TERM LOAN CREDIT AGREEMENT dated as of January 21, 2009 among NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, THE BANKS LISTED HEREIN, THE BANK OF NOVA SCOTIA, as Administrative Agent, U.S. BANK, N.A., as Syndication Agent, and KEYBANK...
Execution
Version
dated as
of
January
21, 2009
among
NATIONAL
RURAL UTILITIES
COOPERATIVE
FINANCE CORPORATION,
THE BANKS
LISTED HEREIN,
THE BANK
OF NOVA SCOTIA,
as
Administrative Agent,
U.S.
BANK, N.A.,
as
Syndication Agent,
and
KEYBANK
NATIONAL ASSOCIATION,
as
Documentation Agent
THE BANK
OF NOVA SCOTIA,
as Lead
Arranger and Bookrunner
TABLE
OF CONTENTS
Page
|
|
ARTICLE
1
|
|
DEFINITIONS
|
|
Section
1.01. Definitions
|
1
|
Section
1.02. Accounting Terms and
Determinations
|
12
|
Section
1.03. Types
of Borrowings
|
12
|
ARTICLE
2
|
|
THE
CREDITS
|
|
Section
2.01. Commitments to
Lend
|
12
|
Section
2.02. Notice
of Borrowings
|
13
|
Section
2.03. Notice
to Banks; Funding of Loans
|
13
|
Section
2.04. Notes
|
14
|
Section
2.05. Maturity of
Loans
|
15
|
Section
2.06. Interest
Rates
|
15
|
Section
2.07. Method
of Electing Interest Rates
|
16
|
Section
2.08. Fees
|
18
|
Section
2.09. Optional Termination or
Reduction of Commitments
|
18
|
Section
2.10. Mandatory Termination of
Commitments
|
18
|
Section
2.11. Prepayments
|
18
|
Section
2.12. General
Provisions as to Payments
|
19
|
Section
2.13. Funding
Losses
|
19
|
Section
2.14. Computation of Interest and
Fees
|
20
|
Section
2.15. Withholding Tax
Exemption
|
20
|
Section
2.16. Increase of
Commitments
|
20
|
Section
2.17. Replacement of
Banks
|
22
|
Section
2.18. Defaulting
Banks
|
23
|
ARTICLE
3
|
|
CONDITIONS
|
|
Section
3.01. Effectiveness
|
24
|
Section
3.02. Borrowings
|
25
|
ARTICLE
4
|
|
REPRESENTATIONS
AND WARRANTIES
|
|
Section
4.01. Corporate Existence, Power and
Authority
|
26
|
Section
4.02. Financial
Statements
|
27
|
Section
4.03. Litigation
|
28
|
Section
4.04. Governmental
Authorizations
|
28
|
Section
4.05. Members’ Subordinated
Certificates
|
28
|
i
Section
4.06. No
Violation of Agreements
|
28
|
Section
4.07. No
Event of Default under the Indentures
|
29
|
Section
4.08. Compliance with
ERISA
|
29
|
Section
4.09. Compliance with Other
Laws
|
29
|
Section
4.10. Tax
Status
|
29
|
Section
4.11. Investment Company
Act
|
30
|
Section
4.12. Disclosure
|
30
|
Section
4.13. Subsidiaries
|
30
|
Section
4.14. Environmental
Matters
|
30
|
ARTICLE
5
|
|
COVENANTS
|
|
Section
5.01. Corporate
Existence
|
31
|
Section
5.02. Disposition of Assets, Merger,
Character of Business, etc
|
31
|
Section
5.03. Financial
Information
|
31
|
Section
5.04. Default
Certificates
|
33
|
Section
5.05. Notice
of Litigation, Legislative Developments and
Defaults
|
34
|
Section
5.06. ERISA
|
34
|
Section
5.07. Payment
of Charges
|
35
|
Section
5.08. Inspection of Books and
Assets
|
35
|
Section
5.09. Indebtness
|
35
|
Section
5.10. Liens
|
36
|
Section
5.11. Maintenance of
Insurance
|
37
|
Section
5.12. Subsidiaries and Joint
Ventures
|
37
|
Section
5.13. Minimum
TIER
|
38
|
Section
5.14. Retirement of Patronage
Capital
|
38
|
Section
5.15. Use of
Proceeds
|
39
|
ARTICLE
6
|
|
DEFAULTS
|
|
Section
6.01. Events
of Defaults
|
39
|
Section
6.02. Notice
of Default
|
41
|
ARTICLE
7
|
|
THE
ADMINISTRATIVE AGENT
|
|
Section
7.01. Appointment and
Authorization
|
41
|
Section
7.02. Administrative Agent and
Affliates
|
41
|
Section
7.03. Action
by Admininstrative Agent
|
42
|
Section
7.04. Consultation with
Experts
|
42
|
Section
7.05. Liability of Administrative
Agent
|
42
|
Section
7.06. Indemnification
|
42
|
Section
7.07. Credit
Decision
|
42
|
Section
7.08. Successor
Admininstrative
|
43
|
Section
7.09. Documention Agent And
Syndication Agent Not Liable
|
43
|
ii
ARTICLE
8
|
|
CHANGE
IN CIRCUMSTANCES
|
|
Section
8.01. Basis
for Determininig Interest Rate Inadequate or Unfair
|
43
|
Section
8.02 Illegality
|
44
|
Section
8.03 Increased Cost and Reduced Return
|
44
|
Section
8.04 Base Rate Loans Substituted for Affected Euro-Dollar
Loans
|
46
|
ARTICLE
9
|
|
MISCELLANEOUS
|
|
Section
9.01. Notices
|
47
|
Section
9.02. No
Waivers
|
47
|
Section
9.03. Expenses; Documentary Taxes;
Indemnification
|
48
|
Section
9.04. Sharing
of Set-offs
|
48
|
Section
9.05. Amendments and
Waivers
|
49
|
Section
9.06. Successors and
Assigns
|
49
|
Section
9.07. Collateral
|
51
|
Section
9.08. Governing
Law
|
51
|
Section
9.09. Counterparts;
Integration
|
51
|
Section
9.10. Several
Obligations
|
52
|
Section
9.11. Severability
|
52
|
Section
9.12. Confidentiality
|
52
|
Section
9.13. WAIVER
OF JURY TRIAL
|
52
|
Section
9.14. USA
Patriot Act
|
53
|
Section
9.15. ICC
Transactions
|
53
|
iii
Schedules
|
|
Commitment
Schedule
|
|
Schedule
5.03 (a)
|
Non-GAAP
Subsidiaries
|
Schedule
9.15
|
ICC
Transactions
|
Exhibits
|
|
Exhibit
A
|
- Form
of Note
|
Exhibit
B-1 and Exhibit B-2
|
- Forms
of RUS Guarantee
|
Exhibit
C
|
- Opinion
of General Counsel for the Borrower
|
Annex
A to Exhibit C - Legal Actions
|
|
Annex
B to Exhibit C - Subsidiaries and
Joint
|
|
Ventures
|
|
Exhibit
D
|
- Assignement
and Assumption
Agreement
|
iv
TERM LOAN
CREDIT AGREEMENT dated as of January 21, 2009, among NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION, a not-for-profit cooperative association
incorporated under the laws of the District of Columbia, as Borrower, the BANKS
listed on the signature pages hereof, THE BANK OF NOVA SCOTIA, as Administrative
Agent, U.S. BANK, N.A., as Syndication Agent, and KEYBANK NATIONAL ASSOCIATION,
as Documentation Agent.
The
parties hereto agree as follows:
ARTICLE
1
Definitions
Section
1.01 . Definitions. The following
terms, as used herein, have the following meanings:
“1972 Indenture” means the
Seventeenth Supplemental Indenture dated as of March 1, 1987, amending and
restating in full the Indenture dated as of December 1, 1972, by and between the
Borrower and U.S. Bank Trust National Association, as trustee, as amended and
supplemented from time to time, providing for the issuance in series of certain
collateral trust bonds of the Borrower.
“1994 Indenture” means the
Indenture dated as of February 15, 1994 and as amended as of September 16, 1994
between the Borrower and U.S. Bank National Association, as trustee, as amended
and supplemented from time to time, providing for the issuance in series of
certain collateral trust bonds of the Borrower.
“2007 Indenture” means the
Indenture dated as of October 25, 2007 between the Borrower and U.S. Bank
National Association, as trustee, as amended and supplemented from time to time,
providing for the issuance in series of certain collateral trust bonds of the
Borrower.
“Adjusted London Interbank Offered
Rate” has the meaning set forth in Section
2.06(b).
“Administrative Agent” means
The Bank of Nova Scotia, in its capacity as administrative agent for the Banks
hereunder, and its successors in such capacity.
“Administrative Questionnaire”
means, with respect to each Bank, the administrative questionnaire in the form
submitted to such Bank by the Administrative Agent and submitted to the
Administrative Agent (with a copy to the Borrower) duly completed by such
Bank.
“Agreement” means this Term
Loan Credit Agreement, as the same may be amended from time to
time.
“Applicable Lending Office”
means, with respect to any Bank, (i) in the case of its Base Rate Loans, its
Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.
“Assignee” has the meaning set
forth in Section 9.06(c).
“Availability Period” means the
period beginning on the Effective Date and ending on the Commitment Termination
Date.
“Bank” means each bank listed
on the signature pages hereof, each Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
“Base Rate” means, for any day,
a rate per annum equal to the highest of (i) the Prime Rate for such day, (ii)
the sum of 2% plus the Federal Funds Rate for such day and (iii) the Adjusted
London Interbank Offered Rate for a one month Interest Period on such day (or if
such day is not a Euro-Dollar Domestic Business Day, the immediately preceding
Euro-Dollar Business Day) plus 2%; provided that, for the
avoidance of doubt, the Adjusted London Interbank Offered Rate for any day shall
be based on the rate appearing on the Reuters BBA Libor Rates Page 3750 (or on
any successor or substitute page of such page) at approximately 11:00 A.M.
London time on such day.
“Base Rate Loan” means a Loan
that bears interest at the Base Rate pursuant to the applicable Notice of
Borrowing or Notice of Interest Rate Election or the last sentence of Section 2.07(a) or Article
8.
“Base Rate Margin” means 2.00%
per annum; provided
that such rate shall increase by 0.50% on the six-month anniversary of the
Effective Date and shall increase by an additional 0.25% on the nine-month
anniversary of the Effective Date.
“Bonds” means any bonds issued
pursuant to any of the Indentures, as the context may require.
“Borrower” means the National
Rural Utilities Cooperative Finance Corporation, a not-for-profit cooperative
association incorporated under the laws of the District of Columbia, and its
successors.
“Borrowing” has the meaning set
forth in Section 1.03.
“Commitment” means (i) with
respect to each Bank listed on the signature pages hereof, the amount set forth
opposite the name of such Bank on the Commitment
Schedule hereto and (ii) with respect to any Assignee that becomes a Bank
pursuant to Section 9.06(c), the amount of the
transferor Bank’s Commitment assigned to it pursuant to Section 9.06(c), in each case as such
2
amount
may from time to time be reduced pursuant to Sections 2.09 and 2.10; provided that, if the context
so requires, the term “Commitment” means the obligation of a Bank to extend
credit up to such amount to the Borrower hereunder.
“Commitment Fee Rate” means
0.50% per annum.
“Commitment Termination Date”
means the earlier of (i) January 31, 2009 or, if such day is not a Euro-Dollar
Business Day, the next preceding Euro-Dollar Business Day and (ii) the date on
which the entire Commitments shall have been terminated pursuant to Section 2.09 or Article
6.
“Consolidated Subsidiary” means
at any date any Subsidiary and any other entity the accounts of which would be
combined or consolidated with those of the Borrower in its combined or
consolidated financial statements if such statements were prepared as of such
date.
“Consolidated Subsidiary Member” has the
meaning set forth in Section
5.03(b)(iii)(A).
“Default” means any condition
or event which constitutes an Event of Default or which with the giving of
notice or lapse of time or both (as specified in Section
6.01) would, unless cured or waived, become an Event of
Default.
“Defaulting Bank” means any
Bank that, at any time during the term of this Agreement, has (a) failed to fund
any portion of any of its Loans within three Domestic Business Days of the date
required to be funded by it hereunder, (b) notified the Borrower, the
Administrative Agent or any Bank that it does not intend to comply with any of
its funding obligations under this Agreement, (c) otherwise failed to pay
over to the Administrative Agent or any other Bank any other amount required to
be paid by it hereunder within three Domestic Business Days of the date when
due, unless the subject of a good-faith dispute, or (d) become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee
or custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment.
“Derivative Cash Settlements” means, for
any period, the line item “derivative cash settlements” as it appears on the
statement of operations of the Borrower and its Consolidated Subsidiaries for
such period delivered to the Banks pursuant to Section
5.03(b), calculated in accordance with generally accepted accounting
principles as in effect from time to time.
“Derivatives Obligations” of
any Person means all obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other
3
similar
transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
“Determination Date” has the
meaning set forth in Section 5.09.
“Documentation Agent” means
Keybank National Association, in its capacity as documentation agent hereunder,
and its successors in such capacity.
“Domestic Business Day” means
any day except a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to close.
“Domestic Lending Office”
means, as to each Bank, its office located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Domestic Lending Office) or such other office as such Bank may hereafter
designate as its Domestic Lending Office by notice to the Borrower and the
Administrative Agent.
“Effective Date” means the date
this Agreement becomes effective in accordance with Section 3.01.
“Environmental Laws” means any
and all federal, state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and governmental
restrictions relating to the environment, the effect of the environment on human
health or to emissions, discharges or releases of pollutants, contaminants,
Hazardous Substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation thereof.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, or any successor
statute.
“ERISA Group” means the
Borrower, any Subsidiary and all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any Subsidiary, are treated as a single
employer under Section 414(b) or (c) of the Internal Revenue Code or, for
purposes of Section 412 of the Internal Revenue Code, under Section 414(b), (c),
(m) or (o) of the Internal Revenue Code.
“Euro-Dollar Business Day”
means any Domestic Business Day on which commercial banks are open for
international business (including dealings in dollar deposits) in
London.
“Euro-Dollar Lending Office”
means, as to each Bank, its office, branch or affiliate located at its address
set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Euro-Dollar Lending Office)
4
or such
other office, branch or affiliate of such Bank as it may hereafter designate as
its Euro-Dollar Lending Office by notice to the Borrower and the Administrative
Agent.
“Euro-Dollar Loan” means a Loan
that bears interest at a Euro-Dollar Rate pursuant to the applicable Notice of
Borrowing or Notice of Interest Rate Election.
“Euro-Dollar Margin” means
3.00% per annum; provided that such rate shall
increase by 0.50% on the six-month anniversary of the Effective Date and shall
increase by an additional 0.25% on the nine-month anniversary of the Effective
Date.
“Euro-Dollar Rate” means, for
any day, a rate per annum determined in accordance with Section 2.06(b).
“Euro-Dollar Reference Bank”
means the principal London office of The Bank of Nova Scotia.
“Euro-Dollar Reserve
Percentage” has the meaning set forth in Section
2.06(b).
“Event of Default” has the
meaning set forth in Section 6.01.
“Federal Funds Rate” means, for
any day, the rate per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Domestic Business Day next succeeding such day; provided that (i) if such day
is not a Domestic Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such rate
is so published on such next succeeding Domestic Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to The Bank of Nova Scotia on
such day on such transactions as determined by the Administrative
Agent.
“Foreclosed Asset” has the
meaning set forth in Section 5.12.
“Group of Loans” means, at any
time, a group of Loans consisting of (i) all Loans which are Base Rate
Loans at such time or (ii) all Euro-Dollar Loans having the same Interest Period
at such time; provided
that if a Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Article 8, such Loan shall be
included in the same Group or Groups of Loans from time to time as it would have
been in if it had not been so converted or made.
“Guarantee” by any Person means
any obligation, contingent or otherwise, of such Person directly or indirectly
guaranteeing any Indebtedness or lease payments of any other Person or otherwise
in any manner assuring the
5
holder of
any Indebtedness of, or the obligee under any lease of, any other Person through
an agreement, contingent or otherwise, to purchase Indebtedness or the property
subject to such lease, or to purchase goods, supplies or services primarily for
the purpose of enabling the debtor or obligor to make payment of the
Indebtedness or under such lease or of assuring such Person against loss, or to
supply funds to or in any other manner invest in the debtor or obligor, or
otherwise; provided
that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of
business. The term “Guarantee” when used as a verb
has a correlative meaning.
“Guaranteed Portion” has the
meaning set forth in the definition of RUS Guaranteed Loan.
