EXECUTION COPY
CREDIT AGREEMENT
DATED AS OF OCTOBER 19, 2004
AMONG
PINNACLE WEST CAPITAL CORPORATION,
THE LENDERS FROM TIME TO TIME PARTIES HERETO,
JPMORGAN CHASE BANK,
AS ADMINISTRATIVE AGENT
UNION BANK OF CALIFORNIA, N.A.,
AS SYNDICATION AGENT
AND
BANK OF AMERICA, N.A., THE BANK OF NEW YORK
AND MIZUHO CORPORATE BANK, LTD.,
AS CO-DOCUMENTATION AGENTS
================================================================================
X.X. XXXXXX SECURITIES INC. AND
UNION BANK OF CALIFORNIA, N.A.
AS CO-LEAD ARRANGERS AND CO-BOOK RUNNERS
================================================================================
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................ 1
1.1. Definitions.............................................................................. 1
1.2. Plural Forms............................................................................. 12
ARTICLE II THE CREDITS........................................................................ 12
2.1. Commitment............................................................................... 12
2.2. Required Payments; Termination........................................................... 12
2.3. Ratable Loans............................................................................ 13
2.4. Types of Advances........................................................................ 13
2.5. Facility Fee; Utilization Margin; LC Fee; Reductions in Aggregate Commitment............. 13
2.6. Minimum Amount of Each Advance........................................................... 14
2.7. Optional Principal Payments.............................................................. 14
2.8. Method of Selecting Types and Interest Periods for New Advances.......................... 14
2.9. Conversion and Continuation of Outstanding Advances...................................... 15
2.10. Changes in Interest Rate, etc. .......................................................... 15
2.11. Rates Applicable After Default........................................................... 16
2.12. Method of Payment........................................................................ 16
2.13. Noteless Agreement; Evidence of Indebtedness............................................. 16
2.14. Telephonic Notices....................................................................... 17
2.15. Interest Payment Dates; Interest and Fee Basis; Regulation D Compensation................ 17
2.16. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.......... 18
2.17. Lending Installations.................................................................... 18
2.18. Non-Receipt of Funds by the Agent........................................................ 19
2.19. Replacement of Lender.................................................................... 19
2.20 Replacement of Lender.................................................................... 19
2.20. Letters of Credit........................................................................ 20
ARTICLE III YIELD PROTECTION; TAXES............................................................ 24
3.1. Yield Protection......................................................................... 24
3.2. Changes in Capital Adequacy Regulations.................................................. 25
3.3. Availability of Types of Advances........................................................ 26
3.4. Funding Indemnification.................................................................. 26
3.5. Taxes.................................................................................... 26
3.6. Lender Statements; Survival of Indemnity................................................. 28
ARTICLE IV CONDITIONS PRECEDENT............................................................... 29
4.1. Effectiveness of Agreement............................................................... 29
4.2. Each Credit Extension.................................................................... 30
ARTICLE V REPRESENTATIONS AND WARRANTIES..................................................... 30
5.1. Existence and Standing................................................................... 30
5.2. Corporate and Governmental Authorization; No Contravention............................... 31
5.3. Binding Effect........................................................................... 31
5.4. Financial Information.................................................................... 31
5.5. Litigation............................................................................... 32
5.6. Compliance with ERISA.................................................................... 32
5.7. Environmental Matters.................................................................... 32
5.8. Taxes.................................................................................... 32
5.9. Material Subsidiaries.................................................................... 32
5.10. Not an Investment Company................................................................ 33
5.11. Public Utility Holding Company Act, Etc. ................................................ 33
5.12. Full Disclosure.......................................................................... 33
ARTICLE VI COVENANTS.......................................................................... 33
6.1. Information.............................................................................. 33
6.2. Maintenance of Property; Insurance....................................................... 35
6.3. Conduct of Business and Maintenance of Existence......................................... 36
6.4. Compliance with Laws..................................................................... 36
6.5. Pari Passu............................................................................... 37
6.6. Ownership of APS......................................................................... 37
6.7. Consolidations, Mergers and Sales of Assets.............................................. 37
6.8. Use of Proceeds.......................................................................... 37
6.9. Interest Coverage Ratio.................................................................. 38
6.10. Indebtedness............................................................................. 38
6.11. Inspection of Property, Books and Records................................................ 38
ARTICLE VII DEFAULTS........................................................................... 38
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES..................................... 40
8.1. Acceleration............................................................................. 40
8.2. Amendments............................................................................... 40
8.3. Preservation of Rights................................................................... 41
ARTICLE IX GENERAL PROVISIONS................................................................. 41
9.1. Survival of Representations.............................................................. 41
9.2. Governmental Regulation.................................................................. 41
9.3. Headings................................................................................. 41
9.4. Entire Agreement......................................................................... 41
9.5. Several Obligations; Benefits of this Agreement.......................................... 42
9.6. Expenses; Indemnification................................................................ 42
9.7. Numbers of Documents..................................................................... 43
9.8. Accounting Terms and Determinations...................................................... 43
9.9. Severability of Provisions............................................................... 43
9.10. Nonliability of Lenders.................................................................. 43
iii
9.11. Confidentiality.......................................................................... 43
9.12. Nonreliance.............................................................................. 44
9.13. Disclosure............................................................................... 44
9.14. USA Patriot Act Notification............................................................. 44
9.15. Relations Among Lenders.................................................................. 44
9.16. Notice of Termination of Existing Agreements............................................. 45
ARTICLE X THE AGENT.......................................................................... 45
10.1. Appointment; Nature of Relationship...................................................... 45
10.2. Powers................................................................................... 45
10.3. General Immunity......................................................................... 46
10.4. No Responsibility for Loans, Recitals, etc. ............................................. 46
10.5. Action on Instructions of Lenders........................................................ 46
10.6. Employment of Agents and Counsel......................................................... 46
10.7. Reliance on Documents; Counsel........................................................... 47
10.8. Agent's Reimbursement and Indemnification................................................ 47
10.9. Notice of Default........................................................................ 47
10.10. Rights as a Lender....................................................................... 47
10.11. Lender Credit Decision................................................................... 48
10.12. Successor Agent.......................................................................... 48
10.13. Agent and Arranger Fees.................................................................. 48
10.14. Delegation to Affiliates................................................................. 49
10.15. Co-Agents, Managing Agent, Documentation Agent, Syndication Agent, etc. ................. 49
ARTICLE XI SETOFF; RATABLE PAYMENTS........................................................... 49
11.1. Setoff................................................................................... 49
11.2. Ratable Payments......................................................................... 49
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................. 49
12.1. Successors and Assigns................................................................... 49
12.2. Participations........................................................................... 50
12.3. Assignments.............................................................................. 51
12.4. Dissemination of Information............................................................. 52
12.5. Tax Treatment............................................................................ 52
ARTICLE XIII NOTICES............................................................................ 53
13.1. Notices; Effectiveness; Electronic Communication......................................... 53
ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION..................... 54
14.1. Counterparts; Effectiveness.............................................................. 54
14.2. Electronic Execution of Assignments...................................................... 54
iv
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................... 54
15.1. CHOICE OF LAW............................................................................ 54
15.2. CONSENT TO JURISDICTION.................................................................. 54
15.3. WAIVER OF JURY TRIAL..................................................................... 55
v
SCHEDULES AND EXHIBITS
PRICING SCHEDULE
COMMITMENT SCHEDULE
SCHEDULE 2.20 EXISTING LETTERS OF CREDIT
EXHIBIT A ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT B NOTE
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CREDIT AGREEMENT
This Agreement, dated as of October 19, 2004, is among Pinnacle West
Capital Corporation, as Borrower, the Lenders and JPMorgan Chase Bank, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. As used in this Agreement:
"Advance" means a borrowing hereunder consisting of the aggregate amount
of several Loans, (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.
"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 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
voting securities, by contract or otherwise.
"Agent" means JPMCB 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 the Lenders.
"Agreement" means this credit agreement, as it may be amended, restated,
supplemented or modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day plus (b) 1/2% per
annum.
"Annual Interest Requirements" means an amount equal to:
(i) interest on long-term debt for such period as reported in the
consolidated income statement for such period, plus
(ii) interest on short-term debt for such period as reported in the
consolidated income statement for such period, plus
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(iii) imputed interest on the Sale Leaseback Obligation Bonds for such
period, such amount being equal to the product of (A) the principal
amount of Sale Leaseback Obligation Bonds outstanding during such
period and (B) the rate of interest applicable to such Sale
Leaseback Obligation Bonds during such period, plus
(iv) all rental payments in respect of operating leases (excluding any
portion of such rental payments attributable to operating expenses
and excluding any payments in respect of Sale Leaseback Obligation
Bonds) with respect to which the payment obligations of the Borrower
or a Consolidated Subsidiary of the Borrower have a present value of
at least $25,000,000.
"Applicable Facility Fee Rate" means, at any time, the percentage rate per
annum as set forth in the Pricing Schedule.
"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.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Commitments represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Utilization Margin" means, at any time, the percentage rate
per annum at which utilization margins are accruing on the Aggregate Outstanding
Credit Exposure at such time as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.
"APS" means the Arizona Public Service Company, an Arizona corporation,
and its successors.
"Arrangers" means, collectively, X.X. Xxxxxx Securities Inc., and its
successors, and Union Bank of California, N.A., and its successors, in their
capacity as Co-Lead Arrangers and Co-Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means the Chairman of the Board, Chief Executive
Officer, Chief Financial Officer, President, Treasurer, Controller, Chief
Operating Officer, any Vice President or any Assistant Treasurer of the
Borrower.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
2
"Borrower" means Pinnacle West Capital Corporation, an Arizona
corporation, and its permitted successors and assigns (including, without
limitation, a debtor in possession on its behalf).
"Borrower's 2003 Form 10-K" means the Borrower's annual report on Form
10-K for the fiscal year ended December 31, 2003, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly report on
Form 10-Q for the quarter ended June 30, 2004, as filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Borrower's SEC Reports" means the Borrower's 2003 Form 10-K; the
Borrower's quarterly reports on Form 10-Q for the quarters ended March 31, 2004
and June 30, 2004; and the Borrower's current reports on Form 8-K as filed with
the Securities and Exchange Commission on January 9, January 28, January 29,
February 2, February 4, April 21, May 7, June 2, June 23, July 29, August 9, and
August 18, 2004.
"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 New York City and Phoenix, Arizona 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 New York City and Phoenix for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made on the
Fedwire system.
"Capital Lease Obligations" means as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on the balance
sheet of such Person under generally accepted accounting principles and, for the
purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with generally accepted
accounting principles.
"Change in Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of thirty percent (30%) or more of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Borrower; or (ii) the majority of the board of directors of the Borrower fails
to consist of Continuing Directors (other than due to death or disability).
"Closing Date" means October 19, 2004.
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"Commitment" means, for each Lender, the obligation of such Lender to make
Loans to, and participate in Letters of Credit issued upon the application of,
the Borrower in an aggregate amount not exceeding the amount set forth opposite
its name on the Commitment Schedule, as it may be modified as a result of any
assignment that has become effective pursuant to Section 12.3.3 or as otherwise
modified from time to time pursuant to the terms hereof.
"Commitment Schedule" means the Schedule identifying each Lender's
Commitment attached hereto and identified as such, which Schedule may be
modified from time to time after the Closing Date by the Agent (and the parties
hereto hereby authorize the Agent to make such modifications) to reflect any
assignment that has become effective pursuant to Section 12.3.3 or as otherwise
modified from time to time pursuant to the terms hereof.
