of 30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur;
or the Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection (f); or
(g) Unsatisfied judgments or orders for the payment of money in excess
of $5,000,000 in the aggregate shall be rendered against the Borrower or
unsatisfied judgments or orders for the payment of money in excess of
$25,000,000 in the aggregate shall be rendered against any of the
Borrower's Material Subsidiaries and there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
provided, however, that any such judgment or order shall not be an Event of
Default under this Section 6.01(g) if and for so long as and to the extent
that (i) the amount of such judgment or order is covered by a policy of
insurance between the defendant and the insurer covering payment thereof
and (ii) such insurer, which shall be rated at least "A" by A.M. Best
Company, has been notified of, and has not disputed the claim made for
payment of, the amount of such judgment or order; or
(h) (i) Any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting Stock of PWCC (or other securities
convertible into such Voting Stock) representing 30% or more of the
combined voting power of all Voting Stock of PWCC; or (ii) during any
period of up to 24 consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such 24-month period were
directors of PWCC shall cease for any reason (other than due to death or
disability) to constitute a majority of the board of directors of PWCC
(except to the extent that individuals who at the beginning of such
24-month period were replaced by individuals (x) elected by a majority of
the remaining members of the board of directors of PWCC or (y) nominated
for election by a majority of the remaining members of the board of
directors of the PWCC and thereafter elected as directors by the
shareholders of PWCC); or (iii) PWCC shall cease for any reason to own,
directly or indirectly 80% of the Voting Stock of the Borrower; or
(i) The Borrower or any of its ERISA Affiliates shall incur, or, with
respect to clause (i) of this Section 6.01(i), shall be reasonably likely
to incur liability in excess of $5,000,000 in the aggregate as a result of
one or more of the following: (i) the occurrence of any ERISA Event; (ii)
the partial or complete withdrawal of the Borrower or any of its ERISA
Affiliates from a Multiemployer Plan; or (iii) the reorganization or
termination of a Multiemployer Plan; and, in any such case, such
incurrence, in the determination of the Lenders, is material in relation to
the financial condition or the financial prospects of the Borrower and its
Subsidiaries, taken as a whole;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances (other than Advances by an Issuing
Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Banks to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Advances, all interest
thereon and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Advances, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Federal
Bankruptcy Code, (A) the obligation of each Lender to make Advances (other than
Advances by an Issuing Bank or a Lender pursuant to
32
Section 2.03(c)) and of the Issuing Banks to issue Letters of Credit shall
automatically be terminated and (B) the Advances, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
SECTION 6.02. Actions in Respect of Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the Agent may
with 8the consent, or shall at the request, of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, (a) pay to the Agent for the benefit of the Lenders in
same day funds at the Agent's office designated in such demand, for deposit in
the L/C Cash Deposit Account, an amount equal to the aggregate Available Amount
of all Letters of Credit then outstanding, provided, however, that in the event
of an actual or deemed entry of an order for relief with respect to the Borrower
under the Federal Bankruptcy Code, the Borrower will pay to the Agent on behalf
of the Lenders in same day funds , for deposit to the L/C Cash Deposit Account,
an amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower, or (b) make such other
arrangements in respect of the outstanding Letters of Credit as shall be
acceptable to the Required Lenders. If at any time the Agent determines that any
funds held in the L/C Cash Deposit Account are subject to any right or interest
of any Person other than the Agent and the Lenders or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Agent, pay to the Agent, as
additional funds to be deposited and held in the L/C Cash Deposit Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Deposit Account that
are free and clear of any such right and interest. Upon the drawing of any
Letter of Credit, to the extent funds are on deposit in the L/C Cash Deposit
Account, such funds shall be applied to reimburse the Issuing Banks to the
extent permitted by applicable law, and if so applied, then such reimbursement
shall be deemed a repayment of the corresponding Advance in respect of such
Letter of Credit. After all such Letters of Credit shall have expired or been
fully drawn upon and all other obligations of the Borrower hereunder and under
the Notes shall have been paid in full, the balance, if any, in such L/C Cash
Deposit Account shall be promptly returned to the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender (in its
capacities as a Lender and Issuing Bank, as applicable) hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
Lender that made any Advance as the holder of the Indebtedness resulting
therefrom until the Agent receives and accepts an Assignment and Acceptance
entered into by such Lender, as assignor, and an Eligible Assignee, as assignee,
as provided in Section 8.07; (ii) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance, observance or satisfaction of any of the terms, covenants or
conditions of this Agreement on the part of the
33
Borrower or the existence at any time of any Default or to inspect the property
