1
Exhibit 10.1
364-DAY
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of
February 28, 1995
and
amended and restated as of
November 26, 1996
among
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,
THE BANKS LISTED HEREIN,
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
Arranged by
X.X. XXXXXX SECURITIES INC.
2
TABLE OF CONTENTS1
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations 14
SECTION 1.03. Types of Borrowings 15
ARTICLE II
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. Fees 27
SECTION 2.09. Optional Termination or Reduction of Commitments 27
SECTION 2.10. Mandatory Termination of Commitments 27
SECTION 2.11. Optional Prepayments 27
SECTION 2.12. General Provisions as to Payments 28
SECTION 2.13. Funding Losses. 29
SECTION 2.14. Computation of Interest and Fees 29
SECTION 2.15. Withholding Tax Exemption. 29
SECTION 2.16. Increase of Commitments. 30
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness 31
SECTION 3.02. Borrowings 33
1 The Table of Contents is not a part of this Agreement.
3
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Page
SECTION 4.01. Corporate Existence, Power and Authority 34
SECTION 4.02. Financial Statements 35
SECTION 4.03. Litigation 36
SECTION 4.04. Governmental Authorizations 36
SECTION 4.05. Capital Term Certificates 36
SECTION 4.06. No Violation of Agreements 37
SECTION 4.07. No Event of Default under the Indentures 37
SECTION 4.08. Compliance with ERISA 38
SECTION 4.09. Compliance with Other Laws 38
SECTION 4.10. Tax Status 38
SECTION 4.11. Investment Company Act 38
SECTION 4.12. Public Utility Holding Company Act 38
SECTION 4.13. Disclosure 38
SECTION 4.14. Subsidiaries 39
SECTION 4.15. Environmental Matters 39
ARTICLE V
COVENANTS
SECTION 5.01. Corporate Existence 40
SECTION 5.02. Disposition of Assets; Merger; Character of
Business; etc. 40
SECTION 5.03. Financial Information 40
SECTION 5.04. Default Certificates 42
SECTION 5.05. Notice of Litigation, Legislative
Developments and Defaults 43
SECTION 5.06. ERISA 44
SECTION 5.07. Payment of Charges 44
SECTION 5.08. Inspection of Books and Assets 44
SECTION 5.09. Indebtedness 45
SECTION 5.10. Liens 46
SECTION 5.11. Maintenance of Insurance 46
SECTION 5.12. Subsidiaries and Joint Ventures 47
SECTION 5.13. Minimum Net Worth 47
SECTION 5.14. Minimum TIER 47
SECTION 5.15. Retirement of Patronage Capital 47
SECTION 5.16. Use of Proceeds 47
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ARTICLE VI
DEFAULTS
Page
SECTION 6.01. Events of Default 48
SECTION 6.02. Notice of Default 50
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization 51
SECTION 7.02. Agent and Affiliates 51
SECTION 7.03. Action by Agent 51
SECTION 7.04. Consultation with Experts 51
SECTION 7.05. Liability of Agent 51
SECTION 7.06. Indemnification 52
SECTION 7.07. Credit Decision 52
SECTION 7.08. Successor Agent 52
SECTION 7.09. Co-Syndication Agents Not Liable 53
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair 53
SECTION 8.02. Illegality 54
SECTION 8.03. Increased Cost and Reduced Return 54
SECTION 8.04. Base Rate Loans Substituted for Affected
Fixed Rate Loans 56
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices 57
SECTION 9.02. No Waivers 57
SECTION 9.03. Expenses; Documentary Taxes; Indemnification 58
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Page
SECTION 9.04. Sharing of Set-Offs 58
SECTION 9.05. Amendments and Waivers 59
SECTION 9.06. Successors and Assigns 59
SECTION 9.07. Collateral 61
SECTION 9.08. Managing Agents; Co-Agents 61
SECTION 9.09. Governing Law 61
SECTION 9.10. Counterparts; Integration 61
SECTION 9.11. Several Obligations 62
SECTION 9.12. Severability 62
Pricing Schedule
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
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REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of February 28,1995 and amended and
restated as of November 26, 1996 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, 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.
The parties hereto agree as follows:
ARTICLE I
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 Xxxxxx Guaranty Trust Company of New York in its capacity
as administrative agent for the Banks hereunder, and its successors in
such capacity.
"Agreement" means the Original Agreement, as amended by the Amended
Agreement and as the same may be further amended from time to time.
"Amended Agreement" means this Amended and Restated Revolving Credit
Agreement dated as of February 28, 1995 and amended and restated as of
November 26, 1996.
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"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.
"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 to be made by a Bank as a Base
Rate Loan in accordance with the applicable Notice of Committed Borrowing
or pursuant to Article VIII.
"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).
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"CD Loan" means a Committed Loan to be made by a Bank as a CD Loan in
accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in the Pricing Schedule.
"CD Reference Banks" means The Bank of Nova Scotia, SunBank, National
Association and Xxxxxx Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Sections 2.09 and
2.10.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.01.
"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 state-
ments if such statements were prepared as of such date.
"Co-Syndication Agents" means X.X. Xxxxxx Securities Inc. and The Bank
of Nova Scotia, each in its capacity as co-syndication 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 trans-
action, 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.
"Determination Date" shall have the meaning provided in Section 5.09.
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"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, judg-
ments, 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.
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"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 to be
made by a Bank as a Euro-Dollar Loan in accordance with the
applicable Notice of Committed Borrowing.
"Euro-Dollar Margin" has the meaning set forth in the
Pricing Schedule.
"Euro-Dollar Reference Banks" means the principal London
offices of The Bank of Nova Scotia, SunBank, National
Association and Xxxxxx Guaranty Trust Company of New York.
"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 Xxxxxx Guaranty Trust Company of New York 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.
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"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 any 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;
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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; and
(c) any Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date;
(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;
and
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(b) any Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date shall end on the 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; and
(b) any Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date shall end on the 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:
(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; and
(c) any Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date;
and
(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; and
(b) any Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date.
"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.
"Minimum Required Net Worth" shall initially be
$1,346,291,939; provided that on each date after the
Effective Date upon which annual financial statements
are required to be delivered pursuant to Section 5.03(ii),
the Minimum Required Net Worth shall be permanently
increased by an amount, if positive, equal to ninety percent
(90%) of (i) the aggregate amount of Net Margins for the
prior fiscal year minus (ii) the aggregate amount of
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retirements of Patronage Capital Certificates made by
the Borrower to Members in the prior fiscal year. In the event that
in any year the amount specified in clause (ii) above is equal to or
greater than the amount specified in clause (i) above, the Minimum
Required Net Worth shall remain the same for that year.
"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 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).
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"Net Worth" means the sum of (i) all accounts which
constitute Members' equity in the Borrower, (ii) all
Indebtedness of the Borrower shown in its balance sheet
dated as of May 31, 1996 as "Members' Subordinated
Certificates" and any other Indebtedness of the Borrower
incurred after May 31, 1996 having substantially similar
provisions as to subordination as those contained in said
outstanding certificates and (iii) any amounts reflected
in the financial statements of the Borrower as a reserve
for loan losses.
"1994 Indenture" means the Indenture dated as of
February 15, 1994 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.
"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)).
"Original Agreement" means the $1,620,000,000
Revolving Credit Agreement dated as of February 28, 1995
among the Borrower, the Banks listed therein, 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.
"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.
17
"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.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly
announced by Xxxxxx Guaranty Trust Company of New York
in New York City from time to time as its Prime Rate.
"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.
"Refunding Borrowing" means a Committed Borrowing
which, after application of the proceeds thereof, results
in no net increase in the outstanding principal amount of
Committed Loans made by any Bank.
"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
60% of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding Notes
evidencing at least 60% of the aggregate unpaid principal
amount of the Loans.
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"Revolving Credit Period" means the period from and
including the Effective Date to but excluding the
Termination Date.
"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 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 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".
19
"Superior Indebtedness" means all Indebtedness of the Borrower (other
than Capital Term Certificates) 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.
"Termination Date" means November 25, 1997 or such later date to which
this Agreement shall have been extended pursuant to Section 2.01(b), or, if
either such day is not a Euro-Dollar Business Day, the next preceding
Euro-Dollar Business Day.
"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 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.
20
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 II 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 II under which participation therein is determined
(i.e., a "Committed Borrowing" is a Borrowing under Section 2.01 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 II
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) 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 Committed
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
$25,000,000 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 (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 2.11, prepay Loans and reborrow at any time during the Revolving
Credit Period under this Section.
(b) Extension of Commitments. The Termination Date may be extended
from time to time in the manner set forth in this subsection (b), in each
case for a period of up to 364 days from the date on which Banks having 100%
of the Commitments shall have notified the Agent of their agreement so to
extend. If the Borrower wishes to request an extension of the Termination
Date, it shall give written notice to that effect (such notice to state the
date to which the 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 Termination Date
then in effect, whereupon
21
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 Termination Date to assign their
Commitments in their entirety, no later than 15 days prior to the Termination
Date then in effect, to one or more Assignees pursuant to Section 9.06(c)
which Assignees will agree to extend the Termination Date. If all Banks
(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 Termination Date
shall be extended for the period specified above.
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,
(c) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, 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 10 Fixed Rate Borrowings shall be
outstanding at any one time, and any Borrowing which would exceed such
limitation shall be made as a Base Rate Borrowing.
22
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. 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 $25,000,000
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.
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.
23
(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 III and VI, 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,
(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
24
$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, 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
25
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 $25,000,000 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.
(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
26
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 III 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 2.12, 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 1:00 P.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
27
recover such corresponding amount on demand from such Bank. If such Bank
does not pay 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
28
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.
SECTION 2.06. Maturity of Loans. Each Loan included in any Borrowing
shall mature, and the principal amount thereof shall be due and payable, on
the last day of the Interest Period applicable to such Borrowing.
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. 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. 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.
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
29
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 10:00 A.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 327.3(e) (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.
30
(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.
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.
(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
31
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 by telex or cable 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
32
a timely quotation, the Agent shall determine the relevant interest
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. Fees.
(a) Facility Fee. The Borrower shall pay to the Agent for the account of
the Banks ratably in proportion to their Commitments a facility fee at the
Facility Fee Rate (determined daily in accordance with the Pricing
Schedule). Such facility fee shall accrue from and including the Effective
Date to but excluding the Termination Date (or such earlier date as the
Commitments shall be terminated) on the aggregate amount of the Commitments
in existence on each such day (whether used or unused).
(b) Agents' Fees. The Borrower shall pay to the Agent and the Co-Xxxxx-
cation Agents, each for its own account, one or more fees in such amounts
and at such times as has been previously agreed between the Borrower and
each of them.
(c) Payments. Accrued fees under subsection (a) of this Section 2.08
shall be payable quarterly in arrears on each January 1, April 1, July 1
and October 1, commencing on the first such date after the Effective Date,
and upon the date of termination of the Commitments in their entirety.
SECTION 2.09. 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 $25,000,000 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 2.10. Mandatory Termination of Commitments. The Commitments shall
terminate on the Termination Date and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on such date.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon at least
one Domestic Business Day's notice to the Agent, prepay any Base Rate
Borrowing (or any
33
Money Market Borrowing bearing interest at the Base Rate pursuant to Section
8.01(a)) in whole at any time, or from time to time in part in amounts
aggregating [$25,000,000] 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 Borrowing.
(b) Except as provided in Section 8.02, the Borrower may not prepay all or
any portion of the principal amount of any Fixed Rate 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 2.12. 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 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
interest on, 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
34
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 2.13. Funding Losses. If the Borrower makes any payment of principal
with respect to any Fixed Rate Loan (pursuant to Article VI or VIII or other-
wise) 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 any Fixed Rate Loans after notice has been
given to any Bank in accordance with Section 2.04(a), 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 failure to borrow, provided
that such Bank shall have delivered to the Borrower a certificate as to the
amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.14. 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 2.15. 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
35
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 2.16. Increase of Commitments. Upon at least 45 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 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
36
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 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
$300,000,000. It is understood that any increase in the amount of the
Commitments pursuant to this Section 2.16 shall not constitute an amendment
of this Agreement or the Notes.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Amended 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,
37
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 trans-
actions 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;
(g) receipt by the Agent, for the account of the Banks, of all facility fees
accrued to but excluding the Effective Date pursuant to Section 2.08(a)
of the Original Agreement; and
(h) 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.
On the Effective Date the Original Agreement will be automatically amended and
restated in its entirety to read as set forth herein. On and after the
Effective Date the rights and obligations of the parties hereto shall be
governed by this Amended Agreement; provided that rights and obligations of
the parties hereto with respect to the period prior to the Effective Date
shall continue to be governed by the provisions of the Original Agreement.
With effect from
38
and including the Effective Date, each Person listed on the signatures pages
hereof which is not a party to the Original Agreement shall become a Bank
party to this Agreement and the Commitment of each Bank shall be the amount
set forth opposite the name of such Bank on the signature pages hereof, as
such amount may be reduced from time to time pursuant to Section 2.09 or
2.10 hereof. All references to "the date hereof" or "the date of this
Agreement" contained in this Agreement shall mean references to November
26, 1996. Any Bank whose Commitment is changed to zero shall upon the
Effective Date cease to be a Bank party to this Agreement; provided that the
provisions of Sections 8.03 and 9.03 thereof shall continue to inure to the
benefit of each such Bank. 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 December
15, 1996.