"Confidential Information" means information that the Borrower furnishes
to any party hereto in writing designated as confidential or that any such party
obtains pursuant to its rights under Section 6.1.9 or 6.11, but does not include
any such information that (a) is or becomes generally available to the public
other than as a result of a breach by any party hereto of its obligations
hereunder, (b) was available to such party on a nonconfidential basis prior to
its disclosure to such party by the Borrower or any of its Affiliates or (c) is
or becomes available to such party from a source other than the Borrower or any
of its Affiliates that is not, to the knowledge of such party after inquiry,
acting in violation of a confidentiality agreement with the Borrower or any
other Person.
"Consolidated Capitalization" means the sum of (i) Consolidated Debt and
(ii) Consolidated Net Worth.
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries determined on a consolidated basis as of such date.
"Consolidated Net Worth" means the sum of (i) the par value (or value
stated on the books of the Borrower) of all classes of capital stock of the
Borrower and its Subsidiaries, excluding the Borrower's capital stock owned by
the Borrower and/or its Subsidiaries, plus (or minus in the case of a surplus
deficit) (ii) the amount of the consolidated surplus, whether capital or earned,
of the Borrower, determined in accordance with generally accepted accounting
principles as of the end of the most recent calendar month (excluding (x)
cumulative charges of up to $300 million to consolidated surplus resulting from,
or in anticipation of, discontinuation of FASB 71, accounting for all or part of
the business and (y) the effect on the Borrower's accumulated other
comprehensive income/loss of the ongoing application of FASB 133).
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements if such statements were prepared as of such
date.
"Continuing Director" means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (i) was a
member of such board of directors on the date of this Agreement, or (ii) was
nominated for election or elected to such board of directors with the approval
of a majority of the Continuing Directors who were members of such board at the
time of such nomination or election.
4
"Conversion/Continuation Notice" is defined in Section 2.9.
"Credit Extension" means the making of an Advance or the issuance of a
Letter of Credit hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Letter of Credit.
"Debt" means as to any Person at any date (without duplication): (i)
indebtedness created, issued, incurred or assumed by such Person for borrowed
money or evidenced by bonds, debentures, notes or similar instruments; (ii) all
obligations of such Person to pay the deferred purchase price of property or
services, excluding, however, trade accounts payable (other than for borrowed
money) arising in, and accrued expenses incurred in, the ordinary course of
business of such Person so long as such trade accounts payable are paid within
180 days of the date incurred; (iii) all Debt secured by a lien on any asset of
such Person, to the extent such Debt has been assumed by, or is a recourse
obligation of, such Person; (iv) all Guarantees by such Person; (v) all Capital
Lease Obligations of such Person; and (vi) the amount of all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds and similar
instruments in support of Debt.
"Default" means an event described in Article VII.
"Derivative Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"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 the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute and any rule or regulation issued thereunder.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary are treated as a single employer under Section 414 of the Internal
Revenue Code.
5
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the LIBO Rate applicable to such
Interest Period, plus (ii) the then Applicable Margin, changing as and when the
Applicable Margin changes.
"Excluded Taxes" means, in the case of each Lender, each Issuing Bank or
applicable Lending Installation and the Agent, (A) taxes imposed on its overall
net income, and franchise taxes imposed on it, by (i) the United States, (ii)
any jurisdiction under the laws of which such Lender, such Issuing Bank or the
Agent is incorporated or organized or (iii) any jurisdiction in which the
Agent's, such Issuing Bank's or such Lender's principal executive office or such
Lender's or Issuing Bank's applicable Lending Installation is located and (B) in
the case of each Lender and Issuing Bank, any United States withholding tax
imposed with respect to any payment by the Borrower pursuant to this Agreement,
but only up to the rate (if any) at which United States withholding tax would
apply to such payments to such Lender or Issuing Bank, or applicable Lending
Installation, at the time such Lender or Issuing Bank, as applicable, first
becomes a party to this Agreement.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Credit Agreements" means, collectively, (i) that certain Credit
Agreement, dated as of December 18, 2003, by and among the Borrower, the lenders
parties thereto and Bank One, NA, as administrative agent, and (ii) that certain
Credit Agreement, dated as of November 30, 2001, by and among the Borrower, the
lenders parties thereto, and JPMorgan Chase Bank, as administrative agent, in
each case, as the same has been amended, restated, supplemented or otherwise
modified from time to time.
"Facility Termination Date" means October 19, 2007, 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, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"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.
6
"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.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Guarantee" means as to any Person, any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person or in any manner providing for the payment of any Debt of any other
Person or otherwise protecting the holder of such Debt against loss (whether by
virtue of partnership arrangements, agreements to keep well, to purchase assets,
goods, securities or services, or to take-or-pay or otherwise), provided that
the term "Guarantee" shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hazardous Substances" means (i) any toxic, radioactive, caustic or
otherwise hazardous substance, as defined by any applicable Environmental Law;
(ii) petroleum, its derivatives, by-products and other hydrocarbons; or (iii)
any substance having any constituent elements displaying any of the foregoing
characteristics, as defined by any applicable Environmental Law.
"Income Available for Debt Service" means an amount equal to:
(i) consolidated net income of the Borrower and its Consolidated
Subsidiaries for such period, plus
(ii) all material non-recurring items which decreased said net income
for such period, minus
(iii) all material non-recurring items which increased said net income
for such period, plus
(iv) income taxes deducted in determining said net income for such
period, plus
(v) total Annual Interest Requirements of the Borrower and its
Consolidated Subsidiaries for such period, plus
(vi) depreciation and amortization, and nuclear fuel amortization for
such period, minus
(vii) allowance for equity and borrowed funds used during construction
for such period, minus
(viii) deferrals as described in Financial Accounting Standards Board
Statement No. 71 for such period, plus or minus
7
(ix) other significant noncash items for such period as may be
specified under Financial Accounting Standards Board Statements or
other accounting guidelines.
"Interest Coverage Ratio" means, with respect to the Borrower and its
Consolidated Subsidiaries, for each twelve-month period ending on the last day
of each fiscal quarter (determined as of the last day of such fiscal quarter),
the ratio of Income Available for Debt Service to, without duplication of any
item, Annual Interest Requirements.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six 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, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth 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, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Issuing Bank" means JPMCB or any other Lender (with such Lender's
consent) satisfactory to the Agent and the Borrower in its capacity as issuer of
Letters of Credit hereunder.
"JPMCB" means JPMorgan Chase Bank, in its individual capacity, and its
successors.
"LC Disbursement" means a payment made by an Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (ii) the aggregate
unpaid amount of all Reimbursement Obligations at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC
Exposure at such time.
"LC Fee" is defined in Section 2.5.3.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective permitted successors and assigns.
"Lending Installation" means, with respect to a Lender, an Issuing Bank or
the Agent, the office, branch, subsidiary or affiliate of such Lender, Issuing
Bank or the Agent listed on the administrative information sheets provided to
the Agent in connection herewith or on the signature pages hereof or on a
Schedule or otherwise selected by such Lender, Issuing Bank or the Agent
pursuant to Section 2.17.
8
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement, including, without limitation, each Letter of Credit deemed issued by
JPMCB, as Issuing Bank, hereunder pursuant to Section 2.20.1(ii).
"Letter of Credit Application" is defined in Section 2.20.1(i).
"Letter of Credit Collateral Account" is defined in Section 2.20.10.
"LIBO Rate" means, with respect to any Eurodollar Advance for any Interest
Period, the rate appearing on Page 3750 of the Dow Xxxxx Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Advance for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means, 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 and any Notes issued pursuant to
Section 2.13.
"Material Debt" means Debt (other than the Credit Extensions) of the
Borrower and/or one or more of its Material Subsidiaries in an aggregate
principal amount exceeding $25,000,000.
"Material Derivative Obligations" means Derivative Obligations of the
Borrower and/or one or more of its Material Subsidiaries with an aggregate
xxxx-to-market termination amount exceeding $25,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"Material Subsidiary" means APS and each other Subsidiary of the Borrower
(other than SunCor Development Company and any of its Subsidiaries) whose
consolidated assets exceed 10% of the consolidated assets of the Borrower and
its Consolidated Subsidiaries.
9
"Modify" and "Modification" are defined in Section 2.20.1(i).
"Moody's" means Xxxxx'x Investors Service, Inc., and any successor
thereto.
"Multiemployer Plan" means, at any time, an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.13.
"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, any Issuing Bank, the Agent or any
indemnified party arising under the Loan Documents.
"Other Taxes" is defined in Section 3.5(ii).
"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 Applicable Percentage of the LC Exposure at
such time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each of March, June, September and
December and the Facility Termination Date.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability company,
a partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means, at any time, an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pricing Schedule" means the Schedule attached hereto identified as such.
10
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMCB as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
"Purchasers" is defined in Section 12.3.1.
"PWEC" means Pinnacle West Energy Corporation, an Arizona corporation, and
its successors.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders 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 LC
Disbursements and all other obligations of the Borrower then outstanding under
Section 2.20 to reimburse the applicable Issuing Bank for amounts paid by such
Issuing Bank in respect of any one or more drawings under Letters of Credit
issued by it.
"Required Lenders" means Lenders in the aggregate having more than 50% of
the Aggregate Commitment at such time or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding more than 50% of the Aggregate
Outstanding Credit Exposure at such time.
"S&P" means Standard and Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Sale Leaseback Obligation Bonds" means PVNGS II Funding Corp.'s (i) 7.39%
Secured Lease Obligation Bond, Series 1993, due 2005; (ii) 8.00% Secured Lease
Obligation Bonds, Series 1993, due 2015; (iii) any other bonds issued by the
Borrower in connection with a sale/leaseback transaction; and (iv) any
refinancing or refunding of the obligations specified in subclauses (i) through
(iii) above.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person. Unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
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"Syndication Agent" means Union Bank of California, N.A. and its
successors and assigns.
"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.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurodollar Loan.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
1.2. Plural Forms. 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, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (i) make Loans to the Borrower and
(ii) participate in Letters of Credit issued upon the request of the Borrower,
provided that, after giving effect to the making of each such Loan and the
issuance of each such Letter of Credit, such Lender's Outstanding Credit
Exposure shall not exceed its Commitment. 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 to extend credit hereunder shall
expire on the Facility Termination Date. The Issuing Banks will issue Letters of
Credit hereunder on the terms and conditions set forth in Section 2.20.
2.2. Required Payments; Termination. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations (other than contingent indemnity
obligations and other expense reimbursement obligations not then due and
payable) shall be payable on the Facility Termination Date.
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2.3. Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to their Applicable Percentages.
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. Facility Fee; Utilization Margin; LC Fee; Reductions in Aggregate
Commitment.
2.5.1 The Borrower agrees to pay to the Agent for the account of
each Lender a facility fee at a per annum rate equal to the Applicable
Facility Fee Rate on such Lender's Commitment (whether used or unused)
from the date hereof to and including the Facility Termination Date,
payable in arrears on each Payment Date hereafter, provided that, if any
Lender continues to have Outstanding Credit Exposure outstanding hereunder
after the termination of its Commitment (including, without limitation,
during any period when Outstanding Credit Exposure may be outstanding but
new Credit Extensions may not be made hereunder), then such facility fee
shall continue to accrue on the Outstanding Credit Exposure owed to such
Lender until such Outstanding Credit Exposure is repaid in full.
2.5.2 For each day from and after the date hereof to but not
including the Facility Termination Date on which the Aggregate Outstanding
Credit Exposure exceeds fifty percent (50%) of the Aggregate Commitment,
the interest rate otherwise applicable to the Advances and the LC Fee,
respectively, shall be increased by an amount equal to a utilization
margin at a rate per annum equal to the Applicable Utilization Margin in
effect from time to time, payable from the date hereof until the date on
which this Agreement is terminated in full and the Aggregate Outstanding
Credit Exposure has been paid in full pursuant to Section 2.2. Such
utilization margin shall be payable in arrears on each Payment Date
hereafter and on the date on which this Agreement is terminated in full
and the Aggregate Outstanding Credit Exposure hereunder has been paid in
full pursuant to Section 2.2.