(including the books and records) of the Borrower; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, this Agreement or any other instrument or document furnished pursuant
hereto; and (vi) shall incur no liability under or in respect of this Agreement
by acting upon any notice, consent, certificate or other instrument or writing
(which may be by facsimile) believed by it to be genuine and signed or sent by
the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and any Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders. The Agent
shall have no duty to disclose any information obtained or received by it or any
of its Affiliates relating to the Borrower or any of its Subsidiaries to the
extent such information was obtained or received in any capacity other than as
Agent.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
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 Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender severally agrees to
indemnify the Agent (to the extent not promptly reimbursed by the Borrower) from
and against such Lender's Ratable Share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement
(collectively, the "Indemnified Costs"), provided that no Lender shall be liable
for any portion of the Indemnified Costs resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its Ratable Share
of any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Borrower. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05
applies whether any such investigation, litigation or proceeding is brought by
the Agent, any Lender or a third party.
(b) Each Lender severally agrees to indemnify the Issuing Banks (to
the extent not promptly reimbursed by the Borrower) from and against such
Lender's Ratable Share of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against any such Issuing Bank in any way relating to or arising out of this
Agreement or any action taken or omitted by such Issuing Bank hereunder or in
connection herewith; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Issuing
Bank's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse any such Issuing Bank promptly upon
demand for its Ratable Share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
8.04, to the extent that such Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrower.
(c) The failure of any Lender to reimburse the Agent or any Issuing
Bank promptly upon demand for its Ratable Share of any amount required to be
paid by the Lenders to the Agent as provided herein shall
34
not relieve any other Lender of its obligation hereunder to reimburse the Agent
or any Issuing Bank for its Ratable Share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse the Agent or any
Issuing Bank for such other Lender's Ratable Share of such amount. Without
prejudice to the survival of any other agreement of any Lender hereunder, the
agreement and obligations of each Lender contained in this Section 7.05 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the Notes. Each of the Agent and each Issuing Bank agrees to
return to the Lenders their respective Ratable Shares of any amounts paid under
this Section 7.05 that are subsequently reimbursed by the Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent approved, so long as no Event of Default has occurred and is
continuing, by the Borrower, which consent shall not be unreasonably withheld or
delayed. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 7.07. Other Agents. Each Lender hereby acknowledges that
neither the documentation agent nor any other Lender designated as any "Agent"
on the signature pages hereof has any liability hereunder other than in its
capacity as a Lender.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, (b) increase the
Commitments of the Lenders, (c) reduce the principal of, or interest on, the
Advances or any fees or other amounts payable hereunder due to such Lenders, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Advances or any fees payable hereunder due to such Lenders, (e) change the
percentage of the Revolving Credit Commitments or of the aggregate unpaid
principal amount of the Advances, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder or (f)
amend this Section 8.01; and provided further that (x) no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement or any Note and (y) no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Banks in addition to the
Lenders required above to take such action, adversely affect the rights or
obligations of the Issuing Banks in their capacities as such under this
Agreement.
SECTION 8.02. Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including facsimile
communication) and mailed, faxed or delivered or (y) as and to the extent set
forth in Section 8.02(b) and in the proviso to this Section 8.02(a), if to the
Borrower, at its address at X.X. Xxx 00000, Xxxxxxx, Xxxxxxx 00000-0000,
Attention: Treasurer; if to any Initial Lender, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender, at its
Domestic Lending Office specified in the Assignment and Acceptance pursuant to
which it became a Lender; and if to the Agent, at its address at Xxx Xxxxx Xxx,
Xxx Xxxxxx, Xxxxxxxx 00000, Attention: Bank Loan Syndications Department; or, as
to the Borrower or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties and, as to each other party,
at such other address as shall be designated by such party in a written notice
to
35
the Borrower and the Agent, provided that materials required to be delivered
pursuant to Section 5.01(h)(i), (ii) and (iv) shall be delivered to the Agent as
specified in Section 8.02(b). All such notices and communications shall, when
mailed, faxed or e-mailed, be effective when deposited in the mails, faxed or
confirmed by e-mail, respectively, except that notices and communications to the
Agent pursuant to Article II, III or VII shall not be effective until received
by the Agent. Delivery by facsimile of an executed counterpart of any amendment
or waiver of any provision of this Agreement or the Notes or of any Exhibit
hereto to be executed and delivered hereunder shall be effective as delivery of
a manually executed counterpart thereof.