“Hazardous Substances” means
any toxic, radioactive, caustic or otherwise hazardous substance, including
petroleum, its derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics.
“Increased Amount Date” has the
meaning set forth in Section 2.16.
“Incremental Bank” has the
meaning set forth in Section 2.16.
“Incremental Commitments” has
the meaning set forth in Section 2.16.
“Incremental Loan” has the
meaning set forth in Section 2.16.
“Indebtedness” with respect to
any Person means:
(1) all
indebtedness which would appear as indebtedness on a balance sheet of such
Person prepared in accordance with generally accepted accounting principles (i)
for money borrowed, (ii) which is evidenced by securities sold for money or
(iii) which constitutes purchase money indebtedness;
(2) all
indebtedness of others Guaranteed by such Person;
(3) all
indebtedness secured by any Lien upon property owned by such Person, even though
such Person has not assumed or become liable for the payment of such
indebtedness; and
(4) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement (including any lease in the nature of a title
retention agreement) with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession of such property), but only if
such property is included as an asset on the balance sheet of such
Person;
provided that, in computing
the “Indebtedness” of
such Person, there shall be excluded any particular indebtedness if, upon or
prior to the maturity thereof, there shall have been deposited with the proper
depositary in trust money (or
6
evidences
of such indebtedness) in the amount necessary to pay, redeem or satisfy such
indebtedness, and thereafter such money and evidences of indebtedness so
deposited shall not be included in any computation of the assets of such Person;
and provided further that no provision of
this definition shall be construed to include as “Indebtedness” of the Borrower
or its Consolidated Subsidiaries any indebtedness by virtue of any agreement by
the Borrower or its Consolidated Subsidiaries to advance or supply funds to
Members or Consolidated Subsidiary Members.
“Indenture” means either the
1972 Indenture, the 1994 Indenture, the 2007 Indenture or any other Indenture
that provides for borrowing on terms not materially more disadvantageous to the
Borrower’s unsecured creditors than the borrowings under the 1972 Indenture, the
1994 Indenture or the 2007 Indenture, and “Indentures” means all such
Indentures.
“Interest Expense” means, for
any period, the line item “interest expense” as it appears on the statement of
operations of the Borrower and its Consolidated Subsidiaries for such period
delivered to the Banks pursuant to Section 5.03(b),
calculated in accordance with generally accepted accounting principles as in
effect from time to time.
“Interest Period” means: (1)
with respect to each Euro-Dollar Loan, the period commencing on the date on
which such Loan is made or the date on which such Loan is continued as or
converted to a Euro-Dollar Loan, as applicable, and ending one, two, three or
six months thereafter, as the Borrower may elect in the Notice of Borrowing or
the applicable Notice of Interest Rate Election; provided that:
(a) any
Interest Period which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any
Interest Period which begins on the last Euro-Dollar Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar month;
and
(c) any
Interest Period of any Euro-Dollar Loan included in such Borrowing which would
otherwise end after the Maturity Date shall, with respect to such Euro-Dollar
Loan, end on such Maturity Date;
(2) with
respect to each Base Rate Borrowing, the period commencing on the date of such
Borrowing and ending 30 days thereafter; provided that:
7
(a) any
Interest Period which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding Euro-Dollar Business Day;
and
(b) any
Interest Period of any Base Rate Loan included in such Borrowing which would
otherwise end after the Maturity Date shall, with respect to such Base Rate
Loan, end on such Maturity Date.
“Internal Revenue Code” means
the Internal Revenue Code of 1986, as amended, or any successor
statute.
“Investments” has the meaning
set forth in Section 5.12.
“Joint Venture” means any
corporation, partnership, association, joint venture or other entity in which
the Borrower, directly or indirectly through Subsidiaries or Joint Ventures, has
an equity interest at the time of 10% or more but which is not a Subsidiary;
provided that no Person
whose only assets are RUS Guaranteed Loans and investments incidental thereto
shall be deemed a Joint Venture.
“Lien” means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset. For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
“Loan” means a Base Rate Loan
or a Euro-Dollar Loan and “Loans” means Base Rate Loans
or Euro-Dollar Loans or any combination of the foregoing.
“London Interbank Offered Rate”
has the meaning set forth in Section
2.06(b).
“March 14, 2008 Revolving Credit
Agreement” means the Revolving Credit Agreement, dated as of March 14,
2008, as amended from time to time, among Borrower, The Bank of Nova Scotia, as
administrative agent, and the other institutions party thereto.
“Maturity Date” means 364 days
from the Effective Date.
“Member” means any Person which
is a member or a patron of the Borrower.
“Members’ Subordinated
Certificate” means a note of the Borrower or its Consolidated
Subsidiaries substantially in the form of the membership subordinated
subscription certificates and the loan and guarantee subordinated certificates
outstanding on the date of the execution and delivery of this Agreement and any
other Indebtedness of the Borrower or its Consolidated
8
Subsidiaries
having substantially similar provisions as to subordination as those contained
in said outstanding membership subordinated subscription certificates and loan
and guarantee subordinated certificates.
“Moody’s” means Xxxxx’x
Investors Service, Inc., and its successors.
“Multiple Employer Plan” means
a single employer plan, as defined in Section 4001 of ERISA and subject to Title
IV of ERISA, which has two or more contributing sponsors, one of whom is the
Borrower or a Subsidiary of the Borrower or any member of the ERISA Group, at
least two of whom are not under common control, within the meaning of Section
4063 of ERISA.
“Net Income” means, for any
period, the sum of (i) the line item “net income” on the consolidated statement
of operations of the Borrower and its Consolidated Subsidiaries plus (ii) the line item
“minority interest” on the consolidated statement of operations of the Borrower
and its Consolidated Subsidiaries at the last day of such period, each as it
appears in the financial statements for such period delivered to the Banks
pursuant to Section 5.03(b), and each calculated in
accordance with generally accepted accounting principles as in effect from time
to time; provided that
non-cash adjustments (whether positive or negative) required to be made pursuant
to SFAS 133 and SFAS 52 on each such line item shall be excluded from the
calculation thereof to the extent otherwise included therein.
“Notes” means promissory notes
of the Borrower, substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Loans, and “Note” means any one of such
promissory notes issued hereunder.
“Notice of Borrowing” has the
meaning set forth in Section 2.02.
“Notice of Interest Rate
Election” has the meaning set forth in Section
2.07.
“Participant” has the meaning
set forth in Section 9.06(b).
“Patronage Capital
Certificates” means those certificates that evidence the portion of Net
Income allocated by the Borrower among its Members in accordance with applicable
cooperative principles.
“PBGC” means the Pension
Benefit Guaranty Corporation or any entity succeeding to any or all of its
functions under ERISA.
“Person” means an individual, a
corporation, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
“Plan” means any multiemployer
plan or single employer plan (including any Multiple Employer Plan), as defined
in Section 4001 and subject to Title IV of ERISA, which is maintained or
contributed to by, or at any time during the five
9
calendar
years preceding the date of this Agreement was maintained or contributed to by,
the Borrower or a Subsidiary of the Borrower or any member of the ERISA
Group.
“Prime Rate” means the rate of
interest published by the Wall
Street Journal from time to time as its prime rate.
“Qualified Subordinated
Indebtedness” means the Borrower’s (i) 6.75% Subordinated Deferrable
Interest Notes Due 2043, (ii) 6.10% Subordinated Deferrable Interest Notes Due
2044, (iii) 5.95% Subordinated Deferrable Interest Notes Due 2045, and (iv) any
other Indebtedness of the Borrower having substantially similar terms as to
subordination as those contained in the instruments and documents relating to
the foregoing Indebtedness or that would be junior to any of the foregoing;
provided that such
Indebtedness (a) will not mature prior to the Maturity Date and (b) does not
require payments of principal prior to the Maturity Date, except pursuant to
acceleration or at the option of the Borrower.
“REDLG Program Liens” means
Liens on any asset of the Borrower required to be pledged as collateral to
support obligations of the Borrower with respect to any government Guarantee
provided pursuant to regulations issued under the Rural Electrification Act of
1936, 7 U.S.C. 901 et. seq., and the Food, Conservation and Energy Act of 2008,
Pub. L. 110-234 Stat. 923 (“REDLG Obligations”) so long as
such Guarantee supports long-term Indebtedness issued by the Borrower and
permitted by Section 5.09.
“REDLG Obligations” has the
meaning set forth in the definition of REDLG Program Liens.
“Regulation U” means Regulation
U of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
“Regulation X” means Regulation
X of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
“Reportable Event” means an
event described in Section 4043(c) of ERISA or regulations promulgated by the
Department of Labor thereunder (with respect to which the 30 day notice
requirement has not been waived by the PBGC).
“Required Banks” means at any
time Banks having at least 51% of the sum of the aggregate amount of the unused
Commitments and the aggregate principal outstanding amount of the
Loans.
“RUS” means the Rural Utilities
Service of the Department of Agriculture of the United States of America (as
successor to the Rural Electrification Administration of the Department of
Agriculture of the United States of America) or any other regulatory body which
succeeds to its functions.
10
“RUS Guaranteed Loan” means any
loan made by any Person, which loan (x) bears interest at least equal to such
Person’s cost of funds and (y) is guaranteed, in whole or in
part, as to principal and interest by the United States of America through the
RUS pursuant to a guarantee, which guarantee contains provisions no less
favorable to the holder thereof than the provisions set forth in the form of
Exhibit B-1 or Exhibit
B-2 hereto; and “Guaranteed
Portion” of any RUS Guaranteed Loan means that portion of principal of,
and interest on, such RUS Guaranteed Loan which is guaranteed by the United
States of America through the RUS as provided in clause (y).
“S&P” means Standard and
Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., and its
successors.
“Securities and Exchange
Commission” means the Securities and Exchange Commission or any other
governmental authority succeeding to any or all of the functions of the
Securities and Exchange Commission.
“SFAS 52” means Statement of
Financial Accounting Standards No. 52 entitled “Foreign Currency Translations”,
issued December, 1981 by the Financial Accounting Standards Board, as amended
from time to time.
“SFAS 133” means Statement of
Financial Accounting Standards No. 133 entitled “Accounting for Derivative
Instruments and Hedging Activities”, issued June, 1998 by the Financial
Accounting Standards Board as amended from time to time.
“Special Purpose Subsidiary”
has the meaning set forth in Section
5.12.
“Start-up Investments” has the
meaning set forth in Section 5.12.
“Subsidiary” of any Person
means (i) any corporation more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the time stock
of any class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through its Subsidiaries, and (ii) any other
Person in which such Person directly or indirectly through Subsidiaries has more
than a 50% voting and equity interest; provided that no Person whose
only assets are RUS Guaranteed Loans and investments incidental thereto shall be
deemed a Subsidiary.
“Superior Indebtedness” means
all Indebtedness of the Borrower and its Consolidated Subsidiaries (other than
Members’ Subordinated Certificates and Qualified Subordinated Indebtedness), but
excluding (i) Indebtedness of the Borrower or any of its Consolidated
Subsidiaries to the extent that the proceeds of such Indebtedness are used to
fund Guaranteed Portions of RUS Guaranteed Loans and (ii) any indebtedness of
any Member Guaranteed by the Borrower or any of its Consolidated Subsidiaries
(“Guaranteed
Indebtedness”), to the extent that either (x) the long-term unsecured
debt of such Member is rated at least
11
BBB+ by
S&P or Baa1 by Xxxxx’x or (y) the payment of principal and interest by the
Borrower or any of its Consolidated Subsidiaries in respect of such Guaranteed
Indebtedness is covered by insurance or reinsurance provided by an insurer
having an insurance financial strength rating of AAA by S&P or a financial
strength rating of Aaa by Xxxxx’x.
“Syndication Agent” means U.S.
Bank, N.A., in its capacity as syndication agent hereunder, and its successors
in such capacity.
“Term-Out of March 14, 2008 Revolving
Credit Agreement” means if any loans outstanding under the March 14, 2008
Revolving Credit Agreement on the maturity date thereof are converted into one
or more term loans in accordance with the provisions of the March 14, 2008
Revolving Credit Agreement.
“TIER” means, for any period,
the ratio of (x) Net Income plus Interest Expense plus Derivative Cash
Settlements to (y) Interest Expense plus Derivative Cash
Settlements, in each case for such period.
“Type” refers to whether a Loan
is a Base Rate Loan or a Euro-Dollar Loan.
Section
1.02 . Accounting Terms and
Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower’s independent public accountants) with the most recent audited
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks.
Section
1.03 . Types of
Borrowings. The term “Borrowing” denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 2 on a single date and for a single Interest
Period. Borrowings are classified for purposes of this Agreement by
reference to the pricing of Loans comprising such Borrowing (e.g., a “Euro Dollar Borrowing” is a
Borrowing comprised of Euro Dollar Loans).
ARTICLE 2
The
Credits
Section
2.01 . Commitments to
Lend. During the Availability
Period, each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make Loans to the Borrower pursuant to this Section from time
to time (but in no event on more than three occasions unless in accordance with
Section 2.16(d)) in amounts such that the
aggregate principal amount of Loans by such Bank shall not exceed the amount of
its Commitment. Each Borrowing shall be in an aggregate principal
amount of $50,000,000 or any larger multiple of $10,000,000
12
(except
that any such Borrowing may be in the maximum aggregate amount available in
accordance with Section 3.02(e)) and shall be made
from the several Banks ratably in proportion to their respective Commitments.
Commitments hereunder are not revolving and amounts repaid or prepaid may not be
reborrowed.
Section
2.02 . Notice of
Borrowings. The Borrower
shall give the Administrative Agent notice (a “Notice of Borrowing”) not
later than 11:00 A.M. (New York City time) on (x) the date of such Borrowing, in
the case of each Base Rate Borrowing, and (y) the third Euro-Dollar Business Day
before such Borrowing, in the case of each Euro-Dollar Borrowing,
specifying:
(a) the date
of such Borrowing, which shall be a Domestic Business Day in the case of a Base
Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,
(b) the
aggregate amount of such Borrowing,
(c) whether
the Loans comprising such Borrowing are to bear interest initially at the Base
Rate or a Euro-Dollar Rate, and
(d) in the
case of a Euro-Dollar Borrowing, the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period.
Notwithstanding
the foregoing, no more than ten Euro-Dollar Loans shall be outstanding at any
one time, and any Borrowing which would exceed such limitation shall be made as
a Base Rate Borrowing.
Section
2.03 . Notice to Banks; Funding of
Loans. (a) Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank’s share (if any) of such Borrowing and such
Notice of Borrowing shall not thereafter be revocable by the
Borrower.
(b) Not later
than 1:00 P.M. (New York City time) on the date of each Borrowing, each Bank
shall make available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address specified in or pursuant to Section
9.01. Unless the Administrative Agent determines that any
applicable condition specified in Section 3.02 has
not been satisfied, the Administrative Agent will thereafter make the funds so
received from the Banks available to the Borrower at the Administrative Agent’s
aforesaid address.
(c) Unless
the Administrative Agent shall have been notified by any Bank prior to the date
of such Borrowing (or prior to 1:00 P.M. (New York City time) on the date
of such Borrowing in the case of a Base Rate Borrowing) that such Bank does not
intend to make available to the Administrative Agent such Bank’s portion of the
Borrowing to be made on such date, the Administrative Agent may assume that such
Bank has made such amount available to the
13
Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Administrative
Agent by such Bank, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not
pay such corresponding amount forthwith upon the Administrative Agent’s demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall promptly pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover
from such Bank or the Borrower interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) in the
case of a Bank, the Federal Funds Rate for each such day and (y) in the case of
the Borrower, the then applicable rate for Base Rate Loans or Euro-Dollar Loans,
as appropriate. Nothing herein shall be deemed to relieve any Bank
from its obligation to fulfill its Commitment hereunder or to prejudice any
rights which the Borrower may have against any Bank as a result of any default
by such Bank hereunder. For purposes of this subsection (c), no amount paid to the Administrative Agent
hereunder shall be considered to have been recovered by the Administrative Agent
on the date of payment unless such amount shall have been received by the
Administrative Agent by 2:30 P.M. (New York City time) on such
date.
Section
2.04 . Notes. (a) Any
Bank may request that the Loans of such Bank be evidenced by a single Note
payable to the order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Bank’s Loans.
(b) Each Bank
that has requested that its Loans be evidenced by a Note may, by notice to the
Borrower and the Administrative Agent, request that its Loans of a particular
Type be evidenced by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate modifications to
reflect the fact that it evidences solely Loans of the relevant
Type. Each reference in this Agreement to the “Note” of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon
receipt of each Bank’s Note pursuant to Section
3.01(b), the Administrative Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount and type of each Loan
made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects in connection
with any transfer or enforcement of its Note, endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of
any Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Bank
is hereby irrevocably authorized by the Borrower so
14
to
endorse its Note and to attach to and make a part of its Note a continuation of
any such schedule as and when required.