2.5.3 The Borrower agrees to pay (i) to the Agent for the account of
each Lender a participation fee with respect to its participations in
Letters of Credit (the "LC Fee"), which shall accrue at the same
Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Closing Date to
but excluding the later of the date on which such Lender's Commitment
terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue
at a per annum rate agreed upon between the Borrower and the applicable
Issuing Bank on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) related to
Letters of Credit issued by it during the period from and including the
Closing Date to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC Exposure, as
well as such Issuing Bank's standard fees with respect to the issuance or
Modification of any Letter of Credit issued by it or processing of
drawings thereunder. Participation fees and fronting fees accrued through
and including the last day of March,
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June, September and December of each year shall be payable on or before
the third Business Day following such last day, commencing on the first
such date to occur after the Closing Date; provided that all such accrued
and unpaid fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable either on demand, if such
termination is due to a Default arising under Section 7.1, 7.6 or 7.7, or
otherwise within 3 days after demand. Any other fees payable to the
Issuing Banks pursuant to this Section 2.5.3 shall be payable within 10
days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the
last day).
2.5.4 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 three Business Days' prior written notice to the
Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Commitment may not be
reduced below the Aggregate Outstanding Credit Exposure. All accrued
facility fees and utilization margin shall be payable on the effective
date of any termination of the obligations of the Lenders to make Credit
Extensions hereunder and on the final date upon which the Aggregate
Outstanding Credit Exposure is repaid hereunder.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and, except as provided in Section 2.20.5, each Floating Rate Advance
shall be in the minimum amount of $5,000,000 (and in multiples of $1,000,000 if
in excess thereof), provided, however, 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 $1,000,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon one
Business Day's 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 $5,000,000 or any integral multiple of
$1,000,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three Business Days' prior notice to the Agent.
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
1:30 p.m. (New York time) on 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,
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(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
The Agent will promptly send each Borrowing Notice to the Lenders. Not later
than 3:30 p.m. (New York time) on each Borrowing Date, each Lender shall make
available its Loan or Loans in funds immediately available in New York 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 or as otherwise provided in such Borrowing Notice.
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 11:00 a.m. (New York 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) in connection with the conversion or continuation of an Advance as a
Eurodollar Advance, (a) the amount of such Advance which is to be
converted or continued and (b) 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 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
15
otherwise in accordance with the terms hereof. No Interest Period may end after
the Facility Termination Date. The Borrower shall select Interest Periods so
that it is not necessary to repay any portion of a Eurodollar Advance prior to
the last day of the applicable Interest Period in order to make a mandatory
repayment required pursuant to Section 2.2.
2.11. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9 or 2.10, 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 under Section 7.1, 7.6 (relating to the
Borrower) or 7.7 (relating to the Borrower) and without any election or action
on the part of the Agent or any Lender, (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 LC Fee
shall be increased to a rate per annum equal to the Applicable Margin used to
determine the interest applicable to Eurodollar Loans in effect from time to
time plus 2% per annum, provided that the Required Lenders may, at their option
revoke such increase notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates or the LC Fee.
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 1:00 p.m. (New York time) on the date when due and shall be
applied ratably by the Agent among the Lenders in accordance with amounts then
owing to such 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. Each reference to the Agent in this Section 2.12
shall also be deemed to refer, and shall apply equally, to the Issuing Banks, in
the case of payments required to be made by the Borrower to the Issuing Banks
pursuant to Section 2.20.5.
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 Credit
Extension 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.
(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 LC Exposure
16
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,
however, 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 promissory
note in substantially the form of Exhibit C (a "Note"). In such
event, the Borrower shall prepare, execute and deliver to such
Lender such Note payable to the order of such Lender or its
registered assigns. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (prior to any assignment
pursuant to Section 12.3) be represented by one or more Notes
payable to the order of the payee named therein, except to the
extent that any such Lender 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; Regulation D
Compensation.
2.15.1 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 on Eurodollar
Advances and fees shall be calculated for actual days elapsed on the basis
of a 360-day year. Interest on Floating Rate Advances shall be calculated
for actual days elapsed on the basis of a 365-/366-day year. Interest
shall be payable for the day an Advance is made but not for the
17
day of any payment on the amount paid if payment is received prior to 1:00
p.m. (New York time) at the place of payment. If any payment of principal
of or interest on an Advance, any fees or any other amounts payable to the
Agent or any Lender hereunder 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, fees and commissions in connection with
such payment.
2.15.2 Each Lender may require the Borrower to pay,
contemporaneously with each payment of interest on such Lender's
Eurodollar Loans, additional interest on the such Lender's Eurodollar Loan
at a rate per annum determined by such Lender up to but not exceeding the
excess of (i) (A) the applicable LIBO Rate divided by (B) one minus the
"Eurodollar Reserve Percentage" (as defined below) over (ii) the
applicable LIBO Rate. Any Lender wishing to require payment of such
additional interest (x) shall so notify the Borrower and the Agent, in
which case such additional interest on such Lender's Eurodollar Loans
shall be payable to such Lender at the place indicated in such notice with
respect to each Interest Period commencing at least three Business Days
after the giving of such notice and (y) shall notify the Borrower at least
five Business Days prior to each date on which interest is payable on the
Eurodollar Loans of the amount then due it under this Section 2.15.2.
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the interest rate on Eurodollar Advances is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Lender to United States residents).
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 and its
participation in any LC Exposure and the Issuing Banks may book the Letters of
Credit issued by it at any Lending Installation selected by such Lender or
Issuing Bank, as the case may be, 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, Letters of Credit, participations in LC Exposure and
any Notes issued hereunder shall be deemed held by each Lender or Issuing Bank,
as the case may be, for the benefit of any such Lending Installation. Each
Lender or Issuing Bank, as the case may be, 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 or
Letters of Credit will be issued by it and for whose account Loan payments or
payments with respect to Letters of Credit are to be made.
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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 1:00 p.m. (New York time) on 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 or
before the fifth Business Day after 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 to terminate or
replace the Commitment and Outstanding Credit Exposure of such Affected Lender,
provided that no Default shall have occurred and be continuing at the time of
such termination or replacement, and provided further that, concurrently with
such termination or replacement, (i) if the Affected Lender is being replaced,
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 Outstanding
Credit Exposure and other Obligations then 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 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, (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 Outstanding Credit Exposure of such Affected Lender been prepaid on such
date rather than sold to the replacement Lender, in each case to the extent not
paid by the purchasing Lender and (iii) if the Affected Lender is being
terminated, the Borrower shall pay to such Affected Lender all Obligations then
due and payable to such Affected Lender (including the amounts described in the
immediately preceding clauses (i) and (ii) plus such Affected Lender's
Outstanding Credit Exposure) and (iv) concurrently with the effectiveness of
such release or termination, such Affected Lender shall be released with respect
to its Commitments and such Commitments shall be terminated, and, in the case of
replacement, Outstanding Credit Exposure assigned by such Affected Lender, and
shall cease to be a Lender hereunder but shall continue to be entitled to the
benefits of, and subject to, those provisions of this Agreement and the other
Loan Documents which survive payment of the Obligations and termination of the
applicable agreement.
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2.20. Letters of Credit.
2.20.1 General; Existing Letters of Credit. (i) Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to
the Agent and the applicable Issuing Bank, and to renew, extend, increase,
decrease or otherwise modify each Letter 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 date that is five Business Days
prior to the Facility Termination Date. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the
applicable Issuing Bank relating to any Letter of Credit (a "Letter of
Credit Application"), the terms and conditions of this Agreement shall
control. Without limitation of the immediately preceding sentence, no such
Letter of Credit Application may impose any additional conditions on the
issuance of a Letter of Credit nor obligations of the Borrower to the
Issuing Bank or any Lender, other than as expressly stated in this
Agreement.
(ii) Schedule 2.20 contains a schedule of certain letters of credit
issued for the account of the Borrower prior to the Closing Date.
Subject to the satisfaction of the conditions contained in Sections
4.1 and 4.2, from and after the Closing Date such letters of credit
shall be deemed to be Letters of Credit issued pursuant to this
Section 2.20.
2.20.2 Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the
Modification of an outstanding Letter of Credit), the Borrower shall hand
deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing
Bank) to the applicable Issuing Bank and the Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the
Letter of Credit to be Modified, and specifying the date of issuance or
Modification (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with Section 2.20.3),
the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to
prepare or Modify such Letter of Credit. If requested by the applicable
Issuing Bank, but subject to Section 2.20.1(i) hereof, the Borrower also
shall submit a Letter of Credit Application on such Issuing Bank's
standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued or Modified only if (A) after giving
effect to such issuance or Modification (and upon such issuance or
Modification the Borrower shall be deemed to represent and warrant that)
(i) the LC Exposure shall not exceed $100,000,000 and (ii) the Aggregate
Outstanding Credit Exposure shall not exceed the Aggregate Commitment and
(B) the Issuing Bank has not received written notice from the Agent, the
Required Lenders or the Borrower, at least one Business Day prior to the
requested date of issuance or Modification of the applicable Letter of
Credit, that one or more applicable conditions contained in Section 4.2
shall not be satisfied.
20
2.20.3 Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date eighteen
months after the date of the issuance or any renewal or extension of such
Letter of Credit and (ii) the date that is five Business Days prior to the
Facility Termination Date. A Letter of Credit may contain a provision
pursuant to which it is deemed to be extended on an annual basis unless
notice of termination is given by the Issuing Bank subject to clause (ii)
in the immediately preceding sentence.
2.20.4 Participations. On the Closing Date with respect to the
Letters of Credit identified on Schedule 2.20, and for all other Letters
of Credit by the issuance of such Letter of Credit, or a Modification to a
Letter of Credit increasing the amount thereof, and without any further
action on the part of the Issuing Bank issuing such Letter of Credit or
the Lenders, such Issuing Bank hereby grants to each Lender, and each
Lender hereby acquires from such Issuing Bank, a participation in such
Letter of Credit equal to such Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent, for the account
of the applicable Issuing Bank, such Lender's Applicable Percentage of
each LC Disbursement made by the Issuing Bank and not reimbursed by the
Borrower on the date due as provided in Section 2.20.5, or of any
reimbursement payment required to be refunded to the Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 2.20.4 in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or
Unmatured Default or reduction or termination of the Commitments, and that
each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
2.20.5 Reimbursement. If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall
reimburse such LC Disbursement by paying to the Agent an amount equal to
such LC Disbursement not later than 2:30 p.m., New York City time, on the
date that such LC Disbursement is made, if the Borrower shall have
received notice of such LC Disbursement prior to 1:00 p.m., New York City
time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 2:30 p.m.,
New York City time, on (i) the Business Day that the Borrower receives
such notice, if such notice is received prior to 1:00 p.m., New York City
time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice
is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $1,000,000, the Borrower may
request in accordance with Section 2.8 that such payment be financed with
a Floating Rate Advance in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting Floating Rate Advance. If the
Borrower fails to make such payment when due, the Agent shall notify each
Lender of the applicable LC Disbursement, the payment then due from the
Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Lender shall pay
to the Agent its Applicable Percentage of the payment then due from the
21
Borrower, in the same manner as provided in Section 2.12 with respect to
Loans made by such Lender (and Section 2.12 shall apply, mutatis mutandis,
to the payment obligations of the Lenders), and the Agent shall promptly
pay to the applicable Issuing Bank the amounts so received by it from the
Lenders. Promptly following receipt by the Agent of any payment from the
Borrower pursuant to this paragraph, the Agent shall distribute such
payment to the applicable Issuing Bank or, to the extent that Lenders have
made payments pursuant to this paragraph to reimburse such Issuing Bank,
then to such Lenders and the applicable Issuing Bank as their interests
may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse any Issuing Bank for any LC Disbursement (other than the funding
of Floating Rate Advances as contemplated above) shall not constitute a
Loan and shall not relieve the Borrower of its obligation to reimburse
such LC Disbursement.