(b) So long as Citibank or any of its Affiliates is the Agent,
materials required to be delivered pursuant to Section 5.01(h)(i), (ii) and (iv)
shall be delivered to the Agent in an electronic medium in a format acceptable
to the Agent and the Lenders by e-mail at xxxxxxxxxxxxxxx@xxxxxxxxx.xxx. The
Borrower agrees that the Agent may make such materials, as well as any other
written information, documents, instruments and other material relating to the
Borrower, any of its Subsidiaries or any other materials or matters relating to
this Agreement, the Notes or any of the transactions contemplated hereby
(collectively, the "Communications") available to the Lenders by posting such
notices on Intralinks or a substantially similar electronic system (the
"Platform"). The Borrower acknowledges that (i) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided "as is" and "as available" and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the Agent
or any of its Affiliates in connection with the Platform.
(c) Each Lender agrees that notice to it (as provided in the next
sentence) (a "Notice") specifying that any Communications have been posted to
the Platform shall constitute effective delivery of such information, documents
or other materials to such Lender for purposes of this Agreement; provided that
if requested by any Lender the Agent shall deliver a copy of the Communications
to such Lender by email, facsimile or mail. Each Lender agrees (i) to notify the
Agent in writing of such Lender's e-mail address to which a Notice may be sent
by electronic transmission (including by electronic communication) on or before
the date such Lender becomes a party to this Agreement (and from time to time
thereafter to ensure that the Agent has on record an effective e-mail address
for such Lender) and (ii) that any Notice may be sent to such e-mail address.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the
administration, modification and amendment of this Agreement, the Notes and the
other documents to be delivered hereunder, including, without limitation, the
reasonable fees and expenses of counsel for the Agent with respect thereto and
with respect to advising the Agent as to its rights and responsibilities under
this Agreement. The Borrower further agrees to pay on demand all costs and
expenses of the Agent and the Lenders, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, reasonable fees and expenses of counsel for the
Agent and each Lender in connection with the enforcement of rights under this
Section 8.04(a).
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (i) the Notes, this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Advances or (ii) the actual or alleged presence of Hazardous Materials on
any property of the Borrower or any of its
36
Subsidiaries or any Environmental Action relating in any way to the Borrower or
any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, equityholders or creditors
or an Indemnified Party or any other Person, whether or not any Indemnified
Party is otherwise a party thereto, unless such litigation or proceeding is
brought by the Borrower and the Borrower prevails, and whether or not the
transactions contemplated hereby are consummated. The Borrower also agrees not
to assert any claim for special, indirect, consequential or punitive damages
against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, arising out of or otherwise relating to the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.08(d) or (e), 2.10 or 2.12,
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, or by an Eligible Assignee to a Lender other than on the last day
of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a result of a
demand by the Borrower pursuant to Section 8.07(a), the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and the Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Section 2.01, which shall only become effective upon satisfaction of
the conditions precedent set forth in Section 3.01) when it shall have been
executed by the Borrower and the Agent and when the Agent shall have been
notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
and, if demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.11 or 2.14) upon at least five Business Days' notice to such Lender
and the Agent, will assign to one or more Persons all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Credit Commitment, its Unissued Letter of Credit
Commitment, the Advances owing to it, its participations in Letters of Credit
and the Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all rights
and obligations under this Agreement, (ii) except in the case of an assignment
to a Person
37
that, immediately prior to such assignment, was a Lender or an assignment of all
of a Lender's rights and obligations under this Agreement, the amount of the
Revolving Credit Commitment or Unissued Letter of Credit Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof unless the Borrower and the Agent otherwise agree, (iii) each
such assignment shall be to an Eligible Assignee, (iv) each such assignment made
as a result of a demand by the Borrower pursuant to this Section 8.07(a) shall
be arranged by the Borrower after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower pursuant to this
Section 8.07(a) unless and until such Lender shall have received one or more
payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement, and (vi) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,500 payable by the parties
to each such assignment, provided, however, that in the case of each assignment
made as a result of a demand by the Borrower, such recordation fee shall be
payable by the Borrower except that no such recordation fee shall be payable in
the case of an assignment made at the request of the Borrower to an Eligible
Assignee that is an existing Lender, and (vii) any Lender may, without the
approval of the Borrower and the Agent, assign all or a portion of its rights to
any Lender or to any of its or their Affiliates that is not a natural person.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.11, 2.14 and 8.04
to the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations (other than its obligations
under Section 7.05 to the extent any claim thereunder relates to an event
arising prior such assignment) under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto). For the avoidance of doubt, no assignment by an Issuing Bank
pursuant to this Section 8.07(a) shall affect its rights and obligations in its
capacity as an Issuing Bank with respect to any Letters of Credit issued by it
and than outstanding.