Section
2.05 . Maturity of
Loans. Each Loan hereunder shall mature, and the principal
amount thereof shall be due and payable on the Maturity Date.
Section
2.06 . Interest
Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the sum of
the Base Rate plus the applicable Base Rate Margin for such day. Such
interest shall be payable for each Interest Period on the last day thereof and,
with respect to the principal amount of any Base Rate Loan that is prepaid or
converted to a Euro-Dollar Loan, on the date of such prepayment or
conversion. Any overdue principal of or interest on any Base Rate
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each
Euro-Dollar Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the sum of the Euro-Dollar Margin plus the applicable Adjusted London
Interbank Offered Rate. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, three months after the first day thereof and, with respect to
the principal amount of any Euro-Dollar Loan that is prepaid or converted to a
Base Rate Loan, on the date of such prepayment or conversion.
The
“Adjusted London Interbank
Offered Rate” applicable to any Interest Period means a rate per annum
equal to the quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (i) the applicable London Interbank Offered Rate by
(ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The
“London Interbank Offered
Rate” applicable to any Interest Period means the rate appearing on
Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of
such Reuters Service, or if the Reuters Service ceases to be available, any
successor to or substitute for such Reuters Service, providing rate quotations
comparable to those currently provided on such page of such Reuters Service, as
determined by the Administrative 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
Euro-Dollar Business Days prior to the commencement of such Interest Period, as
the rate for the offering of dollar deposits with a maturity comparable to such
Interest Period; provided
that, if such rate is not available, such rate shall be the rate per
annum at which deposits in dollars are offered to the Euro-Dollar Reference Bank
in the London interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of the Euro-
15
Dollar
Loan of the Euro-Dollar Reference Bank to which such Interest Period is to apply
and for a period of time comparable to such Interest Period.
“Euro-Dollar Reserve
Percentage” means for any day that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of “Eurocurrency
liabilities” (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be
adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
(d) The
Administrative Agent shall determine each interest rate applicable to the Loans
hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest
error.
(e) The
Euro-Dollar Reference Bank agrees to use its best efforts to furnish quotations
to the Administrative Agent as contemplated by this Section. If the
Euro-Dollar Reference Bank does not furnish a timely quotation, the provisions
of Section 8.01 shall apply.
Section
2.07 . Method of Electing Interest
Rates. (a) The Loans included in each Borrowing
shall bear interest initially at the type of rate specified by the Borrower in
the applicable Notice of Borrowing. Thereafter, the Borrower may from
time to time elect to change or continue the type of interest rate borne by each
Group of Loans (subject to Section 2.07(d) and
the provisions of Article 8), as
follows:
(i) if such
Loans are Base Rate Loans, the Borrower may elect to convert such Loans to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such
Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans to
Base Rate Loans as of any Domestic Business Day, subject to Section 2.13 if any such conversion is effective
16
on any
day other than the last day of an Interest Period applicable to such Loans, or
may elect to continue such Loans as Euro-Dollar Loans, as of the end of any
Interest Period applicable thereto, for an additional Interest
Period.
Each such
election shall be made by delivering a notice (a “Notice of Interest Rate
Election”) to the Administrative Agent not later than 10:30 A.M. (New
York City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of
Interest Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided that (i) such
portion is allocated ratably among the Loans comprising such Group and (ii) such
portion, and the remaining portion to which such Notice does not apply, are each
at least $10,000,000 (unless such portion is comprised of Base Rate
Loans). If no such notice is timely received before the end of an
Interest Period for any Group of Euro-Dollar Loans, the Borrower shall be deemed
to have elected that such Group of Loans be converted to Base Rate Loans at the
end of such Interest Period.
(b) Each
Notice of Interest Rate Election shall specify:
(i) the Group
of Loans (or portion thereof) to which such notice applies;
(ii) the date
on which the conversion or continuation selected in such notice is to be
effective, which shall comply with the applicable clause of Section 2.07(a);
(iii) if the
Loans comprising such Group are to be converted to Euro-Dollar Loans, the
duration of the next succeeding Interest Period applicable thereto;
and
(iv) if such
Loans are to be continued as Euro-Dollar Loans for an additional Interest
Period, the duration of such additional Interest Period.
Each
Interest Period specified in a Notice of Interest Rate Election shall comply
with the provisions of the definition of Interest Period.
(c) Promptly
after receiving a Notice of Interest Rate Election from the Borrower pursuant to
Section 2.07(a), the Administrative Agent shall
notify each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower.
(d) The
Borrower shall not be entitled to elect to convert any Loans to, or continue any
Loans for an additional Interest Period as, Euro-Dollar Loans if (i) the
aggregate principal amount of any Group of Euro-Dollar Loans created or
continued as a result of such election would be less than $10,000,000 or (ii) a
17
Default
shall have occurred and be continuing when the Borrower delivers notice of such
election to the Administrative Agent.
(e) If any
Loan is converted to a different Type of Loan, the Borrower shall pay, on the
date of such conversion, the interest accrued to such date on the principal
amount being converted.
Section
2.08 . Fees. (a) Commitment
Fee. The Borrower shall pay to the Administrative Agent for
the account of each Bank commitment fees accruing at the Commitment Fee Rate on
the daily average amount of such Bank’s unused Commitment for the
period from and including the Effective Date to but excluding the Commitment
Termination Date. Accrued commitment fees shall be payable on the
Commitment Termination Date.
(b) Agents’ Fees. The
Borrower shall pay to the Administrative Agent one or more fees in such amounts
and at such times as has been previously agreed between the Borrower and the
Administrative Agent.
Section
2.09 . Optional Termination or Reduction of
Commitments. During the Availability Period, the Borrower may,
upon at least three Domestic Business Days’ notice to the Administrative Agent
(which notice the Administrative Agent will promptly deliver to the Banks),
(i) terminate the Commitments at any time, if no Loans are outstanding at
such time or (ii) ratably reduce from time to time by an aggregate amount
of $10,000,000 or any larger multiple of $1,000,000, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans.
Section
2.10 . Mandatory Termination of
Commitments. The Commitments shall terminate on the Commitment
Termination Date.
Section
2.11 . Prepayments. (a)
Optional Prepayments.
Subject in the case of Euro-Dollar Loans to Section
2.13, the Borrower may (i) on any Business Day, upon notice to the
Administrative Agent, prepay any Group of Base Rate Loans or (ii) upon at
least three Euro-Dollar Business Days’ notice to the Administrative Agent,
prepay any Group of Euro-Dollar Loans, in each case in whole at any time, or
from time to time in part in amounts aggregating $10,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group of Loans.
(b) Mandatory
Prepayment. Upon the date of a Term-Out of March 14, 2008
Revolving Credit Agreement, the Borrower shall prepay the Loans in an aggregate
amount equal to the aggregate principal amount of the loans that shall have been
converted to term loans pursuant to the Term-Out of March 14, 2008 Revolving
Credit Agreement. Each such mandatory prepayment shall be applied to
prepay the Loans ratably.
18
(c) Upon
receipt of a notice of prepayment pursuant to this Section, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of such Bank’s
ratable share (if any) of such prepayment and such notice shall not thereafter
be revocable by the Borrower.
Section
2.12 . General Provisions as to
Payments. (a) The Borrower shall make each payment of
principal of, and interest on, the Loans and of fees hereunder, not later than
1:00 P.M. (New York City time) on the date when due, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address referred to in Section
9.01. The Administrative Agent will promptly distribute to each
Bank its ratable share of each such payment received by the Administrative Agent
for the account of the Banks. Whenever any payment of principal of,
or interest on, the Base Rate Loans or of fees shall be due on a day which is
not a Domestic Business Day, the date for payment thereof shall be extended to
the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. If the
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks hereunder that the Borrower
will not make such payment in full, the Administrative Agent may assume that the
Borrower has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent that the Borrower shall not have so
made such payment, each Bank shall repay to the Administrative Agent forthwith
on demand such amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such Bank until the
date such Bank repays such amount to the Administrative Agent, at the Federal
Funds Rate.
Section
2.13 . Funding
Losses. If the Borrower
makes any payment of principal with respect to any Euro-Dollar Loan or any
Euro-Dollar Loan is converted to a Base Rate Loan (whether such payment or
conversion is pursuant to Article 2, 6 or 8 or otherwise) on any
day other than the last day of the Interest Period applicable thereto, or the
end of an applicable period fixed pursuant to Section
2.06(c), or if the Borrower fails to borrow, prepay, convert or continue any
Euro-Dollar Loans after notice has been given to any Bank in accordance with Section 2.03(a), 2.07(c) or
2.11(b) the Borrower shall reimburse each Bank
within 15 days after demand for any resulting loss or expense incurred by it,
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period
19
after any
such payment or conversion or failure to borrow, prepay, convert or continue;
provided that such Bank
shall have delivered to the Borrower a certificate as to the amount of such loss
or expense setting forth in reasonable detail the calculation thereof, which
certificate shall be conclusive in the absence of manifest error.
Section
2.15 . Withholding Tax
Exemption. At least five Domestic Business Days prior to the
first date on which interest or fees are payable hereunder for the account of
any Bank, each Bank that is not incorporated under the laws of the United States
of America or a state thereof agrees that it will deliver to each of the
Borrower and the Administrative Agent two duly completed copies of (i) United States Internal Revenue Service Form W-8BEN (or any
successor form), certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which exempts such Bank
from United States withholding tax or reduces the rate of withholding tax on
payments received for the account of such Bank under this Agreement and the
Notes, or (ii) United States Internal Revenue
Service Form W-8ECI (or any successor form), certifying that the income
receivable by such Bank under this Agreement and the Notes is effectively
connected with the conduct of a trade or business in the United
States. Each Bank which so delivers a Form W-8BEN or W-8ECI further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
to the effect set forth in clause (i) or (ii) above, as applicable, unless an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Bank from duly
completing and delivering any such form with respect to it and such Bank advises
the Borrower and the Administrative Agent that it is not capable of making the
certifications set forth in clause (i) or (ii) above, as applicable.
Section
2.16 . Increase of
Commitments. (a) Upon at least five
days’ prior notice to the Administrative Agent (which notice the Administrative
Agent shall promptly transmit to each of the Banks), the Borrower shall have the
right, until the Commitment Termination Date and subject to the terms and
conditions set forth below, to increase the aggregate amount of the Commitments
(but only once) in a minimum amount of $20,000,000 and in integral multiples of
$5,000,000 in excess of that amount; provided that the amount of
such increase
20
when
added to the aggregate amount of all Commitments then existing hereunder
(including by way of creating new Commitments), on or after the Effective Date,
does not exceed $400,000,000.
(b) Any such
increase in the Commitments (the “Incremental Commitments”)
hereunder shall apply, at the option of the Borrower, (x) to the Commitment of
one or more Banks; provided that (i) the
Administrative Agent and each Bank the Commitment of which is to be increased
shall consent to such increase and (ii) the amount set forth on the Commitment Schedule opposite the name of each
Bank the Commitment of which is being so increased shall be amended to reflect
the increased Commitment of such Bank and (iii) if any Loans are outstanding at
the time of such an increase, the Borrower will, notwithstanding anything to the
contrary contained in this Agreement, on the date of such increase, incur and
repay or prepay one or more Loans from the Banks in such amounts so that after
giving effect thereto the Loans shall be outstanding on a pro rata basis (based on the
Commitments of the Banks after giving effect to the changes made pursuant to
this Section 2.16 on such date) from all the Banks
or (y) to the creation of a new Commitment of one or more institutions not then
a Bank hereunder; provided that (i) such
institution becomes a party to this Agreement as a Bank by execution and
delivery to the Borrower and the Administrative Agent of counterparts of this
Agreement, (ii) the Commitment Schedule shall
be amended to reflect the Commitment of such new Bank, (iii) if requested by
such new Bank, the Borrower shall issue a Note to such new Bank in conformity
with the provisions of Section 2.04, (iv) if any
Loans are outstanding at the time of the creation of such Commitment of such
Bank, the Borrower will, notwithstanding anything to the contrary contained in
this Agreement, on the date of the creation of such Commitment, incur and repay
or prepay one or more Loans from the Banks in such amounts so that after giving
effect thereto the Loans shall be outstanding on a pro rata basis (based on the
Commitments of the Banks after giving effect to the changes made pursuant to
this Section 2.16 on such date) from all the Banks
and (v) if such institution is neither a banking institution nor an affiliate of
a Bank, such institution must be consented to by the Administrative
Agent. The date on which the conditions set forth in this paragraph
are satisfied is the “Increased
Amount Date” and each such Bank providing an Incremental Commitment, an
“Incremental
Bank”.
(c) On any
Increased Amount Date on which any Incremental Commitments are effective,
subject to the satisfaction of the foregoing conditions, each Incremental
Bank shall become a Bank hereunder with respect to its Incremental Commitment
and the Incremental Loans made pursuant thereto.
(d) Any
Borrowing in respect of the Incremental Commitments (the “Incremental Loans”) shall
comply with the other provisions of this Article 2;
provided that if the
Increased Amount Date occurs after the date of the third Borrowing hereunder,
the Borrower may make one additional Borrowing so long as (i) the amount of such
Borrowing does not exceed the amount of the Incremental Commitments and (ii)
such Borrowing occurs within three Domestic Business Days of the Increased
Amount Date.
21
(e) The
Administrative Agent shall notify the Banks promptly upon receipt of the
Borrower’s notice of the Increased Amount Date and in respect thereof of
Incremental Commitments and the Incremental Banks.
(f) The terms
and provisions of the Incremental Commitments and Incremental Loans shall be,
except as otherwise set forth herein, identical to the Commitments on the
Effective Date and the initial Loans made under this Agreement.
(g) It is
understood that any increase in the amount of the Commitments or the making of
any Incremental Loans pursuant to this Section 2.16
shall not constitute an amendment of this Agreement or the Notes.
Section
2.17 . Replacement of
Banks. If (i) any Bank requests payment of, or the Borrower is
otherwise required to pay to any Bank, any amount pursuant to Section 8.01(b) or Section
8.03, or (ii) if any Bank becomes a Defaulting Bank, then the Borrower may,
at its sole expense and effort, upon notice to such Bank and the Administrative
Agent, require such Bank to assign and delegate, without recourse, all its
interests, rights and obligations under this Agreement to an Assignee (which
Assignee may be another Bank, if such other Bank agrees to accept such
assignment) that shall assume such obligations pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit D hereto which shall
be executed by such Assignee and (except as otherwise provided in this Section 2.17) such transferor Bank; provided, that (A) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (B) such
transferor Bank shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder (in each case, if any), from the
Assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), which amounts shall be
the only amounts payable to such transferor Bank in respect of such assignment
and delegation, (C) any Bank being replaced pursuant to this Section 2.17 shall be deemed to have granted to the
Administrative Agent the authority to act as its attorney-in-fact solely for the
purpose of executing such Assignment and Assumption Agreement, and (D) in
the case of any such assignment and delegation resulting from a request or claim
for payment under Section 8.03, such assignment will
result in a reduction in any payments due to such transferor Bank on a
dollar-for-dollar basis to the extent that such assignment eliminates or reduces
the amount that such transferor Bank is entitled to receive under Section 8.03. A Bank shall not be required
to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Bank or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply. With respect
to a demand for compensation from a Bank pursuant to Section 8.03(a), the Borrower’s rights under this Section 2.17 shall be an alternative to the Borrower’s
rights under Section 8.04. Upon
execution and delivery by the Assignee and (except as otherwise provided in this
Section 2.17) the transferor Bank of the Assignment
and Assumption Agreement referred to above and payment by such Assignee to
22
such
transferor Bank of the amount (if any) payable by such Assignee pursuant to
clause (B) above: (1) such Assignee shall be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank with a
Commitment equal to such transferor Bank’s Commitment immediately prior to the
effectiveness of such assignment and delegation (or, if there is more than one
Assignee, the respective portion of such Commitment agreed to be assumed by each
such Assignee); provided, that if any
Assignee is the Borrower, a Subsidiary or a Consolidated Subsidiary of the
Borrower, then, only the transferor Bank’s unfunded Commitment (but not any of
its Loans) may be so assigned, and upon such assignment, such Commitment shall
be deemed to be zero for all purposes hereunder for so long as such Assignee
holds such Commitment; and (2) the transferor Bank shall be released from
its future obligations hereunder (but not from any obligation or liability
arising prior to the effectiveness of such assignment and delegation, nor, in
the case of a Defaulting Bank, from any obligation or liability arising in
respect of the matter(s) as a result of which such Bank is a Defaulting
Bank). Upon the consummation of any such assignment and delegation,
the transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall, prior to the first date
on which interest or fees are payable hereunder for its account, deliver to the
Borrower and the Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 2.15. In
connection with any assignment pursuant to this Section
2.17, (I) the Borrower shall cause to be paid to the Administrative
Agent an administrative fee for processing such assignment in the amount of
$3,500, and (II) notwithstanding anything to the contrary set forth herein,
if the transferor Bank does not execute and deliver to the Administrative Agent
a duly completed Assignment and Assumption Agreement reflecting such assignment
within five Domestic Business Days of the date on which the Assignee executes
and delivers such Assignment and Assumption Agreement to the transferor Bank,
then such transferor Bank shall be deemed to have executed and delivered such
Assignment and Assumption Agreement.