2.20.6 Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in Section 2.20.5 shall be absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by any Issuing Bank under a Letter of Credit issued
by it against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing,
that might, but for the provisions of this Section, constitute a legal or
equitable discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. Neither the Agent, the Lenders nor any
Issuing Bank, nor any of their Affiliates, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer
of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay
in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required
to make a drawing thereunder), any error in interpretation of technical
terms or any consequence arising from causes beyond the control of the
Issuing Bank issuing such Letter of Credit; provided that the foregoing
shall not be construed to excuse such Issuing Bank from liability to the
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to
the extent permitted by applicable law) suffered by the Borrower that are
caused by such Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit
issued by it comply with the terms thereof or such Issuing Bank's willful
failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the
terms and conditions of the Letter of Credit. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on
the part of an Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in
each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents
22
presented which appear on their face to be in substantial compliance with
the terms of a Letter of Credit, the applicable Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice
or information to the contrary, or refuse to accept and make payment upon
such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
2.20.7 Disbursement Procedures. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit issued by it. Each
Issuing Bank shall promptly notify the Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such
Issuing Bank has made or will make an LC Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve
the Borrower of its obligation to reimburse such Issuing Bank and the
Lenders with respect to any such LC Disbursement.
2.20.8 Interim Interest. If any Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to Floating Rate Advances; provided that, if the Borrower fails
to reimburse such LC Disbursement when due pursuant to Section 2.20.5,
then Section 2.11 shall apply. Interest accrued pursuant to this Section
2.20.8 shall be for the account of the applicable Issuing Bank, except
that interest accrued on and after the date of payment by any Lender
pursuant to Section 2.20.5 to reimburse the applicable Issuing Bank shall
be for the account of such Lender to the extent of such payment.
2.20.9 Replacement of any Issuing Bank. An Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Agent shall
notify the Lenders of any such replacement of an Issuing Bank. At the time
any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant
to Section 2.5.3. From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the replaced Issuing Bank under this Agreement with respect
to Letters of Credit to be issued by it thereafter and (ii) references
herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
2.20.10 Cash Collateralization. If any Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Agent or the Required Lenders (or, if the maturity of the Loans has been
accelerated, Lenders with LC Exposure
23
representing greater than 50% of the total LC Exposure) demanding the
deposit of cash collateral pursuant to this Section 2.20.10, the Borrower
shall deposit in an account with the Agent, in the name of the Agent and
for the benefit of the Lenders (the "Letter of Credit Collateral
Account"), an amount in cash which is free and clear of all rights and
claims of third parties equal to the aggregate undrawn amount of all
outstanding Letters of Credit as of such date plus any accrued and unpaid
LC Fees thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any
kind, upon the occurrence of any Default with respect to the Borrower
described in Section 7.6 or 7.7. If at any time while any Default is
continuing, the Agent determines that the amount on deposit in the Letter
of Credit Collateral Account shall be less than the aggregate undrawn
amount of all outstanding Letters of Credit as of such date plus any
accrued and unpaid LC Fees thereon, 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 an amount equal to
such deficiency, which funds shall be deposited in the Letter of Credit
Collateral Account. All deposits maintained in the Letter of Credit
Collateral Account shall be held by the Agent as collateral for the
payment and performance of the Reimbursement Obligations of the Borrower
with respect to such undrawn amounts and as otherwise expressly set forth
in this Section 2.20.10. The Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such Letter of
Credit Collateral Account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option
and sole discretion of the Agent and at the Borrower's risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such Letter
of Credit Collateral Account shall be applied by the Agent to reimburse
each Issuing Bank for LC Disbursements with respect to such undrawn
amounts for which it has not otherwise been reimbursed and, to the extent
not so applied, shall be held for the satisfaction of additional
Reimbursement Obligations arising in respect of undrawn amounts of
outstanding Letters of Credit or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder as
a result of the occurrence of a Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Defaults have been cured or waived.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive, 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 or applicable Lending
Installation or Issuing Bank with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
24
(i) 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 or any applicable Lending Installation or any Issuing
Bank (including, without limitation, any such requirement imposed by
the Board of Governors of the Federal Reserve System but excluding
with respect to any Eurodollar Loans any such requirement with
respect to which such Lender is entitled to compensation for the
relevant Interest Period under Section 2.15.2), or
(ii) imposes any other condition the result of which is to increase the
cost to any Lender, Issuing Bank or any applicable Lending
Installation of making, funding or maintaining its Eurodollar Loans
or Commitment, or of issuing or participating in any Letter of
Credit, or reduces any amount receivable by any Lender, Issuing Bank
or any applicable Lending Installation in connection with its
Eurodollar Loans, Commitment, Letters of Credit or participations
therein, by an amount deemed material by such Lender or Issuing
Bank,
and the result of any of the foregoing is to increase the cost to such Lender,
Issuing Bank or applicable Lending Installation of making or maintaining its
Eurodollar Loans or Commitment or of issuing or participating in Letters of
Credit or to reduce the return received by such Lender, Issuing Bank or
applicable Lending Installation in connection with such Eurodollar Loans,
Commitment, Letters of Credit or participations therein, then, within 30 days of
demand by such Lender or Issuing Bank, the Borrower shall pay such Lender or
Issuing Bank, as applicable, such additional amount or amounts as will
compensate such Lender or Issuing Bank, as applicable, for such increased cost
or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or Issuing Bank
determines the amount of capital required or expected to be maintained by such
Lender or Issuing Bank, any Lending Installation of such Lender or Issuing Bank
or any corporation controlling such Lender or Issuing Bank is increased as a
result of a Change, then, within 30 days of demand by such Lender or Issuing
Bank, the Borrower shall pay such Lender or Issuing Bank, as applicable, the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender or Issuing Bank reasonably
determines is attributable to this Agreement, its Outstanding Credit Exposure or
its Commitment to make Loans, or issue or participate in Letters of Credit,
hereunder (after taking into account such Lender or Issuing Bank'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, or change in the interpretation or administration of, 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, Issuing Bank or any Lending Installation or any
corporation controlling any Lender or Issuing Bank. "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
25
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 (i) 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 (ii) the Required Lenders determine that (a)
deposits of a type and maturity appropriate to match fund Eurodollar Advances
are not available, (b) the interest rate applicable to Eurodollar Advances does
not accurately reflect the cost of making or maintaining Eurodollar Advances or
(c) no reasonable basis exists for determining the LIBO Rate, then the Agent
shall suspend the availability of Eurodollar Advances of each affected Lender
and, on the date of such suspension in the case of an event described in clauses
(i) above or on the last day of the then current Interest Period applicable
thereto in the case of an event described in clause (ii) above, require any
affected Eurodollar Advances either to be repaid or, at the election of the
Borrower, converted to Floating Rate Advances (on which interest and principal
shall be payable contemporaneously with the related Eurodollar Loans of the
other Lenders), subject to the payment of any funding indemnification amounts
required by Section 3.4. If the applicable Lender in the case of clause (i)
above, or the Required Lenders in the case of clause (ii) above, notify the
Borrower that the circumstances giving rise to such suspension no longer apply,
the principal amount of each such Floating Rate Advances shall be converted into
Eurodollar Advances on the first day of the next such Interest Period applicable
to the related Eurodollar Loan of the other Lenders.
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 or continued, or a Floating Rate Advance is not converted
into a Eurodollar Advance, on the date specified by the Borrower for any reason
other than default by the Lenders or any Lender, or a Eurodollar Advance is not
prepaid on the date specified by the Borrower for any reason, the Borrower will
indemnify each Lender for any loss or cost (excluding loss of anticipated
profits) 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, Issuing Bank or the Agent hereunder or under any Note or Letter of
Credit Application 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 from
or in respect of any sum payable hereunder to any Lender, Issuing Bank 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, Issuing Bank 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
26
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 or any Note or any
Letter of Credit Application ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, each Issuing Bank
and each Lender 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
Issuing Bank or such Lender as a result of its Commitment, any
Credit Extensions made by it hereunder, any Letter of Credit issued
or participated in by it hereunder, or otherwise in connection with
its participation in this Agreement 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 Issuing Bank or such
Lender 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 more than ten Business Days after the date
on which it becomes a party to this Agreement (but in any event
before a payment is due to it hereunder), (i) deliver to the Agent
two duly completed copies of United States Internal Revenue Service
Form W-8BEN or W-8ECI or successor forms, 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, or (ii) deliver to the Agent a United States
Internal Revenue Service Form W-8IMY or successor form together with
the applicable accompanying duly completed copies of United States
Internal Revenue Service applicable Forms W-8 or W-9 or successor
forms, 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 renewals or additional copies of such form (or any amendment
thereto or successor form) (x) on or before the date that such form
expires or becomes obsolete, (y) after the occurrence of any event
requiring a change in the most recent forms so delivered by it and
(z) from time to time upon reasonable request 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
27
failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a
form originally was required to be provided), the Borrower shall not
gross up the payments as provided under Section 3.5 with respect to
such Non-U.S. Lender, and 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 or Issuing Bank 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
or any Issuing Bank (because the appropriate form was not delivered
or properly completed, because such Lender or Issuing Bank failed to
notify the Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason),
such Lender or Issuing Bank, as applicable, 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 for the Agent, which attorneys may be employees of
the Agent). The obligations of the Lenders and Issuing Banks 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 and issuance or participation in Letters of
Credit 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. The Borrower shall not be required to compensate
a Lender pursuant to Section 3.1, 3.2 or 3.5 for any amounts incurred or arising
thereunder more than 90 days prior to the date that such Lender notifies the
Borrower of the event(s) giving rise to such amounts and of such Lender's
intention to claim compensation therefor; provided that, if the adoption or
change described in Section 3.1 or Change described in 3.2 or adoption or
modification of any applicable law under Section 3.5 giving rise to such request
for
28
compensation is retroactive, then the 90 day period referred to above shall be
extended to include the period of retroactive effect thereof. 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 Sections 3.1, 3.2 or 3.4 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 within 30 days 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.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness of Agreement. This Agreement shall become effective as
of the Closing Date, provided that on or prior to the Closing Date the Borrower
has furnished to the Agent with sufficient copies for the Lenders:
4.1.1 Copies of the articles 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, as well as any other information required by Section 326 of
the USA Patriot Act or necessary for the Agent or any Lender to verify the
identity of the Borrower as required by Section 326 of the USA Patriot
Act.
4.1.2 Copies, certified by the Secretary, Assistant Secretary or an
Associate 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.
4.1.3 An incumbency certificate, executed by the Secretary,
Assistant Secretary or an Associate Secretary of the Borrower, which shall
identify by name and title and bear the signatures of the Authorized
Officers and any other 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.
4.1.4 A certificate, signed by the chief financial officer or
treasurer of the Borrower, stating that on the Closing Date no Default or
Unmatured Default has occurred and is continuing.
4.1.5 Written opinion letters of the Borrower's counsel, addressed
to the Lenders in form and substance reasonably acceptable to the Agent.
