REVOLVING CREDIT AGREEMENT
dated as of
September 29, 1999
among
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,
THE BANKS LISTED HEREIN,
THE BANK OF NOVA SCOTIA
and
BANK ONE, N.A.
as CO-DOCUMENTATION AGENTS,
BANK OF AMERICA, N.A.
as SYNDICATION AGENT
and
THE CHASE MANHATTAN BANK
as ADMINISTRATIVE AGENT
Arranged by
CHASE SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC
TABLE OF CONTENTS
ARTICLE 1
Definitions
Section 1.01. Definitions 1
Section 1.02. Accounting Terms and Determinations 15
Section 1.03. Types of Borrowings 15
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend 15
Section 2.02. Notice of Committed Borrowings 16
Section 2.03. Money Market Borrowings 17
Section 2.04. Notice to Banks; Funding of Loans 21
Section 2.05. Notes 22
Section 2.06. Maturity of Loans 23
Section 2.07. Interest Rates 23
Section 2.08. Method of Electing Interest Rates 27
Section 2.09. Fees 29
Section 2.10. Optional Termination or Reduction of Commitments 30
Section 2.11. Mandatory Termination of Commitments 30
Section 2.12. Optional Prepayments 30
Section 2.13. General Provisions as to Payments 31
Section 2.14. Funding Losses 32
Section 2.15. Computation of Interest and Fees 32
Section 2.16. Withholding Tax Exemption 32
Section 2.17. Increase of Commitments 33
ARTICLE 3
Conditions
Section 3.01. Effectiveness 34
Section 3.02. Borrowings 35
ARTICLE 4
Representations and Warranties
Section 4.01. Corporate Existence, Power and Authority 37
Section 4.02. Financial Statements 37
Section 4.03. Litigations 38
Section 4.04. Governmental Authorizations 38
Section 4.05. Capital Term Certificates 39
Section 4.06. No Violation of Agreements 39
Section 4.07. No Event of Default under the Indentures 39
Section 4.08. Compliance with ERISA 40
Section 4.09. Compliance with Other Laws 40
Section 4.10. Tax Status 40
Section 4.11. Investment Company Act 40
Section 4.12. Public Utility Holding Company Act 40
Section 4.13. Disclosure 40
Section 4.14. Subsidiaries 41
Section 4.15. Environmental Matters 41
Section 4.16. Year 2000 41
ARTICLE 5
Covenants
Section 5.01. Corporate Existence 42
Section 5.02. Disposition of Assets; Merger, Character of Business; etc 42
Section 5.03. Financial Information 43
Section 5.04. Default Certificates 44
Section 5.05. Notice of Litigation, Legislative Developments and Defaults 45
Section 5.06. ERISA 45
Section 5.07. Payment of Charges 46
Section 5.08. Inspection of Books and Assets 46
Section 5.09. Indebtedness 46
Section 5.10. Liens 47
Section 5.11. Maintenance of Insurance 48
Section 5.12. Subsidiaries and Joint Ventures 48
Section 5.13. Minimum TIER 49
Section 5.14. Retirement of Patronage Capital 49
Section 5.15. Use of Proceeds 49
ARTICLE 6
Defaults
Section 6.01. Events of Defaults 49
Section 6.02. Notice of Default 52
ARTICLE 7
The Agent
Section 7.01. Appointment and Authorization 52
Section 7.02. Agent and Affiliates 52
Section 7.03. Action by Agent 52
Section 7.04. Consultation with Experts 52
Section 7.05. Liability of Agent 52
Section 7.06. Indemnification 53
Section 7.07. Credit Decision 53
Section 7.08. Successor Agent 53
Section 7.09. Co-Documentation Agents and Syndication Agent Not Liable 54
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair 54
Section 8.02. Illegality 55
Section 8.03. Increased Cost and Reduced Return 55
Section 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans 57
ARTICLE 9
Miscellaneous
Section 9.01. Notices 58
Section 9.02. No Waivers 58
Section 9.03. Expenses; Documentary Taxes; Indemnification 58
Section 9.04. Sharing of Set-offs 59
Section 9.05. Amendments and Waivers 60
Section 9.06. Successors and Assigns 60
Section 9.07. Collateral 61
Section 9.08. Managing Agents; Co-Agents 62
Section 9.09. Governing Law 62
Section 9.10. Counterparts; Integration 62
Section 9.11. Several Obligations 62
Section 9.12. Severability 62
Section 9.13. Waiver/Appointment Notice 62
Schedule I - Agent Schedule
Exhibit A - Note
Exhibit B - RUS Guarantee
Exhibit C - Money Market Quote Request
Exhibit D - Invitation for Money Market Quotes
Exhibit E - Money Market Quote
Exhibit F - Opinion of General Counsel for the Borrower
Annex A to Exhibit F - Subsidiaries and Joint Ventures
Exhibit G - Opinion of Special Counsel for the Borrower
Exhibit H - Opinion of Special Counsel for the Agent
Exhibit I - Extension Agreement
Exhibit J - Assignment and Assumption Agreement
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of September 29, 1999 among
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, a not-for-profit
cooperative association incorporated under the laws of the District of
Columbia, as Borrower, the BANKS listed on the signature pages hereof,
THE BANK OF NOVA SCOTIA and THE FIRST NATIONAL BANK ONE, N.A., as
Co-Documentation Agents, BANK OF AMERICA, N.A., as Syndication Agent, and
THE CHASE MANHATTAN BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth
in Section 2.07(c).
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the Agent
and submitted to the Agent (with a copy to the Borrower) duly completed by
such Bank.
"Agent" means The Chase Manhattan Bank in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.
"Agreement" means this Revolving Credit Agreement, as the same may
be amended from tie to time.
"Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the
case of its Money Market Loans, its Money Market Lending Office.
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"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan that bears interest at the
Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice
of Interest Rate Election or the last sentence of Section 2.08(a) or
Article 8.
"Bonds" means any bonds issued pursuant to either Indenture or both,
as the context may require.
"Borrower" means the National Rural Utilities Cooperative Finance
Corporation, a not-for-profit cooperative association incorporated under the
laws of the District of Columbia, and its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Term Certificate" means a note of the Borrower substantially
in the form of the membership subscription certificates and the loan and
guarantee certificates outstanding on the date of the execution and delivery
of this Agreement and any other Indebtedness of the Borrower having
substantially similar provisions as to subordination as those contained in
said outstanding membership subscription certificates and loan and guarantee
certificates.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Committed Loan that bears interest at a CD Rate
pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election.
"CD Margin" means .290%.
"CD Reference Banks" means The Chase Manhattan Bank and Bank of
America, N.A.
2
"Commitment" means (i) with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite the name of such Bank
on the signature pages hereof and (ii) with respect to any Assignee that
becomes a Bank pursuant to Section 9.06(c), the amount of the transferor
Bank's Commitment assigned to it pursuant to Section 9.06(c), in each case
as such amount may be reduced from time to time pursuant to Sections 2.10
and 2.11; provided that, if the context so requires, the term "Commitment"
means the obligation of a Bank to extend credit up to such amount to the
Borrower hereunder.
"Committed Loan" means a Revolving Loan or a Term Loan; provided
that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal amount resulting
from such combination or to each of the separate principal amounts resulting
from such subdivision, as the case may be.
"Commitment Termination Date" means September 27, 2000 or such later
date to which this Agreement shall have been extended pursuant to Section
2.01(c), or, if either such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be combined or consolidated with those of
the Borrower in its combined or consolidated financial statements if such
statements were prepared as of such date.
"Co-Documentation Agents" means The Bank of Nova Scotia and Bank One,
N.A., each in its capacity as co-documentation agent for the Banks hereunder,
and their successors in such capacity.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both (as
specified in Section 6.01) would, unless cured or waived, become an Event of
Default.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect
to any of the foregoing transactions) or any combination of the foregoing
transactions.
3
"Determination Date" shall have the meaning provided in Section 5.09.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Agent; provided that any Bank may so
designate separate Domestic Lending Offices for its Base Rate Loans, on the
one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer
to either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.07(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and governmental restrictions relating to
the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
4
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan that bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election.
"Euro-Dollar Margin" means .165%.
"Euro-Dollar Reference Banks" means the principal London offices of
The Chase Manhattan Bank and Bank of America, N.A.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such day,
as published by the Federal Reserve Bank of New York on the Domestic Business
Day next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to The Chase Manhattan
Bank on such day on such transactions as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group of Loans" means, at any time, a group of Loans consisting of
(i) all Committed Loans which are Base Rate Loans at such time, (ii) all
Euro-Dollar
5
Loans having the same Interest Period at such time or (iii) all
CD Loans having the same Interest Period at such time; provided that, if a
Committed Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Article8, such Loan shall be included in the same Group or
Groups of Loans from time to time as it would have been in if it had not
been so converted or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or lease payments of any other Person or otherwise in any manner
assuring the holder of any Indebtedness of, or the obligee under any lease
of, any other Person through an agreement, contingent or otherwise, to
purchase Indebtedness or the property subject to such lease, or to purchase
goods, supplies or services primarily for the purpose of enabling the debtor
or obligor to make payment of the Indebtedness or under such lease or of
assuring such Person against loss, or to supply funds to or in any other
manner invest in the debtor or obligor, or otherwise; provided that the
term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business. The term "Guarantee" when used as a
verb has a correlative meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indebtedness" with respect to any Person means:
(1) all indebtedness which would appear as indebtedness on a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles (i) for money borrowed, (ii) which is evidenced by
securities sold for money or (iii) which constitutes purchase money
indebtedness;
(2) all indebtedness of others Guaranteed by such Person;
(3) all indebtedness secured by any Lien upon property owned
by such Person, even though such Person has not assumed or become liable for
the payment of such indebtedness; and
(4) all indebtedness of such Person created or arising under an
conditional sale or other title retention agreement (including any lease in
the nature of a 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 of
such property), but only if such property is included as an asset on the
balance sheet of such Person;
6
provided that, in computing the "Indebtedness" of such Person, there shall
be excluded any particular indebtedness if, upon or prior to the maturity
thereof, there shall have been deposited with the proper depositary in trust
money (or evidences of such indebtedness) in the amount necessary to pay,
redeem or satisfy such indebtedness, and thereafter such money and evidences
of indebtedness so deposited shall not be included in any computation of the
assets of such Person; and provided further that no provision of this
definition shall be construed to include as "Indebtedness" of the Borrower
any indebtedness by virtue of any agreement by the Borrower to advance or
supply funds to Members.
"Indenture" means either the 1972 Indenture or the 1994 Indenture,
and "Indentures" means both such Indentures.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending
one, two, three or six months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last Euro-
Dollar Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clause (c) below, end on
the last Euro-Dollar Business Day of a calendar month;
(c) any Interest Period which begins before the
Commitment Termination Date and would otherwise end after the
Commitment Termination Date shall end on the Commitment Termination
Date; and
(d) any Interest Period which begins before the first
anniversary of the Commitment Termination Date and would otherwise
end after the first anniversary of the Commitment Termination Date
shall end on the first anniversary of the Commitment Termination
Date;
7
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower
may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins before
the Commitment Termination Date and would otherwise end after the
Commitment Termination Date shall end on the Commitment Termination
Date; and
(c) any Interest Period which begins before the first
anniversary of the Commitment Termination Date and would otherwise
end after the first anniversary of the Commitment Termination Date
shall end on the first anniversary of the Commitment Termination
Date;
(3) with respect to each Base Rate Borrowing, the period commencing on
the date of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins before the
Commitment Termination Date and would otherwise end after the
Commitment Termination Date shall end on the Commitment Termination
Date; and
(c) any Interest Period which begins before the first
anniversary of the Commitment Termination Date and would otherwise
end after the first anniversary of the Commitment Termination Date
shall end on the first anniversary of the Commitment Termination
Date;
(4) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending any whole number of
months thereafter (but not less than one month) as the Borrower may elect in
accordance with Section 2.03; provided that:
8
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last Euro-
Dollar Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clause (c) below, end on
the last Euro-Dollar Business Day of a calendar month;
(c) any Interest Period which begins before the
Commitment Termination Date and would otherwise end after the
Commitment Termination Date shall end on the Commitment Termination
Date; and
(d) any Interest Period which begins before the first
anniversary of the Commitment Termination Date and would otherwise
end after the first anniversary of the Commitment Termination Date
shall end on the first anniversary of the Commitment Termination
Date;
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than 30 days) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins before the
Commitment Termination Date and would otherwise end after the
Commitment Termination Date shall end on the Commitment Termination
Date; and
(c) any Interest Period which begins before the first
anniversary of the Commitment Termination Date and would otherwise end
after the first anniversary of the Commitment Termination Date shall
end on the first anniversary of the Commitment Termination Date;
9
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Joint Venture" means any corporation, partnership, association,
joint venture or other entity in which the Borrower, directly or indirectly
through Subsidiaries or Joint Ventures, has an equity interest at the time of
10% or more but which is not a Subsidiary; provided that no Person whose only
assets are RUS Guaranteed Loans and investments incidental thereto shall be
deemed a Joint Venture.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating to
such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money Market
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market
Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Member" means any Person which is a member or a patron of the
Borrower.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Agent; provided that any Bank may from time to time by
notice to the Borrower and the Agent designate separate Money Market Lending
Offices for its Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute
10
Rate Loans, on the other hand, in which case all references herein to the
Money Market Lending Office of such Bank shall be deemed to refer to either
or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Prime Rate
pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Margins" means operating and non-operating income of the
Borrower and its Subsidiaries determined on a combined or consolidated basis
(excluding income on Guaranteed Portions of RUS Guaranteed Loans) less,
without duplication, operating and non-operating costs and expenses of the
Borrower and its Subsidiaries determined on a combined or consolidated basis
(excluding costs and expenses relating to Guaranteed Portions of RUS
Guaranteed Loans).