Section
2.18 . Defaulting
Banks. Notwithstanding any provision of this Agreement to the
contrary, if any Bank becomes a Defaulting Bank, then the following provisions
shall apply for so long as such Bank is a Defaulting Bank:
(a) commitment
fees shall cease to accrue, or to be payable by the Borrower, on the Commitment
of such Defaulting Bank pursuant to Section 2.08(a)
for the account of such Defaulting Bank or otherwise; provided, however, that if
such Defaulting Bank’s Commitment is assigned to an Assignee pursuant to Section 2.17, commitment fees shall begin to accrue on
such assigned Commitment for the account of such Assignee pursuant to Section 2.08(a) commencing on and from the effective
date of the assignment of such Commitment to such Assignee and shall be payable
by the Borrower pursuant to Section 2.08(a);
and
23
(b) the
Commitment of such Defaulting Bank shall not be included in determining whether
all Banks or the Required Banks have taken or may take any action hereunder
(including any consent to any amendment or waiver pursuant to Section 9.05); provided however, that if
such Defaulting Bank’s Commitment is assigned to an Assignee pursuant to Section 2.17, then subject to Section 2.17, the Commitment of such Assignee shall be
included in determining whether all Banks or the Required Banks shall have taken
or may take any action hereunder (including any consent to any amendment or
waiver pursuant to Section 9.05) with respect to
actions to be taken by the Banks from and after the effective date of the
assignment of such Commitment to such Assignee.
ARTICLE 3
Conditions
(a) receipt
by the Administrative Agent of counterparts hereof signed by each of the parties
hereto (or, in the case of any party as to which an executed counterpart shall
not have been received, receipt by the Administrative Agent in form satisfactory
to it of telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party);
(b) receipt
by the Administrative Agent for the account of each Bank that has requested a
Note of a duly executed Note dated on or before the Effective Date complying
with the provisions of Section 2.04;
(c) receipt
by the Administrative Agent of an opinion of the General Counsel of the
Borrower, substantially in the form of Exhibit C hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request, such opinion to be in form and substance
satisfactory to the Administrative Agent;
(d) receipt
by the Administrative Agent of a certificate signed by the Chief Financial
Officer or the Chief Executive Officer and an Assistant Secretary-Treasurer or
the Controller of the Borrower to the effect that the conditions set forth in
clauses (d) through (h), inclusive, of Section 3.02
have been satisfied as of the Effective Date and, in the case of clauses (d),
(f) and (h), setting forth in reasonable detail the calculations required to
establish such compliance;
(e) receipt
by the Administrative Agent, with a copy for each Bank, of a certificate of an
officer of the Borrower acceptable to the Administrative Agent stating that all
consents, authorizations, notices and filings required or advisable in
connection with this Agreement are in full force and effect, and the
24
Administrative
Agent shall have received evidence thereof reasonably satisfactory to
it;
(f) receipt
by the Administrative Agent (or its assigns) and by each Bank of all fees
required to be paid in the respective amounts heretofore mutually agreed, and
all expenses for which invoices have been presented, on or before the Effective
Date; and
(g) receipt
by the Administrative Agent of all documents the Required Banks may reasonably
request relating to the existence of the Borrower, the corporate authority for
and the validity of this Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the Administrative
Agent.
The
Administrative Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive and binding on all
parties hereto.
Section
3.02 . Borrowings. The
obligation of any Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions, in each case at the
time of such Borrowing and immediately thereafter:
(a) the fact
that the Effective Date shall have occurred on or prior to January 31, 2009 and
that such Borrowing shall occur only during the Availability
Period;
(b) receipt
by the Administrative Agent of a Notice of Borrowing as required by Section 2.02;
(c) subject
to Section 2.16(d), there being a maximum of three
such Borrowings during the Availability Period;
(d) the fact
that the Borrower is in compliance with Section 7.12(a) of the 1972 Indenture
and Section 7.11 of the 1994 Indenture, as each Indenture is in effect as of the
date hereof;
(e) the fact
that the aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments (as such Commitments may be increased
pursuant to Section 2.16);
(f) the fact
that no Default shall have occurred and be continuing;
(g) the fact
that the representations and warranties of the Borrower (in case of a Borrowing,
other than the representation set forth in Section
4.02(c)) contained in this Agreement shall be true (it being understood and
agreed that the representation and warranty set forth in Section 4.12 shall be true and correct as to all
information furnished prior to the making of the respective Loan);
and
25
(h) the fact
that (i) there shall be no collateral securing Bonds issued pursuant to any
Indenture of a type other than the types of collateral permitted to secure Bonds
issued pursuant to such Indenture as of the date hereof, (ii) the allowable
amount of eligible collateral then pledged under any Indenture shall not exceed
150% of the aggregate principal amount of Bonds then outstanding under such
Indenture and (iii) no collateral shall secure Bonds other than (A) eligible
collateral under such Indenture, the allowable amount of which is included
within the computation under subsection (ii) above or (B)
collateral previously so pledged which ceases to be such eligible collateral not
as a result of any acts or omissions to act of the Borrower (other than the
declaration of an “event of
default” as defined in a mortgage which results in the exercise of any
right or remedy described in such mortgage).
Each
Borrowing hereunder shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the facts specified in clauses (d), (e), (f), (g) and (h) of this Section
3.02.
ARTICLE 4
The
Borrower makes the following representations, warranties and agreements, which
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans:
Section
4.01 . Corporate Existence, Power and
Authority. The Borrower is a cooperative
association duly incorporated, validly existing and in good standing under the
laws of the District of Columbia and has the corporate power and authority and
all material governmental licenses, authorizations, consents and approvals
required to own its property and assets and to transact the business in which it
is engaged. The Borrower is duly qualified or licensed as a foreign
corporation in good standing in every jurisdiction in which the nature of the
business in which it is engaged makes such qualification or licensing necessary,
except in those jurisdictions in which the failure to be so qualified or
licensed would not (after qualification, assuming that the Borrower could so
qualify without the payment of any fee or penalty and retain the rights as they
existed prior to such qualification all to an extent so that any fees or
penalties required to be so paid or any rights not so retained would not,
individually or in the aggregate, have a material adverse effect on the business
or financial condition of the Borrower), individually or in the aggregate, have
a material adverse effect upon the business or financial condition of the
Borrower. The Borrower has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and
the Notes. This Agreement has been, and the Notes when executed and
delivered will have been, duly and validly authorized, executed and delivered by
the Borrower, and this Agreement constitutes a legal, valid and binding
agreement of the Borrower, and the Notes, when executed and delivered by the
Borrower in accordance with this Agreement, will constitute legal, valid and
binding obligations of the Borrower, in each case enforceable in
26
accordance
with its terms, except as the same may be limited by bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and by general principles of
equity.
Section
4.02 . Financial Statements. (a) The consolidated balance sheets of the Borrower and
its Consolidated Subsidiaries as at May 31, 2008 and the related consolidated
statements of operations, changes in equity and cash flows for the fiscal year
ended May 31, 2008, including the related notes, accompanied by the opinion and
report thereon of Deloitte & Touche LLP, independent public accountants,
heretofore delivered to the Banks, present fairly in all material respects in
accordance with generally accepted accounting principles (i) the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as at the date of said balance sheets and (ii) the
consolidated results of the operations of the Borrower and its Consolidated
Subsidiaries for said fiscal year. The Borrower has no material
liabilities (contingent or otherwise) of the type required to be disclosed in
financial statements or footnotes which are not disclosed by or reserved against
in the most recent audited financial statements or in the notes thereto other
than (i) Indebtedness incurred and (ii) loan and guarantee commitments issued in
each case by the Borrower in the ordinary course of business since the date of
such financial statements. All such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with prior periods, except as disclosed
therein. The same representations as are set forth in this Section 4.02 shall be deemed to have been made by the
Borrower in respect of the most recent annual and quarterly financial statements
of the Borrower and its Consolidated Subsidiaries (except that the annual
opinion and report of Deloitte & Touche LLP may be replaced by an opinion
and report of another nationally recognized firm of independent public
accountants) furnished or required to be furnished to the Banks prior to or at
the time of the making of each Loan hereunder, at the time the same are
furnished or required to be furnished.
(b) The
unaudited consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as of August 31, 2008 and the related unaudited consolidated
statements of operations, changes in equity and cash flows for the three months
then ended, heretofore delivered to the Banks, present fairly in conformity with
generally accepted accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a)
of this Section 4.02, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and changes in financial position for
such three-month period (subject to normal year-end adjustments). The
Borrower and its Consolidated Subsidiaries have no material liabilities
(contingent or otherwise) of the type required to be disclosed in financial
statements or footnotes which are not disclosed by or reserved against in such
financial statements for such three-month period other than (i) Indebtedness
incurred and (ii) loan and guarantee commitments issued in each case by the
Borrower or its Consolidated Subsidiaries in the ordinary course of business
since the date of such financial statements.
27
(c) Since
August 31, 2008 and except as disclosed in the Borrower’s public filings prior
to the date hereof, there has been no material adverse change in the business,
financial position, results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
Section
4.03 . Litigation. There are no actions, suits, proceedings or investigations
pending or, to the Borrower’s knowledge, threatened by or before any court or
any governmental authority, body or agency or any arbitration board which are
reasonably likely to materially adversely affect the business, property, assets,
financial position or results of operations of the Borrower or the authority or
ability of the Borrower to perform its obligations under this Agreement or the
Notes.
Section
4.04 . Governmental
Authorizations. No material authorization,
consent, approval or license of, or declaration, filing or registration with or
exemption by, any governmental authority, body or agency is required in
connection with the execution, delivery or performance by the Borrower of this
Agreement or the Notes. The Banks acknowledge that the Borrower may
file this Agreement with the Securities and Exchange Commission after the
Effective Date.
Section
4.05 . Members’ Subordinated
Certificates. The holders of the Borrower’s
Members’ Subordinated Certificates are not and will not be entitled to receive
any payments with respect to the principal thereof or interest thereon solely
because of withdrawing or being expelled from membership in the
Borrower.
Section
4.06 . No Violation of
Agreements. Neither the Borrower nor any
Subsidiary is in default in any material respect under any material agreement or
other material instrument to which it is a party or by which it is bound or its
property or assets may be affected. No event or condition exists
which constitutes, or with the giving of notice or lapse of time or both would
constitute, such a default under any such agreement or other
instrument. Neither the execution and delivery of this Agreement or
the Notes, nor the consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or thereof,
will contravene any material provision of law, statute, rule or regulation to
which the Borrower is subject or any material judgment, decree, award,
franchise, order or permit applicable to the Borrower, or will conflict or be
inconsistent with, or will result in any breach of, any of the material terms,
covenants, conditions or provisions of, or constitute (or with the giving of
notice or lapse of time, or both, would constitute) a material default under (or
condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any obligations
prior to the scheduled maturity thereof), or result in the creation or
imposition of any Lien upon any of the property or assets of the Borrower
pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or
other instrument to which it may be subject, or violate any provision of the
certificate of incorporation or by-laws of the Borrower. Without
limiting the generality of the foregoing, the
28
Borrower
is not a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of the Borrower, any agreement or indenture
relating thereto or any other material contract or agreement (including its
certificate of incorporation and by-laws), which would be violated by the
incurring of the Indebtedness to be evidenced by the Notes.
Section
4.07 . No Event of Default under the
Indentures. The Borrower has complied fully
with all of the material provisions of each Indenture. No Event of
Default (within the meaning of such term as defined in each Indenture) and no
event, act or condition (except for possible non-compliance by the Borrower with
any immaterial provision of such Indenture which in itself is not such an Event
of Default under such Indenture) which with notice or lapse of time, or both,
would constitute such an Event of Default has occurred and is continuing under
such Indenture. The Borrowings by the Borrower contemplated by this
Agreement will not cause such an Event of Default under, or the violation of any
covenant contained in, any Indenture.
Section
4.08 . Compliance with
ERISA. The Plans (other than Plans consisting
of multiemployer plans (as defined in Section 4001 of ERISA)) are in substantial
compliance with ERISA other than any failure to comply that is not reasonably
likely to have a material adverse effect on the business, operations, prospects,
property, assets or financial position of the Borrower, no such Plan is
insolvent or in reorganization other than an insolvency or reorganization that
is not reasonably likely to have a material adverse effect on the business,
operations, prospects, property, assets or financial position of the Borrower,
and no such Plan has an accumulated or waived funding deficiency within the
meaning of Section 412 of the Internal Revenue Code other than any accumulated
or waived funding deficiency that is not reasonably likely to have a material
adverse effect on the business, operations, prospects, property, assets or
financial position of the Borrower. No Plan consisting of a
multiemployer plan (as defined in Section 4001 of ERISA) is in
reorganization. Neither the Borrower nor a Subsidiary of the Borrower
nor any member of the ERISA Group has incurred any material liability (including
any material contingent liability) to or on account of a Plan pursuant to
Section 4062, 4063, 4064, 4201 or 4204 of ERISA, no proceedings have been
instituted to terminate any Plan, and no condition exists which presents a
material risk to the Borrower of incurring a material liability to or on account
of a Plan pursuant to any of the foregoing Sections of ERISA.
Section
4.09 . Compliance with Other
Laws. The Borrower and each Subsidiary is in
compliance, in all material respects, with all applicable requirements of law
and all applicable rules and regulations of each Federal, State, municipal or
other governmental department, agency or authority, domestic or
foreign.
Section
4.10 . Tax
Status. The Borrower is exempt from payment of Federal income
tax under Section 501(c)(4) of the Internal Revenue Code.
29
Section
4.13 . Subsidiaries. Each
of the Borrower’s corporate Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
30
ARTICLE 5
Covenants
The
Borrower agrees that, so long as any Bank has any Commitment hereunder or any
amount payable under any Note or any fee payable pursuant to Section 2.09 or any other amount then due and payable
hereunder remains unpaid:
Section
5.03 . Financial
Information. (a) The Borrower will, and will cause each
Subsidiary other than the Subsidiaries listed on Schedule 5.03(a) to, keep its books of account in accordance
with generally accepted accounting principles.