29
4.1.6 Written opinion of Sidley Xxxxxx Xxxxx & Xxxx, LLP, counsel
for the Agent, addressed to the Agent and the Lenders, with respect to the
enforceability of this Agreement and the Notes issued on the Closing Date,
in form and substance reasonably acceptable to the Agent.
4.1.7 Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
4.1.8 Evidence satisfactory to the Agent that the Existing Credit
Agreements shall have been or shall simultaneously on the Closing Date be
terminated (except for those provisions that expressly survive the
termination thereof), all loans outstanding and other amounts owed to the
lenders or agents thereunder shall have been, or shall simultaneously with
the Closing Date, be paid in full, and all liens and security interests,
if any, granted in connection therewith shall have been or shall
simultaneously on the Closing Date be terminated.
4.2. Each Credit Extension. The Lenders shall not be required to make (i)
the initial Credit Extension hereunder unless all of the conditions in Section
4.1 shall have been satisfied as of the Closing Date, and (ii) any Credit
Extension (other than (x) a conversion or continuation of an outstanding Advance
pursuant to Section 2.9 or (y) the financing of any payment under a Letter of
Credit with a Floating Rate Advance made pursuant to Section 2.20.5) unless on
the applicable Credit Extension Date:
4.2.1 There exists no Default or Unmatured Default.
4.2.2 The representations and warranties contained in Article V are
true and correct in all material respects as of such Credit Extension 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 in all material respects on and
as of such earlier date; provided that this requirement shall not apply to
the representations and warranties set forth in Sections 5.4.3, 5.5 and
5.7 with respect to any Loan if the proceeds of such Loan will be used
exclusively to repay the Borrower's commercial paper.
Each Borrowing Notice or request for issuance or Modification of a Letter
of Credit with respect to each such Credit Extension shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 4.2.1 and 4.2.2 have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of Arizona,
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, unless the failure to have any such license, authorization, consent
or
30
approval would not have a material adverse effect on the financial condition or
financial prospects of the Borrower and its Consolidated Subsidiaries taken as a
whole.
5.2. Corporate and Governmental Authorization; No Contravention. The
execution, delivery and performance by the Borrower of this Agreement and the
Notes are within the Borrower's corporate powers, have been duly authorized by
all necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or any Material Subsidiary or result in the creation or imposition of
any Lien on any asset of the Borrower or any Material Subsidiary except as
otherwise permitted hereunder.
5.3. Binding Effect. This Agreement constitutes a valid and binding
agreement of the Borrower and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Borrower, in each case enforceable in accordance with its terms; subject,
however, to the application by a court of general principles of equity and to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally.
5.4. Financial Information.
5.4.1 The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 2003 and the related
consolidated statements of income and of cash flow for the fiscal year
then ended, reported on by Deloitte & Touche LLP and set forth in the
Borrower's 2003 Form 10-K, fairly present in all material respects, in
conformity with generally accepted accounting principles (except as
disclosed therein and except for the application of Statement of Financial
Accounting Standards No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets"; among other guidance, SFAS 144 prescribes accounting
for discontinued operations and defines certain activities as discontinued
operations; SFAS 144 requires the current and prior year operations of NAC
Holding Inc and NAC International Inc (collectively, "NAC") effective in
the third quarter of 2004 to be reclassified as discontinued operations),
the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations
and cash flows for such fiscal year.
5.4.2 The unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of June 30, 2004 and the related
unaudited consolidated statements of income and of cash flows for the six
months then ended, set forth in the Borrower's Latest Form 10-Q, fairly
present in all material respects, in conformity with generally accepted
accounting principles applied on a basis consistent with the financial
statements referred to in Section 5.4.1 (except as disclosed therein and
except for the application of SFAS 144 as it relates to the operations of
NAC being reclassified as discontinued operations), the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash flows for
such six month period (subject to normal year-end adjustments).
31
5.4.3 Except as disclosed in the Borrower's SEC Reports, since
December 31, 2003 there has been no material adverse change in the
financial condition or financial prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
5.5. Litigation. Except as disclosed in the Borrower's SEC Reports, there
is no action, suit or proceeding pending against, or to the knowledge of the
Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could materially adversely affect the financial condition or financial prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole, or
which in any manner draws into question the validity of this Agreement or the
Notes.
5.6. Compliance with ERISA. Each member of the ERISA Group has fulfilled
its obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
5.7. Environmental Matters. Except as disclosed in the Borrower's SEC
Reports, the operations and properties of the Borrower and its Material
Subsidiaries comply in all material respects with all Environmental Laws, except
where (i) the necessity of compliance therewith is being contested in good faith
by appropriate proceedings or (ii) the noncompliance with which would not have a
material adverse effect on the financial condition or financial prospects of the
Borrower and its Consolidated Subsidiaries taken as a whole.
5.8. Taxes. The Borrower and its Material Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by them, except to the
extent that such taxes are being contested in good faith and by appropriate
proceedings and that appropriate reserves for the payment thereof have been
maintained by the Borrower or its Material Subsidiaries in accordance with
generally accepted accounting principles. The charges, accruals and reserves on
the books of the Borrower in respect of taxes or other governmental charges are,
in the opinion of the Borrower, adequate.
5.9. Material Subsidiaries. Each Material Subsidiary is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and, except as disclosed in the Borrower's SEC Reports, has all
corporate and other legal powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except where the failure to have any such license, authorization,
consent or approval would not have a material adverse effect on the financial
condition or financial prospects of the Borrower and its Consolidated
Subsidiaries taken as a whole, and as to
32
APS, except that (i) APS from time to time may make minor extensions of its
lines, plants, services or systems prior to the time a related franchise,
certificate of convenience and necessity, license or permit is procured, (ii)
from time to time communities served by APS may become incorporated and
considerable time may elapse before such a franchise is procured, (iii) certain
such franchises may have expired prior to the renegotiation thereof, (iv)
certain minor defects and exceptions may exist which, individually and in the
aggregate, are not material and (v) certain franchises, certificates, licenses
and permits may not be specific as to their geographical scope.
5.10. Not an Investment Company. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
5.11. Public Utility Holding Company Act, Etc. The Borrower is a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended; however, pursuant to Section 3(a)(1) of such Act and Rule 2
promulgated thereunder, the Borrower is exempt from all provisions of such Act
other than Section 9(a)(2) thereof. The Borrower is a "public utility", as such
term is defined in the Federal Power Act, as amended, which has obtained blanket
authority from the Federal Energy Regulatory Commission to issue securities and
assume liabilities.
5.12. Full Disclosure. All information (other than financial projections)
heretofore furnished by the Borrower in writing to the Agent, any Issuing Bank
or any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information (other than
financial projections) hereafter furnished by the Borrower to the Agent, any
Issuing Bank or any Lender in connection with this Agreement will be, true and
accurate in all material respects on the date as of which such information is
furnished. The financial projections that have been or will be furnished by the
Borrower to the Agent or any Issuing Bank or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby were or
will be prepared in good faith based upon reasonable assumptions. The Borrower
has disclosed to the Lenders in writing (including through the Borrower's SEC
Reports) any and all facts which materially and adversely affect or may
materially and adversely affect (to the extent the Borrower can now reasonably
foresee), the financial condition or financial prospects of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to
perform its obligations under this Agreement.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Information. The Borrower will deliver to each of the Lenders:
6.1.1 As soon as available and in any event within 120 days after
the end of each fiscal year of the Borrower, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated
33
statements of income and cash flow for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year,
accompanied by an opinion thereon of independent certified public
accountants of nationally recognized public standing, which opinion shall
state that said financial statements fairly present in all material
respects the financial position and results of operations of the Borrower
and its Consolidated Subsidiaries as at the end of, and for, such fiscal
year, in conformity with generally accepted accounting principles (except
as disclosed therein);
6.1.2 As soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flow for such quarter and for
the portion of the Borrower's fiscal year ended at the end of such
quarter, setting forth in the case of such statements of income and of
cash flow in comparative form the figures for the corresponding quarter
and the corresponding portion of the Borrower's previous fiscal year,
accompanied by a certificate of an Authorized Officer, which certificate
shall state that said financial statements fairly present in all material
respects the financial condition and results of operations of the Borrower
and its Consolidated Subsidiaries in accordance with generally accepted
accounting principles, consistently applied (except as disclosed therein),
as at the end of, and for, such period (subject to normal year-end audit
adjustments);
6.1.3 Simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of an
Authorized Officer of the Borrower (i) setting forth in reasonable detail
the calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 6.6, 6.9 and 6.10 on the date
of such financial statements and (ii) stating whether any Default or
Unmatured Default exists on the date of such certificate and, if any
Default or Unmatured Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
6.1.4 As soon as possible and in any event within five Business Days
after an Authorized Officer obtains knowledge of any Default or Unmatured
Default, if such Default or Unmatured Default is then continuing, a
certificate of an Authorized Officer setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;
6.1.5 Promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
6.1.6 Promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q
and 8-K (or their equivalents) which the Borrower shall have filed with
the Securities and Exchange Commission;
6.1.7 If and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA)
34
with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator
of any Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required to
be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security under ERISA and the Internal Revenue Code, a certificate of an
Authorized Officer setting forth details as to such occurrence and action,
if any, which the Borrower or applicable member of the ERISA Group is
required or proposes to take; and
6.1.8 Promptly after an Authorized Officer becomes aware of the
occurrence thereof, notice of any change by Xxxxx'x or S&P of their
respective ratings referenced in the Pricing Schedule or of the cessation
(or subsequent commencement) by Xxxxx'x or S&P of publication of their
respective ratings referenced in the Pricing Schedule; and
6.1.9 From time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Lender, may reasonably request.
Information required to be delivered pursuant to Sections 6.1.1, 6.1.2, 6.1.5 or
6.1.6 above shall be deemed to have been delivered on the date on which the
Borrower provides notice to the Lenders that such information has been posted on
the Borrower's website on the Internet at the website address listed on the
signature pages hereof, at xxx.xxx/xxxxx/xxxxxxxx.xxx or at another website
identified in such notice and accessible by the Lenders without charge; provided
that (i) such notice may be included in a certificate delivered pursuant to
Section 6.1.3 and (ii) the Borrower shall deliver paper copies of the
information referred to in Sections 6.1.1, 6.1.2, 6.1.5 or 6.1.6 to any Lender
which requests such delivery.
6.2. Maintenance of Property; Insurance.
6.2.1 The Borrower will keep, and will cause each Material
Subsidiary to keep, all property useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted, unless
the failure to do so would not have a material adverse effect on the
financial condition or financial prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole, it being understood that
this covenant
35
relates only to the working order and condition of such properties and
shall not be construed as a covenant not to dispose of properties.
6.2.2 The Borrower will maintain, and cause each Material Subsidiary
to maintain, insurance with responsible and reputable insurance companies
or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such
Material Subsidiary operates: provided, however, that the Borrower and
each Material Subsidiary may self-insure to the same extent as other
companies engaged in similar businesses and owning similar properties in
the same general areas in which the Borrower or such Material Subsidiary
operates.
6.3. Conduct of Business and Maintenance of Existence.
6.3.1 The Borrower (a) will preserve and maintain, and, except to
the extent permitted under Section 6.7, will cause each Material
Subsidiary to preserve and maintain, (i) its corporate existence and (ii)
all rights and privileges (other than, in the case of APS, "franchises" as
described in Arizona Revised Statutes, Section 40-283 or any successor
provision) reasonably necessary in the normal conduct of its business,
unless the failure to maintain such rights or privileges would not have a
material adverse effect on the financial condition or financial prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole,
and (b) will cause APS to use its best efforts to preserve and maintain
such franchises reasonably necessary in the normal conduct of its
business, except that, in the case of clause (b) above, (i) APS from time
to time may make minor extensions of its lines, plants, services or
systems prior to the time a related franchise, certificate of convenience
and necessity, license or permit is procured, (ii) from time to time
communities served by APS may become incorporated and considerable time
may elapse before such a franchise is procured, (iii) certain such
franchises may have expired prior to the renegotiation thereof, (iv)
certain minor defects and exceptions may exist which, individually and in
the aggregate, are not material and (v) certain franchises, certificates,
licenses and permits may not be specific as to their geographical scope.