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are required to be performed
by it as a Lender.
38
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower.
(d) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Advances owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Each Lender may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and/or obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and any Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the 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 and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Borrower Information relating to the Borrower received by
it from such Lender as provided in Section 8.08.
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Bank") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Bank to
the Agent and the Borrower, the option to provide to the Borrower all or any
part of any Advance that such Granting Bank 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 Advance, (ii) if an SPC
elects not to exercise such option or otherwise fails to provide all or any part
of such Advance, the Granting Bank shall be obligated, as a principal and not as
a surety, to make such Advance pursuant to the terms hereof and (iii) all voting
rights under this Agreement, except with respect to the consent contemplated in
the last sentence of this Section 8.07(g), shall be exercised by the Granting
Bank, all payments hereunder shall continue to be made to the Granting Bank as
agent for its SPC and the Granting Bank will continue to be the sole Lender for
all purposes of this Agreement except as expressly provided in this Section
8.07(g). The making of an Advance by an SPC hereunder shall utilize the
Commitment of the Granting Bank to the same extent, and as if, such Advance were
made by such Granting Bank. 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 Bank). 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 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 contained in this Section 8.07, any SPC may (i) with notice to, but
without the prior written consent of, the Borrower
39
and the Agent and without paying any processing fee therefor, assign all or a
portion of its interests in any Advances to the Granting Bank or to any
financial institutions (consented to by the Borrower and Agent) providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Advances and (ii) disclose on a confidential basis any
non-public information relating to its Advances to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC. Notwithstanding the foregoing, neither such grant made
hereunder nor the holding of interest hereunder by any SPC shall increase any of
the Borrower's obligations and/or liabilities (including without limitation tax
liabilities and other indemnities) which the Borrower has but for such grant or
holding of interest ("SPC Liabilities") and the Granting Bank shall hold the
Borrower harmless and indemnify the Borrower from and against any and all SPC
Liabilities. This Section may not be amended without the written consent of each
SPC affected thereby.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and any Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender may
disclose to any Person any confidential, proprietary or non-public information
of the Borrower furnished to the Agent or the Lenders by the Borrower (such
information being referred to collectively herein as the "Borrower
Information"), except that each of the Agent and each of the Lenders may
disclose Borrower Information (i) to its and its affiliates' employees,
officers, directors, agents and advisors (it being understood that the Persons
to whom such disclosure is made will be informed of the confidential nature of
such Borrower Information and instructed to keep such Borrower Information
confidential on substantially the same terms as provided herein), (ii) to the
extent requested by any regulatory authority, (iii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (iv)
to any other party to this Agreement, (v) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (vi) subject to an agreement containing
provisions substantially the same as those of this Section 8.08, to any assignee
or participant or prospective assignee or participant, (vii) to the extent such
Borrower Information (A) is or becomes generally available to the public on a
non-confidential basis other than as a result of a breach of this Section 8.08
by the Agent or such Lender, or (B) is or becomes available to the Agent or such
Lender on a nonconfidential basis from a source other than the Borrower
(provided that the source of such information was not known by the recipient
after inquiry to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Borrower or
any other Person with respect to such information) and (viii) with the consent
of the Borrower.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
hereby submits to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the Notes, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or the Notes
in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the Notes in any New
York State or federal
40
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.12. No Liability of the Issuing Banks The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither an
Issuing Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against such Issuing Bank, and such Issuing Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) such Issuing Bank's willful misconduct or gross negligence as
determined in a final, non-appealable judgment by a court of competent
jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of such Letter of Credit or (ii) such Issuing
Bank's willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary.
SECTION 8.13. Patriot Act. Each Lender 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 "Act"), it is required to
obtain, verify and record information that identifies each borrower, guarantor
or grantor (the "Loan Parties"), which information includes the name and address
of each Loan Party and other information that will allow such Lender to identify
such Loan Party in accordance with the Act.
41
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the Agent
and the Lenders hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the Notes or the
actions of the Borrower, the Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
ARIZONA PUBLIC SERVICE COMPANY
By /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Title: Vice President and Treasurer
CITIBANK, N.A.,
as Agent
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Title: Vice President
Letter of Credit Commitment
$75,000,000 KEYBANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Title: Vice President
$75,000,000 CITIBANK, N.A.
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Title: Vice President
Revolving Credit Commitment
Joint Lead Arrangers
$37,500,000 CITIBANK, N.A.
By /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Title: Vice President
$37,500,000 KEYBANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxx
-------------------------------------
Title: Vice President
Co-Documentation Agents
$30,000,000 BANK OF AMERICA N.A.
By /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Title: Managing Director
$30,000,000 THE BANK OF NEW YORK
By /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
42
Lenders
$20,000,000 BANK ONE, NA
By /s/ Xxxx Xxx Xxxx
-------------------------------------
Title: Director
$20,000,000 BARCLAYS BANK PLC
By /s/ Sydney X. Xxxxxx
-------------------------------------
Title: Director
$20,000,000 CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch
By /s/ Xxxxxxx Xx
-------------------------------------
Title: Director
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Title: Associate
$20,000,000 XXXXXX BROTHERS BANK, FSB.
By /s/ Xxxx X. Xxxxxx
-------------------------------------
Title:
$20,000,000 MELLON BANK, N.A.
By /s/ Xxxx X. Xxxxxx
-------------------------------------
Title: Vice President
$20,000,000 UBS LOAN FINANCE LLC
By /s/ Xxxxx Xxxx
-------------------------------------
Title: Associate Director
By /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Title: Associate Director
$20,000,000 UNION BANK OF CALIFORNIA
By /s/ Xxxxxx Xxxxx
-------------------------------------
Title: Vice President
$20,000,000 XXXXX FARGO BANK, N.A.
By /s/ Ling Li
-------------------------------------
Title: Vice President
$15,000,000 BANCA DI ROMA SPA
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: Vice President
By /s/ Xxxx Xxxxxxxx
----------------------------
SVP & Manager
43
$15,000,000 U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Vice President
$325,000,000 Total of the Revolving Credit
Commitments
44
SCHEDULE I
ARIZONA PUBLIC SERVICE COMPANY
THREE-YEAR CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
Name of Initial Lender Domestic Lending Office Eurodollar Lending Office
---------------------- ----------------------- -------------------------
Banca di Roma SpA
Bank of America, N.A. 000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
TX1-492-14-05 TX1-492-14-05
Dallas, TX 75202 Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx Attn: Xxxxxx Xxxxxxx