"1994 Indenture" means the Indenture dated as of February 15, 1994
and as amended as of September 16, 1999 between the Borrower and First Bank
National Association, as trustee, as amended and supplemented from time to
time, providing for the issuance in series of certain collateral trust bonds
of the Borrower.
"1972 Indenture" means the Seventeenth Supplemental Indenture dated
as of March 1, 1987, amending and restating in full the Indenture dated as of
December 1, 1972, by and between the Borrower and Chemical Bank (as successor
by merger to Manufacturers Hanover Trust Company), as trustee.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued
hereunder.
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"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined
in Section 2.03(f)).
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"Patronage Capital Certificates" means those certificates that
evidence the allocation of Net Margins by the Borrower among its Members in
proportion to interest earned by the Borrower from such Members.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means any multiemployer plan or single employer plan, as
defined in Section 4001 and subject to Title IV of ERISA, which is
maintained, or at any time during the five calendar years preceding the date
of this Agreement was maintained, for employees of the Borrower or a
Subsidiary of the Borrower or any member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by The
Chase Manhattan Bank in New York City from time to time as its Prime Rate.
"Prior Credit Agreement" means the Revolving Credit Agreement dated
as of February 28, 1995, as amended and restated as of November 26, 1996, as
further amended and restated as of November 25, 1997, as further amended and
restated as of November 24, 1998, and as further amended to the date hereof,
among the Borrower, the banks listed on the signature pages thereof, X.X.
Xxxxxx Securities Inc. and the Bank of Nova Scotia, as Co-Syndication Agents,
and Xxxxxx Guaranty Trust Company of New York, as Administrative Agent.
"Qualified Subordinated Indebtedness" means the Borrower's (i) 8%
Quarterly Income Capital Securities (Subordinated Deferrable Interest
Debentures Due 2045) and (ii) any other Indebtedness of the Borrower having
substantially similar terms as those contained in the instruments and
documents relating to the foregoing Indebtedness.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any
one of such Reference Banks.
12
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reportable Event" means an event described in Section 4043(c) of
ERISA or regulations promulgated by the Department of Labor thereunder (with
respect to which the 30 day notice requirement has not been waived by the
PBGC).
"Required Banks" means at any time Banks having at least 51% of the
sum of the aggregate amount of the unused Commitments and the aggregate
principal outstanding amount of the Loans.
"Revolving Credit Period" means the period from and including the
Effective Date to but excluding the Commitment Termination Date.
"Revolving Loan" means a loan made by a Bank pursuant to Section
2.01(a).
"RUS" means the Rural Utilities Service of the Department of
Agriculture of the United States of America (as successor to the Rural
Electrification Administration of the Department of Agriculture of the
United States of America) or any other regulatory body which succeeds to its
functions.
"RUS Guaranteed Loan" means any loan made by any Person, which loan
(x) bears interest at least equal to such Person's cost of funds and (y) is
guaranteed, in whole or in part, as to principal and interest by the United
States of America through the RUS pursuant to a guarantee, which guarantee
contains provisions no less favorable to the holder thereof than the
provisions set forth in the form of Exhibit B-1 or Exhibit B-2 hereto; and
"Guaranteed Portion" of any RUS Guaranteed Loan means that portion of
principal of, and interest on, such RUS Guaranteed Loan which is guaranteed
by the United States of America through the RUS as provided in clause (y).
"S&P" means Standard and Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Subsidiary" of any Person means (i) any corporation more than 50%
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall
13
have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly
through its Subsidiaries, and (ii) any other Person in which such Person
directly or indirectly through Subsidiaries has more than a 50% voting and
equity interest, provided that no Person whose only assets are RUS Guaranteed
Loans and investments incidental thereto shall be deemed a Subsidiary.
Neither the Rural Telephone Finance Cooperative nor the Guaranty Funding
Cooperative is on the date of this Agreement a "Subsidiary", except that the
Rural Telephone Finance Cooperative and, but only so long as the Borrower
maintains control of the Board of Directors of the Guaranty Funding
Cooperative (including, without limitation, the ability to appoint a majority
of such Board of Directors), the Guaranty Funding Cooperative shall each be
considered a "Subsidiary" for purposes of the definitions of "Net Margins"
and "TIER".
"Superior Indebtedness" means all Indebtedness of the Borrower (other
than Capital Term Certificates and Qualified Subordinated Indebtedness) and
its Subsidiaries determined on a combined or consolidated basis, but
excluding Indebtedness of the Borrower or any of its Subsidiaries to the
extent that the proceeds of such Indebtedness are used to fund Guaranteed
Portions of RUS Guaranteed Loans.
"Syndication Agent" means Bank of America, N.A. in its capacity as
Syndication Agent for the Banks hereunder, and its successors in such
capacity.
"Term Loan" means a loan made pursuant to Section 2.01(b).
"TIER" means, for any period, the ratio of (x)Net Margins plus
interest on Indebtedness of the Borrower or its Subsidiaries determined on a
combined or consolidated basis (but excluding Indebtedness of the Borrower or
any of its Subsidiaries to the extent that the proceeds of such Indebtedness
are used to fund Guaranteed Portions of RUS Guaranteed Loans) plus
amortization of bond discount and amortization of bond issuance costs of the
Borrower and its Subsidiaries determined on a combined or consolidated basis
for such period (but excluding such amortization of discount and issuance
costs with respect to Indebtedness referred to in the preceding parenthetical
phrase) to (y) interest on Indebtedness of the Borrower or its Subsidiaries
determined on a combined or consolidated basis (but excluding Indebtedness
of the Borrower or any of its Subsidiaries to the extent that the proceeds
of such Indebtedness are used to fund Guaranteed Portions of RUS Guaranteed
Loans) plus amortization of bond discount and amortization of bond issuance
costs of the Borrower and its Subsidiaries determined on a combined or
consolidated basis for such period (but excluding such amortization of
discount and issuance costs with respect to Indebtedness referred to in the
preceding parenthetical phrase).
Section 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
14
accounting determinations hereunder shall be made and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
combined financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks.
Section 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference
to the pricing of Loans comprising such Borrowing (e.g., a "Euro-Dollar
Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by reference to
the provisions of Article 2 under which participation therein is determined
(i.e., a "Revolving Borrowing" is a Borrowing under Section 2.01(a) in which
all Banks participate in proportion to their Commitments, while a "Money
Market Borrowing" is a Borrowing under Section 2.03 in which the Bank
participants are determined on the basis of their bids in accordance
therewith).
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. (a) Revolving Loans. During the
Revolving Credit Period each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time in amounts such that the aggregate
principal amount of Revolving Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each Borrowing shall be in an
aggregate principal amount of $10,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the maximum aggregate
amount available in accordance with Section 3.02(c) or 3.02(d)) and shall be
made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay or, to the extent permitted by Section 2.12, prepay Loans and
reborrow at any time during the Revolving Credit Period under this Section.
(b) Term Loans. Each Bank severally agrees, on the terms and conditions
set forth in this Agreement, to make a Term Loan to the Borrower on
15
the Commitment Termination Date in an amount up to but not exceeding the
amount of its Commitment, as then in effect.
(c) Extension of Commitments. The Commitment Termination Date may be
extended from time to time in the manner set forth in this subsection (c),
in each case for a period of up to 364 days from the date on which Banks
having 51% of the Commitments shall have notified the Agent of their
agreement so to extend. If the Borrower wishes to request an extension of
the Commitment Termination Date, it shall give written notice to that effect
(such notice to state the date to which the Commitment Termination Date then
in effect is requested to be extended, subject to the provisions of the
preceding sentence) to the Agent not less than 60 nor more than 90 days prior
to the Commitment Termination Date then in effect, whereupon the Agent shall
promptly notify each of the Banks of such request and send a copy of the
Extension Agreement referred to below to each Bank. Each Bank will use its
best efforts to respond to such request, whether affirmatively or negatively,
as it may elect in its discretion, within 30 days of such notice to the
Agent. If less than all Banks respond affirmatively to such request within
30 days, then the Borrower may request the Banks that do not elect to extend
the Commitment Termination Date to assign their Commitments in their
entirety, no later than 15 days prior to the Commitment Termination Date
then in effect, to one or more Assignees pursuant to Section 9.06(c) which
Assignees will agree to extend the Commitment Termination Date. If Banks
having at least 51% of the Commitments (including such Assignees and
excluding their respective transferor Banks) respond affirmatively, then,
subject to receipt by the Agent of counterparts of an Extension Agreement in
substantially the form of Exhibit I hereto duly completed and signed by all
of the parties thereto, the Commitment Termination Date shall be extended for
the period specified above. The Commitment of any Bank that elects not to
extend the Commitment Termination Date shall terminate on the Commitment
Termination Date in effect immediately prior to giving effect to any such
extension.
Section 2.02. Notice of Committed Borrowings. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than
11:00 A.M. (New York City time) on (x) the date of each Base Rate Borrowing,
(y) the second Domestic Business Day before each CD Borrowing and (z) the
third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business
Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
16
(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate, a CD Rate or a Euro-Dollar Rate, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
Notwithstanding the foregoing, no more than 15 Fixed Rate Borrowings
shall be outstaning at any one time, and any Borrowing which would exceed
such limitation shall be made as a Base Rate Borrowing.
Section 2.03. Money Market Borrowings. (a) In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks during the Revolving Credit Period to make offers
to make Money Market Loans to the Borrower. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this
Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall
transmit to the Agent by telex or facsimile transmission a Money Market Quote
Request substantially in the form of Exhibit C hereto so as to be received
no later than 10:00 A.M. (New York City time) on (x) the fifth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in the case of
a LIBOR Auction or (y)the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date
of the Money Market Quote Request for the first LIBOR Auction or Absolute
Rate Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall
be $10,000,000 or any larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
17
The Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days (or
such other number of days as the Borrower and the Agent may agree) of any
other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of
a Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit D hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance
with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes.
Each Money Market Quote must comply with the requirements of this subsection
(d) and must be submitted to the Agent by telex or facsimile transmission at
its offices specified in or pursuant to Section 9.01 not later than (x) 2:00
P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:00 A.M.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the Agent (or any
affiliate of the Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Agent or such affiliate notifies the Borrower of
the terms of the offer or offers contained therein not later than (x) 1:00
P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a LIBOR Auction or (y)
8:45 A.M. (New York City time) on the proposed date of Borrowing, in the
case of an Absolute Rate Auction. Subject to Articles 3 and 6, any Money
Market Quote so made shall be irrevocable except with the written consent of
the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit E hereto and shall in any case specify:
(A) the proposed date of Borrowing,
18
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount (w)may be
greater than or less than the Commitment of the quoting Bank, (x)
must be $1,000,000 or any larger multiple thereof, (y) may not exceed
the principal amount of Money Market Loans for which offers were
requested and (z) may be subject to an aggregate limitation as to
principal amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (rounded to the nearest 1/10,000th of 1%) to be added to
or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (rounded to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market
Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the
related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit E
hereto or does not specify all of the information required by
subsection (d)(ii),
(B) contains qualifying, conditional or similar language,
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes, or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank that
is in accordance with subsection (d) and (y) of any Money Market Quote that
amends,
19
modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted solely to
correct a manifest error in such former Money Market Quote. The Agent's
notice to the Borrower shall specify (A) the aggregate principal amount of
Money Market Loans for which offers have been received for each Interest
Period specified in the related Money Market Quote Request, (B) the
respective principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:00 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall
have mutually agreed and shall have notified to the Banks not later than the
date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the Borrower
shall notify the Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; provided
that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request,
(ii) the aggregate principal amount of each Money Market
Borrowing must be $10,000,000 or any larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to comply
with the requirements of this Agreement.
20
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period,
the principal amount of Money Market Loans in respect of which such offers
are accepted shall be allocated by the Agent among such Banks as nearly as
possible (in such multiples, not greater than $100,000, as the Agent may
deem appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Agent of the amounts of Money Market Loans
shall be conclusive in the absence of manifest error.
Section 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a
Notice of Borrowing, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 1:00 P.M. (New York City time) on the date of
each Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing,
in Federal or other funds immediately available in New York City, to the
Agent at its address specified in or pursuant to Section 9.01. Unless the
Agent determines that any applicable condition specified in Article 3 has
not been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Agent as provided in subsection (b), or remitted by the Borrower to the
Agent as provided in Section 2.13, as the case may be.
(d) Unless the Agent shall have been notified by any Bank prior
to the date of Borrowing (or prior to 1:00P.M. (New York City time) on the
date of Borrowing in the case of a Base Rate Borrowing) that such Bank does
not intend to make available to the Agent such Bank's portion of the
Borrowing to be made on such date, the Agent may assume that such Bank has
made such amount available to the Agent on such date and the Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount, subject to the provisions of subsection (c). If such corresponding
amount is not in fact made available to the Agent by such Bank, the Agent
shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay
21
such corresponding amount forthwith upon the Agent's demand therefor, the
Agent shall promptly notify the Borrower and the Borrower shall promptly pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover from such Bank or the Borrower interest on such corresponding amount
in respect of each day from the date such corresponding amount was made
available by the Agent to the Borrower to the date such corresponding amount
is recovered by the Agent, at a rate per annum equal to (x) in the case of a
Bank, the Federal Funds Rate for each such day and (y) in the case of the
Borrower, the then applicable rate for Base Rate Loans, CD Loans, Euro-Dollar
Loans or Money Market Loans, as appropriate. Nothing herein shall be deemed
to relieve any Bank from its obligation to fulfill its Commitment hereunder
or to prejudice any rights which the Borrower may have against any Bank as a
result of any default by such Bank hereunder. For purposes of this
subsection (d), no amount paid to the Agent hereunder shall be considered to
have been recovered by the Agent on the date of payment unless such amount
shall have been received by the Agent by 2:30 P.M. (New York City time) on
such date.
Section 2.05. Notes. (a) The Loans of each Bank shall be evidenced
by a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note
in an amount equal to the aggregate unpaid principal amount of such Loans.