6.3.2 The Borrower will continue to conduct, directly or through its
Subsidiaries, the same general type of business conducted by the Borrower
and its Material Subsidiaries on the date hereof.
6.4. Compliance with Laws. The Borrower will comply, and cause each
Material Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) except where (i) the necessity of compliance
therewith is contested in good faith by appropriate proceedings or (ii) the
noncompliance with which would not have a material adverse effect on the
financial condition or financial prospects of the Borrower and its Consolidated
Subsidiaries, considered as a whole.
36
6.5. Pari Passu. The Borrower will not create, assume or suffer to exist
any Lien on any of the capital stock of any Material Subsidiary owned by the
Borrower or on any Debt of a Material Subsidiary owed to the Borrower unless the
Lenders are also granted a Lien thereon on a pari passu basis securing all of
the Borrower's obligations under this Agreement and the Notes.
6.6. Ownership of APS. Except to the extent permitted under Section 6.7,
the Borrower will at all times continue to own directly at least 80% of the
outstanding capital stock of APS and PWEC for so long as PWEC is a Material
Subsidiary.
6.7. Consolidations, Mergers and Sales of Assets.
6.7.1 The Borrower will not, nor will it permit any Material
Subsidiary to, merge or consolidate with or into any other Person, except
(i) any Material Subsidiary may merge or consolidate with the Borrower if
the Borrower is the corporation surviving such merger, (ii) any Material
Subsidiary may merge or consolidate with any other Subsidiary, provided
that the Borrower's aggregate direct and indirect ownership interest in
the survivor thereof shall not be less than the greater of the Borrower's
direct and indirect ownership interest in such Subsidiaries prior to such
merger, and (iii) the Borrower or any Material Subsidiary may merge or
consolidate with any other Person if (a) such Person was organized under
the laws of the United States of America or one of its States and (b) the
Borrower or such Material Subsidiary is the corporation surviving such
merger; provided that, in each case, after giving effect thereto, no
Default or Unmatured Default will be in existence.
6.7.2 The Borrower will not sell, lease, transfer, assign or
otherwise dispose of all or substantially all of its assets, or permit any
of its Material Subsidiaries to sell, lease, transfer, assign or otherwise
dispose of all or substantially all of its assets, except for sales,
leases, transfers, assignments, and other dispositions of all or
substantially all of the Borrower's or any such Material Subsidiary's
assets to the Borrower or any other Subsidiary of the Borrower, provided
in each case that no Unmatured Default or Default shall have occurred and
be continuing after giving effect thereto and provided further that (i) in
no case will the sale, lease, transfer, assignment or other disposition by
PWEC of the Silverhawk Power Plant or any interest therein be governed or
prohibited by this Section 6.7.2, and (ii) this Section 6.7.2 will not
govern or prohibit pledges or the grant of security interests, mortgages
or other Liens on any assets.
6.8. Use of Proceeds. The proceeds of the Loans made under this Agreement
will be used by the Borrower to refinance indebtedness from time to time and for
general corporate purposes. All Letters of Credit issued under this Agreement
will be used for general corporate purposes. None of such proceeds will be used,
directly or indirectly, for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying any "margin stock" within the meaning of
Regulation U; provided, however, that the Borrower may use the proceeds of the
Loans made under this Agreement for the purpose of repurchasing shares of the
Borrower's common stock so long as such repurchases do not subject any of the
Lenders to the requirements of Regulation U in respect of this Agreement. In
accordance with applicable Federal Energy Regulatory Commission orders and
precedent, each Credit Extension will be for some lawful object within
37
the corporate purposes of the Borrower, compatible with the public interest, and
reasonably necessary or appropriate for such purposes.
6.9. Interest Coverage Ratio. The Borrower will maintain for each
twelve-month period ending on the last day of each fiscal quarter (determined as
of the last day of such fiscal quarter) an Interest Coverage Ratio of no less
than 2:1.
6.10. Indebtedness. Consolidated Debt will not exceed at any time an
amount equal to 65% of Consolidated Capitalization.
6.11. Inspection of Property, Books and Records. The Borrower will keep,
and will cause each Material Subsidiary to keep, proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to its business and activities; and will permit,
and will cause each Material Subsidiary to permit, representatives of any Lender
at such Lender's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired; provided,
however, that the Borrower and its Material Subsidiaries reserve the right to
restrict access to any of its properties in accordance with reasonably adopted
policies relating to safety and security.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. The Borrower shall fail to pay (i) when due, any principal of any
Loan, (ii) any Reimbursement Obligation within one Business Day after the same
becomes due or (iii) within three Business Days of the date when due, interest
on any Loan, or any fees (including any LC Fee) payable hereunder.
7.2. The Borrower shall fail to observe or perform any covenant contained
in Sections 6.1.4, 6.3.1(a)(i) (solely with respect to the Borrower) and 6.5 to
6.10, inclusive.
7.3. The Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by Section 7.1
or Section 7.2 above) for 30 days after notice thereof has been given to the
Borrower by the Agent at the request of any Lender.
7.4. Any representation, warranty, certification or statement made by the
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been incorrect
in any material respect when made (or deemed made).
7.5. The Borrower or any Material Subsidiary shall fail to pay any
principal of or premium or interest on any Material Debt or Material Derivative
Obligation, when the same
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becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Material Debt or Material Derivative Obligation; or the
Borrower or any Material Subsidiary shall fail to perform or comply with any
other term or covenant in any agreement or instrument relating to such Material
Debt or Material Derivative Obligation and such failure shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such failure is to accelerate, or to permit the acceleration of,
the maturity of such Material Debt or Material Derivative Obligation.
7.6. The Borrower or any Material Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing.
7.7. An involuntary case or other proceeding shall be commenced against
the Borrower or any Material Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed or unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Material Subsidiary under
the federal bankruptcy laws as now or hereafter in effect.
7.8. Any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $25,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $25,000,000.
7.9. Judgments or orders for the payment of money that exceeds any
applicable insurance coverage by more than $25,000,000 in the aggregate shall be
rendered against the Borrower or any Material Subsidiary and such judgments or
orders shall continue unsatisfied or unstayed for a period of 45 days.
7.10. Any Change in Control shall occur.
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. (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 Issuing Banks 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 Issuing Bank or any Lender. If any other Default occurs, the
Required Lenders (or the Agent with the consent of the Required Lenders) may
terminate or suspend the obligations of the Lenders to make Loans hereunder and
the obligation and power of the Issuing Banks 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.
(ii) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the Issuing Banks to issue Letters of Credit
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 Section 8.2, 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 each Lender adversely affected thereby:
8.2.1 Extend the final maturity of any Loan, or extend the expiry
date of any Letter of Credit to a date after the Facility Termination Date
or forgive all or any portion of the principal amount thereof or any
Reimbursement Obligation related thereto, or reduce the rate or extend the
time of payment of interest or fees thereon or any Reimbursement
Obligation related thereto.
8.2.2 Reduce the percentage specified in the definition of Required
Lenders.
8.2.3 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 Commitment of any Lender hereunder or
the commitment to issue Letters of Credit, or permit the Borrower to
assign its rights under this Agreement.
8.2.4 Amend the definition of "Applicable Percentage", this Section
8.2 or any other provision of this Agreement regarding the percentage of
Lenders required to effect an action under the Loan Documents.
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8.2.5 Amend Section 11.2 of this Agreement in a manner that would
alter the pro rata sharing of payments required thereby.
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 relating to any Issuing Bank shall be effective without the written
consent of such Issuing Bank. The Agent may waive payment of the fee required
under Section 12.3.3 without obtaining the consent of any other party to this
Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders, any
Issuing Bank 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, or by the Agent with the consent of, the requisite number of 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
Issuing Banks and the Lenders 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 Lender or Issuing Bank 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.
9.4. Entire Agreement. The Loan Documents and the Letter of Credit
Applications embody the entire agreement and understanding among the Borrower,
the Agent, the Issuing Banks and the Lenders and supersede all prior agreements
and understandings among the Borrower, the Agent, the Issuing Banks and the
Lenders relating to the subject matter thereof other than those contained in the
fee letter and, to the extent expressly set forth therein, the commitment
letter, described in Section 10.13 which shall survive and remain in full force
and effect during the term of this Agreement.
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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, co-venturer 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 and as otherwise expressly
stated herein.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the Agent
and the Arrangers for any reasonable out-of-pocket costs and expenses (including
reasonable attorneys' and paralegals' fees for one firm of attorneys for the
Agent and Arrangers, and which attorneys may be employees of the Agent or either
Arranger and expenses of and fees for other advisors and professionals engaged
by the Agent or the Arrangers in consultation with the Borrower) paid or
incurred by the Agent or the Arrangers in connection with the preparation,
investigation, negotiation, documentation, execution, delivery, syndication,
distribution (including, without limitation, via the internet), review,
amendment, modification, and administration of the Loan Documents and incurred
after the Closing Date. The Borrower also agrees to reimburse the Agent, the
Arrangers, the Issuing Banks and the Lenders for any reasonable out-of-pocket
costs and expenses (including reasonable attorneys' and paralegals' fees and
out-of-pocket expenses of attorneys for the Agent, the Arrangers, the Issuing
Banks and the Lenders, which attorneys may be employees of the Agent, the
Arrangers, the Issuing Banks or the Lenders) paid or incurred by the Agent, the
Arrangers, the Issuing Banks or any Lender in connection with the collection and
enforcement of the Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, each
Arranger, each Issuing Bank, each Lender, their respective
affiliates, and their respective directors, officers, employees and
agents (each, an "Indemnified Party") against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation
therefor whether or not such Indemnified Party is a party thereto,
and all reasonable outside attorneys' and paralegals' fees and
expenses of outside attorneys and paralegals of the Indemnified
Party) 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 expressly stated in
this Agreement to be payable by the Indemnified Party or one of its
Affiliates, including, but not limited to, expenses payable under
Sections 3.5(vii) and 6.11, or 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 such
Indemnified Party or any of its Affiliates, in which case any fees
and expenses previously paid or advanced by the Borrower to such
Indemnified Party in respect of such indemnified obligation will be
returned by such Indemnified Party. In the case of an investigation,
litigation or other proceeding to which the indemnity in this
Section 9.6(ii) applies, such indemnity shall be effective whether
or not such investigation, litigation or proceeding is brought by
the Borrower, its directors, equityholders or creditors or an
Indemnified Party or any other Person, whether or not any
Indemnified Party is
42
otherwise a party thereto, unless such litigation or proceeding is
brought by or against the Borrower and the Borrower prevails in a
final, non-appealable judgment, in which case any fees or expenses
previously paid or advanced by the Borrower to such Indemnified
Party in respect of such indemnified obligation will be returned by
such Indemnified Party, and whether or not the transactions
contemplated hereby are consummated. 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.
9.8. Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared, in accordance with generally accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Borrower's independent public
accountants) with the most recent audited consolidated financial statements of
the Borrower delivered to the Agent; provided that, if the Borrower notifies the
Agent that the Borrower wishes to amend any covenant in Article VI to eliminate
the effect of any change in generally accepted accounting principles on the
operation of such covenant (or if the Agent notifies the Borrower that the
Required Lenders wish to amend Article VI for such purpose), then the Borrower's
compliance with such covenant shall be applied on the basis of generally
accepted accounting principles in effect immediately before the relevant change
in generally accepted accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Borrower and the Required Lenders.
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 Issuing Banks and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, any Arranger,
any Issuing Bank nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, any Arranger, any Issuing Bank nor any Lender
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. Neither the Agent, any Arranger, any Issuing Bank nor any Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to xxx for, any special, indirect, consequential or
punitive 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. Confidentiality. Each Lender, each Issuing Bank and the Agent shall
exercise the same degree of care that it exercises with respect to its own
proprietary information of the same
43
types to maintain the confidentiality of any Confidential Information received
pursuant to this Agreement except that disclosure of such Confidential
Information may be made (i) to the agents, employees, subsidiaries or affiliates
of such Person in connection with its present or prospective business relations
with the Borrower arising out of this Agreement, provided that such Person will
cause such agents, employees, subsidiaries or affiliates to comply with the
provisions of this Section 9.11 with respect to such Confidential Information,
(ii) to prospective transferees or purchasers of any interest in the Outstanding
Credit Exposure (including any Participant), provided that they have agreed to
be bound by the provision of this Section 9.11, (iii) as required by law,
regulations, rule, request or order, subpoena, judicial order or similar order
and in connection with any litigation, (iv) as may be required in connection
with the examination, audit or similar investigation of such Person, (v) to its
direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties,
provided that such counterparties, legal counsel, accountants and other
professional advisors shall agree to comply with the provisions of this Section
9.11 with respect to such Confidential Information, and (vi) to rating agencies
if requested or required by such agencies in connection with a rating relating
to the Credit Extensions hereunder. Without limiting Section 9.4, the Borrower
agrees that the terms of this Section 9.11 shall set forth the entire agreement
between the Borrower and each Lender (including the Issuing Banks and the Agent)
with respect to any confidential information previously or hereafter received by
such Lender in connection with this Agreement, and this Section 9.11 shall
supersede any and all prior confidentiality agreements entered into by such
Lender with respect to such confidential information.
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 and each Lender hereby acknowledge and
agree that JPMCB 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.
9.14. USA Patriot Act Notification. The following notification is provided
to the Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
the Borrower: When the Borrower opens an account, the Agent and the Lenders will
ask for the Borrower's name, tax identification number, business address, and
other information that will allow the Agent and the Lenders to identify the
Borrower. The Agent and the Lenders may also ask to see the Borrower's legal
organizational documents or other identifying documents.
9.15. Relations Among Lenders.
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9.15.1 No Action Without Consent. Except with respect to the
exercise of setoff rights of any Lender, in accordance with Section 11.1,
the proceeds of which are applied in accordance with this Agreement, each
Lender and each Issuing Bank agrees that it will not take any action, nor
institute any actions or proceedings, against the Borrower or with respect
to any Loan Document, without the prior written consent of the Required
Lenders or, as may be provided in this Agreement or the other Loan
Documents, with the consent of the Agent.
9.15.2 No Liability. The Agent shall have the exclusive right on
behalf of the Lenders to enforce the payment of the principal of and
interest on, or LC Exposure in respect of, any Credit Extension after the
date such principal or interest has become due and payable pursuant to the
terms of this Agreement.
9.16. Notice of Termination of Existing Agreements. The Borrower, the
Lenders and the Agent agree that, upon (i) the execution and delivery of this
Agreement by each of the parties hereto and (ii) the satisfaction (or waiver by
the aforementioned parties) of the conditions precedent set forth in Sections
4.1 and 4.2, the Existing Credit Agreements shall be and hereby are terminated.
To the extent any such termination shall require prior written notice be
received within a specified period of days prior to such termination pursuant to
the terms of the Existing Credit Agreements, any such requirements are hereby
waived.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. JPMorgan Chase Bank is hereby
appointed by each of the Lenders and Issuing Banks as its contractual
representative (herein referred to as the "Agent") hereunder and under each
other Loan Document, and each of the Lenders and Issuing Banks irrevocably
authorizes the Agent to act as the contractual representative of such Lender and
Issuing Banks 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 any fiduciary responsibilities to any Lender or any Issuing
Bank by reason of this Agreement or any other Loan Document and that the Agent
is merely acting as the contractual representative of the Lenders and the
Issuing Banks with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders' and
Issuing Banks' contractual representative, the Agent (i) does not hereby assume
any fiduciary duties to any of the Lenders or any Issuing Bank and (ii) 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 and the Issuing Banks, for itself and each of its
Affiliates, 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, each Issuing Bank and each Affiliate of each Lender
and each Issuing Bank 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
45
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 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 the time so furnished,
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 all of the Lenders in the event that and to the extent that
this Agreement expressly requires such approval), 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 (or all of the Lenders in
the event that and to the extent that this Agreement expressly requires such
approval). The Agent shall be fully justified in 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.
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10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, electronic mail message, statement, paper or document
reasonably (but without any requirement of any additional diligence by the Agent
with respect thereto) 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. For purposes of determining compliance with the
conditions specified in Sections 4.1 and 4.2, each Lender that has signed this
Agreement (or otherwise become party hereto pursuant to an assignment under
Section 12.3) shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Agent shall have received notice from such Lender prior to the applicable date
specifying its objection thereto.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to the Lenders'
respective Applicable Percentages of the Aggregate Commitment (or, if the
Aggregate Commitment has been terminated, of the Aggregate Outstanding Credit
Exposure) to the extent not reimbursed by or on behalf of the Borrower and
without limiting any obligation of the Borrower to do so (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.
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 Outstanding Credit Exposure as
any Lender and may exercise the same as
47
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.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, any 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, any 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. Upon any such resignation, the Required Lenders shall, with
the prior written approval of the Borrower (which approval will not be
unreasonably withheld or delayed and which shall be required only so long as no
Default shall be continuing), 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 the Borrower or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned 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 Agent. Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, 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 or 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 and Arranger Fees. The Borrower agrees to pay to the Agent
and the Arrangers, for their respective accounts, the fees agreed to by the
Borrower, the Agent, the Syndication Agent and the Arrangers pursuant to that
certain fee letter agreement dated
48
September 14, 2004 entered into in connection with that certain commitment
letter dated as of September 14, 2004 by and among the Agent, the Syndication
Agent, the Arrangers and the Borrower, 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; provided that the Agent shall remain solely responsible to the other
parties hereto for the performance of such duties. 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. Co-Agents, Managing Agent, Documentation Agent, Syndication Agent,
etc. None of the Lenders identified in this Agreement as a "Co-Agent", "Managing
Agent", "Documentation Agent" or the Syndication Agent shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of such Lenders shall have or be deemed to have a fiduciary relationship
with any Lender. Each Lender hereby makes the same acknowledgments with respect
to such Lenders as it makes with respect to the Agent in Section 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs, any and all deposits of the
Borrower (including all account balances, whether provisional or final and
whether or not collected or available) and any other Debt at any time held or
owing by 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, and each
Lender shall endeavor to give notice of any such set-off to the Borrower,
provided that the failure of any Lender to give such notice shall not in any way
limit any Lender's rights under this Section 11.1.
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) 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 Applicable
Percentage of the 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
49
successors and assigns permitted hereby, except that (i) the Borrower shall not
have the right to assign its rights or obligations under the Loan Documents
without the prior written consent of each Lender, (ii) any assignment by any
Lender must be made in compliance with Section 12.3, and (iii) any transfer by
participation must be made in compliance with Section 12.2. Any attempted
assignment or transfer by any party not made in compliance with this Section
12.1 shall be null and void, unless such attempted assignment or transfer is
treated as a participation in accordance with Section 12.3.3. The parties to
this Agreement acknowledge that clause (ii) of this Section 12.1 relates only to
absolute assignments and this Section 12.1 does not prohibit assignments
creating security interests, including, without limitation, (x) 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 or (y) in the case of a Lender
which is a Fund, any pledge or assignment of all or any portion of its rights
under this Agreement and any Note to its trustee in support of its obligations
to its trustee; provided, however, that no such pledge or assignment 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 Credit Extension or which holds any Note as
the owner thereof for all purposes hereof unless and until such Person complies
with Section 12.3; provided, however, that the Agent may in its discretion (but
shall not be required to) follow instructions from the Person which made any
Credit Extension or which holds any Note to direct payments relating to such
Credit Extension or Note to another Person. Any assignee of the rights to any
Outstanding Credit Exposure 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 Outstanding
Credit Exposure (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 Outstanding Credit Exposure.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may 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 or obligation of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests or
obligations 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.
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
50
to any Outstanding Credit Exposure or Commitment in which such Participant
has an interest which would require consent of all of the Lenders pursuant
to the terms of Section 8.2 or of any other Loan Document.
12.2.3 Benefit of Certain Provisions. The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and
(ii) any Participant not incorporated under the laws of the United States
of America or any State thereof agrees to comply with the provisions of
Section 3.5 to the same extent as if it were a Lender.
12.3. Assignments.
12.3.1 Permitted Assignments. Any Lender may 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 B or in such other form as may be
agreed to by the parties thereto. Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
Fund shall either be in an amount equal to the entire applicable
Commitment and Outstanding Credit Exposure of the assigning Lender or
(unless each of the Borrower and the Agent otherwise consents) be in an
aggregate amount not less than $5,000,000. The amount of the assignment
shall be based on the Commitment or Outstanding Credit Exposure (if the
Commitment has been terminated) subject to the assignment, determined as
of the date of such assignment or as of the "Trade Date," if the "Trade
Date" is specified in the assignment.
12.3.2 Consents. The consent of the Borrower shall be required prior
to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund, provided that the consent of
the Borrower shall not be required if a Default has occurred and is
continuing. The consent of the Agent shall be required prior to an
assignment becoming effective unless the Purchaser is a Lender. The
consent of each Issuing Bank shall be required prior to any assignment
becoming effective. Any consent required under this Section 12.3.2 shall
not be unreasonably withheld or delayed.
12.3.3 Effect; Effective Date. Upon (i) delivery to the Agent of an
assignment, together with any consents required by Sections 12.3.1 and
12.3.2, and (ii) payment of a $3,500 fee by the transferor Lender or the
Purchaser 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
51
assets" under ERISA. On and after the effective date of 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 thereto, and
the transferor Lender shall be released with respect to the Commitment and
Outstanding Credit Exposure assigned to such Purchaser without any further
consent or action by the Borrower, the Lenders, the Agent or the Issuing
Banks. In the case of an assignment covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a Lender hereunder but shall continue to be entitled to the benefits of,
and subject to, those provisions of this Agreement and the other Loan
Documents which survive payment of the Obligations and termination of the
applicable agreement. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section
12.3 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance
with Section 12.2. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 12.3.3, 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.
12.3.4 Register. The Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in New York,
New York a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of the Loans owing to, and
participations in Letters of Credit by, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior notice.
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 Borrower and its Subsidiaries; 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 not incorporated under the laws of 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).
52
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent
by telecopier as follows:
(i) if to the Borrower, at its address or telecopier number set forth on
the signature page hereof;
(ii) if to the Agent or if the applicable Issuing Bank is JPMCB, at its
address or telecopier number set forth on the signature page hereof;
(iii) if to a Lender or to any Issuing Bank other than JPMCB, to it at its
address (or telecopier number) set forth in its administrative
questionnaire delivered to the Agent.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
(b) Electronic Communications. Notices and other communications to
the Lenders may be delivered or furnished by electronic communication
(including e-mail and internet or intranet websites) pursuant to
procedures approved by the Agent or as otherwise determined by the Agent
and notified to the Lenders and the Borrower, provided that the foregoing
shall not apply to notices to any Lender pursuant to Article II if such
Lender has notified the Agent that it is incapable of receiving notices
under such Article by electronic communication. The Agent or the Borrower
may, in its respective discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it or as it otherwise determines and notified to
the other parties, provided that such determination or approval may be
limited to particular notices or communications.
Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be
53
deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.
(c) Change of Address, Etc. Any party hereto may change its address
or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.
ARTICLE XIV
COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
14.1. Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the Agent
and when the Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
14.2. Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any assignment and assumption
agreement shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, or any other state laws based on the
Uniform Electronic Transactions Act.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO BANKS.
15.2. CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING
IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
54
THE PARTIES HERETO HEREBY TO THE FULLEST EXTENT ALLOWED BY LAW IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
IN THE COURTS OF ANY JURISDICTION.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO
IN THE IMMEDIATELY PRECEDING PARAGRAPH. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT 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 ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
55
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
PINNACLE WEST CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Title: Vice President and Treasurer
000 X. 0xx Xxxxxx
Xxxxxxx XX, 00000
Attention: Xx. Xxxxxxx Xxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Website: xxx.xxxxxxxxxxxx.xxx
FEIN: 00-0000000
SIGNATURE PAGE TO CREDIT AGREEMENT
JPMORGAN CHASE BANK,
Individually, as an Issuing Bank and as
Administrative Agent
By: /s/ Xxxxx X. Xxxx
-------------------------------
Title: Managing Director
JPM Loan & Agency Services
0000 Xxxxxx Xx 00xx XX
Xxxxxxx XX, 00000
Ph#: 713-750-2510
Fx#: 000-000-0000
email: xxxxxx.xxxxxxxxx@jpmorgan
with a copy to:
JPMorgan Corporate Banking
NA Power & Utilities
000 Xxxx Xxx 00 XX
Xxx Xxxx, XX 00000
Ph# 212-270-5801
Fx# 000-000-0000
email: xxx.xxxxxx@xxxxxxxx.xxx
For Letters of Credit:
JPMorganChase LOC Tampa
10420 Highland Manor Dr-BL 2, FL 2
Xxxxx, XX 00000
Ph#: 813-432-6339
Fx#: 000-000-0000
email: xxxxx.xxxxxx@xxxxx.xxx
with a copy to:
Global Trade Services
1 Chase Manhattan Plaza 9 FL
Xxx Xxxx, XX 00000
Ph# 000-000-0000
Fx# 000-000-0000
email: xxxxxxx.xxxxxxxxxx@xxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.
Individually and as Syndication Agent
By: /s/ Xxxxxx Xxxx
-------------------------------------
Name: Xxxxxx Xxxx
Title: Assistant Vice President
Energy Capital Services
000 X. Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxx.xxxx@xxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
THE BANK OF NEW YORK,
Individually and as Co-Documentation Agent
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
BANK OF AMERICA, N.A.,
Individually and as Co-Documentation Agent
By: /s/ Xxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
000 X. Xxxxx Xx. XX0-000-00-00
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxx.xxxxxxxxx
@xxxxxxxxxxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
MIZUHO CORPORATE BANK, LTD.,
Individually and as Co-Documentation Agent
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxx.xxxxx@xxxxxxxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
CITIBANK, N.A.,
Individually and as Managing Agent
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Managing Director
Xxx Xxxxx Xxx, Xxxxx 000
Xxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxx.x.xxxxxx@xxxxxxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
BARCLAYS BANK PLC,
Individually and as Managing Agent
By: /s/ Xxxxx Xxxxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Director
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Sydney X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxx.xxxxxx@xxxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
CREDIT SUISSE FIRST BOSTON,
ACTING THROUGH ITS CAYMAN ISLANDS BRANCH,
Individually and as Managing Agent
By: /s/ Xxxxx Xx
-----------------------------------------
Name: Xxxxx Xx
Title: Vice President
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Associate
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxx.xx@xxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
KEYBANK NATIONAL ASSOCIATION,
Individually and as Managing Agent
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
OH-01-27-0847
Attention: Xxxxx X. Xxxxx-Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail:
xxxxxx_xxxxx-xxxxx@xxxxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
UBS LOAN FINANCE LLC,
Individually and as Managing Agent
By: /s/ Xxxxxxx X. Saint
---------------------------------------
Name: Xxxxxxx X. Saint
Title: Director
Banking Products Services, US
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Associate Director
Banking Products Services, XX
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Winslowe Ogbourne
Phone: 000-000-0000
Fax: 000-000-0000
E-mail: Xxxxxxxx.Xxxxxxxx@xxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
UFJ BANK LIMITED,
as a Lender
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
Los Angeles Branch
000 X. Xxxxxxxx Xx.
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx_xxxx@xxxxxxx.xx.xx
SIGNATURE PAGE TO CREDIT AGREEMENT
KBC BANK NV,
as a Lender
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: First Vice President
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Loan Administration
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail:
SIGNATURE PAGE TO CREDIT AGREEMENT
BANCA DI ROMA,
as a Lender
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx (#976417)
Title: Assistant Vice President
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx (#97969)
Title: Vice President
Xxx Xxxxxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxx@xxxxxxxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
COMMITMENT SCHEDULE
COMMITMENTS
Lender Amount of Commitment % of Aggregate Commitment
------ -------------------- -------------------------
JPMorgan Chase Bank $ 32,500,000 10.83%
Union Bank of California, N.A. $ 32,500,000 10.83%
The Bank of New York $ 26,000,000 8.67%
Bank of America, N.A. $ 26,000,000 8.67%
Mizuho Corporate Bank, Ltd. $ 26,000,000 8.67%
Citibank, N.A. $ 22,500,000 7.50%
Barclays Bank PLC $ 22,500,000 7.50%
Credit Suisse First Boston, $ 22,500,000 7.50%
Acting Through Its Cayman
Islands Branch
KeyBank National $ 22,500,000 7.50%
Association
UBS Loan Finance LLC $ 22,500,000 7.50%
UFJ Bank Limited $ 19,500,000 6.50%
KBC Bank NV $ 15,000,000 5.00%
Banca di Roma $ 10,000,000 3.33%
TOTAL $300,000,000.00 100%
PRICING SCHEDULE
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
MARGIN STATUS STATUS STATUS STATUS STATUS
------ ------ ------ ------ ------ ------
Eurodollar Rate 0.50% 0.60% 0.70% 0.925% 1.20%
Floating Rate 0.0% 0.0% 0.0% 0.0% 0.25%
APPLICABLE LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
FEE RATE STATUS STATUS STATUS STATUS STATUS
--- ---- ------ ------ ------ ------ ------
Facility Fee Rate 0.125% 0.150% 0.175% 0.200% 0.300%
Utilization Margin 0.125% 0.125% 0.125% 0.125% 0.250%
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 or 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 or 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 or 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 or Level II Status or Level III
Status and (ii) the Borrower's Xxxxx'x Rating is Baa3 or better or 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.
"Rating" means the credit ratings assigned to the senior unsecured
long-term debt securities of the Borrower without third-party credit enhancement
by the applicable rating agencies. If there is no Rating assigned to debt
securities, the corporate credit rating of the Borrower will be used. Any Rating
assigned to any other debt security of the Borrower shall be
disregarded. The Rating in effect at any date is that in effect at the close of
business on such date.
"S&P Rating" means, at any time, the Rating issued by S&P and then
in effect.
"Status" means Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status.
The Applicable Margin and the Applicable Facility Fee Rate and the
Applicable Utilization Margin shall be determined in accordance with the
foregoing table based on the Borrower's Status as determined from its
then-current Ratings. If at any time the Borrower has no Xxxxx'x Rating or no
S&P Rating, Level V Status shall exist.
In the case of split Ratings from S&P or Xxxxx'x, the Rating to be
used to determine which Status applies is the higher of the two (e.g., BBB+/Baa2
results in Level II Status); provided that if the split is more than one full
rating category, the rating category immediately above the lower of the two
rating categories will be used (e.g., BBB+/Baa3 results in Level III Status, as
does A-/Baa3).
SCHEDULE 2.20
EXISTING LETTERS OF CREDIT
LETTER OF CREDIT NO. AMOUNT
-------------------- -------------
No. P-240053 $ 320,000.00
No. P-226706 $4,373,467.00
No. P-243249 $3,263,657.00
No. P-230876 $2,036,250.00
No. P-236181 $3,160,620.00
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "Assignment and Assumption")
is dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Agent as contemplated below, the interest in and to all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto that represents the
amount and percentage interest identified below of all of the Assignor's
outstanding rights and obligations under the respective facilities identified
below (including without limitation any guaranties included in such facilities
and, to the extent permitted to be assigned under applicable law, all claims
(including without limitation contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity), suits, causes of
action and any other right of the Assignor against any Person whether known or
unknown arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby) (the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor: _________________________
2. Assignee: _________________________ [and is an Affiliate/Approved
Fund of [identify Lender](1)
3. Borrower: Pinnacle West Capital
Corporation
4. Agent: JPMorgan Chase Bank, as agent
under the Credit Agreement
-------------------------------
(1) Select as applicable.
5. Assignee: ________________________
6. Credit Agreement: The Credit Agreement dated as of October
19, 2004 among Pinnacle West Capital
Corporation, the Lenders party thereto,
JPMorgan Chase Bank, as Agent, and the
other agents party thereto.
7. Assigned Interest:
Aggregate Amount of
Commitment/ Amount of Percentage Assigned of
Outstanding Credit Commitment/ Commitment /
Exposure for all Outstanding Credit Aggregate Outstanding
Facility Assigned Lenders* Exposure Assigned* Credit Exposure(2)
-------- -------- -------- ------------------ ------------------
Revolving Credit $ $ _______%
Facility
8. Trade Date: _______________________________(3)
Effective Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By: _______________________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By: ______________________________________
----------------------
* Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(3) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.
Title:
[Consented to and](4) Accepted:
JPMORGAN CHASE BANK, as Agent
By:__________________________________
Title:
[Consented to:](5)
PINNACLE WEST CAPITAL CORPORATION
By:__________________________________
Title:
-------------------------
(4) To be added only if the consent of the Agent is required by the Credit
Agreement.
(5) To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document, (iv)
the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Documents, (v) inspecting any of the property, books or records of the
Borrower, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Credit Extensions or the
Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) 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,
(v) 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 non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement,
together with copies of financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Agent or any other Lender, and (vii)
attached as Schedule 1 to this Assignment and Assumption is any documentation
required to be delivered by the Assignee with respect to its tax status pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee and (b) agrees that (i) it will, independently and without reliance on
the Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action
under the Loan Documents, and (ii) 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.
2. Payments. The Assignee shall pay the Assignor, on the Effective Date,
the amount agreed to by the Assignor and the Assignee. From and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
ADMINISTRATIVE QUESTIONNAIRE
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
EXHIBIT B
NOTE
[Date]
PINNACLE WEST CAPITAL CORPORATION, an Arizona 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 address of JPMorgan Chase Bank
in New York, New York, as Agent, specified pursuant to Section 2.12 of the
Agreement, 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
Facility Termination Date, and the Borrower and shall make such mandatory
payments as are required to be made under the terms of Article II of the
Agreement.
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 October 19, 2004 (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 JPMorgan Chase Bank, as Administrative 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.
PINNACLE WEST CAPITAL CORPORATION
By: __________________________________
Print Name: __________________________
Title: _______________________________
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF ______________________________,
DATED ______________________,
Principal Maturity Principal
Amount of Interest Amount Unpaid
Date of Loan Period Paid Balance
---- --------- ----------- --------- -------