T: 000 000-0000 T: 000 000-0000
F: 000 000-0000 F: 000 000-0000
The Bank of Xxx Xxxx Xxx Xxxx Xxxxxx Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxxx D'Xxxxx Attn: Xxxxx D'Xxxxx
T: 000 000-0000 T: 000 000-0000
F: 212 635--7923 F: 212 635--7923
Bank One, NA
Barclays Bank PLC 000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Attn:
T: 212 412- T: 212 412-
F: 000 000 0000 F: 000 000 0000
Citibank, N.A. Two Xxxxx Xxx Xxx Xxxxx Xxx
Xxx Xxxxxx, XX 00000 Xxx Xxxxxx, XX 00000
Credit Suisse First Boston, One Madison Avenue One Madison Avenue
acting through its Cayman Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Islands Branch Attn: Xx Xxxxxxxxx Attn: Xx Xxxxxxxxx
T: 000 000-0000 T: 000 000-0000
F: 000 000-0000 F: 000 000-0000
KeyBank National Association Attn: Xxxxx Xxxxxxx Attn: Xxxxx Xxxxxxx
T: 000 000-0000 T: 000 000-0000
F: 000 000-0000 F: 000 000-0000
Xxxxxx Brothers Bank, FSB 000 Xxxxxxx Xxxxxx, 000 Xxxxxxx Xxxxxx,
00xx Xxxxx 00xx Xxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxx Attn: Xxxxx Xxxxxx
T: 000 000-0000 T: 000 000-0000
F: 000 000-0000 F: 000 000-0000
Mellon Bank, N.A. 000 Xxxxxxx Xxxx Xxxxx 000 Xxxxxxx Xxxx Place
Room 153-103 Room 153-103
Pittsburgh, PA 15259 Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx Attn: Xxxxxxx Xxxx
T: 000 000-0000 T: 412 234-4710
F: 000 000-0000 F: 000 000-0000
UBS Loan Finance LLC 000 Xxxxxxxxxx Xxxxxxxxx 000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Xxxxxxx Saint Attn: Xxxxxxx Saint
Union Bank of California 000 X. Xxxxxxxx Xxxxxx 000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxx Attn: Xxxxxx Xxxx
T: 000 000-0000 T: 000 000-0000
F: 000 000-0000 F: 000 000-0000
U.S. Bank National 000 X.X. Xxx Xxxxxx, XX-0 000 X.X. Xxx Xxxxxx, XX-0
Association Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx Attn: Xxxxxx Xxxxxxxx
T: 000 000-0000 T: 000 000-0000
F: 000 000-0000 F: 000 000-0000
Xxxxx Fargo Bank, N.A. 000 Xxxxxxxx Xxxx., 000 Xxxxxxxx Blvd.,
00xx Xxxxx 00xx Xxxxx
XXX X0000-000 MAC X0000-000
Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx Xxxxx Attn: Xxxxxxx Xxxx Xxxxx
T: 000 000-0000 T: 000 000-0000
F: 000 000-0000 F: 000 000-0000
2
SCHEDULE 4.01(k)
SUBSIDIARIES
APS Foundation, Inc.
Bixco, Inc.
Axiom Power Solutions, Inc.
PWENewco, Inc.
SCHEDULE 4.01(1)
INDEBTEDNESS
none
EXHIBIT A - FORM OF
PROMISSORY NOTE
U.S.$ _______________ Dated: __________, 200_
FOR VALUE RECEIVED, the undersigned, ARIZONA PUBLIC SERVICE COMPANY,
an Arizona corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its Applicable
Lending Office on the Termination Date (as defined in the Credit Agreement
referred to below) the principal sum of U.S.$[amount of the Lender's Commitment
in figures] or, if less, the aggregate principal amount of the Advances made by
the Lender to the Borrower pursuant to the Three-Year Credit Agreement dated as
of May 21, 2004 among the Borrower, the Lender and certain other lenders parties
thereto, Citigroup Global Markets Inc. and KeyBank National Association, as
joint lead arrangers, KeyBank National Association, as syndication agent, Bank
of America, N.A. and The Bank of New York, as co-documentation agents, and
Citibank, N.A. as Agent for the Lender and such other lenders (as amended or
modified from time to time, the "Credit Agreement"; the terms defined therein
being used herein as therein defined) outstanding on such date.