(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 out-
standing principal amount of the Loans will not exceed the aggregate
amount of the Commitments;
(e) the fact that, immediately after such Borrowing, if such Borrowing is
not a Refunding Borrowing, no Default shall have occurred and be
continuing or, if such Borrowing is a Refunding Borrowing, no Event of
Default shall have occurred and be continuing;
(f) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of a Refunding
Borrowing, the representations and warranties set forth in Section
4.03, the second sentence of Section 4.06, and the
39
first sentence of Section 4.07) 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 IV
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
40
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 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, 1996 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, 1996, 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,
41
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.
(b) The unaudited combined balance sheets of the Borrower and its
Consolidated Subsidiaries as of August 31, 1996 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 commit-
ments issued by the Borrower in the ordinary course of business since the
date of such financial statements.
SECTION 4.03. Litigation. 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
42
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 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 noncompliance
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
43
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 are in substantial
compliance with ERISA, no Plan is insolvent or in reorganization, no Plan
has an accumulated or waived funding deficiency within the meaning of Section
412 of the Internal Revenue Code, 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 liability to or on account of a Plan pursuant
to any of the foregoing Sections of ERISA.
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
44
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 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.
45
ARTICLE V
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 2.08
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 state-
ments of income, expenses and net margins, changes in Members' equity and
cash flow of the Borrower and its Consolidated Subsidiaries
46
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 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
47
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 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 state-
ment 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
48
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 5.09
and Sections 5.12 through 5.15, 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
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 Borrower, 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).
49
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.
SECTION 5.07. Payment of Charges. The Borrower will, and will cause each
Subsidiary to, duly pay and discharge (i) all taxes, assessments and govern-
mental 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
50
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 and (b) the aggregate
amount of Members' equity in the Borrower, other than Capital Term Certifi-
xxxxx, 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 Certificates outstanding on the Determination Date which will remain
outstanding on such given future date and (b) the aggregate amount of Members'
equity in the Borrower, other than Capital Term Certificates, on the
Determination Date. The respective principal amounts of Superior Indebted-
ness and Capital Term Certificates 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 and Capital Term Certificates 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
51
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 1954, as amended, (x) of a Member which is a
state or political subdivision thereof or (y) of a state or political sub-
division 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 Section 103(b)(4)(D), (E), (F), (G), (H) or (J) of
the Internal Revenue Code of 1954, as amended, and (vi) granted by any Sub-
sidiary 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
52
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 Sub-
sidiaries 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 and (ii)
all Indebtedness of the Borrower shown in its balance sheet dated as of May
31, 1996 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, 1996 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.
SECTION 5.13. Minimum Net Worth. The Borrower will not at any time permit
its Net Worth to be less than the Minimum Required Net Worth as in effect
from time to time.
SECTION 5.14. 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 5.15. 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 5.16. 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 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
53
will take any action which might cause this Agreement or the Notes to violate
Regulation U or Regulation X.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) 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, 5.15 or
5.16;
(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;
54
(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
$15,000,000 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 $15,000,000 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);
55
(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 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 $15,000,000 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 2.08(a) 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(e) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
56
ARTICLE VII
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.
SECTION 7.02. Agent and Affiliates. Xxxxxx Guaranty Trust Company 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 Xxxxxx Guaranty Trust Company of New York 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 VI.
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 III, except receipt of items
57
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 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
58
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-Syndication Agents Not Liable. Nothing in this Agreement
shall impose upon any Co-Syndication Agent, in such capacity, any duties or
responsibilities whatsoever.
ARTICLE VIII
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
(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, the obligations of the
Banks to make CD Loans or Euro-Dollar Loans, as the case may be, shall be
suspended. 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.
59
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 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
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
60
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 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
61
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 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
62
Bank to make 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 IX
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; provided that notices to the Agent under Article II or Article VIII
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
63
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
64
respect of the aggregate amount of principal and interest due with
respect 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 any other 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
65
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 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
Article VIII 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
66
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 $2,500. 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 2.15.
(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. Managing Agents; Co-Agents. Each Bank listed on Schedule
I hereto under the heading "Managing Agent" shall be a Managing Agent
hereunder. Each Bank listed on Schedule I hereto under the heading
"Co-Agent" shall be a Co-Agent hereunder. Nothing in this Agreement
shall impose upon any Managing Agent or Co-Agent, each in such capacity,
any duties or responsibilities whatsoever.
SECTION 9.09. 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 9.10. Counterparts; Integration. This Agreement may be signed
in any number of counterparts, each
67
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 9.11. 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 9.12. 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.
68
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 /s/ Xxxxxx X. Xxxxx
Title: Chief Financial Officer
Address: Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Title: Sr. Vice President &
Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
69
Commitments
$125,000,000 XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Sanjeanette Xxxxxx
Title: Vice President
$120,000,000 THE BANK OF NOVA SCOTIA
By /s/ J.R. Trimble
Title: Senior Relationship
Manager
$110,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxx
Title: Vice President
$110,000,000 THE CHASE MANHATTAN BANK
By /s/ Xxxxxx X. Xxxxx
Title: Vice President
$110,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Xxxxxxx Xxxxxxx
Title: Authorized Agent
$110,000,000 NATIONSBANK, N.A.
By /s/ Xxxxx X. Xxxxx
Title: Vice President
70
$ 90,000,000 ABN-AMRO BANK N.V.
By /s/ Xxxxxxx OR Xxxxx
Title: Vice President
By /s/ Xxxxxx X. Xxxxxx
Title: Assistant Vice President
$ 90,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Xxxx X. Xxxxxxx
Title: Vice President
$ 90,000,000 THE TORONTO-DOMINION BANK
By /s/ Xxxxx X. Xxxxxx
Title: Manager Credit
Administration
$ 90,000,000 UNION BANK OF SWITZERLAND, NEW YORK BRANCH
By /s/ Xxxx X. Xxxxxxxx
Title: Vice President
By /s/ Xxxxx X. Xxxx
Title: Assistant Vice President
$ 85,000,000 RABOBANK NEDERLAND
By /s/ Xxxx X. Xxxxxxx
Title: Vice President
By /s/ Xxx Xxxxx
Title: Vice President & Manager
71
$ 70,000,000 BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By /s/ J. Xxxxxx Xxx
Title: Vice President & Manager
$ 55,000,000 CIBC INC.
By /s/ Xxxxxxxx X. XxXxxxx
Title: Authorized Signatory
$ 50,000,000 THE YASUDA TRUST & BANKING COMPANY LTD.
By /s/ Xxxx X. Xxxxxxxxxxxxxx
Title: Senior Vice President
$ 47,500,000 COMERICA BANK
By /s/ Xxxxxx X. Xxxxx
Title: Account Officer
$ 42,500,000 THE INDUSTRIAL BANK OF JAPAN
By /s/ Xxxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
$ 42,500,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
$ 37,500,000 DRESDNER BANK AG
By /s/ Xxxxxxxx X. Xxxxx
Title: Vice President
By /s/ Xxxx X. Xxxxxxx
Title: Assistant Vice President
72
$ 30,000,000 FIRST BANK NATIONAL ASSOCIATION
By /s/ Xxxxxxxxxxx X. Xxxxxx
Title: Commercial Banking Officer
$ 30,000,000 THE FUJI BANK, LIMITED
By /s/ Xxxxxxxx Xxxxxxxxx
Title: Vice President &
Manager
$ 30,000,000 KREDIETBANK N.V.
By /s/ Xxxxxx Xxxxxxxx
Title: Vice President
By /s/ Xxxxxx X. Xxxxx
Title: Vice President
$ 30,000,000 BANCA MONTE DEI PASCHI DI SIENA, S.p.A.
By /s/ X. X. Xxxxxx
Title: First Vice President &
Deputy General Manager
By /s/ Xxxxx X. Xxxxx
Title: Vice President
$ 30,000,000 NORDDEUTSCHE LANDESBANK GIROZENTRALE
New York Branch and/or Cayman Island Branch
By /s/ X. X. Xxxxxx
Title: Senior Vice President
By /s/ X. Xxxxxxxxxx
Title: Vice President
73
$ 25,000,000 BANCO BILBAO VIZCAYA, S.A.
By /s/ Xxxxxxxxx Xxxxx
Title: Vice President
By /s/ Xxxx Xxxxxxxx
Title: Vice President
$ 25,000,000 BANKERS TRUST COMPANY
By /s/ Xxxx Xxxxx
Title: Vice President
$ 25,000,000 BAYERISCHE LANDESBANK GIROZENTRALE
By /s/ Xxxx xxx Xxxxxxxxxxx
Title: Executive Vice President
By /s/ Xxxxx Xxxxxxxx
Title: Senior Vice President &
Manager Lending Division
$ 25,000,000 BANQUE NATIONALE DE PARIS
By /s/ Xxxx Xxxxxxxxx
Title: Vice President
By /s/ Xxxxxxxxx Xxxxxx
Title: Assistant Vice President
$ 25,000,000 CAISSE NATIONALE DE CREDIT AGRICOLE
By /s/ Xxxxxxx X. Xxxxxxxx
Title: Vice President
$ 25,000,000 CRESTAR BANK
By /s/ Xxxxxxx X. Xxxxxxx
Title: Vice President
74
$ 25,000,000 FLEET NATIONAL BANK
By /s/ Xxxxxx X. Xxxx
Title: Vice President
$ 25,000,000 XXXXXX TRUST AND SAVINGS BANK
By /s/ Xxxxxxx X. Xxxxx
Title: Senior Vice President
$ 25,000,000 MELLON BANK N.A.
By /s/ Xxxxx Xxxxxxxxx
Title: Assistant Vice President
$ 25,000,000 THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., NEW YORK BRANCH
By /s/ Xxxxxxxx Xxxxx
Title: Deputy General Manager
$ 25,000,000 THE SAKURA BANK, LTD
By /s/ Xxxxxxxx Xxxxxxx
Title: Senior Vice President
$ 25,000,000 THE TOKAI BANK, LTD
By /s/ Xxxxxxxx Xxxxx
Title: Deputy General Manager
75
$ 22,500,000 COMMERZBANK AG, NEW YORK BRANCH
By /s/ Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
By /s/ Xxxxxx X. Xxxxxxxx
Title: Assistant Cashier
$ 22,500,000 NATIONAL WESTMINSTER BANK PLC
New York Branch
By /s/ Xxxxxxx X. Xxxxx
Title: Vice President
NATIONAL WESTMINSTER BANK PLC
Nassau Branch
By /s/ Xxxxxxx X. Xxxxx
Title: Vice President
$ 22,500,000 ROYAL BANK OF CANADA
By /s/ Xxxxx X. Xxxxx
Title: Manager
$ 20,000,000 BANCA CASSA DI RISPARMIO DI TORINO S.p.A.
By /s/ J. Xxxxx Xxxxxx, Xx.
Title: Vice President
$ 20,000,000 THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Xxxxxxxxx X. Xxxxxx
Title: Vice President
$ 20,000,000 UNITED STATES NATIONAL BANK OF OREGON
By /s/ Xxxxxxx X. Xxxx
Title: Vice President
76
$ 17,500,000 BANK AUSTRIA AG
By /s/ J. Xxxxxxx Xxxx
Title: Vice President
By /s/ W. Xxxxx Xxxxxxx
Title: Assistant Vice President
$ 17,500,000 SUNTRUST BANK, CENTRAL FLORIDA, NA
By /s/ Xxxxx X. Xxxxxxx
Title: Vice President
$ 15,000,000 THE TOYO TRUST AND BANKING COMPANY,
LIMITED, NEW YORK BRANCH
By /s/ Xxxxxxxx Xxxxxxxx
Title: Vice President
$ 15,000,000 BANCO DI NAPOLI, S.p.A.
By /s/ Xxxxxx X. Xxxxx
Title: First Vice President
By /s/ Xxxxx Xxxxxxxxxx
Title: First Vice President
$ 12,500,000 BANK OF MONTREAL
By /s/ Xxxx X. Xxxxx
Title: Director
$ 12,500,000 THE SANWA BANK, LIMITED
By /s/ Xxxxxxx X. Xxxxxx
Title: Vice President
By /s/ Xxxxxx X. Xxxxxxx
Title: Vice President
77
$ 12,500,000 SIGNET BANK
By /s/ Xxxxxxx Xxxxx
Title: Senior Vice President
$ 12,500,000 UNION BANK OF CALIFORNIA, N.A.
By /s/ Xxxxxx X. Xxxxx
Title: Vice President
$ -0- BANK ONE, ARIZONA, NA
By /s/ Xxxxx Xxxxxxx
Title: Vice President
$ -0- BARCLAYS BANK PLC
By /s/ Sydney X. Xxxxxx
Title: Director
$ -0- CREDIT SUISSE
By /s/ Xxxxxxxxxxx X. Xxxxx
Title: Member of Senior
Management
By /s/ Xxxxxx X. Xxxxx
Title: Associate
$ -0- DEUTSCHE BANK AG
By /s/ Xxxxxxxx X. Xxxxxx
Title: Vice President
By /s/ Xxxxx X. Xxxxxxxxx
Title: Associate
78
$ -0- DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By /s/ Xxxx X. Xxxx
Title: Senior Vice President
By /s/ Xxxxxxxx Xxxxxxxx
Title: Senior Vice President
$ -0- LLOYDS BANK PLC
By /s/ Xxxx X. Xxxxxxxxx
Title: Vice President
By /s/ Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
$ -0- NATIONAL CITY BANK
By /s/ Xxxxxxx X. Xxxxxxxxx
Title: Vice President &
Regional Director
$ -0- THE NORTHERN TRUST COMPANY
By /s/ Xxxxx X. Love
Title: Commercial Banking Officer
$ -0- SOCIETE GENERALE
By /s/ Xxxxxx Xxxxx
Title: Vice President
$ -0- THE SUMITOMO BANK, LTD
By /s/ Xxxx X. Xxxxxxxxx
Title: Joint General Manager
79
$ -0- XXXXX FARGO, N.A.
By /s/ Xxxxxxxx Xxxxxx
Title: Vice President
$ -0- WESTDEUTSCHE LANDESBANK GIROZENTRALE
By /s/ Xxxxx X. Xxxxxxx
Title: Vice President
By /s/ Xxxxxx Xxx
Title: Associate
____________________
Total Commitments
$ 2,167,500,000
====================
80
X.X. XXXXXX SECURITIES INC.,
as Arranger and Co-Syndication Agent
By /s/ Xxxxxxx Xxxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
as Co-Syndication Agent
By /s/ J.R. Trimble
Title: Senior Realtionship Manager
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By /s/ Xxxxxxxxxxx Xxxxxx
Title: Vice President
Address:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Loan Department
Telex number: 420230
81
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin" and "Facility Fee Rate" for any
day are the respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on such day:
Level Level Level
Status I II III
Euro-Dollar 0.185% 0.22% 0.25%
Margin
If Utiliza-
tion is
equal to or
less than
50%
If Utiliza- 0.185% 0.345% 0.375%
tion exceeds
50%
CD Margin 0.315% 0.345% 0.375%
If Utiliza-
tion is
equal to or
less than
50%
If Utiliza- 0.315% 0.47% 0.5%
tion exceeds
50%
Facility Fee 0.065% 0.08% 0.1%
Rate
For purposes of this Schedule, the following terms have the following
meanings:
"Level I 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
82
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) by S&P or Aa3 (or any equivalent rating
which is used in lieu thereof) by Xxxxx'x.
"Level II 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 A+ (or any equivalent
rating which is used in lieu thereof) or higher by S&P or A1 (or any
equivalent rating which is used in lieu thereof) or higher by Xxxxx'x
and Level I Status does not exist at such date.
"Level III Status" exists at any date if, at such date, neither of
Level I Status nor Level II Status exists.
"Status" refers to the determination of which of Level I Status,
Level II Status or Level III Status exists at any date.
"Utilization" means at any date the percentage equivalent of a
fraction (i) the numerator of which is the aggregate outstanding principal
amount of the Loans at such date, after giving effect to any borrowing or
payment on such date, and (ii) the denominator of which is the aggregate
amount of the Commitments at such date, after giving effect to any
reduction of the Commitments on such date. For purposes of this Schedule,
if for any reason any Loans remain outstanding after termination of the
Commitments, the Utilization for each date on or after the date of such
termination shall be deemed to be greater than 50%.
The credit ratings to be utilized for purposes of this Pricing
Schedule shall be, so long as the Borrower's unsecured Medium Term Notes
are rated by either S&P or Xxxxx'x, those assigned to the Borrower's
unsecured Medium Term Notes. The rating in effect at any date is that in
effect at the close of business on such date.
83
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 Xxxxxx Guaranty Trust Company of New York, 00 Xxxx Xxxxxx,
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 February 28, 1995 and amended and restated as
of November 26, 1996 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 (as the same
84
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:
85
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Type of Principal Maturity Notation EXHIBIT B
Date Loan Loan Repaid Date Made By
86
EXHIBIT B
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, The
First National Bank of Chicago and National Rural Utilities Cooperative
Finance Corporation dated ___________, 19__.
UNITED STATES OF AMERICA
Date___________, 19__ By_______________________
Administrator of Rural
Electrification
Administration
87
EXHIBIT C
Form of Money Market Quote Request
[Date]
To: Xxxxxx Guaranty Trust Company of New York
(the "Agent")
From: National Rural Utilities
Cooperative Finance Corporation (the "Borrower")
Re: 364-Day Revolving Credit Agreement (the "Revolving Credit Agreement")
dated as of February 28, 1995 and amended and restated as of
November 26, 1996 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
We hereby give notice pursuant to Section 2.03 of the Revolving
Credit Agreement that we request Money Market Quotes for the following
proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount2 Interest Period3
$
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:
---------------------------
2 Amount must be $25,000,000 or a large multiple of $1,000,000.
3 Any number of whole months (but not less than one month) (LIBOR
Auction) or not less than 30 days Absolute Rate Auction), subject to the
provisions of the definition of Interest Period.
88
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 2.03 of the 364-Day Revolving Credit
Agreement dated as of February 28, 1995 and amended and restated as of
November 26, 1996 among the Borrower, the Banks party thereto, X.X. Xxxxxx
Securities Inc. and The Bank of Nova Scotia, as Co-Syndication Agents, and
the undersigned, as Administrative Agent, we are pleased on behalf of the
Borrower to invite you to submit Money Market Quotes to the Borrower for the
following proposed Money Market Borrowing(s):
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].
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
89
EXHIBIT E
Form of Money Market Quote
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
00 Xxxx Xxxxxx
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)
90
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 February 28, 1995 and amended and
restated as of November 26, 1996 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 yourselves, as Administrative
Agent, irrevocably obligates us to make the Money Market Loan(s) for which
any offer(s) are accepted, in whole or in part.
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%).
91
EXHIBIT F
OPINION OF XXXX XXX LIST, ESQ.,
GENERAL COUNSEL OF THE BORROWER
November 26, 1996
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
February 28, 1995 and amended and restated as of November 26, 1996 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.
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
92
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
93
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.
94
EXHIBIT G
OPINION OF MILBANK, TWEED, XXXXXX & XxXXXX,
SPECIAL COUNSEL FOR THE BORROWER
November 26, 1996
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 February 28, 1995 and
amended and restated as of November 26, 1996 (the "Agreement") among the
Borrower, the Banks party thereto, X.X. Xxxxxx Securities Inc. and The
Bank of Nova Scotia, as Co-Syndication Agents, and Xxxxxx Guaranty Trust
Company of New York, in its capacity 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:
95
(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 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 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.
96
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.
97
6. 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.
7. 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.
8. 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 3.01(d) 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,
00
XXXXXXX X
XXXXXXX XX
XXXXX XXXX & XXXXXXXX, SPECIAL COUNSEL
FOR THE AGENT
November 26, 1996
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We have participated in the preparation of the 364-Day Revolving
Credit Agreement dated as of February 28, 1995 and amended and restated
(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 (the "Banks"), 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 (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:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers
and have been duly authorized by all necessary corporate action.
99
2. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Notes 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 giving the foregoing opinion, (i) 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 and (ii) we have relied, without independent
investigation, as to all matters governed by the laws of the District of
Columbia, upon the opinion of Xxxx Xxx List, Esq., General Counsel of the
Borrower, dated the date hereof, a copy of which has been delivered to you.
Very truly yours,
100
EXHIBIT I
EXTENSION AGREEMENT
[Date]
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, XX 00000-0000
Xxxxxx Guaranty Trust Company
of New York, as Administrative Agent
under the Credit Agreement
referred to below
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Gentlemen:
Effective as of [effective date], the undersigned hereby agree to
extend the Termination Date as now in effect under the 364-Day Credit
Agreement dated as of February 28, 1995 and amended and restated as of
November 26, 1996, as further amended and supplemented from time to time
(the "Credit Agreement"), among National Rural Utilities Cooperative
Finance Corporation, the Banks listed therein, 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, 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:
101
[NAME OF BANK]
By____________________________
Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By____________________________
Title:
Agreed and accepted:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
102
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 XXXXXX GUARANTY
TRUST COMPANY OF NEW YORK, 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
February 28, 1995 and amended and restated as of November 26, 1996 (the
"Credit Agreement") among the Borrower, the Assignor and the other Banks
party thereto, as Banks, 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 (the "Agent");
WHEREAS, as provided under the Credit Agreement, the Assignor
has 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.
103
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
104
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:
000
XXXXXX XXXXXXXX XXXXX XXXXXXX
XX XXX XXXX, as Administrative Agent
By__________________________
Title:
