EXHIBIT 4.03
EXECUTION COPY
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CREDIT AGREEMENT
DATED AS OF FEBRUARY 18, 2003
AMONG
SOUTHWESTERN PUBLIC SERVICE COMPANY
THE LENDERS,
BANK ONE, NA,
AS AGENT,
THE BANK OF NEW YORK,
AS SYNDICATION AGENT
AND
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
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CREDIT AGREEMENT
This Agreement, dated as of February 18, 2003, is among Southwestern
Public Service Company, the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Agent. The
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Advance" means a borrowing hereunder, (i) made by the Lenders on the
same Borrowing Date, or (ii) converted or continued by the Lenders on the same
date of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period.
"Affected Lender" is defined in Section 2.19.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all Lenders.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the following officers of the
Borrower, acting singly: the Chairman of the Board, the Chief Executive Officer,
the Vice Chairman of the Board, the Chief Operating Officer, the President, the
Chief Financial Officer or any Executive Vice President, Senior Vice President,
Vice President, Assistant Vice President, Treasurer or Assistant Treasurer.
"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means Southwestern Public Service Company, a New Mexico
corporation, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
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"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans and to participate in Letters of Credit, in an aggregate amount not
exceeding the amount set forth opposite its signature below or as set forth in
any assignment that has become effective pursuant to Section 12.3.2, as such
amount may be modified from time to time pursuant to the terms hereof.
"Commitment Fee Rate" means, at any time, the percentage rate per annum
at which Commitment Fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.
"Consolidated EBITDA" means, for any period, (a) the consolidated net
income of the Company and its Subsidiaries for such period, excluding all
non-operating gains and losses (including extraordinary or unusual gains and
losses, gains and losses from discontinuance of operations, gains and losses
arising from the sale of assets (other than inventory or in connection with a
Qualified Receivables Transaction) and other non-recurring gains and losses),
plus (b) to the extent deducted in determining the amount in clause (a) (but
without duplication), (i) Consolidated Interest Expense, (ii) income taxes,
(iii) depreciation and amortization and (iv) "other income (deductions) - net"
as shown on the Borrower's consolidated statements of income.
"Consolidated Interest Expense" means, for any period, the consolidated
interest expense of the Company and its Subsidiaries for such period (including
imputed interest on Capitalized Leases and, to the extent not otherwise included
in consolidated interest expense, distributions on Trust Preferred Securities,
but excluding "other financing costs" as shown on the Borrower's consolidated
statements of income).
"Contingent Obligation" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take or pay contract, application for a letter of credit or the
obligations of any such Person as general partner of a partnership with respect
to the liabilities of the partnership.
"Conversion/Continuation Notice" is defined in Section 2.9.
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"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Extension" means the making of an Advance or the issuance of a
Letter of Credit.
"Debt to Capitalization Ratio" means the ratio of (a) Total Debt to (b)
the sum of Total Debt plus the Borrower's consolidated stockholders' equity
plus, to the extent not included in stockholders' equity, Mandatorily Redeemable
Stock, as determined in accordance with Agreement Accounting Principles.
"Default" means an event described in Article VII.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) 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 from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, and having a maturity equal to such Interest
Period, provided that (i) if Reuters Screen FRBD is not available to the Agent
for any reason, the applicable Eurodollar Base Rate for the relevant Interest
Period shall instead be the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars as reported by any other generally
recognized financial information service as of 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Agent, the applicable
Eurodollar Base Rate for the relevant Interest Period shall instead be the rate
determined by the Agent to be the rate at which Bank One or one of its Affiliate
banks offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, in the approximate amount
of Bank One's relevant Eurodollar Loan and having a maturity equal to such
Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
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"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Existing Agreement" means the Credit Agreement dated as of February
19, 2002, as amended to the date of this Agreement, among the Borrower, the
lenders party thereto, and Bank One, NA, as agent for said lenders.
"Existing LC" means letter of credit number XXX000000 issued by Issuer
for the account of the Borrower in favor of Southwest Power Pool.
"Facility Termination Date" means February 17, 2004 or any earlier date
on which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Final Maturity Date" means February 17, 2004.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.
"Indebtedness" means, with respect to any Person, all (but without
duplication) of such Person's (i) obligations for borrowed money, (ii)
obligations representing the deferred purchase price of Property or services
(other than accounts payable arising in the ordinary course of such
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Person's business payable on terms customary in the trade), (iii) direct or
contingent obligations arising under letters of credit, banker's acceptances,
bank guaranties, surety bonds and similar instruments, (iv) obligations, whether
or not assumed, secured by Liens or payable out of the proceeds or production
from Property now or hereafter owned or acquired by such Person, (v) obligations
which are evidenced by notes or other instruments, (vi) obligations of such
Person to purchase accounts, securities or other Property arising out of or in
connection with the sale of the same or substantially similar accounts,
securities or Property, (vii) Capitalized Lease Obligations, (viii) net
liabilities under interest rate swap, exchange or cap agreements, (ix) Synthetic
Lease Obligations, (x) obligations under other transactions which are the
functional equivalent, or take the place, of borrowing but which do not
constitute a liability on the consolidated balance sheet of such Person and (xi)
Contingent Obligations in respect of any of the foregoing; provided that
Indebtedness shall not include obligations arising under Qualified Receivables
Transactions.
"Interest Coverage Ratio" means, as of the last day of any fiscal
quarter of the Borrower, the ratio of (i) Consolidated EBITDA for the
four-quarter period ending on such day to (ii) Consolidated Interest Expense for
such period.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two or three months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two or three months thereafter,
provided that if there is no such numerically corresponding day in such next,
second or third succeeding month, such Interest Period shall end on the last
Business Day of such next, second or third succeeding month. If an Interest
Period would otherwise end on a day which is not a Business Day, such Interest
Period shall end on the next succeeding Business Day, provided that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Issuer" means Bank One in its capacity as issuer of Letters of Credit
hereunder.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on its administrative questionnaire or on the signature pages hereof or
otherwise selected by such Lender or the Agent pursuant to Section 2.17.
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"Letter of Credit" means the Existing LC or a letter of credit issued
pursuant to Section 2.20(i).
"Letter of Credit Application" is defined in Section 2.20(iii).
"Letter of Credit Collateral Account" is defined in Section 2.20(xi).
"Letter of Credit Fee" is defined in Section 2.20(iv).
"Letter of Credit Fee Rate" means, at any time, the percentage rate per
annum applicable to Letter of Credit Fees at such time as set forth in the
Pricing Schedule.
"Letter of Credit Obligations means, at any time, the sum, without
duplication, of (i) the aggregate undrawn stated amount of all Letters of Credit
at such time plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at such time.
"Letter of Credit Payment Date" is defined in Section 2.20(v).
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, any Notes issued pursuant to
Section 2.13, any Letter of Credit and any Letter of Credit Application.
"Mandatorily Redeemable Stock" means, with respect to any Person, any
share of such Person's capital stock to the extent that it is (a) redeemable,
payable or required to be purchased or otherwise retired or extinguished, or
convertible into any Indebtedness or other liability of such Person, (i) at a
fixed or determinable date, whether by operation of a sinking fund or otherwise,
(ii) at the option of any Person other than such Person or (iii) upon the
occurrence of a condition not solely within the control of such Person, such as
a redemption required to be made out of future earnings or (b) convertible into
Mandatorily Redeemable Stock.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent, the Lenders or the Issuer thereunder.
"Material Indebtedness" is defined in Section 7.5.
"Modify" and "Modification" are defined in Section 2.20(i)
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"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit D.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent, the Issuer or any
indemnified party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any sale and leaseback
transaction which is not a Capitalized Lease, (iii) all Synthetic Lease
Obligations of such Person and (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person, but excluding from this clause (iv) any Operating Lease which does not
give rise to Synthetic Lease Obligations.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee.
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its pro rata share of the Letter of Credit
Obligations at such time.
"Other Taxes" is defined in Section 3.5(ii).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
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"Prime Rate" means a rate per annum equal to the prime rate of interest
announced by Bank One or by its parent, BANK ONE CORPORATION, from time to time,
changing when and as said prime rate changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Qualified Receivables Transaction" means any transaction or series of
transactions pursuant to which the Borrower or any Subsidiary sells, conveys,
pledges or otherwise transfers to a newly-formed Subsidiary or other special
purpose entity, or any other Person, any accounts receivable (including chattel
paper, instruments and general intangibles) or notes receivable and the rights
and certain other property related thereto, provided that all of the terms and
conditions of such transaction or series of transactions, including the amount
and type of any recourse to the Borrower or any Subsidiary with respect to the
assets transferred, are reasonably acceptable to the Agent.
"Receivables Transaction Attributed Obligations" means, at any time
with respect to any Qualified Receivables Transaction, the unrecovered purchase
price on such date of all assets sold, conveyed, pledged or otherwise
transferred by the Borrower or any Subsidiary to the third-party conduit entity
or other receivables credit provider under such Qualified Receivables
Transaction.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.20 to reimburse the
Issuer for amounts paid by the Issuer in respect of any one or more drawings
under Letters of Credit.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code; and provided, further, that the events described on Schedule
5.9 shall not constitute a Reportable
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Event unless the Required Lenders determine that such events have had or are
reasonably expected to have a Material Adverse Effect.
"Required Lenders" means Lenders in the aggregate having more than 50%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding more than 50% of the aggregate unpaid principal
amount of the Aggregate Outstanding Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SEC" means the Securities and Exchange Commission.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Significant Subsidiary" means, as of any date of determination, each
Subsidiary of the Borrower that meets any of the following criteria:
(i) the Borrower's and its other Subsidiaries'
Investments in and to such Subsidiary (and its respective
Subsidiaries), as shown in the consolidated financial statements of the
Borrower and its Subsidiaries prepared as of the end of the fiscal
quarter ended most recently prior to such date of determination, exceed
10% of the total consolidated assets of the Borrower and its
Subsidiaries; or
(ii) the assets of such Subsidiary (and its respective
Subsidiaries) represent more than 10% of the consolidated assets of the
Borrower and its Subsidiaries as would be shown in the consolidated
financial statements referred to in clause (i) above; or
(iii) such Subsidiary (and its respective Subsidiaries) is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries as
reflected in the financial statements referred to in clause (i) above.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled,
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directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (i) a so-called synthetic or off-balance sheet or tax retention lease or
(ii) an agreement for the use or possession of property creating obligations
that do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as indebtedness
of such Person (without regard to accounting treatment). The amount of Synthetic
Lease Obligations of any Person under any such lease or agreement shall be the
amount which would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles if such lease or
agreement were accounted for as a Capitalized Lease.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Total Debt" means all Indebtedness of the Borrower and its
Subsidiaries (including Trust Preferred Securities, but excluding Mandatorily
Redeemable Stock), determined on a consolidated basis in accordance with
Agreement Accounting Principles. For purposes of calculating Total Debt,
obligations under interest rate swaps and similar arrangements shall be marked
to market in accordance with Financial Accounting Standard 133.
"Transferee" is defined in Section 12.4.
"Trust Preferred Securities" means preferred stock issued by a trust,
the common equities of which are owned by the Borrower.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
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"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II.
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, subject to the terms and conditions set
forth in this Agreement, (a) each Lender severally agrees to make Loans to the
Borrower from time to time in amounts not to exceed in the aggregate at any one
time outstanding the amount of its Commitment and (b) the Issuer agrees to issue
Letters of Credit for the account of the Borrower in an aggregate amount not to
exceed $10,000,000 (and each Lender severally agrees to participate in each such
Letter of Credit as more fully set forth in Section 2.20). Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow at any time prior
to the Facility Termination Date. The Commitments hereunder shall expire on the
Facility Termination Date. Any repayments of Loans after the Facility
Termination Date may not be reborrowed.
2.2 Required Payments; Maturity. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full (or, the case of
any Letter of Credit, a Letter of Credit Collateral Account shall be established
in accordance with Section 2.20(xi)) by the Borrower on the Final Maturity Date.
2.3 Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4 Types of Advances. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5 Commitment Fee; Changes in Aggregate Commitment; Up-Front
Fees.
(i) The Borrower agrees to pay to the Agent for the account of
each Lender a commitment fee at a per annum rate equal to the Commitment Fee
Rate on the daily unused portion of such Lender's Commitment from the date
hereof to and including the Facility Termination Date, payable on each Payment
Date hereafter and on the Facility Termination Date.
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(ii) The Borrower may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in integral multiples of
$1,000,000, upon at least ten (10) Business Days' written notice to the Agent,
which notice shall specify the amount of any such reduction, provided that the
amount of the Aggregate Commitment may not be reduced below the Aggregate
Outstanding Credit Exposure. All accrued commitment fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder.
(iii) The Borrower may, from time to time, by means of a letter
delivered to the Agent substantially in the form of Exhibit E, request that the
Aggregate Commitment be increased to up to $125,000,000 (less the amount of any
previous reductions of the Aggregate Commitment pursuant to clause (ii) above)
by (a) increasing the Commitment of one or more Lenders which have agreed to
such increase and/or (b) adding one or more commercial banks or other Persons as
a party hereto (each an "Additional Lender") with a Commitment in an amount
agreed to by any such Additional Lender; provided that no Additional Lender
shall be added as a party hereto without the written consent of the Agent (which
shall not be unreasonably withheld) or if a Default or an Unmatured Default
exists. Any increase in the Aggregate Commitment pursuant to this clause (iii)
shall be effective three Business Days after the date on which the Agent has
received (and, to the extent applicable, consented to) the applicable increase
letter in the form of Annex 1 to Exhibit E (in the case of an increase in the
Commitment of an existing Lender) or assumption letter in the form of Annex 2 to
Exhibit E (in the case of an Additional Lender). The Agent shall promptly notify
the Borrower and the Lenders of any increase in the amount of the Aggregate
Commitment pursuant to this clause (iii) and of each Lender's pro rata share of
the Aggregate Commitment of each Lender after giving effect thereto. The
Borrower acknowledges that, in order to maintain ratable Advances in accordance
with each Lender's pro rata share of the Aggregate Commitment, prepayment of all
or portions of certain ratable Advances may be required on the date of any
increase in the Aggregate Commitment pursuant to this clause (iii) (and any such
prepayment shall be subject to the provisions of Section 3.4).
(iv) The Borrower agrees to pay to the Agent on behalf of each
Lender on the date the Borrower signs this Agreement an up-front fee in the
amount previously agreed upon among the Company, the Agent and such Lender.
2.6 Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $1,000,000 (and in multiples of $100,000 if in
excess thereof), and each Floating Rate Advance shall be in the minimum amount
of $1,000,000 (and in multiples of $100,000 if in excess thereof), provided that
any Floating Rate Advance may be in the amount of the unused Aggregate
Commitment.
2.7 Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $1,000,000 or any integral multiple of
$100,000 in excess thereof, any portion of the outstanding Floating Rate
Advances upon two Business Days' prior notice to the Agent. The Borrower may
from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $100,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior notice to the Agent.
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2.8 Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.9 Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.9 or are repaid in accordance with Section 2.7. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y) the
Borrower shall have given the Agent a Conversion/Continuation Notice (as defined
below) requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to the terms of Section 2.6, the Borrower may elect from time to
time to convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.10 Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is automatically converted
from a Eurodollar Advance into a Floating Rate Advance
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pursuant to Section 2.9, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum
equal to the Floating Rate for such day. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar
Advance shall bear interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
by the Agent as applicable to such Eurodollar Advance based upon the Borrower's
selections under Sections 2.8 and 2.9 and otherwise in accordance with the terms
hereof. No Interest Period may end after the Final Maturity Date.
2.11 Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (iii) the Letter of Credit Fee Rate shall be increased by 2% per annum,
provided that, during the continuance of a Default under Section 7.6 or 7.7, the
interest rates set forth in clauses (i) and (ii) above and the increase in the
Letter of Credit Fee Rate set forth in clause (iii) above shall be applicable to
all applicable Credit Extensions without any election or action on the part of
the Agent or any Lender.
2.12 Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with Bank One
for each payment of principal, interest, Reimbursement Obligations and fees as
it becomes due hereunder.
2.13 Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
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(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
(c) the original stated amount of each Letter of Credit and the amount of Letter
of Credit Obligations outstanding at any time and (d) the amount of any sum
received by the Agent hereunder from the Borrower and each Lender's share
thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided that the failure of the
Agent or any Lender to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Obligations in
accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a Note. In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender. Thereafter, the Loans evidenced by
such Note and interest thereon shall at all times (including after any
assignment pursuant to Section 12.3) be represented by one or more Notes payable
to the order of the payee named therein or any assignee pursuant to Section
12.3, except to the extent that any such Lender or assignee subsequently returns
any such Note for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.14 Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.15 Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest and commitment fees shall be
calculated for actual days elapsed on the basis of a 360-day year, except that
interest accruing at the Prime Rate shall be calculated for actual days elapsed
on the basis of a 365, or when appropriate 366, day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if
16
payment is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.
2.16 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.17 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19 Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided, further, that, concurrently with such replacement,
(i) another bank or other entity which is reasonably satisfactory to the
Borrower and the Agent shall agree, as of such date, to purchase for cash the
Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit B and to become a Lender for all
purposes under
17
this Agreement and to assume all obligations of the Affected Lender to be
terminated as of such date and to comply with the requirements of Section 12.3
applicable to assignments, and (ii) the Borrower shall pay to such Affected
Lender in same day funds on the day of such replacement (A) all interest, fees
and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5,
and (B) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under Section 3.4 had the Loans of
such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.
2.20 Letters of Credit.
(i) Issuance. The Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby letters of credit and
to renew, extend, increase, decrease or otherwise modify Letters of Credit
("Modify," and each such action a "Modification") from time to time from and
including the date of this Agreement and prior to the Facility Termination Date
upon the request of the Borrower; provided that immediately after each such
Letter of Credit is issued or Modified, (i) the aggregate amount of the
outstanding LC Obligations shall not exceed $10,000,000 and (ii) the Aggregate
Outstanding Credit Exposure shall not exceed the Aggregate Commitment. No Letter
of Credit shall have an expiry date later than the scheduled Facility
Termination Date. By their execution of this Agreement, the Borrower, each
Lender, the Issuer and the Agent agree that, effective as of the date of this
Agreement, the Existing LC shall be a Letter of Credit under this Agreement and
subject to the terms hereof.
(ii) Participations. On the date of this Agreement, with respect to
the Existing LC, and upon the issuance of each other Letter of Credit or the
Modification of any Letter of Credit in accordance with this Section 2.20, the
Issuer shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender, and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Issuer, a participation in such Letter of Credit
(and each Modification thereof) and the related LC Obligations in proportion to
its pro rata share of the Aggregate Commitment.
(iii) Notice. Subject to Section 2.20(i), the Borrower shall give
the Issuer notice prior to 10:00 a.m. (Chicago time) at least three Business
Days prior to the proposed date of issuance or Modification of each Letter of
Credit, specifying the beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such Letter of Credit, and describing the
proposed terms of such Letter of Credit and the nature of the transactions
proposed to be supported thereby. Upon receipt of such notice, the Issuer shall
promptly notify the Agent, and the Agent shall promptly notify each Lender, of
the contents thereof and of the amount of such Lender's participation in such
proposed Letter of Credit. The issuance or Modification by the Issuer of any
Letter of Credit shall, in addition to the conditions precedent set forth in
Article IV (the satisfaction of which the Issuer shall have no duty to
ascertain), be subject to the conditions precedent that such Letter of Credit
shall be satisfactory to the Issuer and that the Borrower shall have executed
and delivered such application agreement and/or such other instruments and
agreements relating to such Letter of Credit as the Issuer shall have reasonably
requested (each a
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"Letter of Credit Application"). In the event of any conflict between the terms
of this Agreement and the terms of any Letter of Credit Application, the terms
of this Agreement shall control.
(iv) Letter of Credit Fees. The Borrower shall pay to the Agent,
for the account of the Lenders ratably in accordance with their respective pro
rata shares of the Aggregate Commitment, with respect to each Letter of Credit,
a letter of credit fee (the "Letter of Credit Fee") at a per annum rate equal to
the Letter of Credit Fee Rate in effect from time to time on the undrawn stated
amount available under such Letter of Credit, such fee to be payable in arrears
on each Payment Date. The Borrower shall also pay to the Issuer for its own
account (x) a fronting fee in the amount agreed to by the Issuer and the
Borrower from time to time, with such fee to be payable in arrears on each
Payment Date, and (y) documentary and processing charges in connection with the
issuance or Modification of and draws under Letters of Credit in accordance with
the Issuer's standard schedule for such charges as in effect from time to time.
(v) Administration; Reimbursement by Lenders. Upon receipt from
the beneficiary of any Letter of Credit of any demand for payment under such
Letter of Credit, the Issuer shall notify the Agent and the Agent shall promptly
notify the Borrower and each other Lender as to the amount to be paid by the
Issuer as a result of such demand and the proposed payment date (the "Letter of
Credit Payment Date"). The responsibility of the Issuer to the Borrower and each
Lender shall be only to determine that the documents (including each demand for
payment) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit. The Issuer shall endeavor to exercise the same care in its issuance and
administration of Letters of Credit as it does with respect to letters of credit
in which no participations are granted, it being understood that in the absence
of any gross negligence or willful misconduct by the Issuer, each Lender shall
be unconditionally and irrevocably obligated, without regard to the occurrence
of any Default or any condition precedent whatsoever, to reimburse the Issuer on
demand for (i) such Lender's pro rata share (determined by such Lender's pro
rata share of the Aggregate Commitment) of the amount of each payment made by
the Issuer under each applicable Letter of Credit to the extent such amount is
not reimbursed by the Borrower pursuant to Section 2.20(vi) below, plus (ii)
interest on the foregoing amount for each day from the date of the applicable
payment by the Issuer to the date on which such Lender pays the amount to be
reimbursed by it, at a rate of interest per annum equal to the Federal Funds
Effective Rate or, beginning on third Business Day after demand for such amount
by the Issuer, the rate applicable to Floating Rate Advances.
(vi) Reimbursement by Borrower. The Borrower shall be irrevocably
and unconditionally obligated to reimburse the Issuer on or before the
applicable Letter of Credit Payment Date for any amount to be paid by the Issuer
upon any drawing under any Letter of Credit issued by the Issuer, without
presentment, demand, protest or other formalities of any kind; provided that the
Borrower shall not hereby be precluded from asserting any claim for direct (but
not consequential) damages suffered by the Borrower to the extent, but only to
the extent, caused by (i) the willful misconduct or gross negligence of the
Issuer in determining whether a request presented under any Letter of Credit
issued by it complied with the terms of such Letter of Credit or (ii) the
Issuer's failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Letter of Credit. All such amounts paid by the Issuer and remaining
unpaid by the Borrower shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2%
19
plus the rate applicable to Floating Rate Advances. The Issuer will pay to each
Lender ratably in accordance with its pro rata share of the Aggregate Commitment
all amounts received by it from the Borrower for application in payment, in
whole or in part, of the Reimbursement Obligation in respect of any Letter of
Credit issued by the Issuer, but only to the extent such Lender has made payment
to the Issuer in respect of such Letter of Credit pursuant to Section 2.20(v).
(vii) Obligations Absolute. The Borrower's obligations under this
Section 2.20 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuer, any Lender or any beneficiary
of a Letter of Credit. The Borrower further agrees with the Issuer and the
Lenders that neither the Issuer nor any Lender shall be responsible for, and the
Borrower's Reimbursement Obligation in respect of any Letter of Credit shall not
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even if such documents should in fact prove to be
in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, any of its Affiliates, the beneficiary of any Letter of
Credit or any financing institution or other party to whom any Letter of Credit
may be transferred or any claims or defenses whatsoever of the Borrower or of
any of its Affiliates against the beneficiary of any Letter of Credit or any
such transferee. The Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit. The
Borrower agrees that any action taken or omitted by the Issuer or any Lender
under or in connection with any Letter of Credit and the related drafts and
documents, if done without gross negligence or willful misconduct, shall be
binding upon the Borrower and shall not put the Issuer or any Lender under any
liability to the Borrower. Nothing in this Section 2.20(vii) is intended to
limit the right of the Borrower to make a claim against the Issuer for damages
as contemplated by the proviso to the first sentence of Section 2.20(vi).
(viii) Actions of Issuer. The Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Issuer. The
Issuer shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or concurrence of
the Required Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Notwithstanding any other provision of this
Section 2.20, the Issuer shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Lenders and any future holders of a
participation in any Letter of Credit.
(ix) Indemnification. The Borrower hereby agrees to indemnify and
hold harmless each Lender, the Issuer and the Agent, and their respective
directors, officers, agents and employees, from and against any and all claims
and damages, losses, liabilities, costs or expenses which such Lender, the
Issuer or the Agent may incur (or which may be claimed against such
20
Lender, the Issuer or the Agent by any Person whatsoever) by reason of or in
connection with the issuance, execution and delivery or transfer of or payment
or failure to pay under any Letter of Credit or any actual or proposed use of
any Letter of Credit, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which the Issuer may incur by reason of
or in connection with (i) the failure of any other Lender to fulfill or comply
with its obligations to the Issuer hereunder (but nothing herein contained shall
affect any rights the Borrower may have against any defaulting Lender) or (ii)
by reason of or on account of the Issuer issuing any Letter of Credit which
specifies that the term "Beneficiary" included therein includes any successor by
operation of law of the named Beneficiary, but which Letter of Credit does not
require that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the Issuer, evidencing the appointment
of such successor Beneficiary; provided that the Borrower shall not be required
to indemnify any Lender, the Issuer or the Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (x) the willful misconduct or gross negligence of the Issuer in
determining whether a request presented under any Letter of Credit issued by the
Issuer complied with the terms of such Letter of Credit or (y) the Issuer's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit. Nothing in this Section 2.20(ix) is intended to limit the obligations of
the Borrower under any other provision of this Agreement.
(X) Lenders' Indemnification. Each Lender shall, ratably in
accordance with its pro rata share of the Aggregate Commitment, indemnify the
Issuer, its affiliates and its directors, officers, agents and employees (to the
extent not reimbursed by the Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct or the Issuer's failure to pay under any Letter of Credit
after the presentation to it of a request strictly complying with the terms and
conditions of the Letter of Credit) that such indemnitees may suffer or incur in
connection with this Section 2.20 or any action taken or omitted by such
indemnitees hereunder.
(xi) Letter of Credit Collateral Account. The Borrower agrees that
it will, upon the request of the Agent or the Required Lenders and until the
final expiration date of any Letter of Credit and thereafter as long as any
amount is payable to the Issuer or the Lenders in respect of any Letter of
Credit, maintain a special collateral account pursuant to arrangements
satisfactory to the Agent (the "Letter of Credit Collateral Account") at the
Agent's office at the address specified pursuant to Article XIII, in the name of
such Borrower but under the sole dominion and control of the Agent, for the
benefit of the Lenders and in which the Borrower shall have no interest other
than as set forth in Section 8.1. The Borrower hereby pledges, assigns and
grants to the Agent, on behalf of and for the ratable benefit of the Lenders and
the Issuer, a security interest in all of the Borrower's right, title and
interest in and to all funds which may from time to time be on deposit in the
Letter of Credit Collateral Account to secure the prompt and complete payment
and performance of the Obligations. The Agent will invest any funds on deposit
from time to time in the Letter of Credit Collateral Account in certificates of
deposit of Bank One having a maturity not exceeding 30 days. Nothing in this
Section 2.20(xi) shall either obligate the Agent to require the Borrower to
deposit any funds in the Letter of Credit Collateral Account or limit the right
of the Agent to release any funds held in the Letter of Credit Collateral
Account in each case other than as required by Section 8.1; provided that if one
or more Letters
21
of Credit are outstanding on the Facility Termination Date, the Borrower shall
deposit funds in the Letter of Credit Collateral Account in an amount equal to
the stated amount of all such Letters of Credit, and such account shall at all
times thereafter have a balance in excess of the full amount available to be
drawn under such Letters of Credit.
(xii) Rights as a Lender. In its capacity as a Lender, the Issuer
shall have the same rights and obligations as any other Lender.
ARTICLE III.
YIELD PROTECTION; TAXES
3.1 Yield Protection. If, on or after the date of this Agreement,
the adoption of or any change in any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any change in the interpretation or
administration thereof by any governmental or quasi-governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender, any applicable Lending
Installation or the Issuer with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:
(i) subjects any Lender, any applicable Lending Installation or
the Issuer to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any
Lender or the Issuer in respect of its Eurodollar Loans,
Letters of Credit or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender, any applicable
Lending Installation or the Issuer (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender, any applicable Lending Installation or
the Issuer of making, funding or maintaining its Eurodollar
Loans or of issuing or participating in Letters of Credit or
reduces any amount receivable by any Lender, any applicable
Lending Installation or the Issuer in connection with its
Eurodollar Loans or Letters of Credit, or requires any Lender,
any applicable Lending Installation or the Issuer to make any
payment calculated by reference to the amount of Eurodollar
Loans or Letters of Credit held or interest received by it, by
an amount deemed material by such Lender or the Issuer, as the
case may be,
and the result of any of the foregoing is to increase the cost to such Lender,
the applicable Lending Installation or the Issuer of making or maintaining its
Eurodollar Loans, Letters of Credit or Commitment or to reduce the return
received by such Lender, the applicable Lending Installation or the Issuer in
connection with such Eurodollar Loans, Letters of Credit or Commitment, then,
within 15 days of demand by such Lender or the Issuer, the Borrower shall
22
pay such Lender or the Issuer such additional amount or amounts as will
compensate such Lender or the Issuer for such increased cost or reduction in
amount received.
3.2 Changes in Capital Adequacy Regulations. If a Lender or the
Issuer determines the amount of capital required or expected to be maintained by
such Lender, the Issuer, any Lending Installation of such Lender or any
corporation controlling such Lender or the Issuer is increased as a result of a
Change, then, within 15 days of demand by such Lender or the Issuer, the
Borrower shall pay such Lender or the Issuer the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender or the Issuer determines is attributable to this Agreement,
its Outstanding Credit Exposure or its Commitment to make Loans and issue or
participate in Letters of Credit, as the case may be, hereunder (after taking
into account such Lender's or the Issuer's policies as to capital adequacy).
"Change" means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender, any Lending Installation or the Issuer or any
corporation controlling any Lender or the Issuer. "Risk-Based Capital
Guidelines" means (i) the risk-based capital guidelines in effect in the United
States on the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.
3.3 Availability of Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate Advances
(on or before the date required by such law, rule, regulation or directive),
subject to the payment of any funding indemnification amounts required by
Section 3.4.
3.4 Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, the Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.
3.5 Taxes. (i) All payments by the Borrower to or for the account
of any Lender, the Issuer or the Agent hereunder or under any Note shall be made
free and clear of and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes
23
from or in respect of any sum payable hereunder to any Lender, the Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or Letter of Credit Application or from the execution or delivery of,
or otherwise with respect to, this Agreement, any Note or any Letter of Credit
Application ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, each Lender
and the Issuer for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, such Lender or the Issuer and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, such Lender or the Issuer makes demand therefor pursuant to
Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
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 Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) deliver to each of the Borrower and the Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to
an exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Agent (x) renewals
or additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by the
Borrower or the Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement 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 Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender 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.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any
24
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be
entitled to indemnification under this Section 3.5 with respect to Taxes imposed
by the United States; provided that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under clause (iv),
above, the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6 Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Agent) as to the amount due, if any, under Section
3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement of any Lender shall be
payable on demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement.
25
ARTICLE IV.
CONDITIONS PRECEDENT
4.1 Initial Credit Extension. The Lenders and the Issuer shall not
be required to make the initial Credit Extension hereunder unless the Borrower
has furnished to the Agent with sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of the
Borrower, together with all amendments, and a certificate of
good standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(ii) Copies certified by the Secretary or Assistant Secretary of
the Borrower, of its by-laws and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which the
Borrower is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by
name and title and bear the signatures of the officers of the
Borrower authorized to sign the Loan Documents to which the
Borrower is a party, upon which certificate the Agent and the
Lenders shall be entitled to rely until informed of any change
in writing by the Borrower.
(iv) Evidence,in form and substance satisfactory to the Agent, that
the Borrower has obtained all governmental approvals necessary
for it to enter into the Loan Documents.
(v) A certificate, signed by an Authorized Officer of the
Borrower, stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is continuing.
(vi) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit A.
(vii) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(viii) Written money transfer instructions, in substantially the form
of Exhibit C, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(ix) Evidence,in form and substance satisfactory to the Agent, of
the termination of the Existing Agreement and the repayment in
full of all outstanding obligations of the Borrower thereunder
(it being understood that the Existing LC shall become a
Letter of Credit hereunder on the date of this Agreement).
26
(x) If the initial Credit Extension will be the issuance of a
Letter of Credit, a properly completed Letter of Credit
Application.
(xi) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2 Each Credit Extension. The Lenders shall not be required to
make any Credit Extension unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing Date except to the
extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation
or warranty shall have been true and correct on and as of such
earlier date.
(iii) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their
counsel.
Each Borrowing Notice and each request for the issuance of a Letter of
Credit shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been satisfied.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1 Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation, partnership or limited liability company duly and
properly incorporated or organized, as the case may be, validly existing and (to
the extent such concept applies to such entity) in good standing under the laws
of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
5.2 Authorization and Validity. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan Documents
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations thereunder
have been duly authorized by proper corporate proceedings. After giving effect
to each Credit Extension hereunder, the aggregate amount of all Indebtedness and
borrowings of the Borrower will not exceed the maximum amount of Indebtedness
and borrowings authorized by the Borrower's Board of Directors. The Loan
Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
27
5.3 No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate (i) any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any of its Subsidiaries, or (ii) the
Borrower's or any Subsidiary's articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, bylaws, or operating or other management agreement, as the case
may be, or (iii) the provisions of any indenture, instrument or agreement to
which the Borrower or any of its Subsidiaries is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
of or on the Property of the Borrower or a Subsidiary pursuant to the terms of
any such indenture, instrument or agreement. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof, which has
not been obtained by the Borrower or any of its Subsidiaries and is in full
force and effect, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance by
the Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents, except that the Borrower is
required to make a notice filing with the SEC pursuant to the SEC's Rule 52
adopted pursuant to the Public Utility Holding Company Act of 1935, as amended.
The Borrower covenants that it will make the notice filing referred to in the
preceding sentence within the time limited prescribed therefor and further
represents that no further consent, approval, license, authorization or
validation of the SEC is required in connection therewith.
5.4 Financial Statements. The September 30, 2002 consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
5.5 Material Adverse Change. Since September 30, 2002 no event has
occurred which could reasonably be expected to have a Material Adverse Effect.
5.6 Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. The United States income tax returns of the
Borrower and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended July 31, 1997. No tax liens have been filed
against the Borrower or any Subsidiary. The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate.
28
5.7 Litigation and Contingent Obligations. Except as described on
Schedule 5.7 or in the Borrower's annual report on Form 10K for the year ended
December 31, 2001 and the Borrower's quarterly reports on Form 10Q for the
periods ended March 31, 2002, June 30, 2002 and September 30, 2002, there is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the knowledge of any of their officers, threatened against or
affecting the Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect or which seeks to prevent, enjoin or
delay the making of any Loans. Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect, the Borrower has no material contingent
obligations not provided for or disclosed in the financial statements referred
to in Section 5.4.
5.8 Subsidiaries. As of the date of this Agreement, the Borrower
has no Subsidiaries other than Southwestern Public Service Capital I.
5.9 ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $25,000,000. Each Plan complies in all material
respects with all applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither the Borrower nor any other
member of the Controlled Group (while it was a member of the Controlled Group)
has withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan. Neither the Borrower nor any other
member of the Controlled Group is party to any Multiemployer Plan.
5.10 Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.11 Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12 Material Agreements. Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13 Compliance With Laws. The Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property.
29
5.14 Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Loans hereunder gives rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
5.15 Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which noncompliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.16 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
5.17 Public Utility Holding Company Act. The Borrower is a
subsidiary of Xcel Energy Inc., which is a regulated "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.18 Insurance. The Borrower and its Subsidiaries maintain a
self-insurance program and maintain with financially sound and reputable
insurance companies insurance on all their Property of a character usually
insured by entities in the same or similar businesses similarly situated against
loss or damage of the kinds and in the amounts, customarily insured against by
such entities, and maintain such other insurance as is usually carried by such
entities.
ARTICLE VI.
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1 Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with Agreement Accounting Principles, and furnish to the Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in
generally accepted accounting principles and required or
approved by the Borrower's independent certified public
accountants) audit report
30
certified by nationally recognized independent certified
public accountants, prepared in accordance with Agreement
Accounting Principles on a consolidated basis for itself and
its Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of
surplus statements, and a statement of cash flows, accompanied
by any management letter prepared by said accountants.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period and consolidated profit and loss and
reconciliation of surplus statements and a statement of cash
flows for the period from the beginning of such fiscal year to
the end of such quarter, all certified by an Authorized
Officer.
(iii) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by an Authorized
Officer, describing said Reportable Event and the action which
the Borrower proposes to take with respect thereto.
(iv) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries, which,
in either case, could reasonably be expected to have a
Material Adverse Effect.
(v) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(vi) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the SEC.
(vii) Together with the annual and quarterly reports referred to in
clauses (i) and (ii) above, a certificate in the form of
Exhibit F, certified by an Authorized Officer.
(viii) Such other information (including non-financial information)
as the Agent or any Lender may from time to time reasonably
request.
6.2 Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Credit Extensions for general corporate
purposes and to repay outstanding Credit Extensions. The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Credit
Extensions to purchase or carry any "margin stock" (as defined in Regulation U)
or to make any hostile Acquisition.
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6.3 Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders within five (5) days
of the occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which could reasonably be expected to have
a Material Adverse Effect (it being understood and agreed that the Borrower and
its Subsidiaries shall not be required to make separate disclosure under this
Section 6.3 of occurrences or developments which have previously been disclosed
to the Lenders in any financial statements or other information delivered to the
Lenders pursuant to Section 6.1).
6.4 Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
6.5 Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6 Insurance. The Borrower will, and will cause each Subsidiary
to, maintain a self-insurance program, and maintain with financially sound and
reputable insurance companies insurance on all their Property in such amounts
and covering such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.
6.7 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, where failure to do so could
reasonably be expected to have a Material Adverse Effect.
6.8 Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
6.9 Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and
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to be advised as to the same by, their respective officers at such reasonable
times and intervals as the Agent or any Lender may designate.
6.10 Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except that,
so long as both immediately prior to and after giving effect to such merger or
consolidation, no Default or Unmatured Default shall have occurred and be
continuing, then (i) any Subsidiary may merge with the Borrower or a
Wholly-Owned Subsidiary and (ii) the Borrower may merge or consolidate with any
other Person so long as the Borrower is the surviving entity.
6.11 Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as
permitted by this Section during the twelve-month period
ending with the month in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries.
(iii) Any disposition of accounts receivable, notes receivable or
unbilled revenue, the rights related to any of the foregoing
and property related to any of the foregoing in connection
with Qualified Receivables Transactions.
6.12 Debt to Capitalization Ratio. The Borrower will not at any
time permit the Debt to Capitalization Ratio to be greater than 0.55 to 1.00.
6.13 Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio as of the last day of any fiscal quarter to be less than
2.75 to 1.0.
6.14 Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books.
33
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.
(e) Liens existing on the date hereof and described in Schedule 6.14.
(f) Liens incurred in connection with Qualified Receivables
Transactions.
(g) Purchase money Liens arising in the ordinary course of business;
provided that the aggregate amount of Indebtedness secured by all such Liens
shall not at any time exceed $5,000,000.
6.15 Intercompany Transactions. The Borrower will not, and will not
permit any Subsidiary to, (a) make any loan or advance to, or any investment in,
Xcel Energy Inc. or any Affiliate thereof (other than the Borrower or any
Subsidiary thereof); or (b) enter into any other transaction with Xcel Energy
Inc. or any Affiliate thereof (other than the Borrower or any Subsidiary
thereof) except in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary
than the Borrower or such Subsidiary would obtain in a comparable arms' length
transaction with unrelated third parties. Nothing in this Section 6.15 shall
restrict the ability of the Borrower to pay dividends to Xcel Energy Inc. so
long as no Default or Unmatured Default exists or would result therefrom.
6.16 Off-Balance Sheet Liabilities. The Borrower will not at any
time permit the aggregate amount of all Off-Balance Sheet Liabilities (excluding
(i) Receivables Transaction Attributed Obligations and (ii) the existing
Off-Balance Sheet Liabilities listed on Schedule 6.16) of the Borrower and its
Subsidiaries to exceed $100,000,000.
6.17 Receivables Transaction Attributed Obligations. The Borrower
will not at any time permit the aggregate amount of all Receivables Transaction
Attributed Obligations to exceed $75,000,000.
ARTICLE VII.
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1 Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
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7.2 Nonpayment of principal of any Loan when due, nonpayment of
any Reimbursement Obligation within one Business Day after the same becomes due,
or nonpayment of interest upon any Loan or of any commitment fee, Letter of
Credit Fee or other obligations under any of the Loan Documents within five days
after the same becomes due.
7.3 The breach by the Borrower of any of the terms or provisions
of Section 6.2, 6.3, 6.10, 6.12 or 6.13.
7.4 The breach by the Borrower (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement which is not remedied within five days
after written notice from the Agent or any Lender.
7.5 Failure of the Borrower and/or any of its Significant
Subsidiaries to pay when due any Indebtedness aggregating in excess of
$25,000,000 ("Material Indebtedness"); or the default by the Borrower and/or any
of its Significant Subsidiaries in the performance of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Indebtedness to become due
prior to its stated maturity; or any Material Indebtedness of the Borrower
and/or any of its Significant Subsidiaries shall be declared to be due and
payable or required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or the Borrower or any
of its Significant Subsidiaries shall not pay, or admit in writing its inability
to pay, its debts generally as they become due.
7.6 The Borrower or any of its Significant Subsidiaries shall (i)
have an order for relief entered with respect to it under the Federal bankruptcy
laws as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate or partnership action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section 7.7.
7.7 Without the application, approval or consent of the Borrower
or any of its Significant Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or any of its
Significant Subsidiaries or any Substantial Portion of its Property, or a
proceeding described in Section 7.6(iv) shall be instituted against the Borrower
or any of its Significant Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 30 consecutive days.
7.8 Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Borrower and its Subsidiaries which, when taken
together with all other Property of the Borrower and its
35
Subsidiaries so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such action
occurs, constitutes a Substantial Portion.
7.9 The Borrower or any of its Significant Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge one or more (i) judgments or
orders for the payment of money in excess of $25,000,000 (or the equivalent
thereof in currencies other than U.S. Dollars) in the aggregate, or (ii)
nonmonetary judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, which judgment(s), in
any such case, is/are not stayed on appeal or otherwise being appropriately
contested in good faith.
7.10 The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $25,000,000; any Reportable Event shall occur in
connection with any Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA in excess of
$5,000,000; a contribution failure occurs with respect to any Plan sufficient to
give rise to a Lien under section 302(f) of ERISA; or the Borrower or any other
member of the Controlled Group shall become party to any Multiemployer Plan.
7.11 The Borrower or any of its Significant Subsidiaries shall (i)
be the subject of any proceeding or investigation pertaining to the release by
the Borrower, any of its Significant Subsidiaries or any other Person of any
toxic or hazardous waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), could reasonably be expected to have a Material Adverse Effect.
7.12 The representations and warranties set forth in Section 5.14
("Plan Assets; Prohibited Transactions") shall at any time not be true and
correct.
7.13 Xcel Energy Inc. or any successor thereto shall cease to own,
free and clear of all Liens or other encumbrances, 100% of the outstanding
shares of voting stock of the Borrower on a fully diluted basis.
ARTICLE VIII.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration; Letter of Credit Collection Account.
(i) If any Default described in Section 7.6 or 7.7 occurs with respect
to the Borrower, the obligations of the Lenders to make Loans hereunder and the
obligation and power of the Issuer to issue Letters of Credit shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent, any Lender or
the Issuer and the Borrower will be and become thereby unconditionally
obligated, without any further notice, act or demand, to pay to the Agent an
amount in immediately available funds, which funds shall be held in the Letter
of Credit Collateral Account, equal to the excess of (x) the amount of LC
Obligations at such time over (y) the amount on deposit in the Letter of Credit
Collateral Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations (such
difference, the "Collateral Shortfall Amount"). If any other Default occurs and
is continuing, the Required Lenders (or the Agent
36
with the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the Issuer to issue Letters of Credit, or declare the Obligations to be due
and payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives, and/or (b) upon notice to the
Borrower and in addition to the continuing right to demand payment of all
amounts payable under this Agreement, make demand on the Borrower to pay, and
the Borrower will, forthwith upon such demand and without any further notice or
act, pay to the Agent in immediately available funds the Collateral Shortfall
Amount, which funds shall be deposited in the Letter of Credit Collateral
Account.
(ii) If at any time while any Default exists, the Agent determines that
the Collateral Shortfall Amount at such time is greater than zero, the Agent may
make demand on the Borrower to pay, and the Borrower will, forthwith upon such
demand and without any further notice or act, pay to the Agent in immediately
available funds the Collateral Shortfall Amount, which funds shall be deposited
in the Letter of Credit Collateral Account.
(iii) The Agent may at any time or from time to time, after funds are
deposited in the Letter of Credit Collateral Account, apply such funds to the
payment of the Obligations and any other amounts as shall from time to time have
become due and payable by the Borrower to the Lenders or the Issuer under the
Loan Documents.
(iv) At any time while any Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Letter of Credit Collateral
Account. After all of the Obligations have been indefeasibly paid in full and
the Aggregate Commitment has been terminated, any funds remaining in the Letter
of Credit Collateral Account shall be returned by the Agent to the Borrower or
paid to whomever may be legally entitled thereto at such time.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2 Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or the Final Maturity
Date, or extend the expiry date of any Letter of Credit to a
date after the Facility Termination Date, forgive all or any
portion of the principal amount thereof, or reduce the rate or
37
extend the time of payment of interest or fees thereon or any
Reimbursement Obligation related thereto.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments required
under Section 2.2, or increase the amount of the Aggregate
Commitment or of the Commitment of any Lender hereunder, or
permit the Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision to this Agreement relating to the Issuer shall be effective without
the written consent of the Issuer. The Agent may waive payment of the fee
required under Section 12.3.2 without obtaining the consent of any other party
to this Agreement.
8.3 Preservation of Rights. No delay or omission of the Lenders,
the Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the Lenders and the Issuer until the Obligations have been paid in
full.
ARTICLE IX.
GENERAL PROVISIONS
9.1 Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the making
of the Credit Extensions herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Issuer or Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
9.3 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
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9.4 Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent, the Lenders and the
Issuer and supersede all prior agreements and understandings among the Borrower,
the Agent, the Lenders and the Issuer relating to the subject matter thereof
other than the fee letter described in Section 10.13.
9.5 Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns, provided that the parties hereto
expressly agree that the Arranger shall enjoy the benefits of the provisions of
Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.
9.6 Expenses; Indemnification. (i) The Borrower shall reimburse
the Agent and the Arranger for all reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and reasonable time
charges of attorneys for the Agent, which attorneys may be employees of the
Agent) paid or incurred by the Agent or the Arranger in connection with the
preparation, negotiation, execution, delivery, syndication, review, amendment,
modification, and administration of the Loan Documents. The Borrower also agrees
to reimburse the Agent, the Arranger, the Lenders and the Issuer for all
reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and reasonable time charges of attorneys for the
Agent, the Arranger, the Lenders and the Issuer, which attorneys may be
employees of the Agent, the Arranger, the Lenders or the Issuer) paid or
incurred by the Agent, the Arranger, any Lender or the Issuer in connection with
the collection and enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, each Lender, the Issuer, their respective affiliates, and each of
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and reasonable expenses (including, without
limitation, all reasonable expenses of litigation or preparation therefor
whether or not the Agent, the Arranger, any Lender, the Issuer or any affiliate
is a party thereto) which any of them may pay or incur arising out of or
relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Credit Extension hereunder except to the
extent that they are determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the party seeking indemnification. The obligations of the Borrower
under this Section 9.6 shall survive the termination of this Agreement.
9.7 Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
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9.8 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.9 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10 Nonliability of Lenders. The relationship between the Borrower
on the one hand and the Lenders, the Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
any Lender nor the Issuer shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, any Lender nor the Issuer undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
The Borrower agrees that neither the Agent, the Arranger, any Lender nor the
Issuer shall have liability to the Borrower (whether sounding in tort, contract
or otherwise) for losses suffered by the Borrower in connection with, arising
out of, or in any way related to, the transactions contemplated and the
relationship established by the Loan Documents, or any act, omission or event
occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, any Lender nor the Issuer
shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to xxx for, any special, indirect or consequential
damages suffered by the Borrower in connection with, arising out of, or in any
way related to the Loan Documents or the transactions contemplated thereby.
9.11 Limited Disclosure. (a) Notwithstanding anything to the
contrary herein, the Borrower, each Lender and the Agent hereby agree that, from
the commencement of discussions with respect to the facility established by this
Agreement (the "Facility"), the Borrower, each Lender and the Agent (and each of
their respective, and their respective Affiliates', employees, officers,
directors, representatives, advisors and agents) are permitted to disclose to
any and all Persons, without limitation of any kind, the structure and tax
aspects (as such terms are used in sections 6011 and 6111 of the Code) of the
Facility, and all materials or any kind (including opinions or other tax
analyses) that are provided to the Borrower, any Lender or the Agent related to
such structure and tax aspects. In this regard, each of the Borrower, each
Lender and the Agent acknowledges and agrees that the disclosure of the
structure or tax aspects of the Facility is not limited in any way by an express
or implied understanding or agreement, oral or written (whether or not such
understanding or agreement is legally binding). Furthermore, each of the
Borrower, each Lender and the Agent acknowledges and agrees that it does not
know or have reason to know that its use or disclosure of information relating
to the structure or tax aspects of the Facility is limited in any other manner
(such as where the Facility is claimed to be proprietary or exclusive) for the
benefit of any other Person.
(b) Neither the Agent nor any Lender may disclose to any Person any
Specified Information (as defined below) except to its, and its Affiliates',
officers, employees, agents,
40
accountants, legal counsel, advisors and other representatives who have a need
to know such Specified Information. "Specified Information" means information
that the Borrower furnishes to the Agent or any Lender in a writing designated
as confidential, but does not include any such information that (i) relates to
the "structure" or "tax aspects" of the transactions contemplated by this
Agreement, as such terms are used in Sections 6011, 6111 and 6112 of the Code
and the regulations promulgated thereunder or (ii) is or becomes generally
available to the public or that is or becomes available to the Agent or such
Lender from a source other than the Borrower.
(c) The provisions of subsection (b) above shall not apply to Specified
Information (i) that is a matter of general public knowledge or has heretofore
been or is hereafter published in any source generally available to the public,
(ii) that is required to be disclosed by law, regulation or judicial order,
including pursuant to the tax shelter regulations under Sections 6011, 6111 and
6112 of the Code, (iii) that is requested by any regulatory body with
jurisdiction over the Agent or any Lender, or (iv) that is disclosed to legal
counsel, accountants and other professional advisors to such Lender, in
connection with the exercise of any right or remedy hereunder or under any Note
or any suit or other litigation or proceeding relating to this Agreement or any
Note, to a rating agency if required by such agency in connection with a rating
relating to Credit Extensions hereunder or to assignees or participants or
potential assignees or participants who agree to be bound by the provisions of
this Section 9.11.
(d) The provisions of this Section 9.11 supersede any confidentiality
obligations of any Lender or the Agent relating to the Facility under any
agreement between the Borrower and any such party. The parties hereto agree that
any such confidentiality obligations of any Lender or the Agent shall be deemed
void ab initio to the extent the same relate to the Facility.
9.12 Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the
Credit Extensions provided for herein.
9.13 Disclosure. The Borrower, each Lender and the Issuer hereby
(i) acknowledge and agree that Bank One and/or its Affiliates from time to time
may hold investments in, make other loans to or have other relationships with
the Borrower and its Affiliates, and (ii) waive any liability of Bank One or
such Affiliate of Bank One to the Borrower or any Lender, respectively, arising
out of or resulting from such investments, loans or relationships other than
liabilities arising out of the gross negligence or willful misconduct of Bank
One or its Affiliates.
ARTICLE X.
THE AGENT
10.1 Appointment; Nature of Relationship. Bank One, is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have
41
any fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Agent is merely acting as the contractual
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2 Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4 No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith, or (f) the
financial condition of the Borrower or of any of the Borrower's Subsidiaries.
The Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
10.5 Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders (or, when expressly required hereunder, all of the
Lenders), and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders. The Lenders hereby acknowledge
that the Agent shall be under no duty to take any discretionary action permitted
to be taken by it pursuant to the provisions of this Agreement or any other Loan
Document unless it shall be requested in writing to do so by the Required
Lenders. The Agent shall be fully justified in
42
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
10.6 Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8 Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
43
10.10 Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
10.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders; provided that the
Agent may not be removed unless the Agent (in its individual capacity) and any
affiliate thereof acting as Issuer is relieved of all of its duties as Issuer
pursuant to documentation reasonably satisfactory to such Person on or prior to
the date of such removal. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint, on behalf of the Borrower and the
Lenders, a successor Agent. If no successor Agent shall have been so appointed
by the Required Lenders within thirty days after the resigning Agent's giving
notice of its intention to resign, then the resigning Agent may appoint, on
behalf of the Borrower and the Lenders, a successor Agent. Notwithstanding the
previous sentence, the Agent may at any time without the consent of any Lender
and with the consent of the Borrower, not to be unreasonably withheld or
delayed, appoint any of its Affiliates which is a commercial bank as a successor
Agent hereunder. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of the Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor Agent shall be
a commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent,
44
the provisions of this Article X shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Agent by merger, or the Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 10.12, then the
term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate
or other analogous rate of the new Agent.
10.13 Agent's Fee. The Borrower agrees to pay to the Agent, for its
own account, the fees agreed to by the Borrower and the Agent pursuant to that
certain letter agreement dated January 23, 2003, or as otherwise agreed from
time to time.
10.14 Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15 Syndication Agent. No Lender identified on the cover page, the
signature pages or otherwise in this Agreement, or in any document related
hereto, as being the "Syndication Agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement in such
capacity other than those applicable to all Lenders. Each Lender acknowledges
that it has not relied, and will not rely, on the Syndication Agent in deciding
to enter into this Agreement or in taking or refraining from taking any action
hereunder or pursuant hereto.
ARTICLE XI.
SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Outstanding Credit Exposure (other
than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5 and payments
made to the Issuer in respect of Reimbursement Obligations so long as the
Lenders have not funded their participations therein) in a greater proportion
than that received by any other Lender, such Lender agrees, promptly upon
demand, to purchase a portion of the Aggregate Outstanding Credit Exposure held
by the other Lenders so that after such purchase each Lender will hold its
ratable proportion of the Aggregate Outstanding Credit Exposure. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
45
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
ARTICLE XII.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of
this Section 12.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank; provided that no such
pledge or assignment creating a security interest shall release the transferor
Lender from its obligations hereunder unless and until the parties thereto have
complied with the provisions of Section 12.3. The Agent may treat the Person
which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with Section 12.3;
provided that the Agent may in its discretion (but shall not be required to)
follow instructions from the Person which made any Loan or which holds any Note
to direct payments relating to such Loan or Note to another Person. Any assignee
of the rights to any Loan or any Note agrees by acceptance of such assignment to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the owner of the rights to any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Loan.
12.2 Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more banks or other entities
("Participants") participating interests in any Outstanding Credit
Exposure owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under
the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of
its Outstanding Credit Exposure and the holder of any Note issued to it
in evidence thereof for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be
determined as if such Lender had not sold such participating interests,
and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
46
12.2.2 Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with respect
to any Credit Extension or Commitment in which such Participant has an
interest which forgives principal, interest, fees or Reimbursement
Obligations or reduces the interest rate or fees payable with respect
to any such Credit Extension or Commitment, extends the Facility
Termination Date or the Final Maturity Date, or postpones any date
fixed for any regularly scheduled payment of principal of, or interest
or fees on, any such Credit Extension or Commitment.
12.2.3 Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
12.3 Assignments.
12.3.1 Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the
Loan Documents. Such assignment shall be substantially in the form of
Exhibit C or in such other form as may be agreed to by the parties
thereto. The consent of the Borrower and the Agent shall be required
prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; provided that if a
Default has occurred and is continuing, the consent of the Borrower
shall not be required. Such consent shall not be unreasonably withheld
or delayed. Each such assignment with respect to a Purchaser which is
not a Lender or an Affiliate thereof shall (unless each of the Borrower
and the Agent otherwise consents) be in an amount not less than the
lesser of (i) $10,000,000 or (ii) the remaining amount of the assigning
Lender's Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).
12.3.2 Effect; Effective Date. Upon (i) delivery to the
Agent of an assignment, together with any consents required by Section
12.3.1, and (ii) payment of a $3,500 fee to the Agent for processing
such assignment (unless such fee is waived by the Agent), such
assignment shall become effective on the effective date specified in
such assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the
applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of
47
such assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by or on
behalf of the Lenders and shall have all the rights and obligations of
a Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the
Borrower, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate
Commitment and the Aggregate Outstanding Credit Exposure assigned to
such Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 12.3.2, the transferor Lender, the Agent and
the Borrower shall, if the transferor Lender or the Purchaser desires
that its Loans be evidenced by Notes, make appropriate arrangements so
that new Notes or, as appropriate, replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment.
12.4 Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).
ARTICLE XIII.
NOTICES
13.1 Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
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 facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth in its administrative questionnaire or (z)
in the case of any party, at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, or (ii) if given by any
other means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section; provided that notices to the
Agent under Article II shall not be effective until received.
13.2 Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
48
ARTICLE XIV.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XV.
CHOICE OF LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL; MAXIMUM INTEREST RATE
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1
ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, ANY LENDER OR THE ISSUER TO
BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE ISSUER AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY
49
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
15.4 Maximum Interest Rate. No provision of the Loan Documents
shall require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law ("Maximum Rate"). If any interest in excess
of the Maximum Rate is provided for or shall be adjudicated to be provided for
in the Notes or otherwise in connection with this Agreement, the provisions of
this Section 15.4 shall govern and prevail and neither the Borrower nor the
sureties, guarantors, successors or assigns of the Borrower shall be obligated
to pay the excess amount of the interest or any other excess sum paid for the
use, forbearance, or detention of sums loaned. In the event the Agent or any
Lender ever receives, collects or applies as interest any amount in excess of
the Maximum Rate, the amount by which such amount exceeds the Maximum Rate shall
be applied as a payment and reduction of the principal of indebtedness evidenced
by the Loans, and, if the principal amount of the Loans has been paid in full,
any remaining excess shall forthwith be paid to the Borrower.
50
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
SOUTHWESTERN PUBLIC SERVICE
COMPANY
By: /s/ Xxxxxxxx X.X. Xxxxx III
----------------------------------------
Title: Vice President and Treasurer
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Title: Assistant Treasurer
000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Credit Agreement
Commitments
$34,000,000 BANK ONE, NA,
Individually and as Agent
By: /s/ Xxxx X. Xxx
---------------------------------------
Title: Director
--------------------------------
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Credit Agreement
$26,000,000 THE BANK OF NEW YORK, as Syndication
Agent and as a Lender
By: /s/
----------------------------------------
Title: Managing Director
---------------------------------
Credit Agreement
$15,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ X Xxxxxxx
---------------------------------------
Title: Vice President
--------------------------------
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: VP & Manager
--------------------------------
Credit Agreement
$15,000,000 UBS AG, CAYMAN ISLANDS BRANCH
By: /s/ Xxxxxxx Xxxxx-XxXxxxxxx
----------------------------------------
Title: Associate Director
--------------------------------
By: /s/
---------------------------------------
Title: Director
--------------------------------
Credit Agreement
$10,000,000 AMARILLO NATIONAL BANK
By: /s/
---------------------------------------
Title: Executive Vice President
---------------------------------
Credit Agreement
PRICING SCHEDULE
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APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
MARGIN STATUS STATUS STATUS STATUS STATUS
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Eurodollar Rate 0.875% 1.000% 1.250% 1.500% 2.500%
---------------------------------------------------------------------------------
Floating Rate zero% zero% zero% zero% 1.00%
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LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
FEES STATUS STATUS STATUS STATUS STATUS
---------------------------------------------------------------------------------
Commitment Fee Rate 0.125% 0.150% 0.175% 0.250% 0.350%
---------------------------------------------------------------------------------
Letter of Credit Fee Rate 0.875% 1.000% 1.250% 1.500% 2.500%
---------------------------------------------------------------------------------
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Borrower's
Xxxxx'x Rating is A3 or better and the Borrower's S&P Rating is A- or better.
"Level II Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower's Xxxxx'x Rating is
Baa1 or better and the Borrower's S&P Rating is BBB+ or better.
"Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status; and (ii) the
Borrower's Xxxxx'x Rating is Baa2 or better and the Borrower's S&P Rating is BBB
or better.
"Level IV Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status, Level II Status or Level III Status; and
(ii) the Borrower's Xxxxx'x Rating is Baa3 or better and the Borrower's S&P
Rating is BBB- or better.
"Level V Status" exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status, Level III Status or Level IV
Status.
"Xxxxx'x Rating" means, at any time, the rating issued by Xxxxx'x and
then in effect with respect to the Borrower's senior unsecured long-term debt
securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Borrower's senior unsecured long-term debt securities
without third-party credit enhancement.
"Status" means Level I Status, Level II Status, Level III Status, Level
IV Status or Level V Status.
The Applicable Margin, the Commitment Fee Rate and the Letter of Credit
Fee Rate shall be determined in accordance with the foregoing table based on the
Borrower's Status as determined from its then-current Xxxxx'x and S&P Ratings.
The credit rating in effect on any date for the purposes of this Schedule is
that in effect at the close of business on such date. If at any time the
Borrower has no Xxxxx'x Rating or no S&P Rating, Level V Status shall exist.
SCHEDULE 5.7
LITIGATION; CONTINGENT LIABILITIES
On July 24, 1995, Lamb County Electric Cooperative, Inc. (LCEC)
petitioned the Public Utility Commission of Texas (PUCT) for a cease and desist
order against the Borrower. LCEC alleged that the Borrower had been unlawfully
providing service to oil-field customers and their facilities in LCEC's singly
certificated area. The Borrower responded that it was lawfully entitled to serve
oil field customers under "grandfather rights" granted to it in the same order
that granted LCEC its certificated area. Ultimately, the Commission issued an
order granting the Borrower's motion for summary disposition, thus denying
LCEC's petition. LCEC appealed the Commission's order to district court, which
upheld the order. LCEC then appealed to the Third Court of Appeals, which
reversed the district court judgment and remanded the case to the Commission for
an evidentiary hearing. The LCEC complaint was transferred to the State Office
of Administrative Hearings (SOAH) for processing. A hearing on the merits was
held October 7-10, 2002, and we are currently waiting for a Proposal For
Decision from the SOAH Administrative Law Judge. In related litigation, on
October 18, 1996, LCEC filed an action for damages based on its claim that the
Borrower has been unlawfully providing service to oil field customers in its
certificated area. This case has remained dormant pending a final determination
by the PUCT of the lawfulness of the service. Damages resulting from a decision
adverse to the Borrower could be material.
Schedule
5.7-1
SCHEDULE 5.9
EXCLUDED REPORTABLE EVENTS
Pursuant to 29 CFR Part 4043, Subparts A and B, a Reportable Event
occurred on November 22, 2002, when five former officers of NRG Energy, Inc. a
wholly owned subsidiary of Xcel Energy Inc., filed an involuntary petition in
the United States Bankruptcy Court, District of Minnesota, alleging non-payment
of certain obligations arising out of their employment with NRG Energy, Inc.
Xcel Energy Inc., as plan sponsor of the Xcel Energy Pension Plan, of
which NRG Energy, Inc. is a participating employer, has complied with the
Pension Benefit Guaranty Corporation's Reporting and Notification requirements,
and takes the position that the Involuntary Petition has no impact on the funded
status of the Xcel Energy Pension Plan.
Schedule
5.9-1
SCHEDULE 6.14
EXISTING LIENS
1. Liens in connection with the $25,000,000 aggregate principal amount of
Red River Authority of Texas Adjustable Rate Tender Securities (Pollution
Control Revenue Refunding Bonds, Southwestern Public Service Company Project),
Series 1996
2. Liens in connection with the $57,300,000 aggregate principal amount of
Potter County Development Corporation Pollution Control Revenue Refunding Bonds
(Southwestern Public Service Company Project), Series 1996
3. Liens in connection with the $44,500,000 aggregate principal amount of
Red River Authority of Texas Adjustable Rate Tender Securities (Pollution
Control Revenue Refunding Bonds, Southwestern Public Service Company Project),
Series 1991
4. Liens in connection with financing in the amount of approximately
$17,700,000 relating to construction of electric bulk power transmission system,
including approximately 284 miles of transmission lines and rights under related
construction contracts, transmission agreement and power sales agreement
5. Leases with respect to assets or Property of the Southwestern Public
Service Company entered into in the ordinary course of business
6. Liens in connection with any attachment, decree or judgment not
constituting a Default under Section 7.9
Schedule
6.14-1
SCHEDULE 6.16
OFF-BALANCE SHEET LIABILITIES
Existing letters of credit issued in favor of Southwest Power Pool in the
aggregate amount of $6,206,763.
Existing Synthetic Lease with an unamortized balance of $13,679,274.13.
Schedule
6.16-1
EXHIBIT A
FORM OF OPINION
February 18, 2003
To: The Agent and the Lenders who are parties to the
Credit Agreement described below.
Re: Southwestern Public Service Company
Ladies and Gentlemen:
We have acted as counsel for Southwestern Public Service Company (the
"Borrower") and have represented the Borrower in connection with its execution
and delivery of a Credit Agreement dated as of February 18, 2003 (the
"Agreement"), among the Borrower, the Lenders named therein, Bank One, NA, as
Agent, The Bank of New York, as Syndication Agent, and Bank One Capital Markets,
Inc., as Lead Arranger and Sole Book Runner, providing for Credit Extensions in
an aggregate principal amount not exceeding $125,000,000 at any one time
outstanding. All capitalized terms used in this opinion and not otherwise
defined herein shall have the meanings attributed to them in the Agreement.
We are not general counsel to the Borrower, and our representation
consists of advising the Borrower on corporate matters as to which we have been
specifically consulted. In connection with this opinion, we have examined the
originals or photocopies of the Agreement, the Notes executed and to be executed
by the Borrower, and such corporate records, agreements and instruments of the
Borrower, certificates of public officials and of officers of the Borrower, such
other documents and records, and such matters of law, as we have deemed
necessary or appropriate for purposes of the opinions rendered below. In such
examination, we have assumed the genuineness of all signatures (other than those
of the Borrower), the authenticity of all documents submitted to us as copies
and the authenticity of the originals of such latter documents. In addition,
where relevant facts were not independently established, we have relied as to
matters of fact (but not conclusions of law) upon the aforesaid agreements,
corporate records, instruments, documents and certificates, discussions with
officers and representatives of the Borrower, the representations and warranties
of the Borrower contained in the Agreement and the certificates of officers of
the Borrower being delivered to you in connection with the Agreement. In
rendering this opinion, we have also assumed that the Agreement has been duly
authorized, executed and delivered by, and is the legal, valid and binding
agreement of, and is enforceable against, the Lenders.
Based on the foregoing examination, and subject to the limitations and
qualifications set forth in this letter, we are of the opinion that:
1. The Borrower is a corporation, duly and properly incorporated,
validly existing, and in good standing under the laws of New Mexico and has all
requisite authority to conduct its business in each jurisdiction in which
qualification is required, except where the failure to
Exhibit A-1
so qualify would not have a Material Adverse Effect.
2. The execution and delivery by the Borrower of the Loan
Documents and the performance by the Borrower of its obligations thereunder have
been duly authorized by proper corporate proceedings on the part of the Borrower
and will not:
(a) require any consent of the Borrower's shareholders;
(b) violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or (ii)
the Borrower's restated articles of incorporation, or bylaws, or (iii)
the provisions of any indenture, instrument or agreement to which the
Borrower is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder; or
(c) result in, or require, the creation or imposition of
any Lien in, of, or on the Property of the Borrower pursuant to the
terms of any indenture, instrument or agreement binding upon the
Borrower.
3. The Loan Documents have been duly executed and delivered by
the Borrower and constitute the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their terms except
to the extent the enforcement thereof may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights generally and
subject also to the availability of equitable remedies if equitable remedies are
sought.
4. Except as set forth in the Borrower's Annual Report on Form
10-K for the fiscal year ended December 31, 2001, the Borrower's Quarterly
reports on Form 10-Q for the quarters ended March 31, 2002, June 30, 2002, and
September 30, 2002, and in Schedule 5.7 to the Agreement, there is no
litigation, arbitration, governmental investigation, proceeding or inquiry
pending or, to the best of our knowledge after due inquiry, threatened against
the Borrower which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect.
5. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof which has not been obtained by the
Borrower is required to be obtained by the Borrower in connection with the
execution and delivery of the Loan Documents, the borrowings under the
Agreement, the payment and performance by the Borrower of the Obligations, or
the legality, validity, binding effect or enforceability of any of the Loan
Documents.
This opinion is subject to and qualified in all respects by the
following:
1. This opinion is limited to federal law and the laws of New
Mexico as in effect on the date hereof, and we disclaim any responsibility to
inform you of any changes after the date
Exhibit A-2
hereof. We express no opinion as to (a) any matter that may be governed by the
laws of any other jurisdiction; (b) state and federal securities, tax, and ERISA
laws, rules, and regulations; or (c) potential liability imposed by any of the
foregoing laws with respect to the transactions contemplated by the Agreement.
2. We express no opinion not expressly stated herein, and no
further or other opinion shall be implied.
This opinion is being delivered solely in connection with the closing
under the Agreement that is being consummated on the date hereof. The opinions
expressed herein are based upon the laws mentioned above in effect on the date
hereof, and we assume no obligation to revise or supplement this letter to take
into account any event, action, interpretation, change of circumstance, change
of law or other matters coming to our attention after the date hereof.
This opinion may be relied upon by the Agent, the Lenders, and their
participants, assignees and other transferees.
Very truly yours,
Exhibit A-3
EXHIBIT B
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_______________________________ (the "Assignor") and _________________________
(the "Assignee") is dated as of ___________________, 20___. The parties hereto
agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as it may be amended, modified, renewed or extended from time
to time is herein called the "Credit Agreement") described in Item 1 of Schedule
1 attached hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under the
Credit Agreement and the other Loan Documents, such that after giving effect to
such assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other Loan
Documents relating to the facilities listed in Item 3 of Schedule 1. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment
Agreement (the "Effective Date") shall be the later of the date specified in
Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by
the Agent) after this Assignment Agreement, together with any consents required
under the Credit Agreement, are delivered to the Agent. In no event will the
Effective Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date are not made on the proposed Effective Date.
4. PAYMENT OBLIGATIONS. In consideration for the sale and
assignment of Loans hereunder, the Assignee shall pay the Assignor, on the
Effective Date, the amount agreed to by the Assignor and the Assignee. On and
after the Effective Date, the Assignee shall be entitled to receive from the
Agent all payments of principal, interest and fees with respect to the interest
assigned hereby. The Assignee will promptly remit to the Assignor any interest
on Loans and fees received from the Agent which relate to the portion of the
Commitment or Loans assigned to the Assignee hereunder for periods prior to the
Effective Date and not previously paid by the Assignee to the Assignor. In the
event that either party hereto receives any payment to which the other party
hereto is entitled under this Assignment Agreement, then the party receiving
such amount shall promptly remit it to the other party hereto.
5. RECORDATION FEE. The Assignor and Assignee each agree to pay
one-half of the recordation fee required to be paid to the Agent in connection
with this Assignment Agreement unless otherwise specified in Item 6 of Schedule
1.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that (i) it is the legal and
Exhibit B-1
beneficial owner of the interest being assigned by it hereunder, (ii) such
interest is free and clear of any adverse claim created by the Assignor and
(iii) the execution and delivery of this Assignment Agreement by the Assignor is
duly authorized. It is understood and agreed that the assignment and assumption
hereunder are made without recourse to the Assignor and that the Assignor makes
no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee
(i) confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement, (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) confirms
that the execution and delivery of this Assignment Agreement by the Assignee is
duly authorized, (v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Lender, (vi) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vii)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as defined
under ERISA and that its rights, benefits and interests in and under the Loan
Documents will not be "plan assets" under ERISA, (viii) agrees to indemnify and
hold the Assignor harmless against all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
nonperformance of the obligations assumed under this Assignment Agreement, and
(ix) if applicable, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any United
States federal income taxes.
8. GOVERNING LAW. This Assignment Agreement shall be governed by
the internal law, and not the law of conflicts, of the State of Illinois.
9. NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement. For the purpose
hereof, the addresses of the parties
Exhibit B-2
hereto (until notice of a change is delivered) shall be the address set forth in
the attachment to Schedule 1.
10. COUNTERPARTS; DELIVERY BY FACSIMILE. This Assignment Agreement
may be executed in counterparts. Transmission by facsimile of an executed
counterpart of this Assignment Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart and such facsimile shall be deemed to be
an original counterpart of this Assignment Agreement.
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto have
executed this Assignment Agreement by executing Schedule 1 hereto as of the date
first above written.
Exhibit B-3
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
Credit Agreement dated as of February 18, 2003 among Southwestern
Public Service Company, the lenders named therein including
the Assignor, and Bank One, NA individually and as Agent for
such lenders, as it may be amended from time to time.
2. Date of Assignment Agreement:_______________, 20
3. Amounts (As of Date of Item 2 above):
a. Assignee's percentage
of Aggregate Commitment
(Advances) purchased
under the Assignment
Agreement** ____%
b. Amount of
Assignor's Commitment
purchased
under the Assignment
Agreement** $____
4. Assignee's Commitment (or Loans
with respect to terminated
Commitments) purchased
hereunder: $__________________
5. Proposed Effective Date: ____________________
6. Non-standard Recordation Fee
Arrangement
N/A***
[Assignor/Assignee
to pay 100% of fee]
[Fee waived by Agent]
Exhibit B-4
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:______________________________ By:___________________________________
Title ___________________________ Title:________________________________
Exhibit B-5
ACCEPTED AND CONSENTED TO****BY ACCEPTED AND CONSENTED
TO BY
SOUTHWESTERN PUBLIC BANK ONE, NA, as Agent
SERVICE COMPANY
By:______________________________ By:___________________________________
Title ___________________________ Title:________________________________
** Percentage taken to 10 decimal places
*** If fee is split 50-50, pick N/A as option
**** Delete if not required by Credit Agreement
Exhibit B-6
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name:____________________________ Telephone No.:________________________
Fax No.:_________________________ Telex No.:____________________________
Answerback:___________________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank: _______________________________________
Account Name & Number for Wire Transfer: _______________________________________
_______________________________________
Other Instructions:_____________________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNOR:__________________
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name:____________________________ Telephone No.:________________________
Fax No.:_________________________ Telex No.:____________________________
Answerback:___________________________
Exhibit B-7
KEY OPERATIONS CONTACTS:
Booking Installation: Booking Installation:
Name: Name:
Telephone No.: Telephone No.:
Fax No.: Fax No.:
Telex No.: Telex No.:
Answerback: Answerback:
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:
Account Name & Number for Wire Transfer:
Other Instructions:
ADDRESS FOR NOTICES FOR ASSIGNEE:
Exhibit B-8
BANK ONE INFORMATION
Assignee will be called promptly upon receipt of the signed
agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
Name: Name:
Telephone No.: (312) Telephone No.: (312)
Fax No.: (312) Fax No.: (312)
Bank One Telex No.: 190201 (Answerback:
FNBC UT)
INITIAL FUNDING STANDARDS:
Libor Fund 2 days after rates are set.
BANK ONE WIRE INSTRUCTIONS: Bank One, NA, ABA # 000000000
LS2 Incoming Account # 481152860000
Ref:________________
ADDRESS FOR NOTICES FOR BANK ONE: 0 Xxxx Xxx Xxxxx, Xxxxxxx, XX 00000
Attn: Agency Compliance Division, Suite
IL1-0353
Fax No. (000) 000-0000 or (000) 000-0000
Exhibit B-9
EXHIBIT C
FORM OF LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To Bank One, NA,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated as of February 18, 2003 (as the same
may be amended or modified, the "Credit Agreement"), among Southwestern Public
Service Company (the "Borrower"), the Lenders named therein and the Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Credit Extensions or other extensions of credit from time to time until receipt
by the Agent of a specific written revocation of such instructions by the
Borrower, provided that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.
Facility Identification Number(s)______________________________________
Customer/Account Name: Southwestern Public Service Company
Transfer Funds To _____________________________________________________
For Account No. _______________________________________________________
Reference/Attention To ________________________________________________
Authorized Officer (Customer Representative) Date________________
___________________________________________ ___________________
(Please Print) Signature
Bank Officer Name Date_____________________
___________________________________________ _________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
Exhibit C-1
EXHIBIT D
FORM OF NOTE
[Date]
Southwestern Public Service Company, a New Mexico corporation
(the "Borrower"), promises to pay to the order of _____________________________
(the "Lender") the aggregate unpaid principal amount of all Loans made by the
Lender to the Borrower pursuant to Article II of the Agreement (as hereinafter
defined), in immediately available funds at the main office of Bank One, NA in
Chicago, Illinois, as Agent, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on the Loans
in full on the Final Maturity Date.
The Lender shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Credit Agreement dated as of February 18, 2003
(which, as it may be amended or modified and in effect from time to time, is
herein called the "Agreement"), among the Borrower, the lenders party thereto,
including the Lender, and Bank One, NA, as Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this Note,
including the terms and conditions under which this Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
Notwithstanding anything to the contrary in this Note, no
provision of this Note shall require the payment or permit the collection of
interest in excess of the maximum permitted by applicable law ("Maximum Rate").
If any interest in excess of the Maximum Rate is provided for or shall be
adjudicated to be so provided, in this Note or otherwise in connection with the
loan transaction, the provisions of this paragraph shall govern and prevail, and
neither the Borrower nor the sureties, guarantors, successors or assigns of the
Borrower shall be obligated to pay the excess of the interest or any other
excess sum paid for the use, forbearance, or detention of sums loaned. If for
any reason interest in excess of the Maximum Rate shall be deemed charged,
required or permitted by any court of competent jurisdiction, the excess shall
be applied a payment and reduction of the principal of indebtedness evidenced by
this Note, and, if the principal amount has been paid in full, any remaining
excess shall forthwith be paid to the Borrower.
Exhibit D-1
This Note shall be construed in accordance with the internal
laws (and not the law of conflicts) of the State of Illinois, but giving effect
to Federal laws applicable to national banks.
SOUTHWESTERN PUBLIC SERVICE
COMPANY
By: __________________________________
Print Name:___________________________
Title:________________________________
By: __________________________________
Print Name:___________________________
Title:________________________________
Exhibit D-2
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF SOUTHWESTERN PUBLIC SERVICE COMPANY
DATED____________,
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Principal Maturity Principal
Date Amount of Loan of Interest Period Amount Paid Unpaid Balance
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Exhibit D-3
EXHIBIT E
FORM OF INCREASE REQUEST
_________________________, 20___
Bank One, NA, as Agent under the
Credit Agreement referred to below
Ladies/Gentlemen:
Please refer to the Credit Agreement dated as of February 18, 2003
among Southwestern Public Service Company (the "Borrower"), various financial
institutions and Bank One, NA, as Agent (as amended, modified, extended or
restated from time to time, the "Credit Agreement"). Capitalized terms used but
not defined herein have the respective meanings set forth in the Credit
Agreement.
In accordance with Section 2.5(iii) of the Credit Agreement, the
Borrower requests an increase in the Aggregate Commitment from $__________ to
$__________. Such increase shall be made by [increasing the Commitment of
____________ from $________ to $________] [adding _____________ as a Lender
under the Credit Agreement with a Commitment of $____________] as set forth in
the letter attached hereto. Such increase shall be effective three Business Days
after the date that the Agent accepts the letter attached hereto or such other
date as is agreed among the Borrower, the Agent and the [increasing] [new]
Lender.
Very truly yours,
SOUTHWESTERN PUBLIC SERVICE COMPANY
By: __________________________________
Name: ________________________________
Title: _______________________________
Exhibit E-1
ANNEX I TO EXHIBIT E
[Date]
Bank One, NA, as Agent under the
Credit Agreement referred to below
Ladies/Gentlemen:
Please refer to the letter dated __________, 20__ from Southwestern
Public Service Company (the "Borrower") requesting an increase in the Aggregate
Commitment from $__________ to $__________ pursuant to Section 2.5(iii) of the
Credit Agreement dated as of February 18, 2003 among the Borrower, various
financial institutions and Bank One, NA, as Agent (as amended, modified,
extended or restated from time to time, the "Credit Agreement"). Capitalized
terms used but not defined herein have the respective meanings set forth in the
Credit Agreement.
The undersigned hereby confirms that it has agreed to increase its
Commitment under the Credit Agreement from $__________ to $__________ effective
on the date which is three Business Days after the acceptance hereof by the
Agent or on such other date as may be agreed among the Borrower, the Agent and
the undersigned.
Very truly yours,
[NAME OF INCREASING BANK]
By:_________________________
Title:______________________
Accepted as of
_________, ____
BANK ONE, NA, as Agent
By: __________________________________
Name: ________________________________
Title: _______________________________
Exhibit E-2
ANNEX II TO EXHIBIT E
[Date]
Bank One, NA, as Agent under the
Credit Agreement referred to below
Ladies/Gentlemen:
Please refer to the letter dated __________, 20___ from Southwestern
Public Service Company (the "Borrower") requesting an increase in the Aggregate
Commitment from $__________ to $__________ pursuant to Section 2.5(iii) of the
Credit Agreement dated as of February 18, 2003 among the Borrower, various
financial institutions and Bank One, NA, as Agent (as amended, modified,
extended or restated from time to time, the "Credit Agreement"). Capitalized
terms used but not defined herein have the respective meanings set forth in the
Credit Agreement.
The undersigned hereby confirms that it has agreed to become a Lender
under the Credit Agreement with a Commitment of $__________ effective on the
date which is three Business Days after the acceptance hereof, and consent
hereto, by the Agent or on such other date as may be agreed among the Borrower,
the Agent and the undersigned.
The undersigned (a) acknowledges that it has received a copy of the
Credit Agreement and the Schedules and Exhibits thereto, together with copies of
the most recent financial statements delivered by the Borrower pursuant to the
Credit Agreement, and such other documents and information as it has deemed
appropriate to make its own credit and legal analysis and decision to become a
Lender under the Credit Agreement; and (b) agrees that it will, independently
and without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit and legal decisions in taking or not taking action under the
Credit Agreement.
The undersigned represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this letter and to become a Lender under
the Credit Agreement; and (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution and delivery of this letter and the performance of its
obligations as a Lender under the Credit Agreement.
The undersigned agrees to execute and deliver such other instruments,
and take such other actions, as the Agent may reasonably request in connection
with the transactions contemplated by this letter.
Exhibit E-3
The following administrative details apply to the undersigned:
(A) Notice Address:
Legal name: _____________________________
Address: ________________________________
_______________________________
_______________________________
Attention: _____________________________
Telephone: (___) ________________________
Facsimile: (___) ________________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
_______________________________
_______________________________
Reference: ___________________________
Attention: ___________________________
The undersigned acknowledges and agrees that, on the date on which the
undersigned becomes a Lender under the Credit Agreement as set forth in the
second paragraph hereof, the undersigned will be bound by the terms of the
Credit Agreement as fully and to the same extent as if the undersigned were an
original Lender under the Credit Agreement.
Very truly yours,
[NAME OF NEW LENDER]
By:_________________________
Title:______________________
Accepted and consented to as of
______________, 20___
BANK ONE, NA, as Agent
By: _____________________________
Name: ___________________________
Title: ____________________________
Exhibit E-4
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
_________________________, 20___
Bank One, NA, as Agent under the
Credit Agreement referred to below
Ladies/Gentlemen:
Please refer to the Credit Agreement dated as of February 18, 2003
among Southwestern Public Service Company (the "Borrower"), various financial
institutions and Bank One, NA, as Agent (as amended, modified, extended or
restated from time to time, the "Credit Agreement"). Capitalized terms used but
not defined herein have the respective meanings set forth in the Credit
Agreement.
The Borrower certifies to you that (a) set forth on the Annexes hereto
are correct calculations of the financial covenants set forth in Sections 6.12
and 6.13 of the Credit Agreement as of _______________; and (b) no Default or
Unmatured Default exists as of the date of this Certificate[, except as
specified in reasonable detail below:]
Very truly yours,
SOUTHWESTERN PUBLIC SERVICE COMPANY
By: __________________________________
Name: ________________________________
Title: _______________________________
Exhibit F-1
ANNEX 1 TO COMPLIANCE CERTIFICATE
Debt to Capitalization Ratio (Section 6.12)
1. Indebtedness
(a) Long-term debt (including current maturities) $_____________
(b) Commercial paper & other short term debt $_____________
(c) Letters of credit $_____________
(d) Net liabilities under swaps, etc. $_____________
(e) Capitalized Lease Obligations $_____________
(f) Synthetic Lease Obligations $_____________
(g) Trust Preferred Securities $_____________
(h) Total Debt (sum of (a) through (g)) $___________
2. Capitalization
(a) Total Common Stock $_____________
(b) Total Retained Earnings $_____________
(c) Total Debt (from 1(h) above) $_____________
(d) Capitalization (sum of (a) through (c)) $___________
3. Debt to Capitalization Ratio (1(h) to 2(d)) ____ to 1.
(not to be greater than 0.55 to 1.0)
Exhibit F-2
ANNEX 2 TO COMPLIANCE CERTIFICATE
Interest Coverage Ratio (Section 6.13)
1. EBITDA
(a) Consolidated Net Income $_____________
(b) Consolidated Interest Expense $_____________
(c) Income Taxes $_____________
(d) Depreciation and Amortization $_____________
(e) Other Income/Deductions (Net) $_____________
(f) Extraordinary Items (net of income tax)(Net) $_____________
(g) EBITDA (total of (a)+(b)+(c)+(d)+/-(e)+/-(f)) $_____________
2. Consolidated Interest Expense $__________
3. Interest Coverage Ratio (1(g) to 2) ____ to 1.0
(not to be less than 2.75 to 1.0)
Exhibit F-3
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS............................................................................... 1
ARTICLE II. THE CREDITS............................................................................... 12
2.1 Commitment.................................................................................... 12
2.2 Required Payments; Maturity................................................................... 12
2.3 Ratable Loans................................................................................. 12
2.4 Types of Advances............................................................................. 12
2.5 Commitment Fee; Changes in Aggregate Commitment; Up-Front Fees................................ 12
2.6 Minimum Amount of Each Advance................................................................ 13
2.7 Optional Principal Payments................................................................... 13
2.8 Method of Selecting Types and Interest Periods for New Advances............................... 13
2.9 Conversion and Continuation of Outstanding Advances........................................... 14
2.10 Changes in Interest Rate, etc................................................................. 14
2.11 Rates Applicable After Default................................................................ 15
2.12 Method of Payment............................................................................. 15
2.13 Noteless Agreement; Evidence of Indebtedness.................................................. 15
2.14 Telephonic Notices............................................................................ 16
2.15 Interest Payment Dates; Interest and Fee Basis................................................ 16
2.16 Notification of Advances, Interest Rates, Prepayments and Commitment Reductions............... 17
2.17 Lending Installations......................................................................... 17
2.18 Non-Receipt of Funds by the Agent............................................................. 17
2.19 Replacement of Lender......................................................................... 17
2.20 Letters of Credit............................................................................. 18
(i) Issuance............................................................................. 18
(ii) Participations....................................................................... 18
(iii) Notice............................................................................... 18
(iv) Letter of Credit Fees................................................................ 19
(v) Administration; Reimbursement by Lenders............................................. 19
(vi) Reimbursement by Borrower............................................................ 19
(vii) Obligations Absolute................................................................. 20
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TABLE OF CONTENTS
(continued)
PAGE
(viii) Actions of Issuer.................................................................... 20
(ix) Indemnification...................................................................... 20
(x) Lenders' Indemnification............................................................. 21
(xi) Letter of Credit Collateral Account.................................................. 21
(xii) Rights as a Lender................................................................... 22
ARTICLE III. YIELD PROTECTION; TAXES................................................................... 22
3.1 Yield Protection.............................................................................. 22
3.2 Changes in Capital Adequacy Regulations....................................................... 23
3.3 Availability of Types of Advances............................................................. 23
3.4 Funding Indemnification....................................................................... 23
3.5 Taxes......................................................................................... 24
3.6 Lender Statements; Survival of Indemnity...................................................... 25
ARTICLE IV. CONDITIONS PRECEDENT...................................................................... 26
4.1 Initial Credit Extension...................................................................... 26
4.2 Each Credit Extension......................................................................... 27
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................................................ 27
5.1 Existence and Standing........................................................................ 27
5.2 Authorization and Validity.................................................................... 27
5.3 No Conflict; Government Consent............................................................... 28
5.4 Financial Statements.......................................................................... 28
5.5 Material Adverse Change....................................................................... 28
5.6 Taxes......................................................................................... 28
5.7 Litigation and Contingent Obligations......................................................... 29
5.8 Subsidiaries.................................................................................. 29
5.9 ERISA......................................................................................... 29
5.10 Accuracy of Information....................................................................... 29
5.11 Regulation U.................................................................................. 29
5.12 Material Agreements........................................................................... 29
5.13 Compliance With Laws.......................................................................... 29
5.14 Plan Assets; Prohibited Transactions.......................................................... 30
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TABLE OF CONTENTS
(continued)
PAGE
5.15 Environmental Matters......................................................................... 30
5.16 Investment Company Act........................................................................ 30
5.17 Public Utility Holding Company Act............................................................ 30
5.18 Insurance..................................................................................... 30
ARTICLE VI. COVENANTS................................................................................. 30
6.1 Financial Reporting........................................................................... 30
6.2 Use of Proceeds............................................................................... 32
6.3 Notice of Default............................................................................. 32
6.4 Conduct of Business........................................................................... 32
6.5 Taxes......................................................................................... 32
6.6 Insurance..................................................................................... 32
6.7 Compliance with Laws.......................................................................... 32
6.8 Maintenance of Properties..................................................................... 33
6.9 Inspection.................................................................................... 33
6.10 Merger........................................................................................ 33
6.11 Sale of Assets................................................................................ 33
6.12 Debt to Capitalization Ratio.................................................................. 33
6.13 Interest Coverage Ratio....................................................................... 33
6.14 Liens......................................................................................... 34
6.15 Intercompany Transactions..................................................................... 34
6.16 Off-Balance Sheet Liabilities................................................................. 34
6.17 Receivables Transaction Attributed Obligations................................................ 34
ARTICLE VII. DEFAULTS.................................................................................. 35
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................................ 36
8.1 Acceleration; Letter of Credit Collection Account............................................. 37
8.2 Amendments.................................................................................... 38
8.3 Preservation of Rights........................................................................ 38
ARTICLE IX. GENERAL PROVISIONS........................................................................ 38
9.1 Survival of Representations................................................................... 39
9.2 Governmental Regulation....................................................................... 39
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(continued)
PAGE
9.3 Headings...................................................................................... 39
9.4 Entire Agreement.............................................................................. 39
9.5 Several Obligations; Benefits of this Agreement............................................... 39
9.6 Expenses; Indemnification..................................................................... 39
9.7 Numbers of Documents.......................................................................... 40
9.8 Accounting.................................................................................... 40
9.9 Severability of Provisions.................................................................... 40
9.10 Nonliability of Lenders....................................................................... 40
9.11 Limited Disclosure............................................................................ 40
9.12 Nonreliance................................................................................... 41
9.13 Disclosure.................................................................................... 42
ARTICLE X. THE AGENT................................................................................. 42
10.1 Appointment; Nature of Relationship........................................................... 42
10.2 Powers........................................................................................ 42
10.3 General Immunity.............................................................................. 42
10.4 No Responsibility for Loans, Recitals, etc.................................................... 43
10.5 Action on Instructions of Lenders............................................................. 43
10.6 Employment of Agents and Counsel.............................................................. 43
10.7 Reliance on Documents; Counsel................................................................ 43
10.8 Agent's Reimbursement and Indemnification..................................................... 43
10.9 Notice of Default............................................................................. 44
10.10 Rights as a Lender............................................................................ 44
10.11 Lender Credit Decision........................................................................ 44
10.12 Successor Agent............................................................................... 45
10.13 Agent's Fee................................................................................... 45
10.14 Delegation to Affiliates...................................................................... 45
10.15 Syndication Agent............................................................................. 46
ARTICLE XI. SETOFF; RATABLE PAYMENTS.................................................................. 46
11.1 Setoff........................................................................................ 46
11.2 Ratable Payments.............................................................................. 46
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS......................................... 46
12.1 Successors and Assigns........................................................................ 46
12.2 Participations................................................................................ 47
12.3 Assignments................................................................................... 48
12.4 Dissemination of Information.................................................................. 49
12.5 Tax Treatment................................................................................. 49
ARTICLE XIII. NOTICES................................................................................... 49
13.1 Notices....................................................................................... 49
13.2 Change of Address............................................................................. 49
ARTICLE XIV. COUNTERPARTS.............................................................................. 49
ARTICLE XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; MAXIMUM INTEREST RATE....... 50
15.1 CHOICE OF LAW................................................................................. 50
15.2 CONSENT TO JURISDICTION....................................................................... 50
15.3 WAIVER OF JURY TRIAL.......................................................................... 50
15.4 Maximum Interest Rate......................................................................... 50
SCHEDULES
Pricing Schedule
5.7 - Litigation and Contingent Liabilities
5.9 - Excluded Reportable Events
6.14 - Existing Liens
6.16 - Off-Balance Sheet Liabilities
EXHIBITS
A Form of Opinion of Counsel to the Borrower
B Form of Assignment Agreement
C Form of Money Transfer Instructions
D Form of Note
E Form of Increase Request
F Form of Compliance Certificate
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