The Borrower promises to pay interest on the unpaid principal amount
of each Advance from the date of such Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, as Agent, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Account No. 00000000 in same day funds. Each Advance owing to the
Lender by the Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance being evidenced by this Promissory
Note and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
ARIZONA PUBLIC SERVICE COMPANY
By
-------------------------------------
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
AMOUNT OF
AMOUNT OF PRINCIPAL PAID UNPAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
---- --------- -------------- ---------------- --------
2
EXHIBIT B - FORM OF NOTICE OF
BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Xxx Xxxxx Xxx
Xxx Xxxxxx, Xxxxxxxx 00000
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, Arizona Public Service Company, refers to the
Three-Year Credit Agreement, dated as of May 21, 2004 (as amended or modified
from time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, certain Lenders parties
thereto, Citigroup Global Markets Inc. and KeyBank National Association, as
joint lead arrangers, KeyBank National Association, as syndication agent, Bank
of America, N.A. and The Bank of New York, as co-documentation agents, and
Citibank, N.A., as Agent for said Lenders, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is __________, 200_.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$_______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in Section 4.01
(other than Section 4.01(l) and, in the case of a Borrowing the proceeds of
which are used to refund commercial paper, Sections 4.01(e)(ii), (f)(ii)
and (j)) of the Credit Agreement are correct, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date;
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom, that
constitutes a Default;
(C) after giving effect to the Proposed Borrowing, to the extent that
the Proposed Borrowing is required to be treated as short-term debt
pursuant to the 1984 Order, the aggregate amount of Authorized Short Term
Debt (as such term is defined in the 1984 Order) including the aggregate
principal amount of all outstanding Advances that are required to be
treated by the Borrower as short-term debt pursuant to the 1984 Order does
not exceed 7% of the Borrower's total capitalization,
(D) to the extent that the Proposed Borrowing is required to be
treated as long-term debt pursuant to the 1986 Order, the aggregate amount
of Continuing Debt (as such term is defined in the 1986 Order) including
the aggregate principal amount of all outstanding Advances that are
required to be treated by the Borrower as long-term debt pursuant to the
1986 Order has not exceeded, during any period of more
than 30 days immediately prior to and including the date of the Borrowing,
and will not exceed, during any period of more than 30 days at any time
such Borrowing is outstanding, $2,698,917,000, and
(E) after giving effect to the Proposed Borrowing, the Indebtedness of
the Borrower does not exceed that permitted by (A) applicable resolutions
of the Board of Directors of the Borrower or (B) applicable Arizona laws,
rules or regulations.
Very truly yours,
ARIZONA PUBLIC SERVICE COMPANY
By
-------------------------------------
Title:.
2
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Three-Year Credit Agreement dated as of May
21, 2004 (as amended or modified from time to time, the "Credit Agreement")
among Arizona Public Service Company, an Arizona corporation (the "Borrower"),
the Lenders (as defined in the Credit Agreement), Citigroup Global Markets Inc.
and KeyBank National Association, as joint lead arrangers, KeyBank National
Association, as syndication agent, Bank of America, N.A. and The Bank of New
York, as co-documentation agents, and Citibank, N.A., as agent for the Lenders
(the "Agent"). Terms defined in the Credit Agreement are used herein with the
same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under [the Credit Agreement as of the date
hereof] [the Credit Agreement as it relates to the the Letter of Credit
Facility] equal to the percentage interest specified on Schedule 1 hereto of
[all outstanding rights and obligations under the Credit Agreement together with
participations in Letters of Credit held by the Assignor on the date hereof]
[such Assignor's Unissued Letter of Credit Commitment]. After giving effect to
such sale and assignment, the Assignee's [Revolving Credit Commitment and the
amount of the Advances owing to the Assignee] [Letter of Credit Commitment] will
be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, the Credit
Agreement or any other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Note[,
if any] held by the Assignor [and requests that the Agent exchange such Note for
a new Note payable to the order of [the Assignee in an amount equal to the
Revolving Credit Commitment assumed by the Assignee pursuant hereto or new Notes
payable to the order of the Assignee in an amount equal to the Revolving Credit
Commitment assumed by the Assignee pursuant hereto and] the Assignor in an
amount equal to the Revolving Credit Commitment retained by the Assignor under
the Credit Agreement, [respectively,] as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service forms required under Section 2.14 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest, fees and Letter of Credit
commissions with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by facsimile shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
[Assignee's Revolving Credit Commitment: $__________]
Aggregate outstanding principal amount of
Advances assigned: $__________
Principal amount of Note payable to Assignee: $__________
Principal amount of Note payable to Assignor: $__________
[Assignee's Letter of Credit Commitment: $__________]
Effective Date*: __________, 200_
[NAME OF ASSIGNOR], as Assignor
By
-------------------------------------
Title:
Dated: __________, 200_
[NAME OF ASSIGNEE], as Assignee
By
-------------------------------------
Title:
Dated: __________, 200_
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
----------
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
3
Accepted [and Approved]** this
____ day of __________, 200_
CITIBANK, N.A., as Agent
By
----------------------------------
Title:
[Approved this _____ day
of __________, 200_
ARIZONA PUBLIC SERVICE COMPANY
By ]*
----------------------------------
Title:
----------
** Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
4
EXECUTION COPY
U.S. $325,000,000
THREE-YEAR CREDIT AGREEMENT
Dated as of May 21, 2004
Among
ARIZONA PUBLIC SERVICE COMPANY
as Borrower
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
CITIBANK, N.A.
as Administrative Agent and Issuing Bank
KEYBANK NATIONAL ASSOCIATION
as Syndication Agent and Issuing Bank
BANK OF AMERICA, N.A. and THE BANK OF NEW YORK
as Co-Documentation Agents
and
CITIGROUP GLOBAL MARKETS INC. and KEYBANK NATIONAL ASSOCIATION
as Joint Lead Arrangers
TABLE OF CONTENTS
ARTICLE I
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Computation of Time Periods 12
SECTION 1.03. Accounting Terms 12
ARTICLE II
SECTION 2.01. The Advances and Letters of Credit 13
SECTION 2.02. Making the Advances 13
SECTION 2.03. Issuance of and Drawings and Reimbursement
Under Letters of Credit 14
SECTION 2.04. Fees 15
SECTION 2.05. Optional Termination or Reduction of the Commitments 16
SECTION 2.06. Repayment of Advances and Letter of Credit Drawings 16
SECTION 2.07. Interest on Advances 17
SECTION 2.08. Interest Rate Determination 17
SECTION 2.09. Optional Conversion of Advances 18
SECTION 2.10. Prepayments of Advances 18
SECTION 2.11. Increased Costs 19
SECTION 2.12. Illegality 20
SECTION 2.13. Payments and Computations 20
SECTION 2.14. Taxes 21
SECTION 2.15. Sharing of Payments, Etc. 22
SECTION 2.16. Evidence of Debt 23
SECTION 2.17. Use of Proceeds 23
ARTICLE III
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01 23
To each of the Lenders party
to the Credit Agreement
May 21, 2004
Page 2
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. 24
SECTION 3.03. Determinations Under Section 3.01 25
ARTICLE IV
SECTION 4.01. Representations and Warranties of the Borrower 25
ARTICLE V
SECTION 5.01. Affirmative Covenants 27
SECTION 5.02. Negative Covenants 29
SECTION 5.03. Financial Covenants 31
ARTICLE VI
SECTION 6.01. Events of Default 31
SECTION 6.02. Actions in Respect of Letters of Credit upon Default 33
ARTICLE VII
SECTION 7.01. Authorization and Action 33
SECTION 7.02. Agent's Reliance, Etc. 33
SECTION 7.03. Citibank and Affiliates 34
SECTION 7.04. Lender Credit Decision 34
SECTION 7.05. Indemnification 34
SECTION 7.06. Successor Agent 35
SECTION 7.07. Other Agents. 35
ARTICLE VIII
SECTION 8.01. Amendments, Etc. 35
To each of the Lenders party
to the Credit Agreement
May 21, 2004
Page 3
SECTION 8.02. Notices, Etc. 35
SECTION 8.03. No Waiver; Remedies 36
SECTION 8.04. Costs and Expenses 36
SECTION 8.05. Right of Set-off 37
SECTION 8.06. Binding Effect 37
SECTION 8.07. Assignments and Participations 37
SECTION 8.08. Confidentiality 40
SECTION 8.09. Governing Law 40
SECTION 8.10. Execution in Counterparts 40
SECTION 8.11. Jurisdiction, Etc. 40
SECTION 8.12. No Liability of the Issuing Banks 41
SECTION 8.13. Waiver of Jury Trial 42
To each of the Lenders party
to the Credit Agreement
May 21, 2004
Page 4
Schedules
Schedule I - List of Applicable Lending Offices
Schedule 2.01(b) - Existing Letters of Credit
Schedule 4.01(k) - Subsidiaries
Schedule 4.01(1) - Existing Indebtedness
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of Counsel for the Borrower