Each such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans
of the relevant type. Each reference in this Agreement to the "Note" of such
Bank shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b),
the Agent shall forward such Note to such Bank. Each Bank shall record the
date, amount, type and maturity of each Loan made by it and the date and
amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding; provided that the failure of any Bank to
make any such recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make
a part of its Note a continuation of any such schedule as and when required.
22
Section 2.06. Maturity of Loans. (a) The Revolving Loans shall
mature, and the principal amount thereof shall be due and payable, on the
last day of the Revolving Credit Period.
(b) Each Money Market Loan shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
(c) The Term Loans shall mature on the first anniversary of the
Commitment Termination Date.
Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable for each Interest
Period on the last day thereof and, with respect to the principal amount of
any Base Rate Loan that is prepaid or converted to a CD Loan or Euro-Dollar
Loan, on the date of such prepayment or conversion. Any overdue principal
of or interest on any Base Rate Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 2% plus the
rate otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the sum of the CD Margin plus the applicable Adjusted CD Rate;
provided that if any CD Loan shall, as a result of clause (2)(b) of the
definition of Interest Period, have an Interest Period of less than 30 days,
such Loan shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than 90 days, 90 days after the first day thereof
and, with respect to the principal amount of any CD Loan that is prepaid or
converted to a Base Rate Loan or Euro-Dollar Loan, on the date of such
prepayment or conversion. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
CD Margin plus the Adjusted CD Rate applicable to such Loan and (ii) the
rate applicable to Base Rate Loans for such day.
23
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ----- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upwards, if necessary, to the next
higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate
of deposit dealers of recognized standing for the purchase at face value
from each CD Reference Bank of its certificates of deposit in an amount
comparable to the unpaid principal amount of the CD Loan of such CD Reference
Bank to which such Interest Period applies and having a maturity comparable
to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation
any basic, supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest Period and in an
amount of $100,000 or more. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Domestic
Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or
a comparable successor assessment risk classification) within the meaning of
12 C.F.R. Section
24
327.4(a) (or any successor provision) to the Federal Deposit Insurance
Corporation (or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the United States.
The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Euro-Dollar Margin plus the applicable
Adjusted London Interbank Offered Rate. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, three months after the first day thereof and, with
respect to the principal amount of any Euro-Dollar Loan that is prepaid or
converted to a Base Rate Loan or CD Loan, on the date of such prepayment or
conversion.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing
(i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-
Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Euro-Dollar Reference Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Dollar Business
Days before the first day of such Interest Period in an amount approximately
equal to the principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of "Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the interest
rate on Euro-Dollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage.
25
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at
a rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate applicable
to such Loan and (ii) the Euro-Dollar Margin plus the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of 1%) by dividing
(x) the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which one day (or, if such amount due
remains unpaid more than three Euro-Dollar Business Days, then for such other
period of time not longer than six months as the Agent may select) deposits
in dollars in an amount approximately equal to such overdue payment due to
each of the Euro-Dollar Reference Banks are offered to such Euro-Dollar
Reference Bank in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of
Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus
the rate applicable to Base Rate Loans for such day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of
the London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if each Euro-Dollar Reference Bank were to
participate in the related Money Market LIBOR Borrowing ratably in proportion
to its Commitment) plus (or minus) the Money Market Margin quoted by the Bank
making such Loan in accordance with Section 2.03. Each Money Market Absolute
Rate Loan shall bear interest on the outstanding principal amount thereof,
for the Interest Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such Loan in accordance
with Section 2.03. Such interest shall be payable for each Interest Period
on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the Prime Rate for such day.
(f) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference
Bank does not furnish a timely quotation, the Agent shall determine the
relevant interest
26
rate on the basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on a
timely basis, the provisions of Section 8.01 shall apply.
Section 2.08. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the
type of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change
or continue the type of interest rate borne by each Group of Loans (subject
to Section 2.08(d) and the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to CD Loans as of any Domestic Business
Day or to Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect
to convert such Loans to Base Rate Loans as of any Domestic Business
Day, or convert such Loans to Euro-Dollar Loans as of any Euro-
Dollar Business Day or continue such Loans as CD Loans, as of the end
of any Interest Period applicable thereto, for an additional Interest
Period, subject to Section 2.14 if any such conversion is effective on
any day other than the last day of an Interest Period applicable to
such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans as of any Domestic
Business Day, or convert such Loans to CD Loans as of any Euro-Dollar
Business Day or may elect to continue such Loans as Euro-Dollar Loans,
as of the end of any Interest Period applicable thereto, for an
additional Interest Period, subject to Section 2.14 if any such
conversion is effective on any day other than the last day of an
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Administrative Agent not later than 10:30
A.M. (New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic Loans of one
type to Domestic Loans of the other type or are CD Loans to be continued as
CD Loans for an additional Interest Period, in which case such notice shall
be delivered to the Agent not later than 10:30 A.M. (New York City time) on
the second Domestic Business Day before such conversion or continuation is
to be effective). A Notice of Interest Rate Election may, if it so
specifies, apply to only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (i) such portion is allocated ratably
among the Loans comprising such Group and (ii) the
27
portion to which such Notice applies, and the remaining portion to which it
does not apply, are each at least $10,000,000 (unless such portion is
comprised of Base Rate Loans). If no such notice is timely received before
the end of an Interest Period for any Group of CD Loans or Euro-Dollar Loans,
the Borrower shall be deemed to have elected that such Group of Loans be
converted to Base Rate Loans at the end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of Section 2.08(a);
(iii) if the Loans comprising such Group are to be
converted, the new Type of Loans and, if the Loans resulting from such
conversion are to be CD Loans or Euro-Dollar Loans, the duration of
the next succeeding Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-
Dollar Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election
from the Borrower pursuant to Section 2.08(a), the Agent shall notify each
Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower.
(d) The Borrower shall not be entitled to elect to convert any
Committed Loans to, or continue any Committed Loans for an additional
Interest Period as, CD Loans or Euro-Dollar Loans if (i) the aggregate
principal amount of any Group of CD Loans or Euro-Dollar Loans created or
continued as a result of such election would be less than $10,000,000 or
(ii) a Default shall have occurred and be continuing when the Borrower
delivers notice of such election to the Agent.
(e) If any Committed Loan is converted to a different type of Loan, the
Borrower shall pay, on the date of such conversion, the interest accrued to
such date on the principal amount being converted.
28
Section 2.09. Fees.
(a) Facility Fees. The Borrower shall pay to the Agent for the
account of each Bank facility fees on the daily average amount of such Bank's
Commitment (whether used or unused), for the period from the Effective Date
to but excluding the earlier of the date the Commitments are terminated or
the Commitment Termination Date, at a rate of 0.085% per annum; provided
that, if such Bank continues to have any Committed Loans outstanding after
its Commitment terminates, then such facility fee shall continue to accrue
on the daily outstanding principal amount of such Bank's Committed Loans from
and including the date on which its Commitment terminates to but excluding
the date on which such Bank ceases to have any Committed Loans outstanding.
Accrued facility fees shall be payable on each January 1, April 1, July 1,
and October 1 and on the date the Commitments are terminated (and, if later,
on the date the Loans shall be repaid in their entirety); provided that any
facility fees accruing after the first anniversary of the Commitment
Termination Date shall be payable on demand.
(b) Utilization Fees. (i) During any period when the aggregate
outstanding principal amount of the Loans exceeds 50% of the aggregate amount
of the Commitments or the Commitments have been terminated but Loans are
outstanding, the Borrower shall, unless Minimum Rating Status exists, pay to
the Agent for the account of each Bank utilization fees at a rate of 0.125%
per annum. Such utilization fee shall accrue on the average daily aggregate
outstanding principal amount of such Bank's Loans and shall be payable on
each January 1, April 1, July 1, and October 1 and on the date the
Commitments are terminated (and, if later, on the date the Loans shall be
repaid in their entirety); provided that any utilization fees accruing after
the first anniversary of the Commitment Termination Date shall be payable on
demand.
(ii) For purposes of this Section, "Minimum Rating Status" exists
at any date if at such date the Borrower has outstanding senior unsecured
long-term debt and such debt, without third party enhancement, is rated (or,
if on such date the Borrower has no outstanding senior unsecured long-term
debt, evidence satisfactory to the Agent is provided to the effect that the
rating of senior unsecured long-term debt of the Borrower, assuming that it
had outstanding senior unsecured long-term debt, would be rated) at least
AA- (or any equivalent rating which is used in lieu thereof) or higher by
S&P or Aa3 (or any equivalent rating which is used in lieu thereof) or higher
by Xxxxx'x.
(c) Agents' Fees. The Borrower shall pay to the Agent and the
Co-Syndication Agents, each for its own account, one or more fees in such
amounts
29
and at such times as has been previously agreed between the Borrower and each
of them.
Section 2.10. Optional Termination or Reduction of Commitments.
During the Revolving Credit Period, the Borrower may, upon at least three
Domestic Business Days' notice to the Agent (which notice the Agent will
promptly deliver to the Banks), (i)terminate the Commitments at any time, if
no Loans are outstanding at such time or (ii)ratably reduce from time to
time by an aggregate amount of $10,000,000 or any larger multiple of
$1,000,000, the aggregate amount of the Commitments in excess of the
aggregate outstanding principal amount of the Loans.
Section 2.11. Mandatory Termination of Commitments. The Commitments
shall terminate on the Commitment Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
Section 2.12. Optional Prepayments. (a) Subject in the case of
Fixed Rate Loans to Section 2.14, the Borrower may (i) upon at least one
Domestic Business Day's notice to the Agent, prepay any Group of Domestic
Loans (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) or (ii) upon at least three Euro-Dollar Business
Days' notice to the Agent, prepay any Group of Euro-Dollar Loans, in each
case in whole at any time, or from time to time in part in amounts
aggregating $10,000,000 or any larger multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Group of Loans (or
such Money Market Borrowing).
(b) Except as provided in Section 2.12(a), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan
prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share (if any) of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
Section 2.13. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of
fees hereunder, not later than 1:00 P.M. (New York City time) on the date
when due, in Federal or other funds immediately available in New York City,
to the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each
30
Bank its ratable share of each such payment received by the Agent for the
account of the Banks. Whenever any payment of principal of, or intereston,
the Domestic Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of,
or interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. Whenever any
payment of principal of, or interest on, the Money Market Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar Business Day.
If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that
the Borrower will not make such payment in full, the Agent may 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
Bank on such due date an amount equal to the amount then due such Bank. If
and to the extent that the Borrower shall not have so made such payment, each
Bank shall repay to the Agent forthwith on demand such amount distributed to
such Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate.
Section 2.14. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a different type of Loan (whether such payment or conversion is
pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last
day of the Interest Period applicable thereto, or the end of an applicable
period fixed pursuant to Section 2.07(d), or if the Borrower fails to borrow,
prepay, convert or continue any Fixed Rate Loans after notice has been given
to any Bank in accordance with Section 2.04(a), 2.08(c) or 2.12(c) the
Borrower shall reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties,
but excluding loss of margin for the period after any such payment or
conversion or failure to borrow, prepay, convert or continue; provided that
such Bank shall have delivered to the Borrower a certificate as to the amount
of such
31
loss or expense, which certificate shall be conclusive in the absence of
manifest error.
Section 2.15. Computation of Interest and Fees. Interest based on
the Prime Rate and fees hereunder shall be computed on the basis of a year
of 365 days (or 366 days in a leap year) and paid for the actual number of
days elapsed (including the first day but excluding the last day). All other
interest shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day).
Section 2.16. Withholding Tax Exemption. At least five Domestic
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated
under the laws of the United States of America or a state thereof agrees that
it will deliver to each of the Borrower and the Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Bank is entitled to receive payments
under this Agreement and its Note without deduction or withholding of any
United States federal income taxes. Each Bank which so delivers a Form 1001
or 4224 further undertakes to deliver to each of the Borrower and the Agent
two additional copies of such form (or a successor form) on or before the
date that such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Agent, in each case certifying
that such Bank is entitled to receive payments under this Agreement and its
Note without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty,
law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or
which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the Agent that
it is not capable of receiving payments without any deduction or withholding
of United States federal income tax.
Section 2.17. Increase of Commitments. Upon at least 15 days' prior
notice to the Agent (which notice the Agent shall promptly transmit to each
of the Banks), the Borrower shall have the right, subject to the terms and
conditions set forth below and with the consent of the Banks as set forth
below, to increase the aggregate amount of the Commitments in multiples of
$5,000,000. Any such increase shall apply, at the option of the Borrower,
(x) to the Commitment of one or more Banks, provided that (i) the Required
Banks (including each Bank whose Commitment is to be increased) shall consent
to such increase, (ii) the amount set forth on the signature pages hereof
opposite the name of each Bank the
32
Commitment of which is being so increased shall be amended to reflect the
increased Commitment of such Bank and (iii) if any Committed Loans are
outstanding at the time of such an increase, the Borrower will,
notwithstanding anything to the contrary contained in this Agreement, on the
date of such increase incur and repay or prepay one or more Committed Loans
from the Banks in such amounts so that after giving effect thereto, the
Committed Loans shall be outstanding on a pro rata basis (based on the
Commitments of the Banks after giving effect to the changes made pursuant
hereto on such date) from all the Banks or (y) to the creation of a new
Commitment of an institution not then a Bank hereunder, provided that (i)
such institution becomes a party to this Agreement as a Bank by execution
and delivery to the Borrower and the Agent of counterparts of this Agreement,
(ii) the Required Banks shall consent to the creation of such Commitment of
such Bank, (iii) the signature pages hereof shall be amended to reflect the
Commitment of such new Bank, (iv) the Borrower shall issue a Note to such
new Bank in conformity with the provisions of Section 2.05, (v) if any
Committed Loans are outstanding at the time of the creation of such
Commitment of such Bank, the Borrower will, notwithstanding anything to the
contrary contained in this Agreement, on the date of the creation of such
Commitment incur and repay or prepay one or more Committed Loans from the
Banks in such amounts so that after giving effect thereto, the Committed
Loans shall be outstanding on a pro rata basis (based on the Commitments of
the Banks after giving effect to the changes made pursuant hereto on such
date) from all the Banks and (vi) if such institution is neither a banking
institution nor an affiliate of a Bank, such institution must be consented
to by the Agent; provided further that any such increase or creation may
apply, at the option of the Borrower, as set forth in clause (x) or (y) above
but without the consent of the Required Banks so long as (i) the amount of
such increase or the amount of such new Commitment so created, as the case
may be, when added to the aggregate amount of all such prior increases in
the Commitments and all such prior creations of new Commitments, in each
case created after the Effective Date, does not exceed $800,000,000 and
(ii) after giving effect to such increase or new Commitment, the amount of
the Commitment of any Bank shall not exceed 17.5% of the aggregate amount of
the Commitments (excluding, for purposes of this clause (ii), any increase
resulting solely from the merger or the acquisition of one Bank into or by
another Bank). It is understood that any increase in the amount of the
Commitments pursuant to this Section 2.17 shall not constitute an amendment
of this Agreement or the Notes.
33
ARTICLE 3
Conditions
Section 3.01. Effectiveness. This Agreement shall become effective
on the date (the "Effective Date") on which the Agent shall have received the
following documents or other items, each dated the Effective Date unless
otherwise indicated:
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of an opinion of Xxxx Xxx List, Esq.,
General Counsel of the Borrower, substantially in the form of Exhibit F
hereto and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request, such
opinion to be in form and substance satisfactory to the Agent;
(d) receipt by the Agent of an opinion of Milbank, Tweed, Xxxxxx
& XxXxxx, special counsel for the Borrower, substantially in the form of
Exhibit G hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably
request, such opinion to be in form and substance satisfactory to the Agent;
(e) receipt by the Agent of an opinion of Xxxxx Xxxx & Xxxxxxxx,
special counsel for the Agent, substantially in the form of Exhibit H hereto
and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request, such
opinion to be in form and substance satisfactory to the Agent;
(f) receipt by the Agent of a certificate signed by the Chief
Financial Officer or the Governor and an Assistant Secretary-Treasurer or the
Controller of the Borrower to the effect set forth in clauses (c) through
(g), inclusive, of Section 3.02 and, in the case of clauses (c), (e) and (g),
setting forth in reasonable detail the calculations required to establish
such compliance;
34
(g) receipt by the Agent, with a copy for each Bank, of a
certificate of an officer of the Borrower acceptable to the Agent stating
that all consents, authorizations, notices and filings required or advisable
in connection with this Agreement are in full force and effect, and the Agent
shall have received evidence thereof reasonably satisfactory to it;
(h) evidence satisfactory to the Required Banks that the
Commitments, as defined in the Prior Credit Agreement, have been terminated
(except that Sections 2.13, 7.05, 7.06, 8.03 and 9.03 (and Section 2.12 and
Article 9 insofar as such Section or Article relates to such Sections 2.13,
7.05, 7.06, 8.03 and 9.03, as applicable)) of the Prior Credit Agreement
shall survive the termination of such Commitments and shall remain in full
force and effect) and all amounts owed under the Prior Credit Agreement have
been paid in full; and
(i) receipt by the Agent of all documents the Required Banks may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement and the Notes, and any other
matters relevant hereto, all in form and substance satisfactory to the Agent.
The Agent shall promptly notify the Borrower and the Banks of the Effective
Date, and such notice shall be conclusive and binding on all parties hereto.
Section 3.02. Borrowings. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) the fact that the Effective Date shall have occurred prior
to October 15, 1999;
(b) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(c) the fact that, immediately after such Borrowing, the Borrower
is in compliance with Section 7.12(a) of the 1972 Indenture and Section 7.11
of the 1994 Indenture, as each Indenture is in effect as of the date hereof;
(d) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(e) the fact that, immediately after such Borrowing, no Default
shall have occurred and be continuing;
35
(f) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true on and as of the date of
such Borrowing (it being understood and agreed that the representation and
warranty set forth in Section 4.13 shall be true and correct as to all
information furnished prior to the making of the respective Loan); and
(g) the fact that, at the time of such Borrowing, (i) there shall
be no collateral securing Bonds issued pursuant to either Indenture of a
type other than the types of collateral permitted to secure Bonds issued
pursuant to such Indenture as of the date hereof and (ii) the Allowable
Amount of Eligible Collateral then pledged under either Indenture shall not
exceed 150% of the aggregate principal amount of Bonds then Outstanding under
such Indenture and no collateral shall secure Bonds other than the Eligible
Collateral under such Indenture, the Allowable Amount of which is included
within the prior computation or collateral previously so pledged which ceases
to be such Eligible Collateral not as a result of any acts or omissions to
act of the Borrower (other than the declaration of an "event of default" as
defined in a Mortgage which results in the exercise of any right or remedy
described in such Mortgage); each defined term used in this clause (g) shall
have the meaning assigned thereto in the applicable Indenture.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts
specified in clauses (c), (d), (e), (f) and (g) of this Section.
ARTICLE 4
Representations and Warranties
The Borrower makes the following representations, warranties and
agreements, which shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans:
Section 4.01. Corporate Existence, Power and Authority. The Borrower is a
cooperative association duly incorporated, validly existing and in good
standing under the laws of the District of Columbia and has the corporate
power and authority and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and to
transact the business in which it is engaged. The Borrower is duly qualified
or licensed as a foreign corporation in good standing in every jurisdiction
in which the nature of the business in which it is engaged makes such
qualification or licensing necessary, except in those jurisdictions in which
the failure to be so qualified or licensed would not (after qualification,
assuming that the Borrower could so qualify
36
without the payment of any fee or penalty and retain the rights as they
existed prior to such qualification all to an extent so that any fees or
penalties required to be so paid or any rights not so retained would not,
individually or in the aggregate, have a material adverse effect on the
business or financial condition of the Borrower), individually or in the
aggregate, have a material adverse effect upon the business or financial
condition of the Borrower. The Borrower has the corporate power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement and the Notes. This Agreement has been, and the Notes when
executed and delivered will have been, duly and validly authorized, executed
and delivered by the Borrower, and this Agreement constitutes a legal, valid
and binding agreement of the Borrower, and the Notes, when executed and
delivered by the Borrower in accordance with this Agreement, will constitute
legal, valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
Section 4.02. Financial Statements. (a) The combined balance sheets
of the Borrower and its Consolidated Subsidiaries as at May 31, 1999 and the
related combined statements of income, expenses and net margins, changes in
Members' equity and cash flows for the fiscal year ended May 31, 1999,
including the related notes, accompanied by the opinion and report thereon of
Xxxxxx Xxxxxxxx & Co., certified public accountants, heretofore delivered to
the Banks, present fairly in accordance with generally accepted accounting
principles (i) the combined financial position of the Borrower and its
Consolidated Subsidiaries as at the date of said balance sheets and (ii) the
combined results of the operations of the Borrower and its Consolidated
Subsidiaries for said fiscal year. The Borrower has no material liabilities
(contingent or otherwise) which are not disclosed by or reserved against in
the most recent audited financial statements or in the notes thereto other
than (i) Indebtedness incurred and (ii) loan and guarantee commitments issued
in each case by the Borrower in the ordinary course of business since the
date of such financial statements. All such financial statements have been
prepared in accordance with generally accepted accounting principles applied
on a basis consistent with prior periods, except as disclosed therein. The
same representations as are set forth in this Section 4.02 shall be deemed to
have been made by the Borrower in respect of the most recent annual and
quarterly financial statements of the Borrower and its Consolidated
Subsidiaries (except that the opinion and report of Xxxxxx Xxxxxxxx & Co.
may be replaced by an opinion and report of another nationally recognized
firm of independent certified public accountants) furnished or required to
be furnished to the Banks prior to or at the time of the making of each Loan
hereunder, at the time the same are furnished or required to be furnished.
37
(b) The unaudited combined balance sheets of the Borrower and its
Consolidated Subsidiaries as of August 31, 1999 and the related unaudited
combined statements of income, expenses and net margins, changes in Members'
equity and cash flows for the three months then ended, heretofore delivered
to the Banks, present fairly in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements
referred to in subsection (a) of this Section 4.02, the combined financial
position of the Borrower and its Consolidated Subsidiaries as of such date
and their combined results of operations and changes in financial position
for such three-month period (subject to normal year-end adjustments). The
Borrower has no material liabilities (contingent or otherwise) which are not
disclosed by or reserved against in such financial statements for such three-
month period other than Indebtedness incurred and loan and guarantee
commitments issued by the Borrower in the ordinary course of business since
the date of such financial statements.
Section 4.03. Litigations. There are no actions, suits, proceedings
or investigations pending or, to the Borrower's knowledge, threatened by or
before any court or any governmental authority, body or agency or any
arbitration board which are reasonably likely to materially adversely affect
the business, property, assets, financial position or results of operations
of the Borrower or the authority or ability of the Borrower to perform its
obligations under this Agreement or the Notes.
Section 4.04. Governmental Authorizations. No authorization,
consent, approval or license of, or declaration, filing or registration with
or exemption by, any governmental authority, body or agency is required in
connection with the execution, delivery or performance by the Borrower of
this Agreement or the Notes.
Section 4.05. Capital Term Certificates. The holders of the
Borrower's Capital Term Certificates are not and will not be entitled to
receive any payments with respect to the principal thereof or interest
thereon solely because of withdrawing or being expelled from membership in
the Borrower.
Section 4.06. No Violation of Agreements. Neither the Borrower nor
any Subsidiary is in default in any material respect under any material
agreement or other instrument to which it is a party or by which it is bound
or its property or assets may be affected. No event or condition exists
which constitutes, or with the giving of notice or lapse of time or both
would constitute, such a default under any such agreement or other
instrument. Neither the execution and delivery of this Agreement or the
Notes, nor the consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or thereof,
will contravene any provision of law, statute, rule or regulation
38
to which the Borrower is subject or any judgment, decree, award, franchise,
order or permit applicable to the Borrower, or will conflict or be
inconsistent with, or will result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute (or with the giving
of notice or lapse of time, or both, would constitute) a default under
(or condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any
obligations prior to the scheduled maturity thereof), or result in the
creation or imposition of any Lien upon any of the property or assets of the
Borrower pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument to which it may be subject, or violate any
provision of the certificate of incorporation or by-laws of the Borrower.
Without limiting the generality of the foregoing, the Borrower is not a party
to, or otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of the Borrower, any agreement or indenture relating
thereto or any other contract or agreement (including its certificate of
incorporation and by-laws), which would be violated by the incurring of the
Indebtedness to be evidenced by the Notes.
Section 4.07. No Event of Default under the Indentures. The
Borrower has complied fully with all of the material provisions of each
Indenture. No Event of Default (within the meaning of such term as defined
in each Indenture) and no event, act or condition (except for possible non-
compliance by the Borrower with any immaterial provision of such Indenture
which in itself is not such an Event of Default under such Indenture) which
with notice or lapse of time, or both, would constitute such an Event of
Default has occurred and is continuing under such Indenture. The Borrowings
by the Borrower contemplated by this Agreement will not cause such an Event
of Default under, or the violation of any covenant contained in, either
Indenture.
Section 4.08. Compliance with ERISA. The Plans (other than Plans
consisting of mulitemployer plans (as defined in Section 4001 of ERISA)) are
in substantial compliance with ERISA, no such Plan is insolvent or in
reorganization, and no such Plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Internal Revenue Code.
No Plan consisting of a multiemployer plan (as defined in Section 4001 of
ERISA) is in reorganization. Neither the Borrower nor a Subsidiary of the
Borrower nor any member of the ERISA Group has incurred any material
liability (including any material contingent liability) to or on account of
a Plan pursuant to Section 4062, 4063, 4064, 4201 or 4204 of ERISA, no
proceedings have been instituted to terminate any Plan, and no condition
exists which presents a material risk to the Borrower or a Subsidiary of the
Borrower of incurring a material liability to or on account of a Plan
pursuant to any of the foregoing Sections of ERISA.
39
Section 4.09. Compliance with Other Laws. The Borrower and each
Subsidiary is in compliance, in all material respects, with all applicable
requirements of law and all applicable rules and regulations of each Federal,
State, municipal or other governmental department, agency or authority,
domestic or foreign.
Section 4.10. Tax Status. The Borrower is exempt from payment of
Federal income tax under Section 501(c)(4) of the Internal Revenue Code.
Section 4.11. Investment Company Act. 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.
Section 4.12. Public Utility Holding Company Act. The Borrower is
not a "holding company", or a "subsidiary company" of a "holding company",
or an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
Section 4.13. Disclosure. To the best of the Borrower's knowledge,
information and belief, neither this Agreement nor any document, certificate
or financial statement furnished to any Bank by or on behalf of the Borrower
in connection herewith (all such documents, certificates and financial
statements, taken as a whole) contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact
(other than facts of a general economic or political nature) known to the
Borrower which in its judgment materially adversely affects or in the future
is likely to (so far as is now known to the Borrower) have a material adverse
effect upon the business, operations, prospects, property, assets or
financial condition of the Borrower which has not been set forth in this
Agreement or in other documents, certificates or financial statements
furnished to the Banks by or on behalf of the Borrower in connection with the
transactions contemplated hereby.
Section 4.14. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Section 4.15. Environmental Matters. In the ordinary course of its
business, the Borrower conducts reviews, to the extent appropriate given the
40
nature of its business operations, of the effect of Environmental Laws on the
business, operations and properties of the Borrower and its Subsidiaries, in
the course of which it identifies and evaluates associated liabilities and
costs (including, without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or previously owned,
any capital or operating expenditures required to achieve or maintain
compliance with environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, the Borrower has reasonably
concluded that such associated liabilities and costs, including the cost of
compliance with Environmental Laws, are unlikely to have a material adverse
effect on the business, financial condition, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole.
Section 4.16. Year 2000. The cost to the Borrower and its
Subsidiaries of any reprogramming required to permit the proper functioning,
in and following the year 2000, of (i) the computer systems of the Borrower
and its Subsidiaries and (ii) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the
Borrower's systems interface) and the testing of all such systems and
equipment, as so reprogrammed, and of the reasonably foreseeable consequences
of year 2000 to the Borrower and its Subsidiaries (including, without
limitation, reprogramming errors and the failure of others' systems or
equipment) would not reasonably be expected to result in a Default or Event
of Default or have a material adverse effect on the operations, business,
properties or condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole. To the knowledge of the Borrower, except for
such of the reprogramming referred to in the preceding sentence as may be
necessary, which reprogramming the Borrower expects to complete in a timely
fashion, the computer and management information systems of the Borrower and
its Subsidiaries are and, with ordinary course upgrading and maintenance and
planned systems conversions and/or upgrades, will continue to be, sufficient
to permit the Borrower to conduct its businesses without a material adverse
effect on the operations, business, properties or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole.
41
ARTICLE 5
Covenants
The Borrower agrees that, so long as any Bank has any Commitment hereunder or
any amount payable under any Note or any fee payable pursuant to Section 2.09
or any other amount then due and payable hereunder remains unpaid:
Section 5.01. Corporate Existence. The Borrower, at its own cost
and expense, will, and will cause each Subsidiary to, do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence, material rights and franchises; provided, however, that
neither the Borrower nor any Subsidiary shall be required to preserve any
right or franchise or, in the case of a Subsidiary, its corporate existence,
if its Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or such
Subsidiary (provided that the termination of the corporate existence of a
Subsidiary shall be permitted if the Board of Directors of the Borrower shall
determine that its existence is not desirable in the conduct of the business
of the Borrower) and that the loss thereof is not disadvantageous in any
material respect to the Banks.
Section 5.02. Disposition of Assets; Merger, Character of Business;
etc. The Borrower will not wind up or liquidate its business or sell, lease,
transfer or otherwise dispose of all or substantially all of its assets as an
entirety or in a series of related transactions and will not consolidate with
or merge with or into any other Person other than a merger with a Subsidiary
in which the Borrower is the surviving Person. The Borrower will not engage
in any business other than the business contemplated by its certificate of
incorporation and by-laws, each as in effect on the Effective Date.
Section 5.03. Financial Information. The Borrower will, and will
cause each Subsidiary to, keep its books of account in accordance with
generally accepted accounting principles and the Borrower will furnish to the
Banks (i) as soon as available and in any event within 60 days after the
close of each of the first three quarters of each fiscal year of the
Borrower, as at the end of, and for the period commencing at the end of the
previous fiscal year and ending with, such quarter, unaudited combined
balance sheets of the Borrower and its Consolidated Subsidiaries and the
related unaudited combined statements of income, expenses and net margins,
changes in Members' equity and cash flow of the Borrower and its Consolidated
Subsidiaries for such quarter and for the portion of the Borrower's fiscal
year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, all in
reasonable detail and certified (subject to normal year-end adjustments) as
to fairness of
42
presentation in accordance with generally accepted accounting principles and
consistency (except for changes concurred in by the Borrower's independent
certified public accountants) by the Chief Financial Officer, the Governor,
an Assistant Secretary-Treasurer or the Controller of the Borrower; (ii) as
soon as practicable and in any event within 90 days after the close of each
fiscal year of the Borrower, as at the end of and for the fiscal year just
closed, combined balance sheets of the Borrower and its Consolidated
Subsidiaries and the related combined statements of income, expenses and net
margins, changes in Members' equity and cash flow for such fiscal year for
the Borrower and its Consolidated Subsidiaries, all in reasonable detail and
fully certified (without any qualification as to the scope of the audit) by
Xxxxxx Xxxxxxxx & Co. or other independent certified public accountants of
nationally recognized standing selected by the Borrower, who shall have
audited the books and accounts of the Borrower for such fiscal year; (iii)
together with the financial statements referred to in clauses (i) and (ii)
above, a certificate signed by the Governor, the Chief Financial Officer, an
Assistant Secretary-Treasurer or the Controller of the Borrower, in such
detail as shall be reasonably satisfactory to the Required Banks, (x)
identifying (A) all Indebtedness outstanding as at the end of the fiscal
period covered by such financial statements extended by the Borrower or by
any other Person and Guaranteed by the Borrower to any of the forty Members
with the largest amount of Indebtedness to (or Guaranteed by) the Borrower
outstanding as at the end of the fiscal period covered by such financial
statements (the "Largest Members") as to which, to the knowledge and
information of the Borrower, the Member is in default (whether in the payment
of the principal thereof or interest thereon or with respect to any material
covenant or agreement contained in any instrument, mortgage or agreement
evidencing or relating to such Indebtedness) and specifying whether such
default has been waived by the Borrower or such other Person and the nature
and status of each such default not so waived and (B) the aggregate amount of
all Indebtedness outstanding as of the end of the fiscal period covered by
such financial statements as to which, to the knowledge and information of
the Borrower, Members other than the Largest Members are in default (whether
in the payment of the principal thereof or interest thereon or with respect
to any material covenant or agreement contained in any instrument, mortgage
or agreement evidencing or relating to such Indebtedness), (y) identifying
the ten Members with the largest amount of Indebtedness to (or Guaranteed by)
the Borrower outstanding as of the end of the fiscal period covered by such
financial statements, together with the principal amount of such Indebtedness
outstanding with respect to each such Member as of the end of such fiscal
period and (z) identifying all loans which are RUS Guaranteed Loans and are
outstanding as of the end of the fiscal period covered by such financial
statements, together with (a) the principal amount of each such RUS
Guaranteed Loan as of the end of such fiscal period, (b) the total amount of
Indebtedness incurred by the Borrower and Subsidiaries of the Borrower in
order to fund such
43
RUS Guaranteed Loan, (c) the total interest expense incurred during such
fiscal period by the Borrower and Subsidiaries of the Borrower in connection
with the Indebtedness referred to in preceding clause (b) and (d) the amount
of the Guaranteed Portion of such RUS Guaranteed Loan; (iv) with reasonable
promptness, copies of all regular and periodical financial statements or
other financial reports and documents which the Borrower may make available
to its Members or bondholders or file with the Securities and Exchange
Commission; (v) promptly after obtaining knowledge or receiving notice of a
change (whether an increase or decrease) in any rating issued by S&P or
Xxxxx'x pertaining to any securities of, or guaranteed by, the Borrower or
any of its Subsidiaries or affiliates, a notice setting forth such change;
and (vi) with reasonable promptness, such other information respecting the
business, operations, prospects and financial condition of the Borrower or
any of its Subsidiaries or any Joint Venture as any Bank may, from time to
time, reasonably request, including, without limitation, with respect to the
performance and observance by the Borrower of the covenants and conditions
contained in this Agreement.
Section 5.04. Default Certificates. Concurrently with each
financial statement delivered to the Banks pursuant to clauses (i) and (ii)
of Section 5.03, the Borrower will furnish to the Banks a certificate signed
by the Governor, the Chief Financial Officer, an Assistant Secretary-
Treasurer or the Controller of the Borrower to the effect that the review of
the activities of the Borrower during such year or the portion thereof
covered by such financial statement and of the performance of the Borrower
under this Agreement has been made under his supervision and that to the
best of his knowledge, based on such review, there exists no event which
constitutes a Default or an Event of Default under this Agreement or, if any
such event exists, specifying the nature thereof, the period of its existence
and what action the Borrower has taken and proposes to take with respect
thereto, which certificate shall set forth the calculations or other data
required to establish compliance with the provisions of Section 5.0 9 and
Sections 5.12 through 5.14, inclusive, at the end of such fiscal quarter or
fiscal year, as the case may be. The Borrower further covenants that upon
any such officer of the Borrower obtaining knowledge of any Default or Event
of Default under this Agreement, it will forthwith, and in no event later
than the close of business on the Business Day immediately after the day
such knowledge is obtained, deliver to the Banks a statement of any officer
referred to above specifying the nature and the period of existence thereof
and what action the Borrower has taken and proposes to take with respect
thereto.
Section 5.05. Notice of Litigation, Legislative Developments and
Defaults. The Borrower will promptly give written notice to each of the
Banks of (i) any action, proceeding or claim of which the Borrower may have
notice, which may be commenced or asserted against the Borrower or any
Subsidiary in which
44
the amount involved is $1,000,000 or more and is not covered in full by
insurance or as to which any insurer has disclaimed liability; (ii) any
dispute which may exist between the Borrower or any Subsidiary and any
governmental body, which is likely to materially and adversely affect the
normal business operation of the Borrower or the Borrower and its
Subsidiaries taken as a whole or any of the material properties and assets
of the Borrower or the Borrower and its Subsidiaries taken as a whole; (iii)
any legislation enacted by any governmental body and any rulings and
regulations promulgated by any governmental or regulatory bodies, known or
which should be known to the Borrower, affecting the Borrower or any
Subsidiary or generally affecting the Borrower's Members which is likely to
materially and adversely affect the present or future operations of the B
orrower, the Borrower and its Subsidiaries taken as a whole or the Borrower's
Members; and (iv) any default by the Borrower or any Subsidiary or event or
condition known or which should be known to the Borrower which with the
giving of notice or lapse of time, or both, would constitute a default, with
respect to any payment or payments in respect of Indebtedness of the Borrower
or such Subsidiary aggregating in excess of $15,000,000 (whether in payment
of principal thereof or interest thereon or with respect to any material
covenant or agreement contained in any instrument, mortgage, deed of trust
or agreement evidencing or relating to such Indebtedness or otherwise).
Section 5.06. ERISA. As soon as possible and, in any event, within
10 days after the Borrower or a Subsidiary of the Borrower knows or has
reason to know that a Reportable Event has occurred, that an accumulated
funding deficiency has been incurred or an application may be or has been
made to the Secretary of the Treasury for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code with respect to a
Plan, that a Plan has been or may be terminated, that proceedings may be or
have been instituted to terminate a Plan, or that the Borrower, a Subsidiary
of the Borrower or any member of the ERISA Group will or may incur any
liability to or on account of a Plan under Section 4062, 4063, 4064, 4201 or
4204 of ERISA, the Borrower will deliver to each of the Banks a certificate
of the Chief Financial Officer of the Borrower setting forth details as to
such occurrence and action, if any, which the Borrower or such Subsidiary is
required or proposes to take, together with any notices required to be filed
with or by the Borrower, such Subsidiary, such member of the ERISA Group,
the PBGC or the plan administrator with respect thereto. Upon the request
of any Bank, the Borrower will furnish to such Bank a copy of the annual
report of each Plan (Form 5500) required to be filed with the Internal
Revenue Service. Copies of annual reports or any notices required to be
delivered to the Banks hereunder shall be delivered no later than 10 days
after the later of the date such report or notice has been filed with the
Internal Revenue Service or the PBGC or received by the Borrower or a
Subsidiary of the Borrower.
45
Section 5.07. Payment of Charges. The Borrower will, and will cause
each Subsidiary to, duly pay and discharge (i) all taxes, assessments and
governmental charges or levies imposed upon or against it or its property or
assets, prior to the date on which penalties attach thereto, unless and to
the extent only that such taxes, assessments and governmental charges or
levies are being contested in good faith by appropriate proceedings; and
(ii) all lawful claims, including, without limitation, claims for labor,
materials, supplies or services, which might or could, if unpaid, become a
Lien upon such property or assets, unless and to the extent only that the
validity of the amount thereof is being contested in good faith by
appropriate proceedings.
Section 5.08. Inspection of Books and Assets. The Borrower will,
and will cause each Subsidiary to, permit any representative of any Bank (or
any agent or nominee of such Bank) to visit and inspect any of the property
of the Borrower or such Subsidiary, to examine the books of record and
account of the Borrower or such Subsidiary and to discuss the affairs,
finances and accounts of the Borrower or such Subsidiary with the officers
and independent public accountants of the Borrower or such Subsidiary, all
at such reasonable times and as often as such Bank may reasonably request.
Section 5.09. Indebtedness. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, incur, assume or Guarantee any Superior
Indebtedness, or make any optional prepayment on any Capital Term
Certificate, provided that (i) subject to the provisions of Section 5.12, any
Subsidiary may incur Superior Indebtedness owing to the Borrower or assume or
Guarantee Indebtedness of any Person (other than the Borrower or any of its
Subsidiaries) owing to the Borrower and (ii) the Borrower may incur, assume
or Guarantee Superior Indebtedness or make optional prepayments on Capital
Term Certificates if, after giving effect to any such action specified above
in this clause (ii), (x) on the date of such incurrence, assumption or
Guarantee or making of such optional prepayment (the "Determination Date")
the aggregate principal amount of Superior Indebtedness then outstanding
would not exceed ten times the sum of (a) the aggregate principal amount of
Capital Term Certificates outstanding on the Determination Date, (b) the
aggregate amount of Members' equity in the Borrower, other than Capital Term
Certificates, on the Determination Date and (c) the aggregate principal
amount of Qualified Subordinated Indebtedness outstanding on the
Determination Date and (y)on no given future date would the aggregate
principal amount of Superior Indebtedness outstanding on the Determination
Date which will remain outstanding on such given future date exceed ten
times the sum of (a) the aggregate principal amount of Capital Term C
ertificates outstanding on the Determination Date which will remain
outstanding on such given future date, (b) the aggregate amount of Members'
equity in the Borrower, other than Capital Term Certificates, on the
Determination Date and (c)
46
the aggregate principal amount of Qualified Subordinated Indebtedness
outstanding on the Determination Date which will remain outstanding on such
given future date. The respective principal amounts of Superior
Indebtedness, Capital Term Certificates and Qualified Subordinated
Indebtedness to be outstanding on such given future date shall be determined
after giving effect to mandatory sinking fund payments, other mandatory
prepayments and serial and other maturity payments required to be made on or
prior to said given future date by the terms of such Superior Indebtedness,
Capital Term Certificates, Qualified Subordinated Indebtedness or any
indenture or other instrument pursuant to which they are respectively issued.