(b) The
Borrower will furnish to the Banks:
(i) as soon
as available and in any event within 60 days after the close of each of the
first three quarters of each fiscal year of the Borrower, as at the end of, and
for the period commencing at the end of the previous fiscal year and ending
with, such quarter, unaudited consolidated balance sheets of the Borrower and
its Consolidated Subsidiaries and the related unaudited consolidated statements
of operations, changes in equity and cash flow of the Borrower and its
Consolidated Subsidiaries for such quarter and for the portion of the Borrower’s
fiscal year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the corresponding
portion of the Borrower’s previous fiscal year, all in reasonable detail and
certified (subject to normal year-end adjustments) as
31
to
fairness of presentation in accordance with generally accepted accounting
principles in all material respects and consistency (except for changes
concurred in by the Borrower’s independent public accountants) by the Chief
Executive Officer, the Chief Financial Officer, an Assistant Secretary-Treasurer
or the Controller of the Borrower;
(ii) as soon
as practicable and in any event within the earlier of (i) two Domestic Business
Days after filing with the Securities and Exchange Commission and (ii) 120 days
after the close of each fiscal year of the Borrower, as at the end of and for
the fiscal year just closed, consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries and the related consolidated statements of operations,
changes in equity and cash flow for such fiscal year for the Borrower and its
Consolidated Subsidiaries, all in reasonable detail and fully certified (without
any qualification as to the scope of the audit) by Deloitte & Touche LLP or
other independent public accountants of nationally recognized standing selected
by the Borrower, who shall have audited the books and accounts of the Borrower
for such fiscal year;
(iii) together
with the financial statements referred to in clauses (i) and (ii) above, a
certificate signed by the Chief Executive Officer, the Chief Financial Officer,
an Assistant Secretary-Treasurer or the Controller of the Borrower, in such
detail as shall be reasonably satisfactory to the Required Banks,
(A) identifying
(x) all Indebtedness outstanding as at the end of the fiscal period covered by
such financial statements extended by the Borrower or its Consolidated
Subsidiaries or by any other Person and Guaranteed by the Borrower or its
Consolidated Subsidiaries to the ten Members or borrowers of any Consolidated
Subsidiary (“Consolidated
Subsidiary Members”), taken as a whole, with the largest amount of
Indebtedness to (or Guaranteed by) the Borrower or its Consolidated Subsidiaries
outstanding as at the end of the fiscal period covered by such financial
statements (the “Largest
Members”) as to which, to the knowledge and information of the Borrower
or such Consolidated Subsidiary, the Member or Consolidated Subsidiary Member is
in default (whether in the payment of the principal thereof or interest thereon
or with respect to any material covenant or agreement contained in any
instrument, mortgage or agreement evidencing or relating to such Indebtedness)
and specifying whether such default has been waived by the Borrower or such
Consolidated Subsidiary or such other Person and the nature and status of each
such default not so waived and (y) the aggregate amount of all Indebtedness
outstanding as of the end of the fiscal period covered by such financial
statements as to which, to the knowledge and information of the Borrower or such
Consolidated Subsidiary, Members or Consolidated Subsidiary Members other than
the
32
Largest
Members are in default in the payment of the principal thereof or interest
thereon or are in default with respect to any material covenant or agreement
contained in any instrument, mortgage or agreement evidencing or relating to
such Indebtedness and as to which the Borrower or such Consolidated Subsidiary
has commenced the exercise of remedies in respect thereof,
(B) identifying
the ten Members or Consolidated Subsidiary Members, taken as a whole, with the
largest amount of Indebtedness to (or Guaranteed by) the Borrower or its
Consolidated Subsidiaries outstanding as of the end of the fiscal period covered
by such financial statements, together with the principal amount of such
Indebtedness outstanding with respect to each such Member or Consolidated
Subsidiary Member as of the end of such fiscal period, and
(C) providing
the aggregate principal amount of all loans which are RUS Guaranteed Loans and
are outstanding as of the end of the fiscal period covered by such financial
statements, provided
that if such amount has previously been disclosed by the Borrower in its regular
or periodical reports filed with, or furnished to, the Securities and Exchange
Commission, then the certificate need only reference such report and the section
of such report in which such information may be found;
(iv) with
reasonable promptness, copies of all regular and periodical reports (including
Current Reports on Form 8-K) filed with, or furnished to, the Securities and
Exchange Commission;
(v) promptly
after obtaining knowledge or receiving notice of a change (whether an increase
or decrease) in any rating issued by S&P or Xxxxx’x pertaining to any
securities of, or guaranteed by, the Borrower or any of its Subsidiaries or
affiliates, a notice setting forth such change; and
(vi) with
reasonable promptness, such other information respecting the business,
operations, prospects and financial condition of the Borrower or any of its
Subsidiaries or any Joint Venture as any Bank may, from time to time, reasonably
request, including, without limitation, with respect to the performance and
observance by the Borrower of the covenants and conditions contained in this
Agreement.
Section
5.04 . Default
Certificates. Concurrently with each financial statement
delivered to the Banks pursuant to clauses (i)
and (ii) of Section
5.03(b), the Borrower will furnish to the Banks a certificate signed by the
Chief Executive Officer, the Chief Financial Officer, an Assistant
Secretary-Treasurer or the Controller of the Borrower to the effect that the
review of the activities of the Borrower during such year or the portion thereof
covered by such financial
33
statement
and of the performance of the Borrower under this Agreement has been made under
his supervision and that to the best of his knowledge, based on such review,
there exists no event which constitutes a Default or an Event of Default under
this Agreement or, if any such event exists, specifying the nature thereof, the
period of its existence and what action the Borrower has taken and proposes to
take with respect thereto, which certificate shall set forth the calculations or
other data required to establish compliance with the provisions of Section 5.09 and Sections 5.12 through 5.14,
inclusive, at the end of such fiscal quarter or fiscal year, as the case may
be. The Borrower further covenants that upon any such officer of the
Borrower obtaining knowledge of any Default or Event of Default under this
Agreement, it will forthwith, and in no event later than the close of business
on the Domestic Business Day immediately after the day such knowledge is
obtained, deliver to the Banks a statement of any officer referred to above
specifying the nature and the period of existence thereof and what action the
Borrower has taken and proposes to take with respect thereto.
34
deficiency
has been incurred or an application may be or has been made to the Secretary of
the Treasury for a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code with respect to a Plan, that a Plan has been or may be
terminated, that proceedings may be or have been instituted to terminate a Plan,
or that the Borrower, a Subsidiary of the Borrower or any member of the ERISA
Group will or may incur any liability in excess of $5,000,000 to or on account
of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA, the Borrower
will deliver to each of the Banks a certificate of the Chief Financial Officer
of the Borrower setting forth details as to such occurrence and action, if any,
which the Borrower or such Subsidiary is required or proposes to take, together
with any notices required to be filed by the Borrower, such Subsidiary, such
member of the ERISA Group or the plan administrator with the PBGC with respect
thereto.
Section
5.09 . Indebtedness. (a)
The Borrower will not, and will not permit any of its Consolidated Subsidiaries
(other than Rural Telephone Finance Cooperative and National Cooperative
Services Corporation) to, incur, assume or Guarantee any Superior Indebtedness,
or make any optional prepayment on any Members’ Subordinated Certificate; provided that (i)
subject to the provisions of Section 5.12, any
such Subsidiary may incur Superior Indebtedness owing to the Borrower or assume
or Guarantee Indebtedness of any Person (other than the Borrower or any of its
Subsidiaries) owing to the Borrower and (ii) the Borrower may incur, assume
or Guarantee Superior Indebtedness or make optional prepayments on Members’
Subordinated Certificates if, after giving effect to any such action specified
above in this clause (ii), (x) on the date of such
incurrence, assumption or Guarantee or making of such optional prepayment (the
“Determination Date”)
the aggregate principal amount of Superior Indebtedness then outstanding would
not exceed ten times the sum of (a) the aggregate principal amount of Members’
Subordinated Certificates outstanding on the Determination Date, (b) the
aggregate amount of the line item “total equity” shown on the consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries on the
Determination Date, (c) the aggregate amount of the line item “minority
interest” shown on the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries on the Determination Date and (d) the aggregate
principal amount of Qualified Subordinated Indebtedness outstanding on the
Determination Date and (y) on no given future date ending on the last day
of each fiscal quarter would the aggregate principal amount of Superior
Indebtedness outstanding on the Determination Date which will remain outstanding
on such given future date exceed ten times the sum of (a) the aggregate
35
principal
amount of Members’ Subordinated Certificates outstanding on the Determination
Date which will remain outstanding on such given future fiscal quarter-end date,
(b) the aggregate amount of the line item “total equity” shown on the
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries on the Determination Date, (c) the aggregate amount of the line
item “minority interest” shown on the consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries on the Determination Date and (d) the
aggregate principal amount of Qualified Subordinated Indebtedness outstanding on
the Determination Date which will remain outstanding on such given future date;
provided that the
non-cash adjustments (whether positive or negative) required to be made pursuant
to SFAS 133 and SFAS 52 shall be excluded from calculations under clause (ii) above to the extent otherwise included
therein. The respective principal amounts of Superior Indebtedness,
Members’ Subordinated Certificates and Qualified Subordinated Indebtedness to be
outstanding on such given future date shall be determined after giving effect to
mandatory sinking fund payments, other mandatory prepayments and serial and
other maturity payments required to be made on or prior to said given future
date by the terms of such Superior Indebtedness, Members’ Subordinated
Certificates, Qualified Subordinated Indebtedness or any indenture or other
instrument pursuant to which they are respectively issued.
(b) If any
Loan is outstanding hereunder, the Borrower will not take any action which would
prevent it from then complying, or fail to take any action which would enable it
then to comply, with the provisions of 3.02(h), assuming for this purpose only
that the Borrower then intended to borrow from one or more of the Banks
hereunder.
Section
5.10 . Liens. The Borrower will not create or permit to exist any Lien on
or with respect to any Indebtedness of any Member which is an asset of the
Borrower, now existing or hereafter created, or on any notes, mortgages or other
documents or instruments evidencing any such Indebtedness, and the Borrower will
not permit any Consolidated Subsidiary to create or permit to exist any Lien on
or with respect to any of such Subsidiary’s assets, except Liens (i) granted by
the Borrower to the trustee pursuant to any Indenture, (ii) on any such
Indebtedness granted by the Borrower or its Consolidated Subsidiary to secure
any borrowing for the purpose of making loans to Member power supply systems or
loans to Members for bulk power supply projects or loans to Members for the
36
purpose
of providing financing to telephone and related systems eligible to borrow from
the RUS or loans to borrowers borrowing from National Cooperative Services
Corporation or Rural Telephone Finance Cooperative, which borrowing or
borrowings are on terms (except as to terms of interest, premium, if any, and
amortization) not materially more disadvantageous to the Borrower’s unsecured
creditors than the borrowings under any Indenture (it being understood that the
Borrower can not pledge such assets to an extent greater than 150% of the
aggregate principal amount of such Indebtedness); provided that Liens incurred
in reliance on this subsection (ii) shall not secure amounts exceeding
$500,000,000 in the aggregate at any one time outstanding, (iii) of current
taxes not delinquent or a security for taxes being contested in good faith, (iv)
other than in favor of the PBGC, created by or resulting from any legal
proceedings (including legal proceedings instituted by the Borrower or any
Subsidiary) which are being contested in good faith by appropriate proceedings,
including appeals of judgments as to which a stay of execution shall have been
issued, and adequate reserves shall have been established, (v) created by the
Borrower to secure Guarantees by the Borrower of Indebtedness, the interest on
which is excludable from the gross income of the recipient thereof for Federal
income tax purposes as provided in Section 103(a) of the Internal Revenue Code
or Section 103(a) of the Internal Revenue Code of 1954, as amended, (x) of a
Member which is a state or political subdivision thereof or (y) of a state or
political subdivision thereof incurred to benefit a Member for one of the
purposes provided in Section 142(a)(2), (4), (5), (6), (8), (9), (10) or (12) of
the Internal Revenue Code or Section 103(b)(4)(D), (E), (F), (G), (H) or (J) of
the Internal Revenue Code of 1954, as amended, (vi) granted by any Subsidiary to
the Borrower, (vii) REDLG Program Liens securing REDLG Obligations with respect
to government Guarantees of Indebtedness of the Borrower in an aggregate
principal or face amount not to exceed $6,000,000,000 at any one time
outstanding, and (viii) on any such Indebtedness granted
by the Borrower to secure any borrowings, which borrowings are on terms (except
as to terms of interest, premium, if any, and amortization) not materially more
disadvantageous to the Borrower’s unsecured creditors than the borrowings under
any Indenture (it being understood that the Borrower can not pledge such assets
to an extent greater than 150% of the aggregate principal amount of such
Indebtedness); provided
that Liens incurred in reliance on this subsection (viii) shall not secure amounts exceeding
$1,000,000,000 in the aggregate at any one time outstanding.
Section
5.11 . Maintenance of
Insurance. The Borrower will maintain, and will cause each
Subsidiary to maintain, insurance in such amounts, on such forms and with such
companies as is necessary or appropriate for its business.
Section
5.12 . Subsidiaries and Joint
Ventures. The Borrower will not permit (a) the sum
of (i) the amount of Indebtedness owing to the Borrower by all of its
Subsidiaries and Joint Ventures plus (ii) the amount
paid by the Borrower in respect of the stock, obligations or securities of or
any other interest in such Subsidiaries and Joint Ventures plus (iii) any capital
contributions by the Borrower to such Subsidiaries and Joint Ventures (the
amounts referred to in paragraphs (i) through
(iii), the “Investments”) plus (iv) the amount of
assets
37
(excluding
Foreclosed Assets) otherwise sold or transferred by the Borrower to such
Subsidiaries and Joint Ventures (other than sales at fair market value) minus (v) any Start-up
Investments minus (vi) any
Investment made in cash by the Borrower in any Special Purpose Subsidiary (up to
a maximum amount not to exceed the lesser of (x) the amount necessary to
provide such Special Purpose Subsidiary with sufficient working capital to
conduct its business as contemplated hereby and (y) $150,000,000) to exceed
at any time (b) 10% of the sum of (i) all accounts which, in
accordance with generally accepted accounting principles, constitute equity in
the Borrower and its Consolidated Subsidiaries at such time plus (ii) all
Indebtedness of the Borrower shown on its balance sheet dated as of May 31, 2008
as Members’ Subordinated Certificates as such Indebtedness shall be reduced from
time to time and any other Indebtedness of the Borrower incurred after May 31,
2008 having substantially similar provisions as to subordination as those
contained in said outstanding certificates as such other Indebtedness shall be
reduced from time to time, in each case at such time plus (iii) all “minority
interest” shown on the consolidated statement of operations of the Borrower and
its Consolidated Subsidiaries most recently delivered by the Borrower to the
Banks pursuant to Section 4.02 or Section 5.03 plus (iv) all Qualified Subordinated
Indebtedness outstanding at such time; provided that non-cash
adjustments (whether positive or negative) required to be made pursuant to SFAS
133 and SFAS 52 shall be excluded from the calculation of the amounts specified
in clauses 5.12(b)(i), 5.12(b)(ii), 5.12(b)(iii)
and 5.12(b)(iv) to the extent otherwise included
therein; provided
further that, in addition to the foregoing, the Borrower may transfer
assets with an aggregate fair market value of not more than $150,000,000 to a
bankruptcy remote trust required to be established to support REDLG Obligations
of the Borrower, and any such transfer shall be excluded from any calculation
under clauses (a) and (b) above to the extent otherwise included
therein. For the purpose of this Section
5.12, “Foreclosed
Asset” means (x) any property distributed or to be distributed to the
Borrower with the authority of any Bankruptcy Court in connection with the
bankruptcy of any of the Borrower’s debtors and (y) property received by the
Borrower upon enforcement by the Borrower of its security interest (if any) in
such property or in settlement of delinquent accounts or other overdue amounts
owed to it by any of the Borrower’s debtors; “Special Purpose Subsidiary”
means any domestic Subsidiary all of the shares of capital stock or other
ownership interest of which are directly or indirectly owned by the Borrower,
which Subsidiary is established for the sole purpose of, and whose sole business
shall at all times be, holding Foreclosed Assets; and “Start-up Investments” means
Investments made in a Special Purpose Subsidiary solely to finance such Special
Purpose Subsidiary’s initial acquisition of Foreclosed Assets.
Section
5.14 . Retirement of Patronage
Capital. The Borrower shall not make, or permit any
Subsidiaries of the Borrower to make, any payments to
38
Members
in respect of Patronage Capital Certificates unless (i) the TIER for the
immediately preceding fiscal year for which financial statements have been
delivered to the Banks pursuant to Section 5.03(b)
equals or exceeds 1.05:1.00 and (ii) there exists (and would exist after giving
effect to any such payment) no Default or Event of Default under this
Agreement.
ARTICLE 6
Defaults
Section
6.01 . Events
of Default. If one or more of the following events (“Events of Default”) shall have
occurred and be continuing:
(a) Principal and
Interest. The Borrower shall (i) fail to pay when due
(whether upon stated maturity, by acceleration or otherwise) any principal of
any Loan or (ii) fail, and such failure shall continue uncured for one or
more Domestic Business Days, to pay when due (whether upon stated maturity, by
acceleration or otherwise) any interest on any Loan;
(b) Other
Amounts. The Borrower shall fail to pay when due
any fee or other amount payable under this Agreement (including pursuant to Section 2.08(b)) and such failure remains uncured for
five days after the due date thereof;
(c) Covenants Without
Notice. The Borrower shall fail to observe or perform any
covenant or agreement on its part to be observed or performed which is set forth
in Section 5.01 (only with respect to the Borrower’s
corporate existence), 5.02, 5.09, 5.10, 5.12, 5.13, 5.14 or 5.15;
(d) Covenants With 10 Days’
Grace. The Borrower shall fail to observe or perform any
covenant or agreement on its part to be observed or performed, which is set
forth in the last sentence of Section 5.04, or in Section 5.05, 5.06, 5.07, 5.08, and such
non-observance or non-performance shall continue unremedied for a period of more
than 10 days;
(e) Other
Covenants. The Borrower shall fail to observe or perform any
covenant, condition or agreement on its part to be observed or performed, other
than as referred to in subsections (a), (b), (c) and (d) above, for a period of 30 days after written
notice specifying such failure and requesting that it be remedied is given by
any Bank to the Borrower and the other Banks; provided that, if the failure
be such that it cannot be corrected within the applicable period, but can be
39
corrected
within a reasonable period of time thereafter, it shall not constitute a Default
if corrective action is instituted by the Borrower within the applicable period
and diligently pursued until the failure is corrected, but any such failure that
is not so corrected within 45 days after such applicable period shall constitute
a Default;
(f) Representations. Any
representation, warranty, certification or statement made or deemed to be made
by the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made or deemed to be made;
(g) Non-Payments of Indebtedness and/or
Derivatives Obligations. The Borrower or any Subsidiary of the
Borrower shall fail to make any payment or payments aggregating for the Borrower
and its Subsidiaries in excess of $50,000,000 in respect of Indebtedness and/or
Derivatives Obligations of the Borrower or any Subsidiary (other than the Loans
or any Indebtedness under this Agreement) when due (whether upon stated
maturity, by acceleration or otherwise) or within any applicable grace
period;
(h) Defaults Under Other
Agreements. The Borrower or any Subsidiary shall fail to
observe or perform within any applicable grace period any covenant or agreement
contained in any agreement or instrument relating to any Indebtedness of the
Borrower or any Subsidiary, aggregating for the Borrower and its Subsidiaries in
excess of $50,000,000 if the effect of such failure is to accelerate, or to
permit the holder of such Indebtedness or any other Person to accelerate, the
maturity of such Indebtedness;
(i) Bankruptcy. The
Borrower or any Subsidiary shall generally not pay its debts as they become due,
or shall admit in writing its inability to pay its debts generally or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any Subsidiary seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, conservation or proceeding in the nature
thereof, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief or protection of debtors, or
seeking the entry of an order for relief or the appointment of a receiver
(including state regulatory authorities acting in a similar capacity), trustee,
custodian or other similar official for it or for any substantial part of its
property, and, in the case of any such proceeding instituted against it (but not
instituted by it) shall remain undismissed or unstayed for a period of 60 days;
or the Borrower or any Subsidiary shall take any action to authorize any of the
actions set forth above in this subsection (i);
(j) ERISA. A Plan
shall fail to maintain the minimum funding standard required by Section 412 of
the Internal Revenue Code for any plan year or a waiver of such standard is
sought or granted under Section 412(d), or a Plan is, shall have been or is
likely to be terminated or the subject of termination
40
proceedings
under Section 4042 of ERISA, or the Borrower or a Subsidiary of the Borrower or
any member of the ERISA Group has incurred or is likely to incur a liability to
or on account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA,
and there shall result from any such event or events either a liability or a
material risk of incurring a liability to the PBGC or a Plan, which in the
opinion of the Required Banks, will have a material adverse effect upon the
business, operations or the financial condition of the Borrower; or
(k) Money Judgment. A
final judgment or order for the payment of money in excess of $50,000,000 shall
be rendered against the Borrower or any Subsidiary and such judgment or order
shall continue unsatisfied and in effect for a period of 45 days during which
execution shall not be effectively stayed or deferred (whether by action of a
court, by agreement or otherwise);
then, and
in any such event, and at any time thereafter, if any Event of Default shall
then be continuing, the Administrative Agent, upon the request of the Required
Banks, shall by notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent, any Bank
or the holder of any Note to enforce its claims against the
Borrower: (a) declare the Commitments terminated, whereupon the
Commitment of each Bank shall forthwith terminate immediately and any fee
payable pursuant to Section 2.09 shall forthwith
become due and payable without any other notice of any kind; and/or (b) declare
the principal of and accrued interest on the Loans, and all other obligations
owing hereunder, to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that, if an Event of
Default specified in subsection (i) shall occur,
the result which would occur upon the giving of written notice by the
Administrative Agent to the Borrower, as specified in clauses (a) and (b) above, shall
occur automatically without the giving of any such notice.
Section
6.02 . Notice
of Default. The Administrative Agent shall give notice to the
Borrower under Section 6.01(e) promptly upon
being requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE 7
The
Administrative Agent
41
the
Administrative Agent, and The Bank of Nova Scotia and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not
the Administrative Agent hereunder.
Section
7.03 . Action by
Administrative Agent. The obligations of the Administrative
Agent hereunder are only those expressly set forth herein. Without
limiting the generality of the foregoing, the Administrative Agent shall not be
required to take any action with respect to any Default, except as expressly
provided in Article 6.
Section
7.05 . Liability of Administrative
Agent. Neither the Administrative Agent nor any of its
affiliates nor any of their respective directors, officers, agents, or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither
the Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to
be delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Administrative Agent shall not
incur any liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
reasonably believed by it to be genuine or to be signed by the proper party or
parties.
42
appropriate,
made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action
under this Agreement.
Section
7.09 . Documentation Agent And
Syndication Agent Not Liable. Nothing in this Agreement shall
impose upon the Documentation Agent or the Syndication Agent, each in such
capacity, any duties or responsibilities whatsoever.
ARTICLE 8
Change
in Circumstances
(a) the
Administrative Agent is advised by the Euro-Dollar Reference Bank that the
London Interbank Offered Rate is not available in the manner set forth in the
definition of London Interbank Offered Rate for such Interest Period,
or
(b) in the
case of a Borrowing, Banks having 50% or more of the aggregate amount of the
Commitments advise the Administrative Agent that the
43
Adjusted
London Interbank Offered Rate, as determined by the Administrative Agent will
not adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period,
the
Administrative Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make Euro-Dollar Loans or to continue or convert
outstanding Loans as or into Euro-Dollar Loans shall be suspended and (ii) each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto.
44
(i) shall
subject any Bank (or its Applicable Lending Office) to any tax, duty or other
charge with respect to its Euro-Dollar Loans, its Notes or its obligation to
make Euro-Dollar Loans, or shall change the basis of taxation of payments to any
Bank (or its Applicable Lending Office) of the principal of or interest on its
Euro-Dollar Loans or any other amounts due under this Agreement in respect of
its Euro-Dollar Loans or its obligation to make Euro-Dollar Loans (except for
changes in the rate of tax on the overall net income of such Bank or its
Applicable Lending Office imposed by the jurisdiction in which such Bank’s
principal executive office or Applicable Lending Office is located);
or
(ii) shall
impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or the
London interbank market any other condition affecting its Euro-Dollar Loans, its
Notes or its obligation to make Euro-Dollar Loans; and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Administrative Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction (including any amount or amounts equal to any
taxes on the overall net income of such Bank payable by such Bank with respect
to the amount of payments required to be made pursuant to this Section 8.03(a)).
(b) If any
Bank determines that the adoption of any applicable law, rule, regulation,
guideline or request concerning capital adequacy, or any change therein, or any
change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency (including, without limitation, any
such adoption or change the effect of which would be, for purposes of capital
adequacy requirements, to treat the Commitments hereunder as not constituting
commitments with an original maturity of one year or less), occurring after the
date hereof, will have the effect of increasing the amount of capital required
or expected to be maintained by such Bank based on the existence of such Bank’s
Commitment hereunder or its obligations hereunder, it will notify the
Borrower. This determination will be made on a Bank-by-Bank
basis. The Borrower will pay to each Bank on demand such additional
amounts as are necessary to compensate for the increased cost to such Bank as a
result of the event described in the first sentence of this Section 8.03(b). In determining such
45
amount,
such Bank will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, and such Bank will pass such costs on
to the Borrower only if such costs are passed on in a similar manner by such
Bank to similarly-situated borrowers (which are parties to credit or loan
documentation containing a provision similar to this Section 8.03(b)), as determined by such Bank in its
reasonable discretion. Each Bank’s determination of compensation
shall be conclusive if made in accordance with this provision. Each
Bank, upon determining that any increased costs will be payable pursuant to this
Section 8.03(b), will give prompt written notice
thereof to the Borrower, which notice shall show the basis for calculation of
such increased costs, although the failure to give any such notice shall not
release or diminish any of the Borrower’s obligations to pay increased costs
pursuant to this Section 8.03(b).
(c) Each Bank
will promptly notify the Borrower and the Administrative Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A Bank claiming compensation
under this Section shall furnish a certificate to the Borrower setting forth the
additional amount or amounts to be paid to it hereunder, which shall be
conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution
methods.
(d) Failure
or delay on the part of any Bank to demand compensation pursuant to this Section
8.03 shall not constitute a waiver of such Bank’s right to demand such
compensation; provided
that the Borrower shall not be required to compensate any Bank pursuant to this
Section 8.03 for any increased costs or reductions incurred more than six months
prior to the date that such Bank notifies the Borrower and the Administrative
Agent of the circumstances giving rise to such increased costs or reductions and
of such Bank’s intention to claim compensation therefor; provided further that, if the
circumstances giving rise to such increased costs or reductions are retroactive,
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof.
Section
8.04 . Base Rate Loans Substituted for
Affected Euro-Dollar Loans. If (i) the obligation of any Bank
to make, or to continue or convert outstanding Loans as or to, Euro-Dollar Loans
has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section
8.03(a) and the Borrower shall, by at least five Euro-Dollar Business Days’
prior notice to such Bank through the Administrative Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer apply:
46
(a) all Loans
which would otherwise be made by such Bank as Euro-Dollar Loans shall be made
instead as Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks),
and
(b) after
each of its Euro-Dollar Loans has been repaid, all payments of principal which
would otherwise be applied to repay such Euro-Dollar Loans shall be applied to
repay its Base Rate Loans instead.
ARTICLE 9
Section
9.01 . Notices. (a) All notices, requests, directions, consents, approvals
and other communications to any party hereunder shall be in writing (including
bank wire, telex, facsimile transmission or similar writing) and shall be given
to such party (subject to subparagraph (b)
below): (x) in the case of the Borrower or the Administrative Agent,
at its address or telex or telecopier number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address or telex or telecopier
number set forth in its Administrative Questionnaire or (z) in the case of any
other party, such other address or telex or telecopier number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrower. Each such notice, request, direction, consent, approval or
other communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received or (ii) if given by any other means, when delivered or
received at the address specified in this Section; provided that notices to the
Administrative Agent under Article 2 or Article 8 shall not be effective until
received.
(b) Notices
and other communications to the Banks hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent; provided that
the foregoing shall not apply to notices pursuant to Article 2 or Article 8
unless otherwise agreed by the Administrative Agent and the applicable
Bank. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or
communications.
47
Section
9.03 . Expenses; Documentary Taxes;
Indemnification. (a) The Borrower
shall pay (i) all documented reasonable out-of-pocket expenses of the
Administrative Agent, including reasonable fees and disbursements of special
counsel for the Administrative Agent, in connection with the preparation of this
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all documented reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Bank, including reasonable fees and disbursements
incurred by counsel or in-house counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other enforcement proceedings
resulting therefrom. The Borrower shall indemnify each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this Agreement
or the Notes and any and all liabilities with respect to or resulting from any
delay or omission (unless solely attributable to such Bank) to pay such
taxes.
(b) The
Borrower agrees to indemnify each Bank, their respective affiliates and the
respective directors, officers, agents, advisors and employees of the foregoing
(each an “Indemnitee”)
and hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs, claims, demands and expenses of any kind, including,
without limitation, the reasonable fees and disbursements of counsel, which may
be incurred by any Indemnitee (or by the Administrative Agent in connection with
its actions as Agent hereunder) in connection with any investigative,
administrative or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) relating to or arising out of this Agreement or any
actual or proposed use of proceeds of Loans hereunder; provided that no Indemnitee
shall have the right to be indemnified hereunder for its own gross negligence,
willful misconduct or unlawful conduct as determined by a court of competent
jurisdiction.
48
participation
as fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
Section
9.05 . Amendments and Waivers. Except as provided by Section
2.16, any provision of this Agreement or the Notes may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks (and, if the rights or duties of the
Administrative Agent are affected thereby, by the Administrative Agent); provided that, no such
amendment or waiver shall (i) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation without the written
consent of such Bank, (ii) reduce the principal
of or rate of interest on any Loan or any fees hereunder without the written
consent of each Bank directly affected thereby, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or for any reduction or termination of any Commitment
without the written consent of each Bank directly affected thereby, (iv) change
the percentage of the Commitments (other than in connection with any increase in
Commitments pursuant to Section 2.16) or of the
aggregate unpaid principal amount of the Notes without the written consent of
each Bank directly affected thereby or (v) change any of the provisions of this
Section 9.05 or the definition of “Required Banks”
or any other provision hereof specifying the number or percentage of Banks
required to waive, amend or modify any rights hereunder, make any determination
or grant any consent hereunder or take any other action under any provision of
this Agreement without the written consent of each Bank.
Section
9.06 . Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank
may at any time grant to one or more affiliates of such Bank, banks or other
institutions (each a “Participant”) participating
interests in its Commitment or any or all of its Loans. In the event
of any such grant by a Bank of a participating interest to a Participant,
whether or not upon notice to the Borrower and the Administrative Agent, such
Bank shall remain responsible for the performance of its obligations hereunder,
and the Borrower and the Administrative Agent shall continue to deal solely and
directly with such Bank in connection with such Bank’s rights and obligations
under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of Section 9.05
without the consent of the Participant. Subject to the provisions of
subsection (e), the Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
49
entitled
to the benefits, and be bound by the obligations, of Article 8 with respect to its participating
interest. An assignment or other transfer which is not permitted by
subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection (b).
(c) Any Bank
may at any time assign to one or more banks or other institutions (each an
“Assignee”) all, or a
proportionate part (but not in any case in an amount less than $10,000,000,
unless (x) such Assignee is another Bank or an affiliate of such transferor Bank
or (y) such assignment is for all of such transferor Bank’s rights and
obligations under this Agreement and the Notes) of all of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit D hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Borrower
and the Administrative Agent, such consents not to be unreasonably withheld;
provided that (i) if an
Assignee is another Bank or an affiliate of such transferor Bank, or (ii) in the
case of an assignment by any Bank to one or more Assignees after the occurrence
and during the continuance of an Event of Default, no such consent of the
Borrower shall be required. Upon execution and delivery of such an
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the
transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $3,500. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section
2.15.
(d) Any Bank
may at any time assign all or any portion of its rights under this Agreement and
its Note to a Federal Reserve Bank. No such assignment shall release
the transferor Bank from its obligations hereunder.
(e) No
Assignee, Participant or other transferee of any Bank’s rights shall be entitled
to receive any greater payment under Section 8.03
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower’s prior written
consent or by reason of the provisions of Section
8.02 or 8.03 requiring such Bank to designate
50
a
different Applicable Lending Office under certain circumstances or at a time
when the circumstances giving rise to such greater payment did not
exist.
Section
9.08 . Governing Law. (a) This Agreement and each Note shall be governed by and
construed in accordance with the laws of the State of New York.
(b) The
Borrower 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 the parties hereto
hereby 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, to the fullest extent permitted by law, 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 the Administrative Agent or any Bank may otherwise have to bring any action
or proceeding relating to this Agreement against the Borrower or its properties
in the courts of any jurisdiction.
(c) The
Borrower 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 paragraph (b) of this Section. 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.
(d) Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section
9.01. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by
law.
51
Section
9.12 . Confidentiality. The
Administrative Agent and each Bank represent that they will maintain the
confidentiality of any written or oral information provided by or on behalf of
the Borrower (hereinafter collectively called “Confidential Information”),
subject to the Administrative Agent’s and each Bank’s (a) obligation to
disclose any such Confidential Information pursuant to a request or order under
applicable laws or regulations or from a regulatory authority or pursuant to a
subpoena or other legal process, (b) right to disclose any such
Confidential Information to its bank examiners, auditors, counsel and other
professional advisors, and its employees, officers and directors, and to other
Banks (it being understood that such Persons shall be informed of the
confidential nature of such information and instructed to keep it
confidential), (c) right to disclose any such Confidential Information in
connection with any litigation or dispute involving the Banks and the Borrower
or any of its Subsidiaries and affiliates, (d) right to provide such
information to Participants, prospective Participants to which sales of
participating interests are permitted pursuant to Section 9.06(b) and prospective Assignees to which
assignments of interests are permitted pursuant to Section 9.06(c) if such Participant, prospective
Participant or prospective Assignee agrees in writing to maintain the
confidentiality of such information on terms substantially similar to those of
this Section as if it were a “Bank” party hereto, and (e) right to disclose
Confidential Information to its affiliates if such affiliate agrees in writing
to maintain the confidentiality of such information on terms substantially
similar to those of this Section. Notwithstanding the foregoing, any
such information supplied to a Bank, Participant, prospective Participant or
prospective Assignee under this Agreement shall cease to be Confidential
Information if it is or becomes known to such Person by other than unauthorized
disclosure, or if it becomes a matter of public knowledge other than as a result
of a breach of this Section by such Person.
Section
9.13 . WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
52
Section
9.14 . USA Patriot Act. Each Bank hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Bank to identify the Borrower in accordance with the
Act.
Section
9.15 . ICC
Transactions. Notwithstanding anything to the contrary set
forth in this Agreement (without limiting the terms of the penultimate sentence
of this Section 9.15) or in any of the Notes or
other instruments or documents that have been or are in the future executed or
delivered pursuant to, or that otherwise relate to, this Agreement or to any
Borrowings or Loans hereunder (all of the foregoing, collectively with this
Agreement, the “Credit
Documentation”), (a) to the extent necessary under the Credit
Documentation, the Banks hereby consent to, and waive any Default, Event of
Default or other breach, violation, default or noncompliance with the provisions
of the Credit Documentation that might otherwise be caused by or be attributable
to, the “ICC
Transactions” as such term is defined in Schedule 9.15 hereto, and (b) the ICC Transactions, the “ICC Assets,” the “ICC Related Companies” (as
such terms are respectively defined in Schedule 9.15 hereto), and the assets, liabilities and
operations of the ICC Related Companies (including without limitation any
circumstances, events, occurrences, actions or omissions relating to, of or by
any of the ICC Related Companies), are hereby excluded from, and shall not be
taken into account in applying, interpreting or determining compliance with, the
provisions of the Credit Documentation (including without limitation, the
definitions, representations, warranties, covenants, agreements, conditions and
events of default set forth in the Credit Documentation) and may be excluded
from any certifications, notices, reports or statements delivered or to be
delivered pursuant to the Credit Documentation. Without limiting the
generality of the foregoing, the defined terms “Controlled Subsidiary,”
“Consolidated Subsidiary Member,” “ERISA Group,” “Joint Venture,” “Member” and
“Subsidiary,” among others, as used in the Credit Documentation shall not
include the ICC Related Companies. Notwithstanding the preceding
provisions of this Section 9.15, any new
investments in the ICC Related Companies by purchase of equity and/or debt
securities, funding (through capital contributions and/or newly originated
loans) of working capital or capital expenditure needs of the ICC Related
Companies, payment by RTFC or the Borrower of claims of other creditors of the
ICC Related Companies, and/or provision of any new guarantees, letters of credit
and/or other new credit support or credit enhancement of the debt or other
obligations of the ICC Related Companies, in the case of each of the foregoing,
made or provided by the Borrower and/or RTFC at any time from the date hereof
shall not exceed in the aggregate (but without double-counting any such new
investments) $275,000,000 without the consent of the Required
Banks. To the extent that the Credit Documentation provides that any
of the ICC Transactions may be implemented if certain advance notice thereof is
given, all such conditions or requirements of advance notice shall be deemed to
have been complied with and all such notices shall be deemed to have been duly
and timely given in accordance with the terms of the Credit
Documentation.
53
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
NATIONAL
RURAL UTILITIES
COOPERATIVE
FINANCE
CORPORATION
|
|
By:
|
/s/ XXXXXX X. XXXXX |
Name:Xxxxxx
X. Xxxxx
|
|
Title:
Senior Vice President, Chief
Financial
Officer and Assistant
Secretary-Treasurer
|
|
Address:
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx
00000
Attention: Xxxxxx
X. Xxxxx
Title:Senior
Vice President, Chief
Financial
Officer and Assistant Secretary-Treasurer
Telephone
No.: (000)
000-0000
Telecopier
No.: (000)
000-0000
|
THE
BANK OF NOVA SCOTIA, as Administrative Agent and as a
Bank
|
|
By:
|
/s/ XXXXX XXXXXX |
Name:
Xxxxx Xxxxxx
|
|
Title:
Managing Director
|
|
Address:
c/o GWS Loan Operations
000 Xxxx Xxxxxx Xxxx, 0xx
Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention:
NYA Loan Operations
Telephone
No.: (000) 000-0000
Telecopier
No.: (000) 000-0000
E-mail: xxxxx_xxxxxx@xxxxxxxxxxxxx.xxx
xxxxx_xxx@xxxxxxxxxxxxx.xxx
|
U.S. Bank, N.A., as a Bank and as
Syndication Agent
|
|
By:
|
/s/ XXXX X. XXXXXXXX |
Name:
Xxxx X. Xxxxxxxx
|
|
Title:
Vice President
|
KEYBANK NATIONAL
ASSOCIATION, as a Bank and as
Documention Agent
|
|
By:
|
/s/ XXXXXXX X. XXXXXX |
Name:
Xxxxxxx X. Xxxxxx
|
|
Title:
Senior Vice President
|
PNC Bank, N.A., as a
Bank
|
|
By:
|
/s/ D. XXXXXXXX XXXXXXX |
Name:
D. Xxxxxxxx Xxxxxxx
|
|
Title:
Vice President
|
Institution
|
Commitment
|
Bank
of Nova Scotia
|
$75,000,000
|
Keybank
National Association
|
$50,000,000
|
U.S.
Bank, N.A.
|
$50,000,000
|
PNC
Bank, N.A.
|
$25,000,000
|
Total
|
$200,000,000
|
SCHEDULE
5.03(a)
NON-GAAP
SUBSIDIARIES
x.
|
Xxxxxx
Realty Holdings, LLC, organized in the State of Delaware. Borrower owns
100% of the membership interests.
|
x.
|
Xxxxxx
Realty Investors, LLC, organized in the State of Delaware. Borrower owns
100% of the membership interests.
|
x.
|
Xxxxxx
Realty Partners, LP, organized in the State of Delaware. Xxxxxx Realty
Holdings, LLC is the general partner and owns 0.5% of the partnership
interests, and Xxxxxx Realty Investors, LLC is the limited partner and
owns 99.5% of the partnership
interests.
|
d.
|
CFC
Advantage, LLC, organized in the State of Delaware. Borrower owns 100% of
the membership interests.
|
SCHEDULE
9.15
ICC
TRANSACTIONS
Background
As
described in the Borrower’s filings with the U.S. Securities and Exchange
Commission, Rural Telephone Finance Cooperative (“RTFC”), a Consolidated
Subsidiary of the Borrower, made secured loans to Innovative Communication
Corporation (“ICC”), a
diversified telecommunications company organized under the laws of the United
States Virgin Islands (“USVI”) and headquartered in
St. Croix, USVI, which loans have been on non-accrual status since February
2005, and ICC and certain of its affiliates are the subject of pending
bankruptcy proceedings. Through operating divisions and subsidiaries,
ICC provides cellular, wireline local and long-distance telephone, cable
television, Internet access and other telecommunications services in the eastern
and southern Caribbean and in mainland France. ICC and its
subsidiaries are hereby defined as the “ICC Companies.” As
of August 31, 2008, RTFC had $484 million in loans outstanding to ICC, and all
such ICC loans have been on non-accrual status since February 1,
2005. A Bankruptcy Trustee has been appointed to manage the
operations of the ICC bankrupt estate (the “Trustee”). The
Trustee has separated the bankrupt estate into two groups described by the
Trustee as follows:
“Group 1”:
·
|
Wireline
telephone operations in the USVI,
|
·
|
Wireless
telephone operations in the USVI and St. Maarten/St. Xxxxxx,
and
|
·
|
Cable
television service operations in the USVI, the British Virgin Islands and
St. Maarten.
|
“Group 2”:
·
|
Cable
television operations in Guadeloupe, Martinique and
France.
|
ICC
Transactions
The
Borrower and RTFC are contemplating the acquisition of some or all of the assets
and/or stock of the ICC Companies in Group 1 and/or Group 2 (collectively,
“ICC Assets”), either
through a credit bid pursuant to which, if such credit bid is successful, ICC
Assets would be transferred to RTFC, the Borrower or one or more designees
controlled by the Borrower or RTFC (and which may be one or more special purpose
entities owned directly or indirectly by the Borrower or RTFC) or through one or
more joint ventures with one or more third-party bidders pursuant to which the
Borrower, RTFC and/or one or more special purpose entities created by the
Borrower or RTFC would receive partial equity
ownership
in the acquisition entity/ies (the above-mentioned designees, special purpose
entities and joint ventures, together with the ICC Companies, are hereby defined
collectively as the “ICC
Related Companies”); and in either case, among other things, (i) RTFC may
transfer some or all of its rights with respect to its ICC loans (including
without limitation the right to acquire ICC Assets pursuant to a successful RTFC
credit bid) to the Borrower or to one or more special purpose entities
controlled and designated by the Borrower, and such transfer(s) of RTFC’s rights
may occur (A) in exchange for the Borrower’s forgiveness of, or in satisfaction
of, some or all of RTFC’s indebtedness to the Borrower that was incurred to
finance RTFC’s ICC loans, and/or (B) pursuant to the terms of a guaranty
agreement between the Borrower and RTFC under which the Borrower has guaranteed,
subject to certain limitations, that RTFC’s loss in respect of its ICC loans
will not exceed its loss reserve therefor and under which the Borrower is
entitled to be transferred RTFC’s rights relating to the ICC loans if RTFC makes
a call on the guaranty; (ii) the Borrower and/or RTFC may provide equity and/or
debt capitalization of, and ongoing funding for, the entities involved in the
acquisition, ownership and operation of ICC Assets, and may create one or more
of special purpose entities for such purposes; (iii) the Borrower and/or RTFC
may provide working capital and capital expenditure financing to the ICC
Companies and for the ICC Assets, either directly or through such special
purpose entity/ies; (iv) the acquisition of ICC Assets would involve settling
claims of other creditors of the ICC Companies, which settlements may be
financed by the Borrower and/or RTFC directly or through ICC Related Companies;
(v) the Borrower and/or RTFC may provide credit support and/or credit
enhancement for obligations of ICC Related Companies, including without
limitation in the form of guaranties and/or letters of credit; (vi) the Borrower
or RTFC would hold such ICC Assets (through one or more special purpose
entities) or such joint venture investment(s) and operate or provide for the
operation of the ICC Companies for the purpose of preserving and rehabilitating
such ICC Assets, preparing them for resale or other disposition and reselling or
disposing of them in one or more transactions at a price or prices or for other
consideration satisfactory to RTFC and/or the Borrower; and (vii) the
Borrower and/or RTFC may engage staff and/or outside consultants, agents,
managers, management companies and other professional advisers to advise and
assist with respect to, and/or to carry out, the foregoing. All of
the potential transactions, actions and other matters referred to above in this
paragraph (together with such other related transactions and steps, occurring
prior to or concurrently with or within a reasonable time after the
transactions, actions and other matters referred to above and as may be
reasonably necessary to carry out such transactions, actions and other matters)
are hereby defined collectively as the “ICC
Transactions.”
Nothing
in this Schedule 9.15 or in Section 9.15 of the Credit Agreement shall constitute
an obligation on the Borrower, RTFC or any other Person to enter into all or any
of the transactions, or to take all or any of the actions, described in this
Schedule 9.15. Transactions and
actions referred to in this Schedule 9.15 are
not necessarily listed in the chronological order in which they may be entered
into or taken.
FORM OF
NOTE
New York,
New York [DATE]
For value
received, National Rural Utilities Cooperative Finance Corporation, a
not-for-profit cooperative association incorporated under the laws of the
District of Columbia (the “Borrower”), promises to pay to
the order of [·] (the
“Bank”), for the account
of its Applicable Lending Office, the unpaid principal amount of each Loan made
by the Bank to the Borrower pursuant to the Term Loan Credit Agreement referred
to below on the Maturity Date with respect to such Loan. The Borrower
promises to pay interest on the unpaid principal amount of each such Loan on the
dates and at the rate or rates provided for in the Term Loan Credit
Agreement. All such payments of principal and interest shall be made
in lawful money of the United States in Federal or other immediately available
funds at the office of The Bank of Nova Scotia, c/o GWS Loan Operations, 000
Xxxx Xxxxxx Xxxx, 0xx Xxxxx,
Xxxxxxx, Xxxxxxx, X0X 0X0, Attn: NYA Loan Operations.
All Loans
made by the Bank, the respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and, prior to any
transfer hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of
the Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Term Loan Credit
Agreement.
This note
is one of the Notes referred to in the Term Loan Credit Agreement dated as of
January 21, 2009, among the Borrower, the Banks listed on the signature pages
thereof, The Bank of Nova Scotia, as Administrative Agent, U.S. Bank, N.A., as
Syndication Agent, and Keybank National Association as Documentation Agent (as
the same may be amended from time to time, the “Term Loan Credit
Agreement”).Terms defined in the Term Loan Credit Agreement are used
herein with the same meanings. Reference is made to the Term Loan
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
|
|
By:
|
|
Name:
|
|
Title:
|
Ex.A-1
Note
(cont'd)
LOANS AND
PAYMENTS OF PRINCIPAL
Date
|
Amount
of
Loan
|
Type
of
Loan
|
Amount
of
Principal
Repaid
|
Maturity
Date
|
Notation
Made
By
|
Ex.A-2
FORM OF RUS
GUARANTEE
The
United States of America acting through the Administrator of the Rural Utilities
Service (“RUS”) hereby
unconditionally guarantees to [name of Payee] the making of [__%] of the
payments of principal and interest when and as due on this Note of _________
(the “Cooperative”) in
accordance with the terms hereof and of the Loan Agreement referred to in this
Note, until such principal and interest shall be indefeasibly paid in full
(which includes interest accruing on such principal between the date of default
under this Note and the payment in full of this Guarantee), irrespective of
receipt by RUS of any sums or property from its enforcement of its remedies for
the Cooperative default. This Guarantee shall be incontestable except
for fraud or misrepresentation of which the holder had actual knowledge at the
time it became a holder. RUS hereby waives diligence, presentment,
demand, protest and notice of any kind, as well as any requirement that [name of
Payee] exhaust any right or take any action against the
Cooperative.
This
Guarantee is issued pursuant to Title III of the Rural Electrification Act of
1936, as amended (7 U.S.C. '' 901,
et seq.), and the Loan Guarantee
and Servicing Agreement among RUS, the Cooperative, Bank One, NA and National
Rural Utilities Cooperative Finance Corporation dated ___________,
____.
UNITED
STATES OF AMERICA
|
||
Date________________,
___
|
By:
|
|
Name:
|
||
Title:Administrator
of Rural
Electrification
Administration
|
Ex.B-1
FORM OF RUS
GUARANTEE
The
United States of America acting through the Administrator of the Rural Utilities
Service (“RUS”) hereby
unconditionally guarantees to the Payee the making of the payments of principal
and Guaranteed Interest when and as due on the Note of _______________ (the
“Cooperative”) dated
_____ in the original principal amount of $ _____ (the “Note”), in accordance with the
terms thereof and of the Loan Agreement and the Master Loan Guarantee and
Servicing Agreement referred to in the Note, until such principal and Guaranteed
Interest shall be indefeasibly paid in full (which includes interest accruing at
the Guaranteed Interest Rate between the date of default under the Note and the
payment in full of this Guarantee), irrespective of receipt by RUS of any sums
or property from its enforcement of its remedies for the Cooperative’s
default. This Guarantee shall be incontestable except for fraud or
misrepresentation of which the holder had actual knowledge at the time it became
a holder. RUS hereby waives diligence, presentment, demand, protest
and notice of any kind (except the “Default Notice” required pursuant to Section
5.3(a) of the Master Loan Guarantee and Servicing Agreement), and acknowledges
that the Payee does not have any right or obligation to exercise any right or
take any action against the Cooperative.
This
Guarantee is issued pursuant to the Rural Electrification Act of 1936, as
amended (7 U.S.C. ''
901, et seq.) (the “Act”), and the Master Loan
Guarantee and Servicing Agreement between RUS and National Rural Utilities
Cooperative Finance Corporation dated as of February 16, 1999.
THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE UNITED STATES OF AMERICA, TO THE EXTENT APPLICABLE, AND
OTHERWISE THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
THE
UNDERSIGNED, AS [ADMINISTRATOR] OF RUS, DOES HEREBY CERTIFY THAT I AM AUTHORIZED
UNDER THE ACT AND 7 CFR PART 1700 TO DELIVER THIS GUARANTEE.
UNITED
STATES OF AMERICA
|
|
By:
|
|
Name:
|
|
Title:[Administrator]
of the Rural Utilities Service
|
Dated:__________________ RUS Loan
No____________________________
Ex.B-2
EXHIBIT
C
OPINION OF GENERAL COUNSEL
OF THE BORROWER
January
21, 2009
To the
Administrative Agent and each of the Bank parties
to
the Term Loan Credit Agreement referred to below
x/x Xxx
Xxxx xx Xxxx Xxxxxx
Xxx
Xxxxxxx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
I, Xxxx
Xxx List, General Counsel of the National Rural Utilities Cooperative Finance
Corporation (the “Borrower”), am delivering this
opinion pursuant to the Term Loan Credit Agreement (the “Agreement”) dated as of
January 21, 2009 among the Borrower, the Banks listed on the signature pages
thereof, The Bank of Nova Scotia, as Administrative Agent, U.S. Bank, N.A., as
Syndication Agent, and Keybank National Association, as Documentation Agent.
Terms defined in the Agreement are used herein as therein
defined. This opinion is being rendered to you at the request of the
Borrower, pursuant to Section 3.01(c) of the Agreement.
I have
examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion. This opinion is limited to the laws of the District of
Columbia.
Upon the
basis of the foregoing, I am of the opinion that:
1. The
Borrower is a cooperative association duly incorporated, validly existing and in
good standing under the laws of the District of Columbia and has the corporate
power and authority and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and to transact
the business in which it is engaged. The Borrower is duly qualified
or licensed as a foreign corporation in good standing in every jurisdiction in
which the nature of the business in which it is engaged makes such qualification
or licensing necessary, except in those jurisdictions in which the failure to be
so qualified or licensed would not (after qualification, assuming that the
Borrower could so qualify without the payment of any fee or penalty and retain
its rights as they existed prior to such qualification all to an extent so that
any fees or penalties required to be so paid or any rights not so retained would
not, individually or in the aggregate, have a material adverse effect on the
business or financial condition of the Borrower), individually or in the
aggregate, have a material adverse effect upon the business or financial
condition of the Borrower.
Ex.C-1
2. The
Borrower has the corporate power and authority to execute, deliver and carry out
the terms and provisions of the Agreement and the Notes. The
Agreement and the Notes have been duly and validly authorized, executed and
delivered by the Borrower, and the Agreement constitutes a legal, valid and
binding agreement of the Borrower, and the Notes constitute legal, valid and
binding obligations of the Borrower, in each case enforceable in accordance with
its terms, except as the same may be limited by: (a) bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting creditors’
rights (including without limitation, the effect of statutory and other law
regarding fraudulent conveyances, fraudulent transfers and preferential
transfers); and (b) the exercise of judicial discretion and the application of
principles of equity, good faith, fair dealing, reasonableness, conscionability
and materiality (regardless of whether the applicable agreements are considered
in a proceeding in equity or at law). The opinions expressed in this paragraph
shall be understood to mean that if there is a default in performance of an
obligation, (i) if a failure to pay or other damage can be shown and (ii) if the
defaulting party can be brought into a court which will hear the case and apply
the governing law, then, subject to the availability of defenses, and to the
exceptions set forth in sections (a) and (b) of this paragraph, the court will
provide a money damage (or perhaps injunctive or specific performance)
remedy.
3. There
are no actions, suits, proceedings or investigations pending or, to my
knowledge, threatened against or affecting the Borrower by or before any court
or any governmental authority, body or agency or any arbitration board which are
reasonably likely to materially adversely affect the business, property, assets,
financial position or results of operations of the Borrower or the authority or
ability of the Borrower to perform its obligations under the Agreement or the
Notes. Without limiting the foregoing opinion, I would like to draw
your attention to the legal actions described on Annex A.
4. No
authorization, consent, approval or license of, or declaration, filing or
registration with or exemption by, any governmental authority, body or agency is
required in connection with the execution, delivery or performance by the
Borrower of the Agreement or the Notes.
5. The
holders of the Borrower’s Members’ Subordinated Certificates are not and will
not be entitled to receive any payments with respect to the principal thereof or
interest thereon solely because of withdrawing or being expelled from membership
in the Borrower.
6. Neither
the Borrower nor any Consolidated Subsidiary is in default in any material
respect under any material agreement or other instrument to which it is a party
or by which it or its property or assets is bound. No event or condition exists
which constitutes, or with the giving of notice or lapse of time or both would
constitute, such a default under any such agreement or other
instrument.
Ex.C-2
Neither
the execution and delivery of the Agreement or the Notes, nor the consummation
of any of the transactions therein contemplated, nor compliance with the terms
and provisions thereof, will contravene any provision of law, statute, rule or
regulation to which the Borrower is subject or any judgment, decree, award,
franchise, order or permit applicable to the Borrower, or will conflict or be
inconsistent with, or will result in any material breach of, any of the material
terms, covenants, conditions or provisions of, or constitute (or with the giving
of notice or lapse of time, or both, would constitute) a default under (or
condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any obligations
prior to the scheduled maturity thereof), or result in the creation or
imposition of any Lien upon any of the property or assets of the Borrower
pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or
other instrument to which it may be subject, or violate any provision of the
certificate of incorporation or by-laws of the Borrower. Without
limiting the generality of the foregoing, the Borrower is not a party to, or
otherwise subject to any provision contained in, any instrument evidencing
Indebtedness of the Borrower, any agreement or indenture relating thereto or any
other contract or agreement (including its certificate of incorporation and
by-laws), which would be violated by the incurring of the Indebtedness to be
evidenced by the Notes.
7. The
Borrower has complied fully with all of the material provisions of each
Indenture. No Event of Default (within the meaning of such term as
defined in any Indenture) and no event, act or condition (except for possible
non-compliance by the Borrower with any immaterial provisions of such Indenture
which in itself is not such an Event of Default under such Indenture) which with
notice or lapse of time, or both, would constitute such an Event of Default has
occurred and is continuing under such Indenture. The borrowings of
the Borrower contemplated by the Agreement will not cause such an Event of
Default under, or the violation of any covenant contained in, any
Indenture.
8. Set
forth on Annex B attached hereto is a true, correct and complete list of all of
the Borrower’s Subsidiaries and Joint Ventures, the jurisdiction of
incorporation or organization of each such Subsidiary and Joint Venture and the
nature and percentage of the Borrower’s ownership of each such Subsidiary and
Joint Venture.
9. The
Borrower has received a ruling from the Internal Revenue Service to the effect
that it is exempt from payment of Federal income tax under Section 501(c)(4) of
the Internal Revenue Code of 1986, and nothing has come to our attention that
leads us to believe that the Borrower is not so exempt.
Although
the parties have agreed that the Agreement and Notes shall be governed by and
construed in accordance with the laws of the State of New York, if a court were
to hold that the Agreement and Notes are to be governed and construed in
accordance with the laws of the District of Columbia, the Agreement and Notes
Ex.C-3
would,
under the laws of the District of Columbia, be legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms, subject as to enforceability only to those
qualifications referenced in Paragraph 1 above.
Sincerely,
Xxxx Xxx
List
General
Counsel
Ex.C-4
Annex
A
Innovative
Communication Corporation ("ICC") is a diversified telecommunications company
and Rural Telephone Finance Cooperative (“RTFC”) borrower headquartered in St.
Croix, United States Virgin Islands ("USVI"). In the USVI, through
its subsidiary Virgin Islands Telephone Corporation d/b/a Innovative Telephone
("Vitelco"), ICC provides cellular, wireline local and long-distance telephone,
cable television, and Internet access services. Through other
subsidiaries, ICC provides telecommunications, cable television, and Internet
access services in the eastern and southern Caribbean and mainland
France.
As of
November 30, 2008 and May 31, 2008, RTFC had $485 million and $492 million,
respectively, in loans outstanding to ICC. All loans to ICC have been
on non-accrual status since February 1, 2005. ICC has not made debt
service payments to RTFC since June 2005.
RTFC is
the primary secured lender to ICC. RTFC’s collateral for the loans
included (i) a series of mortgages, security agreements, financing statements,
pledges and guaranties creating liens in favor of RTFC on substantially all of
the assets and voting stock of ICC, (ii) a direct pledge of 100% of the voting
stock of ICC’s USVI local exchange carrier subsidiary, Vitelco, (iii) secured
guaranties, mortgages and direct and indirect stock pledges encumbering the
assets and ownership interests in substantially all of ICC’s other operating
subsidiaries and certain of its parent entities, including ICC’s immediate
parent, Emerging Communication, Inc., a Delaware corporation ("Emcom") and
Emcom’s parent, Innovative Communication Company LLC, a Delaware limited
liability company ("ICC-LLC"), and (iv) a personal guaranty of the loans from
ICC’s indirect majority shareholder and chairman, Xxxxxxx Xxxxxxx
("Xxxxxxx").
In
February 2006, involuntary bankruptcy petitions were filed against Xxxxxxx,
Emcom and ICC-LLC; and on April 26, 2006, RTFC reached a settlement of related
litigation with ICC, Vitelco, ICC-LLC, Emcom, their directors and Xxxxxxx,
individually. Under the settlement, RTFC obtained entry of judgments
in the District Court for the District of the Virgin Islands against ICC for
approximately $525 million and Xxxxxxx for approximately $100
million. RTFC also obtained dismissals with prejudice of all
counterclaims, affirmative defenses and other lawsuits alleging wrongful acts by
RTFC, certain of its officers, and National Rural Utilities Cooperative Finance
Corporation (“CFC”), thereby resolving all the related loan litigation in RTFC’s
favor. Xxxxxxx and related parties continue to asset claims in
proceedings against CFC and certain of its officers and directors and other
parties.
On July
31, 2006, ICC-LLC, Emcom and Xxxxxxx each filed a voluntary bankruptcy petition
for reorganization. The cases are pending in the United States
District Court for the Virgin Island, Bankruptcy Division (the “Bankruptcy
Ex.C-5
Court”). A
Chapter 11 trustee, Xxxx Xxxxxxxx, was later appointed for the ICC-LLC and Emcom
estates; and Xxxxxxx’x individual case was converted to Chapter 7 liquidation in
October 2007. Xxxxxxx’x Chapter 7 trustee is in the process of
marshaling Xxxxxxx’x non-exempt assets for disposition and eventual payment in
respect of creditor claims.
On
September 21, 2007, the Bankruptcy Court entered an order placing ICC in its own
bankruptcy proceeding, and on October 3, 2007 appointed Xxxx Xxxxxxxx as its
trustee. The Chapter 11 trustee of ICC has assumed ownership and
control of ICC, including its subsidiaries, and has begun to marshal RTFC
collateral and other assets, including property in Xxxxxxx’x possession or
control, for disposition and eventual payment in respect of RTFC’s claims and
the claims of other parties-in-interest. Certain assets have been
sold, including certain foreign companies, aircraft, and real
estate. The principal assets in the U.S. Virgin Islands, including
Vitelco, are scheduled to be auctioned in February 2009.
In most
cases, the sale (as part of the Chapter 11 cases) of ICC or any of its
subsidiaries engaged in a regulated telecommunications or cable television
business, or of the regulated assets of ICC or its subsidiaries, will require
the prior consent of the respective regulators in the United States (including
the Federal Communications Commission and the U.S. Virgin Islands Public
Services Commission), the British Virgin Islands, France and its Caribbean
territories, and the Netherlands Antilles. In certain limited cases,
only a post-transaction notification will be required.
On or
about December 7, 2008, Xxxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxx
Xxxxxx filed a lawsuit in the United States District for the United States
Virgin Islands against CFC, RTFC, Xxxxxxx X. Xxxxxxxx, Xxxx Xxx List, Xxxxxx X.
Xxxxx, Xxxxx Xxxxxxxx et. al. alleging violations of the Racketeer Influenced
and Corrupt Organizations Act and the Virgin Islands Criminally Influenced and
Corrupt Organizations Act, torts actionable under Virgin Islands law,
and common law civil conspiracy. CFC and RTFC believe that the suit
is completely without merit and will vigorously pursue a dismissal of the
case. CFC and RTFC believe that the allegations raised in this
complaint, like similar allegations brought previously and either released or
dismissed, are completely baseless, and part of a pattern of abusive litigation
in this matter.
As a
result of certain interest rate swap transactions with Xxxxxx Brothers Special
Financing, Inc. (“LBSF”) that were guaranteed by Xxxxxx Brothers Holding, Inc.
(“LBHI”), CFC will be a creditor in the bankruptcies of LBHI and LBSF. As
of September 26, 2008, CFC terminated interest rate swaps with LBSF totaling a
termination net settlement amount of $26 million.
Nothing
herein constitutes an admission that the foregoing are reasonably likely to
materially adversely affect the business, property, assets, financial position
or results of CFC or the authority or ability of CFC to perform its obligations
under the Agreement or the Notes.
Ex.C-6
Annex
B
Subsidiaries, Special Purpose
Subsidiaries and Joint Ventures:
|
a.
|
CFC
Advantage, LLC, organized in the State of Delaware. Borrower owns 100% of
the membership interests.
|
|
x.
|
Xxxxxx
Realty Holdings, LLC, organized in the State of Delaware. Borrower owns
100% of the membership interests.
|
|
x.
|
Xxxxxx
Realty Investors, LLC, organized in the State of Delaware. Borrower owns
100% of the membership interests.
|
|
x.
|
Xxxxxx
Realty Partners, LP, organized in the State of Delaware. Xxxxxx Realty
Holdings, LLC is the general partner and owns 0.5% of the partnership
interests, and Xxxxxx Realty Investors, LLC is the limited partner and
owns 99.5% of the partnership
interests.
|
Denton Realty Partners, LP ownership
interest:
Rayzor Ranch,
L.P. 25%
Laurel Development II,
L.P. 10%
W/J Lakes Development
LP
50%
W/J Lakes
LP 50%
Ex.C-7
ASSIGNMENT AND ASSUMPTION
AGREEMENT
AGREEMENT
dated as of ___________, 200__ among [ASSIGNOR] (the “Assignor”), [ASSIGNEE] (the
“Assignee”), NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION (the “Borrower”) and THE BANK OF
NOVA SCOTIA, as Administrative Agent (the “Agent”).
W I T N E
S S E T H
WHEREAS,
this Assignment and Assumption Agreement (the “Agreement”) relates to the
Term Loan Credit Agreement dated as of January 21, 2009 (the “Credit Agreement”), among the
Borrower, the Banks listed on the signature pages thereof, The Bank of Nova
Scotia, as Administrative Agent (the “Agent”), U.S. Bank, N.A., as
Syndication Agent, and Keybank National Association, as Documentation
Agent;
WHEREAS,
as provided under the Credit Agreement, the Assignor has a Commitment to make
Loans to the Borrower in an aggregate principal amount at any time outstanding
not to exceed $__________;
WHEREAS,
Loans made to the Borrower by the Assignor under the Credit Agreement in the
aggregate principal amount of $__________ are outstanding at the date hereof;
and
WHEREAS,
the Assignor proposes to assign to the Assignee all of the rights of the
Assignor under the Credit Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the “Assigned Amount”), together
with a corresponding portion of its outstanding Loans, and the Assignee proposes
to accept assignment of such rights and assume the corresponding obligations
from the Assignor on such terms;
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, the parties hereto agree as follows:
Section
1. Definitions. All
capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.
Ex.D-1
Administrative
Agent and the payment of the amounts specified in Section
3 required to be paid on the date hereof (i) the Assignee shall, as of the
date hereof, succeed to the rights and be obligated to perform the obligations
of a Bank under the Credit Agreement with a Commitment in an amount equal to the
Assigned Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
Section 3. Payments. As
consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between
them. It is understood that commitment fees accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each
of the Assignor and the Assignee hereby agrees that if it receives any amount
under the Credit Agreement which is for the account of the other party hereto,
it shall receive the same for the account of such other party to the extent of
such other party’s interest therein and shall promptly pay the same to such
other party.
Section
4. Consent of the Borrower and the
Administrative Agent. This Agreement is conditioned upon the
consent of the Borrower and the Administrative Agent pursuant to Section 9.06(c) of the Credit Agreement. The
execution of this Agreement by the Borrower and the Administrative Agent is
evidence of this consent. Pursuant to Section
9.06(c) of the Credit Agreement, if requested by the Assignee, the Borrower
agrees to execute and deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.
Section
5. Non-Reliance on
Assignor. The Assignor makes no representation or warranty in
connection with, and shall have no responsibility with respect to, the solvency,
financial condition, or statements of the Borrower, or the validity and
enforceability of the obligations of the Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower.
Section
6. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Ex.D-2
Section
7. Counterparts. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
Ex.D-3
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
|
|
By:
|
|
Name:
|
|
Title:
|
[ASSIGNEE]
|
|
By:
|
|
Name:
|
|
Title:
|
NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
|
|
By:
|
|
Name:
|
|
Title:
|
THE
BANK OF NOVA SCOTIA, as Administrative Agent
|
|
By:
|
|
Name:
|
|
Title:
|
Ex.D-4