(b) If any Loan is outstanding hereunder, the Borrower will not
take any action which would prevent it from then complying, or fail to take
any action which would enable it then to comply, with the provisions of
Section 3.02(g), assuming for this purpose only that the Borrower then
intended to borrow from one or more of the Banks hereunder.
Section 5.10. Liens. The Borrower will not create or permit to
exist any Lien on or with respect to any Indebtedness of any Member which is
an asset of the Borrower, now existing or hereafter created, or any
collateral securing any such Indebtedness, and the Borrower will not permit
any Subsidiary to create or permit to exist any Lien on or with respect to
any of such Subsidiary's assets, except Liens (i) granted by the Borrower to
the trustee pursuant to either Indenture, (ii) on any such Indebtedness
granted by the Borrower to secure any borrowing for the purpose of making
loans to Member power supply systems or loans to Members for bulk power
supply projects or loans to Members for the purpose of providing financing
to telephone and related systems eligible to borrow from the RUS, which
borrowing or borrowings are on terms (except as to terms of interest,
premium, if any, and amortization) not materially more disadvantageous to
the Borrower's unsecured creditors than the borrowings under either Indenture
(it being understood that the Borrower can not pledge such assets to an
extent greater than 150% of the aggregate principal amount of such
Indebtedness) and which Liens secure amounts not exceeding $500,000,000 in
the aggregate at any one time outstanding, (iii) of current taxes not
delinquent or a security for taxes being contested in good faith, (iv) other
than in favor of the PBGC, created by or resulting from any legal proceedings
(including legal proceedings instituted by the Borrower or any Subsidiary)
which are being contested in good faith by appropriate proceedings, including
appeals of judgments as to which a stay of execution shall have been issued,
and adequate reserves shall have been established, (v) created by the
Borrower to secure Guarantees by the Borrower of Indebtedness, the interest
on which is excludable from the gross income of the recipient thereof for
Federal income tax purposes as provided in Section 103(a) of the Internal
Revenue Code or Section 103(a) of the Internal Revenue Code of
47
1954, as amended, (x) of a Member which is a state or political subdivision
thereof or (y) of a state or political subdivision thereof incurred to
benefit a Member for one of the purposes provided in Section 142(a)(2), (4),
(5), (6), (8), (9), (10) or (12) of the Internal Revenue Code or Xxxxxxx 0
00(x)(0)(X), (X), (X), (X), (H) or (J) of the Internal Revenue Code of 1954,
as amended, and (vi) granted by any Subsidiary to the Borrower.
Section 5.11. Maintenance of Insurance. The Borrower will maintain,
and will cause each Subsidiary to maintain, insurance in such amounts, on
such forms and with such companies as is necessary or appropriate for its
business.
Section 5.12. Subsidiaries and Joint Ventures. The sum of the
amount of Indebtedness owing to the Borrower by all of its Subsidiaries and
Joint Ventures plus the amount paid by the Borrower in respect of the stock,
obligations or securities of or any other interest in such Subsidiaries and
Joint Ventures plus any capital contributions by the Borrower to such
Subsidiaries and Joint Ventures plus the amount of assets otherwise sold or
transferred by the Borrower to such Subsidiaries and Joint Ventures (other
than sales at fair market value) shall not exceed at any time 10% of the sum
of (i) all accounts which, in accordance with generally accepted accounting
principles, constitute Members' equity in the Borrower at such time, (ii)
all Indebtedness of the Borrower shown in its balance sheet dated as of May
31, 1999 as "Members' Subordinated Certificates" as such Indebtedness shall
be reduced from time to time and any other Indebtedness of the Borrower
incurred after May 31, 1999 having substantially similar provisions as to
subordination as those contained in said outstanding certificates as such
other Indebtedness shall be reduced from time to time, in each case at such
time and (iii) all Qualified Subordinated Indebtedness outstanding at such
time.
Section 5.13. Minimum TIER. The Borrower shall at no time permit
the average of the TIERs for the six (6) immediately preceding fiscal
quarters of the Borrower to be less than 1.025:1.00.
Section 5.14. Retirement of Patronage Capital. The Borrower shall
not make, or permit any Subsidiaries of the Borrower to make, any payments
to Members in respect of Patronage Capital Certificates unless (i) the TIER
for the immediately preceding fiscal year equals or exceeds 1.05:1.00 and
(ii) there exists (and would exist after giving effect to any such payment)
no Default or Event of Default under this Agreement.
Section 5.15. Use of Proceeds. The proceeds of the Loans made
hereunder may be used by the Borrower for general corporate purposes. None
of such proceeds will be used, directly or indirectly, for the purpose,
whether
48
immediate, incidental or ultimate, of buying or carrying any "margin stock",
within the meaning of Regulation U. Neither the Borrower nor any agent
acting on its behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation U or Regulation X.
ARTICLE 6
Defaults
Section 6.01. Events of Defaults. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) Principal and Interest. The Borrower shall (i)fail to pay
when due (whether upon stated maturity, by acceleration or otherwise) any
principal of the Notes or (ii)fail, and such failure shall continue uncured
for one or more Business Days, to pay when due (whether upon stated maturity,
by acceleration or otherwise) any interest on the Notes;
(b) Other Amounts. The Borrower shall fail to pay when due any
fee or other amount payable under this Agreement and such failure remains
uncured for five (5) days after the due date thereof;
(c) Covenants Without Notice. The Borrower shall fail to observe
or perform any covenant or agreement on its part to be observed or performed
which is set forth in Section 5.01, 5.02, 5.09, 5.10, 5.12, 5.13, 5.14 or
5.15;
(d) Covenants With 10 Days Grace. The Borrower shall fail to
observe or perform any covenant or agreement on its part to be observed or
performed, which is set forth in Section 5.05, 5.06, 5.07 or 5.08, and such
non-observance or non-performance shall continue unremedied for a period of
more than 10 days;
(e) Other Covenants. The Borrower shall fail to observe or
perform any covenant, condition or agreement on its part to be observed or
performed, other than as referred to in subsections (a), (b), (c) and (d)
above, for a period of 30 days after written notice specifying such failure
and requesting that it be remedied is given by any Bank to the Borrower and
the other Banks; provided that, if the failure be such that it cannot be
corrected within the applicable period, but can be corrected within a
reasonable period of time thereafter, it shall not constitute a default if
corrective action is instituted by the Borrower within the applicable period
and diligently pursued until the failure is corrected;
49
(f) Representations. Any representation, warranty, certification
or statement made or deemed to be made by the Borrower in this Agreement or
in any certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect in any material respect
when made or deemed to be made;
(g) Non-Payments of Indebtedness and/or Derivatives Obligations.
The Borrower or any Subsidiary of the Borrower shall fail to make any payment
or payments aggregating for the Borrower and its Subsidiaries in excess of
$25,000,000 in respect of Indebtedness and/or Derivatives Obligations of the
Borrower or any Subsidiary (other than the Notes or any Indebtedness under
this Agreement) when due (whether upon stated maturity, by acceleration or
otherwise) or within any applicable grace period;
(h) Defaults Under Other Agreements. The Borrower or any
Subsidiary shall fail to observe or perform within any applicable grace
period any covenant or agreement contained in any agreement or instrument
relating to any Indebtedness of the Borrower or any Subsidiary, aggregating
for the Borrower and its Subsidiaries in excess of $25,000,000 if the effect
of such failure is to accelerate, or to permit the holder of such
Indebtedness or any other Person to accelerate, the maturity of such
Indebtedness;
(i) Bankruptcy. The Borrower or any Subsidiary shall generally
not pay its debts as they 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 Subsidiary seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, conservation or proceeding in the nature thereof, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors, or seeking
the entry of an order for relief or the appointment of a receiver (including
state regulatory authorities acting in a similar capacity), 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) shall remain undismissed or unstayed for a period of 60
days; or the Borrower or any Subsidiary shall take any action to authorize
any of the actions set forth above in this subsection (i);
(j) ERISA. A Plan shall fail to maintain the minimum funding
standard required by Section 412 of the Internal Revenue Code for any plan
year or a waiver of such standard is sought or granted under Section 412(d),
or a Plan is, shall have been or is likely to be terminated or the subject of
termination proceedings under ERISA, or the Borrower or a Subsidiary of the
Borrower or any
50
member of the ERISA Group has incurred or is likely to incur a liability to
or on account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of
ERISA, and there shall result from any such event or events either a
liability or a material risk of incurring a liability to the PBGC or a Plan,
which in the opinion of the Required Banks, will have a material adverse
effect upon the business, operations or the financial condition of the
Borrower or a Subsidiary of the Borrower; or
(k) Money Judgment. A final judgment or order for the payment of
money in excess of $25,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue unsatisfied and in
effect for a period of 45 days during which execution shall not be
effectively stayed or deferred (whether by action of a court, by agreement
or otherwise); then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, the Agent, upon the request
of the Required Banks, shall by notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Agent, any Bank
or the holder of any Note to enforce its claims against the Borrower: (a)
declare the Commitments terminated, whereupon the Commitment of each Bank
shall forthwith terminate immediately and any fee payable pursuant to Section
2.09 shall forthwith become due and payable without any other notice of any
kind; or (b) declare the principal of and accrued interest on the Loans, and
all other obligations owing hereunder, to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that, if an Event of Default specified in subsection (i) shall
occur, the result which would occur upon the giving of written notice by the
Agent to the Borrower, as specified in clauses (a) and (b) above, shall occur
automatically without the giving of any such notice.
Section 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(b) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
The Agent
Section 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
51
Section 7.02. Agent and Affiliates. The Chase Manhattan Bank of New
York shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were
not the Agent, and The Chase Manhattan Bank and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business
with the Borrower or any Subsidiary or affiliate of the Borrower as if it
were not the Agent hereunder.
Section 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article
6.
Section 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
Section 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents, or
employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness
of this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) reasonably believed by
it to be genuine or to be signed by the proper party or parties.
Section 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except
such as result from such indemnitee's gross negligence or willful misconduct)
that such indemnitees may
52
suffer or incur in connection with this Agreement or any action taken or
omitted by such indemnitees hereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
Section 7.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 15 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of its appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
Section 7.09. Co-Documentation Agents and Syndication Agent Not
Liable. Nothing in this Agreement shall impose upon any Co-Documentation
Agent or the Syndication Agent, each in such capacity, any duties or
responsibilities whatsoever.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
53
(b) in the case of a Committed Borrowing, Banks having 50% or
more of the aggregate amount of the Commitments advise the Agent that the
Adjusted CD Rate or the Adjusted London Interbank Offered Rate, as the case
may be, as determined by the Agent will not adequately and fairly reflect the
cost to such Banks of funding their CD Loans or Euro-Dollar Loans, as the
case may be, for such Interest Period, the Agent shall forthwith give notice
thereof to the Borrower and the Banks, whereupon until the Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer
exist, (i) the obligations of the Banks to make CD Loans or Euro-Dollar
Loans, as the case may be, or to continue or convert outstanding Loans as or
into CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended
and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the case may be,
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any Fixed Rate
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, (i)if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall bear
interest for each day from and including the first day to but excluding the
last day of the Interest Period applicable thereto at the Base Rate for such
day.
Section 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank (or
its Euro-Dollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Bank
shall so notify the Agent, the Agent shall forthwith give notice thereof to
the other Banks and the Borrower, whereupon until such Bank notifies the
Borrower and the Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Bank to make Euro-Dollar Loans or to
convert outstanding Loans into Euro-Dollar Loans or continue outstanding
Loans as Euro-Dollar Loans, shall be suspended. Before giving any notice to
the Agent pursuant to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid the need for giving
such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower
54
shall immediately prepay in full the then outstanding principal amount of
each such Euro-Dollar Loan, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base
Rate Loan.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after
(x)the date hereof, in the case of any Committed Loan or any obligation to
make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its Fixed Rate
Loans, its Notes or its obligation to make Fixed Rate Loans, or shall change
the basis of taxation of payments to any Bank (or its Applicable Lending
Office) of the principal of or interest on its Fixed Rate Loans or any other
amounts due under this Agreement in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans (except for changes in the rate of tax on
the overall net income of such Bank or its Applicable Lending Office imposed
by the jurisdiction in which such Bank's principal executive office or
Applicable Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding (A) with respect to
any CD Loan, any such requirement included in an applicable Domestic Reserve
Percentage and (B) with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment (excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Applicable Lending Office) or shall impose on
any Bank (or its Applicable Lending Office) or on the United States market
for certificates of deposit or the London interbank market any other
condition affecting its Fixed Rate Loans, its Notes or its obligation to
make Fixed Rate Loans; and the result of any of the foregoing is to increase
the cost to such Bank (or its
55
Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction (including any
amount or amounts equal to any taxes on the overall net income of such Bank
payable by such Bank with respect to the amount of payments required to be
made pursuant to this Section 8.03(a)).
(b) If any Bank determines that the adoption of any applicable
law, rule, regulation, guideline or request concerning capital adequacy, or
any change therein, or any change in interpretation or administration thereof
by any governmental authority, central bank or comparable agency (including,
without limitation, any such adoption or change the effect of which would be,
for purposes of capital adequacy requirements, to treat the Commitments
hereunder as not constituting commitments with an original maturity of one
year or less), occurring after the date hereof, will have the effect of
increasing the amount of capital required or expected to be maintained by
such Bank based on the existence of such Bank's Commitment hereunder or its
obligations hereunder, it will notify the Borrower. This determination will
be made on a Bank by Bank basis. The Borrower will pay to each Bank on
demand such additional amounts as are necessary to compensate for the
increased cost to such Bank as a result of the event described in the first
sentence of this Section 8.03(b). In determining such amount, such Bank will
act reasonably and in good faith and will use averaging and attribution
methods which are reasonable, and such Bank will pass such costs on to the
Borrower only if such costs are passed on in a similar manner by such Bank
to similarly situated borrowers (which are parties to credit or loan
documentation containing a provision similar to this Section 8.03(b)), as
determined by such Bank in its reasonable discretion. Each Bank's
determination of compensation shall be conclusive if made in accordance with
this provision. Each Bank, upon determining that any increased costs will
be payable pursuant to this Section 8.03(b), will give prompt written notice
thereof to the Borrower, which notice shall show the basis for calculation
of such increased costs, although the failure to give any such notice shall
not release or diminish any of the Borrower's obligations to pay increased
costs pursuant to this Section 8.03(b).
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not,
in the judgment of such Bank, be
56
otherwise disadvantageous to such Bank. A Bank claiming compensation under
this Section shall furnish a certificate to the Borrower setting forth the
additional amount or amounts to be paid to it hereunder, which shall be
conclusive in the absence of manifest error. In determining such amount,
such Bank may use any reasonable averaging and attribution methods.
Section 8.04. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make, or to continue or convert
outstanding Loans as or to, Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03(a)
and the Borrower shall, by at least five Euro-Dollar Business Days' prior
notice to such Bank through the Agent, have elected that the provisions of
this Section shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as CD
Loans or Euro-Dollar Loans, as the case may be, shall be made instead as Base
Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
ARTICLE 9
Miscellaneous
Section 9.01. Notices. All notices, requests, directions, consents,
approvals and other communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar writing) and
shall be given to such party: (x) in the case of the Borrower or the Agent,
at its address or telex or telecopier number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address or telex or telecopier
number set forth in its Administrative Questionnaire or (z) in the case of
any other party, such other address or telex or telecopier number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower. Each such notice, request, direction, consent, approval or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received or (ii) if given by any other means, when delivered or
received at the address specified in this Section;
57
provided that notices to the Agent under Article 2 or Article 8 shall not be
effective until received.
Section 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under
any Note shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Documentary Taxes; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses of the Agent,
including reasonable fees and disbursements of special counsel for the Agent,
in connection with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agent or any Bank, including reasonable fees and
disbursements incurred by counsel or in-house counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom. The Borrower shall indemnify
each Bank against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution and
delivery of this Agreement or the Notes and any and all liabilities with
respect to or resulting from any delay or omission (unless solely
attributable to such Bank) to pay such taxes.
(b) The Borrower agrees to indemnify each Bank, their respective
affiliates and the respective directors, officers, agents and employees of
the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from
and against any and all liabilities, losses, damages, costs and expenses of
any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by any Indemnitee (or by the
Agent in connection with its actions as Agent hereunder) in connection with
any investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) relating to or arising out of
this Agreement or any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be indemnified hereunder
for its own gross negligence, willful misconduct or unlawful conduct as
determined by a court of competent jurisdiction.
Section 9.04. Sharing of Set-offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest then due with respect to any Note held by it which is greater than
the proportion received by any other Bank in respect of the aggregate amount
of principal and interest due with respect
58
to any Note held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Banks, and such other adjustments shall be made, as may be required so
that all such payments of principal and interest with respect to the Notes
held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any
right of set-off or counterclaim it may have and to apply the amount subject
to such exercise to the payment of indebtedness of the Borrower other than
its indebtedness under the Notes. The Borrower agrees, to the fullest extent
it may effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
Section 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or waiver shall,
unless signed by all the Banks, (i) increase or decrease the Commitment of
any Bank (except for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of
or rate of interest on any Loan or any fees hereunder, (iii) postpone the
date fixed for any payment of principal of or interest on any Loan or any
fees hereunder or for any reduction or termination of any Commitment or (iv)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this Section or anyother
provision of this Agreement.
Section 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations
59
under this Agreement. Any agreement pursuant to which any Bank may grant
such a participating interest shall provide that such Bank shall retain the
sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant.
Subject to the provisions of subsection (e), the Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits, and be bound by the obligations, of Article8 with
respect to its participating interest. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (but not in
any case in an amount less than $10,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and Assumption
Agreement in substantially the form of Exhibit J hereto executed by such
Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent, such consents not to be unreasonably
withheld; provided that if an Assignee is another Bank or an affiliate of
such transferor Bank, no such consent shall be required; and provided further
that such assignment may, but need not, include the rights of the transferor
Bank in respect of outstanding Money Market Loans. Upon execution and
delivery of such an instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required.Upon
the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the
Agent an administrative fee for processing such assignment in the amount of
$3,500. If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the first
date on which interest or fees are payable hereunder for its account, deliver
to the Borrower and the Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with
Section 2.16.
60
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02 or 8.03 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
Section 9.07. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
Section 9.08. Governing Law. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the State of New
York.
Section 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject
matter hereof.
Section 9.10. Several Obligations. The obligations of the Banks
hereunder are several. Neither the failure of any Bank to carry out its
obligations hereunder nor of this Agreement to be duly authorized, executed
and delivery by any Bank shall relieve any other Bank of its obligations
hereunder (or affect the rights hereunder of such other Bank). No Bank shall
be responsible for the obligations of, or any action taken or omitted by,
any other Bank hereunder.
Section 9.11. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 9.12. Notice. The Borrower hereby notifies each Bank party
to the Prior Credit Agreement of the Borrower's termination of the
Commitments (as
61
defined in the Prior Credit Agreement), such termination to be effective on
the Effective Date. Each Bank party to the Prior Credit Agreement hereby
waives the Borrower's obligation to notify the Administrative Agent under
the Prior Credit Agreement of such termination in advance of such
termination.
62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By:____________________________________
Title:
Address: Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Title:
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
63
Commitments
$100,000,000 THE BANK OF NOVA SCOTIA
By:______________________________
Title:
$50,000,000 BANK ONE, N.A. (MAIN OFFICE-CHICAGO)
By:______________________________
Title:
$50,000,000 ABN AMRO BANK N.V.
By:______________________________
Title:
By:______________________________
Title:
$50,000,000 BANK OF AMERICA, N.A.
By:______________________________
Title:
64
$50,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By:_________________________________
Title:
$50,000,000 THE CHASE MANHATTAN BANK
By:_________________________________
Title:
$50,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By:_____________________________
Title:
$50,000,000 XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By:_______________________________
Title:
$50,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By:_______________________________
Title:
By:_______________________________
Title:
65
$50,000,000 TORONTO DOMINION (NEW YORK), INC.
By:_____________________________
Title:
Total Commitments
$550,000,000
==============
66
BANK ONE, N.A. (MAIN OFFICE-CHICAGO),
as Documentation Agent
By:______________________________
Title:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:______________________________
Title:
Address: Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Telecopy number:
67
EXHIBIT A
NOTE
New York, New York
,19
For value received, National Rural Utilities Cooperative Finance
Corporation, a not-for-profit cooperative association incorporated under the
laws of the District of Columbia (the "Borrower"), promises to pay to the
order of (the "Bank"), for the account of its Applicable Lending Office, the
unpaid principal amount of each Loan made by the Bank to the Borrower
pursuant to the Revolving Credit Agreement referred to below on the last day
of the Interest Period relating to such Loan. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and
at the rate or rates provided for in the Revolving Credit Agreement. All
such payments of principal and interest shall be made in lawful money of the
United States in Federal or other immediately available funds at the office
of The Bank of Nova Scotia, Xxx Xxxxxxx Xxxxx, 000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, prior to any transfer hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding may be
endorsed by the Bank on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that the failure
of the Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Revolving Credit
Agreement.
This note is one of the Notes referred to in the 364-Day Revolving
Credit Agreement dated as of September 29, 1999 among the Borrower, the banks
listed on the signature pages thereof, Bank One, N.A., as Documentation
Agent, and The Bank of Nova Scotia, as Administrative Agent (as the same may
be amended from time to time, the "Revolving Credit Agreement"). Terms
defined in the Revolving Credit Agreement are used herein with the same
meanings. Reference is made to the Revolving Credit Agreement for provisions
for the prepayment hereof and the acceleration of the maturity hereof.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date Amount Type Amount of Maturity Notation
of of Principal Date Made
Loan Loan Repaid By
EXHIBIT B-1
Form of RUS Guarantee
The United States of America acting through the Administrator of the
Rural Utilities Service ("RUS") hereby unconditionally guarantees to [name
of Payee] the making of [__%] of the payments of principal and interest when
and as due on this Note of _________ (the "Cooperative") in accordance with
the terms hereof and of the Loan Agreement referred to in this Note, until
such principal and interest shall be indefeasibly paid in full (which
includes interest accruing on such principal between the date of default
under this Note and the payment in full of this Guarantee), irrespective of
receipt by RUS of any sums or property from its enforcement of its remedies
for the Cooperative default. This Guarantee shall be incontestable except
for fraud or misrepresentation of which the holder had actual knowledge at
the time it became a holder. RUS hereby waives diligence, presentment,
demand, protest and notice of any kind, as well as any requirement that
[name of Payee] exhaust any right or take any action against the Cooperative.
This Guarantee is issued pursuant to Title III of the Rural
Electrification Act of 1936, as amended (7 U.S.C. {{ 901, et seq.), and the
Loan Guarantee and Servicing Agreement among RUS, the Cooperative, Bank One,
N.A. and National Rural Utilities Cooperative Finance Corporation dated
___________, 19__.
UNITED STATES OF AMERICA
Date___________, 19__ By_______________________
Administrator of Rural Electrification
Administration
EXHIBIT B-2
Form of RUS Guarantee
The United States of America acting through the Administrator of the
Rural Utilities Service ("RUS") hereby unconditionally guarantees to the
Payee the making of the payments of principal and Guaranteed Interest when
and as due on the Note of _______________ (the "Cooperative") dated _____ in
the original principal amount of $ _____ (the "Note"), in accordance with the
terms thereof and of the Loan Agreement and the Master Loan Guarantee and
Servicing Agreement referred to in the Note, until such principal and
Guaranteed Interest shall be indefeasibly paid in full (which includes
interest accruing at the Guaranteed Interest Rate between the date of default
under the Note and the payment in full of this Guarantee), irrespective of
receipt by RUS of any sums or property from its enforcement of its remedies
for the Cooperative's default. This Guarantee shall be incontestable except
for fraud or misrepresentation of which the holder had actual knowledge at
the time it became a holder. RUS hereby waives diligence, presentment,
demand, protest and notice of any kind (except the "Default Notice" required
pursuant to Section 5.3(a) of the Master Loan Guarantee and Servicing
Agreement), and acknowledges that the Payee does not have any right or
obligation to exercise any right or take any action against the Cooperative.
This Guarantee is issued pursuant to the Rural Electrification Act of
1936, as amended (7 U.S.C. 901, et seq.) (the "Act"), and the Master Loan
Guarantee and Servicing Agreement between RUS and National Rural Utilities
Cooperative Finance Corporation dated as of February 16, 1999.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE UNITED STATES OF AMERICA, TO THE EXTENT
APPLICABLE, AND OTHERWISE THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
THE UNDERSIGNED, AS [ADMINISTRATOR] OF RUS, DOES HEREBY CERTIFY THAT
I AM AUTHORIZED UNDER THE ACT AND 7 CFR PART 1700 TO DELIVER THIS GUARANTEE.
UNITED STATES OF AMERICA,
by
[Administrator]
of the
Rural Utilities Service
Dated: RUS Loan No.
EXHIBIT C
Form of Money Market Quote Request
[Date]
To: The Bank of Nova Scotia
(the "Agent")
From: National Rural Utilities
Cooperative Finance Corporation (the "Borrower")
Re: 364-Day Revolving Credit Agreement (the "Revolving Credit Agreement")
dated as of September 29, 1999 among the Borrower, the banks listed
on the signature pages thereof, Bank One, N.A., as Documentation
Agent, and The Bank of Nova Scotia, as Administrative Agent.
We hereby give notice pursuant to Section of the Revolving Credit
Agreement that we request Money Market Quotes for the following proposed
Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount(1) Interest Period(2)
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate].
[The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Revolving Credit
Agreement.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By________________________
Title:
____________________
(1) Amount must be $10,000,000 or a larger multiple of $1,000,000.
(2) Any number of whole months (but not less than one month) (LIBOR
Auctiion) or not less than 30 days (Absolute Rate Auction), subject to the
provisions of the definition of Interest
EXHIBIT D
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to the National Rural Utilities Cooperative
Finance Corporation (the "Borrower")
Pursuant to Section of the 364-Day Revolving Credit Agreement dated
as of dated as of September 29, 1999 among the Borrower, the banks listed on
the signature pages thereof, Bank One, N.A., as Documentation Agent, and The
Bank of Nova Scotia, as Administrative Agent:
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.] Please respond to this invitation by no later than [2:00 P.M.] [9:00
A.M.] (New York City time) on [date].
The Bank of Nova Scotia
By______________________
Authorized Officer
EXHIBIT E
FORM OF MONEY MARKET QUOTE
THE BANK OF NOVA SCOTIA,
as Administrative Agent
Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Re: Money Market Quote to
National Rural Utilities Cooperative
Finance Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank: _____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the following
rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made
for $1,000,000 or a larger multiple thereof.
(notes continued on following page)
We understand and agree that the offer(s) set forth above, subject
to the satisfaction of the applicable conditions set forth in the 364-Day
Revolving Credit Agreement dated as of September 29, 1999 among the Borrower,
the banks listed on the signature pages thereof, Bank One, N.A., as
Documentation Agent, and The Bank of Nova Scotia, as Administrative Agent.
Very truly yours,
[NAME OF BANK]
Dated: _______________
By: __________________________
Authorized Officer
*** Any number of whole months (but not less than one month) or not less
than 30 days, as specified in the related Invitation. No more than five
bids are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (rounded to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (rounded to the nearest 1/10,000th
of 1%).
EXHIBIT F
OPINION OF XXXX XXX LIST, ESQ.,
GENERAL COUNSEL OF THE BORROWER
September __, 1999
I am General Counsel of the National Rural Utilities Cooperative
Finance Corporation (the "Borrower ") and am delivering this opinion pursuant
to the 364-Day Revolving Credit Agreement (the "Agreement") dated as of
September 29, 1999 among the Borrower, the banks listed on the signature
pages thereof, Bank One, N.A., as Documentation Agent, and TheBank of Nova
Scotia, as Administrative Agent. Terms defined in the Agreement are used
herein as therein defined. This opinion is being rendered to you at the
request of my client, the Borrower, pursuant to Section 3.01(c) of the
Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted
such other investigations of fact and law as I have deemed necessary or
advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a cooperative association duly incorporated,
validly existing and in good standing under the laws of the District of
Columbia and has the corporate power and authority and all material
governmental licenses, authorizations, consents and approvals required to own
its property and assets and to transact the business in which it is engaged.
The Borrower is duly qualified or licensed as a foreign corporation in good
standing in every jurisdiction in which the nature of the business in which
it is engaged makes such qualification or licensing necessary, except in
those jurisdictions in which the failure to be so qualified or licensed would
not (after qualification, assuming that the Borrower could so qualify without
the payment of any fee or penalty and retain its rights as they existed prior
to such qualification all to an extent so that any fees or penalties required
to be so paid or any rights not so retained would not, individually or in the
aggregate, have a material adverse effect on the business or financial
condition of the Borrower), individually or in the aggregate, have a material
adverse effect upon the business or financial condition of the Borrower. The
Borrower has the corporate power and authority to execute, deliver and carry
out the terms and provisions of the Agreement and the Notes. The Agreement
and the Notes have been duly and validly authorized, executed and delivered
by the Borrower, and the Agreement constitutes a legal, valid and binding
agreement of the Borrower, and the Notes constitute legal, valid and binding
obligations of the Borrower, in each case enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and by
general principles of equity.
2. There are no actions, suits, proceedings or investigations
pending or, to my knowledge, threatened against or affecting the Borrower by
or before any court or any governmental authority, body or agency or any
arbitration board which are reasonably likely to materially adversely affect
the business, property, assets, financial position or results of operations
of the Borrower or the authority or ability of the Borrower to perform its
obligations under the Agreement or the Notes.
3. No authorization, consent, approval or license of, or
declaration, filing or registration with or exemption by, any governmental
authority, body or agency is required in connection with the execution,
delivery or performance by the Borrower of the Agreement or the Notes.
4. The holders of the Borrower's Capital Term Certificates are not
and will not be entitled to receive any payments with respect to the
principal thereof or interest thereon solely because of withdrawing or being
expelled from membership in the Borrower.
5. Neither the Borrower nor any Subsidiary is in default in any
material respect under any material agreement or other instrument to which
it is a party or by which it is bound or its property or assets may be
affected. No event or condition exists which constitutes, or with the giving
of notice or lapse of time or both would constitute, such a default under any
such agreement or other instrument. Neither the execution and delivery of
the Agreement or the Notes, nor the consummation of any of the transactions
therein contemplated, nor compliance with the terms and provisions thereof,
will contravene any provision of law, statute, rule or regulation to which
the Borrower is subject or any judgment, decree, award, franchise, order or
permit applicable to the Borrower, or will conflict or be inconsistent with,
or will result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute (or with the giving of notice or lapse of time,
or both, would constitute) a default under (or condition or event entitling
any Person to require, whether by purchase, redemption, acceleration or
otherwise, the Borrower to perform any obligations prior to the scheduled
maturity thereof), or result in the creation or imposition of any Lien upon
any of the property or assets of the Borrower pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other instrument to which it
may be subject, or violate any provision of the certificate of incorporation
or by-laws of the Borrower. Without limiting the generality of the
foregoing, the Borrower is not a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the
Borrower, any agreement or indenture relating thereto or any other contract
or agreement (including its certificate of incorporation and by-laws), which
would be violated by the incurring of the Indebtedness to be evidenced by
the Notes.
6. The Borrower has complied fully with all of the material
provisions of each Indenture. No Event of Default (within the meaning of
such term as defined in either Indenture) and no event, act or condition
(except for possible non-compliance by the Borrower with any immaterial
provision of such Indenture which in itself is not such an Event of Default
under such Indenture) which with notice or lapse of time, or both, would
constitute such an Event of Default has occurred and is continuing under
such Indenture. The borrowings by the Borrower contemplated by the Agreement
will not cause such an Event of Default under, or the violation of any
covenant contained in, either Indenture.
7. Set forth on Annex A attached hereto is a true, correct and
complete list of all of the Borrower's Subsidiaries and Joint Ventures, the
jurisdiction of incorporation or organization of each such Subsidiary and
Joint Venture and the nature and percentage of the Borrower's ownership of
each such Subsidiary and Joint Venture.
8. The Borrower has received a ruling from the Internal Revenue
Service to the effect that it is exempt from payment of Federal income tax
under Section 501(c)(4) of the Internal Revenue Code of 1986, and nothing
has come to our attention that leads us to believe that the Borrower is not
so exempt.
EXHIBIT G
OPINION OF MILBANK, TWEED, XXXXXX & XxXXXX,
SPECIAL COUNSEL FOR THE BORROWER
September __, 1999
We have acted as special counsel to National Rural Utilities
Cooperative Finance Corporation (the "Borrower") in connection with the
364-Day Revolving Credit Agreement dated as of September 29, 1999 (the
"Agreement") among the Borrower, the banks listed on the signature pages
thereof, Bank One, N.A., as Documentation Agent, and The Bank of Nova Scotia,
as Administrative Agent (the "Agent"). All capitalized terms used but not
defined herein have the respective meanings given to such terms in the
Agreement.
In rendering the opinions expressed below, we have examined:
(i) the Agreement;
(ii) the Notes; and
(iii) such corporate records of the Borrower and such other
documents as we have deemed necessary as a basis for the
opinions expressed below.
In our examination, we have assumed the genuineness of all signatures
(other than the Borrower's), the authenticity of all documents submitted to
us as originals and the conformity with authentic original documents of all
documents submitted to us as copies. When relevant facts were not
independently established, we have relied upon statements of governmental
officials and upon representations made in or pursuant to the Agreement and
certificates of appropriate representatives of the Borrower.
In rendering the opinions expressed below, we have assumed, with
respect to all of the documents referred to in this opinion letter (except as
provided below), that:
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid,
binding and enforceable obligations of, all of the parties
(except the Borrower) to such documents;
(ii) all signatures (except signatures of officers of the
Borrower) to such documents have been duly authorized; and
(iii) all of the parties to such documents (except the Borrower)
are duly organized and validly existing and have the power
and authority (corporate and other) to execute, deliver and
perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:
1. The Borrower is a cooperative association duly incorporated,
validly existing and in good standing under the laws of the District of
Columbia. The Borrower has the corporate power and authority to execute,
deliver and carry out the terms and provisions of the Agreement and the
Notes. The Agreement and the Notes have been duly and validly authorized,
executed and delivered by the Borrower, and the Agreement constitutes a
legal, valid and binding agreement of the Borrower, and the Notes constitute
legal, valid and binding obligations of the Borrower, in each case
enforceable against the Borrower in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights of creditors generally and except as the enforceability of the
Agreement and the Notes is subject to the application of general principles
of equity (regardless of whether considered in a proceeding in equity or at
law), including, without limitation, (a) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy and
(b) concepts of materiality, reasonableness, good faith and fair dealing.
2. To our best knowledge, there are no actions, suits, proceedings
or investigations pending or threatened against the Borrower by or before any
court or any governmental authority, body or agency or any arbitration board
which in our view are reasonably likely to materially adversely affect the
business, property, assets, financial position or results of operations of
the Borrower or the authority or ability of the Borrower to perform its
obligations under the Agreement or the Notes.
3. No authorization, consent, approval or license of, or
declaration, filing or registration with or exemption by, any governmental
authority, body or agency is required in connection with the execution,
delivery or performance by the Borrower of the Agreement or the Notes.
4. The holders of the Borrower's Capital Term Certificates are not
and will not be entitled to receive any payments with respect to the
principal thereof or interest thereon solely because of withdrawing or being
expelled from membership in the Borrower.
5. Neither the execution and delivery of the Agreement or the Notes,
nor the consummation of any of the transactions therein contemplated, nor
compliance with the terms and provisions thereof, will contravene any
provision of law, statute, rule or
regulation to which the Borrower is subject or any judgment, decree, award,
franchise, order or permit known to us applicable to the Borrower, or will
conflict or be inconsistent with, or will result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute (or with the
giving of notice or lapse of time, or both, would constitute) a default under
(or condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any
obligations prior to the scheduled maturity thereof), or result in the
creation or imposition of any Lien upon any of the property or assets of the
Borrower pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument known to us to which it may be subject, or
violate any provision of the certificate of incorporation or by-laws of the
Borrower. Without limiting the generality of the foregoing, to our best
knowledge the Borrower is not a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the
Borrower, any agreement or indenture relating thereto or any other contract
or agreement (including its certificate of incorporation and by-laws), which
would be violated by the incurring of the Indebtedness to be evidenced by the
Notes.
6. 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.
7. The Borrower is not a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company", as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended.
The foregoing opinions are subject to the following qualifications:
We express no opinion as to the effect of the laws of any jurisdiction in
which any Bank is located (other than New York) that limit the interest,
fees or other charges such Bank may impose.
We express no opinion concerning any law other than the law of New
York, the District of Columbia and the federal law of the United States.
Insofar as this opinion pertains to matters of District of Columbia law, we
have relied on the opinion of Xxxx Xxx List, Esq. being delivered to you
contemporaneously herewith.
This opinion letter is, pursuant to Section of the Agreement,
provided to you by us in our capacity as special counsel to the Borrower and
at its request and may not be relied upon by any Person or for any purpose
other than in connection with the transactions contemplated by the Agreement
without, in each instance, our prior written consent.
Very truly yours,
EXHIBIT H
OPINION OF
XXXXX XXXX & XXXXXXXX, SPECIAL COUNSEL
FOR THE AGENT
September __, 1999
To the Banks and the Agent
Referred to Below
x/x Xxx Xxxx xx Xxxx Xxxxxx, as Agent
Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We have participated in the preparation of the 364-Day Revolving
Credit Agreement dated as of September 29, 1999 (the "Credit Agreement")
among the National Rural Utilities Cooperative Finance Corporation, a not-
for-profit cooperative association incorporated under the laws of the
District of Columbia (the "Borrower"), the banks listed on the signature
pages thereof, Bank One, N.A., as Documentation Agents, and The Bank of Nova
Scotia, as Administrative Agent (the "Agent"), and have acted as special
counsel for the Agent for the purpose of rendering this opinion pursuant to
Section 3.01(e) of the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and the
Notes issued today constitute valid and binding obligations of the Borrower,
in each case enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and by general principles of equity.
In rendering the foregoing opinion, we have assumed that (i) the
Borrower is duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and (ii) the execution,
delivery and performance by the Borrower of the Credit Agreement and the
Notes issued by the Borrower are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene or constitute a default under, any provision
of applicable law or regulation or of the Borrower's certificate of
incorporation or by-laws or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or result in the
creation or imposition of any lien on the assets of the Borrower or any
Subsidiary of the Borrower.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws
of the United States of America. In giving the foregoing opinion, we express
no opinion as to the effect (if any) of any law of any jurisdiction (except
the State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not re relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
EXHIBIT I
EXTENSION AGREEMENT
[Date]
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
The Bank of Nova Scotia,
as Administrative Agent
under the Credit Agreement
referred to below
Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Gentlemen:
Effective as of [effective date], the undersigned hereby agree to extend the
Commitment Termination Date as now in effect under the 364-Day Credit
Agreement dated as of September 29, 1999 as amended and supplemented from
time to time (the "Credit Agreement"), among National Rural Utilities
Cooperative Finance Corporation, the Banks listed therein, Bank One, N.A.,
as Documentation Agent, and The Bank of Nova Scotia, as Administrative
Agent, to [Date]. Terms defined in the Credit Agreement are used herein as
therein defined.
This Extension Agreement shall be construed in accordance with and governed
by the law of the State of New York.
[NAME OF BANK]
By____________________________
Title:
[NAME OF BANK]
By____________________________
Title:
THE BANK OF NOVA SCOTIA, as Administrative Agent
By____________________________
Title:
Agreed and accepted:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
EXHIBIT J
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ___________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION (the "Borrower") and THE BANK OF NOVA SCOTIA,
as Administrative Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the 364-Day Credit Agreement dated as of September 29, 1999 (the
"Credit Agreement") among the Borrower, the Assignor and the other Banks
party thereto, as Banks, Bank One, N.A., as Documentation Agent, and The
Bank of Nova Scotia, as Administrative Agent (the "Agent");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at
any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under
the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of
its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to
the Assignee all of the rights of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the
Assignor under the Credit Agreement to the extent of
the Assigned Amount, including the purchase from the Assignor of the
corresponding portion of the principal amount of the Committed Loans made by
the Assignor outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee, the Borrower and the Agent and the
payment of the amounts specified in Section 3 required to be paid on the date
hereof (i) the Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned Amount, and
(ii) the Commitment of the Assignor shall, as of the date hereof, be reduced
by a like amount and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been assumed by the
Assignee. The assignment provided for herein shall be without recourse to
the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between
them. It is understood that commitment and/or facility fees accrued to the
date hereof are for the account of the Assignor and such fees accruing from
and including the date hereof are for the account of the Assignee. Each of
the Assignor and the Assignee hereby agrees that if it receives any amount
under the Credit Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly pay the same
to such other party.
SECTION 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the Agent
pursuant to Section 9.06(c) of the Credit Agreement. The execution of this
Agreement by the Borrower and the Agent is evidence of this consent.
Pursuant to Section 9.06(c) of the Credit Agreement the Borrower agrees to
execute and deliver a Note payable to the order of the Assignee to evidence
the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance on
the Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE
CORPORATION
By__________________________
Title:
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By__________________________
Title:
